2010 Annual report

The directors present their report and audited financial statements for the year ended 31 December 2010.

Dual listed structure and constitutional documents

An explanation of the dual listed companies structure (DLC), which unified Rio Tinto plc and Rio Tinto Limited in 1995, and of the Companies’ constitutional documents can be found in the Material contracts section. This section also provides a description of voting rights restrictions which may apply in respect of the shares of either Company under specified circumstances.

Activities and business review

Rio Tinto’s principal activities during 2010 were minerals exploration, development, production and processing.

The business review (see Overview and Performance sections) provides a comprehensive review of the development, performance and likely future developments of Rio Tinto’s operations for the year ended 31 December 2010. The information set out in the business review is incorporated by reference into this report and is deemed to form part of this report.

The subsidiary and associated undertakings principally affecting the profits or net assets of the Group in the year are listed in notes 37 to 40 to the financial statements.

Significant changes and events affecting the Group during 2010 and until the date of this report have been:

• On 1 February 2010, the sale to Amcor of the majority of the Alcan Packaging businesses, comprising Alcan Packaging global Pharmaceuticals, global Tobacco, Food Europe and Food Asia divisions, completed for US$1,948 million.
• During 2010, the Group increased its ownership in Ivanhoe Mines to 40.3 per cent and to 42.1 per cent in January 2011. Rio Tinto controls and manages the Oyu Tolgoi copper/gold project in Mongolia and has agreed a pathway to increase its stake in Ivanhoe Mines to 49 per cent.
• The sale of the Alcan Packaging Food Americas division to Bemis Company, Inc for a total consideration of US$1.2 billion completed on 1 March 2010.
• On 19 March 2010, Rio Tinto announced that it had signed a non binding memorandum of understanding with Chinalco to establish a joint venture covering the development and operation of the Simandou iron ore project in Guinea, in which Chinalco would acquire a 47 per cent interest of Rio Tinto’s 95 per cent holding in the Simandou project. On 29 July 2010, Rio Tinto and Chalco, a subsidiary of Chinalco, signed a binding agreement to establish the joint venture, with Chalco providing US$1.35 billion on an earn in basis through sole funding of ongoing development work over the next two to three years.
• On 29 March 2010, the four Shanghai employees detained on 5 July 2009 on charges of receiving bribes and stealing commercial secrets were convicted by Shanghai Number One Intermediate People’s Court.
• On 31 March 2010, Rio Tinto announced that it had received a binding offer from Sun European Partners, LLP to acquire the Alcan Beauty Packaging business. On 5 July 2010, Rio Tinto announced the completion of the sale of its Alcan Packaging business for an undisclosed sum and the acquisition by Amcor of the Medical Flexibles business for US$66 million.
• With the structural shift in the iron ore market away from benchmarking pricing, Rio Tinto announced on 9 April 2010 that it would be negotiating contracts with its customers to supply iron ore priced on a quarterly basis.
• The re-commencement of Rio Tinto’s expansion programme in its Iron Ore Company of Canada (IOC) operations was announced on 6 May 2010, with the investment by IOC of US$401 million to increase its annual concentrate capacity by four million tonnes to 22 million tones by 2012. On 9 February 2011, a further US$277 million investment was announced in the next phase of a project that will ultimately raise IOC’s concentrate production capacity by 40 per cent to 26 million tonnes per year (Mt/a).
• On 15 June 2010, Rio Tinto announced that it would invest US$469 million in constructing the Kennecott Eagle nickel and copper mine in Michigan’s Upper Peninsula (US).
• Together with BHP Billiton, Rio Tinto announced on 21 June 2010 that it had signed a Heads of Agreement with the Western Australian Government under which (i) they agreed to pay iron ore royalties at all their mines at a rate of 5.625 per cent for fine ore and 7.5 per cent for lump ore from 1 July 2010; (ii) they agreed to a set of State Agreement amendments to promote greater efficiency and flexibility for their respective operations; and (iii) they made a combined payment to the State Government’s Consolidated Revenue Fund of A$350 million.
• On 30 June 2010, the Australian Competition Tribunal issued a decision to not declare the Hamersley railway line available for third party access under Part IIIA of the Trade Practices Act. The Robe River line was declared, but only until 2018, rather than for the 20 year period desired by the applicants.
• Between July and September 2010, Rio Tinto announced investments to expand Cape Lambert port and to de-bottleneck Dampier port to increase capacity as detailed in the Capital projects section.
• On 5 August 2010, the Group received a binding offer for the sale of 61 per cent of Alcan Engineered Products to certain investment funds affiliated with Apollo Global Management, LLC (Apollo) and the Fonds Stratégique d’Investissement. The divestment completed on 4 January 2011.
• On 30 August 2010, Rio Tinto announced an investment, together with its joint venture participant, Hope Downs Iron Ore Pty Ltd, of US$1.6 billion to develop the Hope Downs 4 iron ore project in Western Australia.
• On 14 September 2010, the Group announced its investment of US$803 million to ramp up the underground block cave project at its Argyle diamond mine in Western Australia.
• On 21 September 2010, Rio Tinto completed the off market buy-back of all of the Rio Tinto Limited ordinary shares held by Tinto Holdings Australia Pty Ltd.
• On 23 September 2010, Rio Tinto Alcan announced a US$347 million investment to modernise and increase the ISAL smelter’s capacity by 20 per cent following the completion of a long term energy supply agreement with Landsvirkjun, the Icelandic power utility. This was followed by an announcement on 1 October 2010 of a further investment of US$140 million to develop a value-added casting facility.
• On 18 October 2010, Rio Tinto announced that it had jointly decided with BHP Billiton to end plans for an iron ore production joint venture in the Pilbara region in Western Australia following extensive discussions with regulators.
• Rio Tinto announced on 20 October 2010 that it would invest a further US$3.1 billion to expand its iron ore infrastructure in the Pilbara. On 26 November 2010, it was announced that new drilling results and ongoing assessment of assets in the Pilbara had revealed a 2.0 billion tonne addition to the Mineral Resource base. Rio Tinto announced on 1 December 2010 that it approved a further US$1.2 billion investment for significant expansions at the Brockman 4 and Western Turner Syncline mines in the Pilbara in its drive to lift annual iron ore production capacity in Western Australia’s Pilbara region to 283 Mt/a. Rio Tinto also approved a final feasibility study into increasing Pilbara production capacity to 333 Mt/a.
• On 3 December 2010, Rio Tinto Limited and Sinosteel Corporation announced the extension of their 1987 Channar Mining joint venture in the Pilbara region, leading the way for a further 50 million tonnes of iron ore to be produced under this joint venture in addition to the original Channar agreements for the production of 200 million tonnes.
• Rio Tinto and Chinalco signed a non-binding Memorandum of Understanding on 3 December 2010 to establish an exploration joint venture in China to explore mainland China for world-class mineral deposits. Chinalco will hold a 51 per cent interest in the joint venture and Rio Tinto will hold a 49 per cent interest.
• On 14 December 2010, Rio Tinto announced it is to invest in its Canadian aluminium smelters to improve production efficiency through modernisation and expansion. The bulk of this new investment – US$758 million – will be spent on completing the first phase of the AP60 plant in Saguenay-Lac-Saint-Jean, Quebec. Rio Tinto will also invest an additional US$300 million for further construction in preparation for the US$2.5 billion modernisation of the Kitimat smelter in British Columbia.
• Rio Tinto completed the divestment of its equity holdings in Cloud Peak Energy Inc on 21 December 2010, following a secondary public offering with gross proceeds of US$573.3 million.
• On 23 December 2010, Rio Tinto announced that it had entered into an agreement to acquire all the issued and outstanding shares of Riversdale Mining Limited by way of a recommended off-market takeover offer for a valuation of approximately A$3.9 billion. The offer has been extended to 18 March 2011.
• Rio Tinto approved a US$933 million investment on 9 February 2011 to extend the life of the Marandoo iron ore mine in the Pilbara region by 16 years to 2030.
• On 10 February 2011, Rio Tinto announced a capital management programme, comprising a US$5 billion share buy-back which, subject to market conditions, it expects to complete by the end of 2012.
• On 23 February 2011, the Group received a binding offer from Imerys to acquire the talc business for US$340 million. The binding offer is subject to customary closing conditions.

Details of events after the statement of financial position date are contained in note 48 to the financial statements.

As permitted by sections 299(3) and 299A(3) of the Australian Corporations Act 2001, information which is likely to result in unreasonable prejudice, regarding likely future developments in, and the expected results of the operations of the Group or its strategies and prospects, has been omitted.

Risk identification, assessment and management

A summary of the Group's position regarding risk identification, assessment and management is contained in the Risk management section. The Group's principal risks and uncertainties are set out in the Principal risks and uncertainties section.

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Share capital

Details of the Group’s share capital as at 31 December 2010 can be found at note 28 and note 29 to the financial statements. Details of rights and obligations attached to each class of shares can be found in the Material contracts section under the heading “Dual listed companies structure – voting rights”. The voting rights of shares held beneficially by a third party in line with an employee share plan are set out in the Executive remuneration section.

Details of certain agreements triggered on a change of control can be found in the Material contracts section under the heading “Dual listed companies structure”.

Details of certain restrictions on holding shares in Rio Tinto are described in the Material contracts section under the heading “Dual listed companies structure – limitations on ownership of shares and merger obligations”. There are no other restrictions on the transfer of ordinary shares in Rio Tinto plc save for:

• restrictions that may from time to time be imposed by laws and regulations (for example, those relating to market abuse and insider dealing);
• restrictions that may be imposed pursuant to the Listing Rules of the UK Financial Services Authority, whereby certain employees of the Group require approval to deal in shares;
• restrictions on the transfer of shares that may be imposed under Rio Tinto plc’s Articles of Association or under Part 22 of the UK Companies Act 2006, in either case following a failure to supply information required to be disclosed following service of a request under section 793 of the UK Companies Act 2006; and
• restrictions on the transfer of shares held under certain employee share plans while they remain subject to the plan.

Details of substanial shareholders of Rio Tinto plc and Rio Tinto Limited can be found on the Substantial shareholders page.

At the annual general meetings held in 2010, shareholders authorised:

• the purchase by Rio Tinto Limited and its subsidiaries, and the on-market repurchase by Rio Tinto plc of up to 152,488,000 Rio Tinto plc shares (representing approximately ten per cent of Rio Tinto plc’s issued share capital at that time);
• the off-market purchase by Rio Tinto plc of up to 152,488,000 Rio Tinto plc shares acquired by Rio Tinto Limited or its subsidiaries under the above authority;
• the off-market or on-market buy-back by Rio Tinto Limited of up to 43.5 million Rio Tinto Limited shares (representing approximately ten per cent of Rio Tinto Limited’s issued share capital at the time); and
• the off-market buy-back by Rio Tinto Limited of up to all of Rio Tinto Limited’s shares indirectly held by Rio Tinto plc through Tinto Holdings Australia Pty Ltd.

On 21 September 2010, Rio Tinto completed the off-market buy-back of all of the Rio Tinto Limited shares held by Tinto Holdings Australia Pty Ltd. The buy-back was undertaken in two tranches: Rio Tinto Limited acquired 150,437,365 shares from Tinto Holdings Australia Pty Ltd at a price per share of A$69.27 on 27 August 2010. The remaining 20,635,155 shares were bought back at a price of A$75.13 on 21 September 2010.

All shares repurchased by Rio Tinto Limited from Tinto Holdings Australia Pty Ltd were subsequently cancelled.

During 2010, in order to satisfy obligations under employee share plans, Rio Tinto plc issued 2,336,005 shares from treasury, and Rio Tinto plc’s registrar purchased on market 693,000 shares and delivered 561,852 ordinary shares to plan participants. Rio Tinto Limited’s registrar purchased on market and delivered 1,550,969 shares to plan participants.

Also during the year, the Companies’ registrar purchased on market 660,948 Rio Tinto plc shares and 658,700 Rio Tinto Limited shares to satisfy obligations to shareholders under the dividend reinvestment plans.

On 10 February 2011, Rio Tinto announced a capital management programme, comprising a US$5 billion share buy-back which, subject to market conditions, is expected to complete by the end of 2012. In the period to 21 February 2011, 1,725,000 Rio Tinto plc shares were repurchased for a total aggregate consideration of US$125,500,000.

For the period 1 January 2011 to 21 February 2011, Rio Tinto plc issued 354,237 shares from treasury in connection with employee share plans and Rio Tinto Limited’s registrar purchased on market and delivered 462,169 shares to plan participants.

Awards over 3,010,321 Rio Tinto plc shares and 1,783,657 Rio Tinto Limited shares were granted under employee share plans during 2010. As at 21 February 2011, awards were outstanding over 11,624,153 Rio Tinto plc shares and 5,842,538 Rio Tinto Limited shares. Upon vesting, awards may be satisfied by the issue of new shares, the purchase of shares on market, or, in the case of Rio Tinto plc, by issuing treasury shares.

Dividends

The total dividend for 2010 will be US 108 cents, of which US 45 cents was paid as an interim dividend in September 2010. Final dividends of 39.14 pence or 61.94 Australian cents per share will be paid on 31 March 2011. Full details of dividends paid and the dividend policy can be found in the Dividends section.

Annual general meetings

The 2011 annual general meetings will be held on 14 April in London and on 5 May in Perth. Separate notices of the 2011 annual general meetings are produced for the shareholders of each Company.

Directors

The names of the directors who served during the year, together with their biographical details and other information are shown in the Board of directors section. Sir David Clementi and David Mayhew retired at the conclusion of the Rio Tinto Limited annual general meeting held on 26 May 2010. Sam Walsh, Ann Godbehere and Robert Brown were appointed as directors with effect from 5 June 2009, 9 February 2010 and 1 April 2010, respectively and were elected by shareholders at the 2010 annual general meetings.

A provision of the new UK Corporate Governance Code requires all directors to retire and submit themselves for re-election by shareholders annually. With the exception of Sir Rod Eddington and Yves Fortier who will be retiring at the conclusion of the 2011 annual general meetings, all directors will stand for re-election at the 2011 annual general meetings.

Details of directors' service contracts and letters of appointment can be found in the Other remuneration and statutory disclosures and Chairman and non executive directors’ remuneration sections.

A table of directors’ attendance at board and committee meetings during 2010 can be found in Board committees.

Remuneration of directors and executives

The Remuneration report forms part of the Directors’ report and includes details of the nature and amount of each element of the remuneration (including share options) of each of the directors and of the key management personnel and highest paid executives below board level in respect of whom disclosures are required in 2010.

The 2009 Remuneration report was approved by shareholders at the 2010 annual general meetings.

Secretaries

Details of the company secretary of each of Rio Tinto plc and Rio Tinto Limited with their qualifications and experience are set out on the Company secretaries page.

Corporate governance

A full report on corporate governance can be found in the Corporate governance section and forms part of this Directors’ report.

Indemnities and insurance

The Articles of Association and Constitution of the Companies provide for them to indemnify, to the extent permitted by law, officers of the Companies, including officers of wholly owned subsidiaries, against liabilities arising from the conduct of the Group’s business. The directors and the company secretaries of the Companies, and certain employees serving as directors of subsidiaries at the Group’s request have been indemnified in accordance with these provisions. No amount has been paid under any of these indemnities during the year.

The Group has purchased directors’ and officers’ insurance during the year. In broad terms, the insurance cover indemnifies individual directors’ and officers’ personal legal liability and legal defence costs for claims arising out of actions taken in connection with Group business. It is a condition of the insurance policy that detailed terms and premiums paid cannot be disclosed.

Employment policies and communication

Information about the Group's employment policies and our employees is available on the Social wellbeing page of the Sustainable development review.

Donations

During 2010, the Group spent US$166 million on community assistance programmes and payments into benefit receiving trusts set up in directly negotiated community impact benefit agreements. As required by UK regulation, donations in the UK during 2010 amounted to £1.8 million (2009: £1.8 million) including £0.18 million for education programmes, £0.97 million for environment programmes, £0.01 million for health programmes, £0.57 million for general sponsorships and donations, and management costs totalling £0.05 million. No donations were made for political purposes in the EU, Australia or elsewhere, as defined by the UK Companies Act 2006.

Governmental regulations

Rio Tinto is subject to extensive governmental regulations affecting all aspects of its operations and consistently seeks to apply best practice in all of its activities. Due to Rio Tinto’s product and geographical spread, there is unlikely to be any single governmental regulation in effect that could have a material effect on the Group’s business.

Rio Tinto’s operations in Australia and New Zealand are subject to state and federal regulations of general application governing mining and processing, land tenure and use, environmental requirements, including site specific environmental licences, permits and statutory authorisations, workplace health and safety, trade and export, corporations, competition, access to infrastructure, foreign investment and taxation. Some operations are conducted under specific agreements with the respective governments and associated acts of parliament.

In addition, Rio Tinto’s uranium operations in the Northern Territory, Australia and Namibia are subject to specific regulation in relation to mining and the export of uranium.

US and Canada-based operations are subject to local, state, provincial and national regulations governing mining and processing, access to infrastructure, land tenure and use, environmental aspects of operations, product and workplace health and safety, trade and export administration, corporations, competition, securities and taxation. In relation to hydroelectric power generation in Canada, water rights, as well as power sales and purchases, are regulated by the Quebec and British Columbia provincial agencies.

Rio Tinto’s operations in Europe are subject to national and European rules and regulations governing general and specific aspects of current and planned operations, notably land tenure and use, workplace health and safety, environmental issues, including applicable regulations in case of sale or closure of industrial sites and permit requirements concerning activities listed for environmental protection purposes, chemical risks management (REACH), competition requirements including compliance with antitrust rules, trade and export, corporations, intellectual property, labour requirements (including personal data protection), investment and taxation.

Rio Tinto’s South African-based operations are subject to black economic empowerment legislation which includes the requirement to transfer (for fair value) 26 per cent of the Group’s South African mining assets to historically disadvantaged South Africans by 2014.

Environmental regulation

Rio Tinto measures its performance against environmental regulation by rating incidents on a low, moderate, high, or critical scale of likelihood and consequence of impacting the environment. High and critical ratings are reported to the executive management team and the Committee on social and environmental accountability, including progress with remedial actions. Prosecutions and other breaches are also used to gauge Rio Tinto’s performance.

In 2010, there were 18 environment incidents rated high at Rio Tinto managed operations compared with 12 in 2009.

These incidents were of a nature to affect the environment or to concern local communities. Of these, nine resulted from water discharge, six were spills and three related to air emissions. Examples of these include:

• discharge standards for water being exceeded and also the overflow of leachate from a landfill to an adjacent water course at Alucam, Cameroon.
• leakage of unleaded petrol from a storage tank at Gove, Australia.
• a spill of alumina and coke waste from the loading dock at the port for Alucam, Cameroon.
• recorded levels for dust and tar in air emissions which exceeded permitted amounts on a number of occasions at Rotterdam, Holland.
• flooding during a storm event which led to the overflow of water from the red mud retention dam onto land adjoining the facility at Gardanne, France.
• overflow from a retention pond into local waterways during a high rainfall event at Kitimat, Canada.
• flooding of sediment-laden water off site onto nearby land and creeks following heavy rainfall at Northparkes, Australia.
• a pump failure at a weir during a storm resulted in an overflow of mine water into the local river at Palabora, South Africa.
• recording of levels of SO₂ in air emissions above permitted amounts on a number of occasions at Palabora, South Africa.

During 2010, 13 operations incurred fines amounting to US$540,328 (US$80,150 in 2009). Several fines paid in 2010 relate to incidents that occurred in 2008 and 2009. An amount of US$262,046 relates to an incident that occurred in September 2008 at a plant in Saguenay, Canada. An amount of US$174,697 relates to an incident that occurred in April 2009 at a port facility in Saguenay, Canada. An amount of US$48,527 relates to an incident that occurred in August 2008 at a plant in Saguenay, Canada.

Australian corporations that exceed specified thresholds are required under the Australian National Greenhouse and Energy Reporting Act 2007 to register and report on greenhouse gas emissions and energy use and production. Three Rio Tinto entities, Rio Tinto Limited, Alcan Gove Pty Limited and Pechiney Consolidated Australia Limited are separately covered by the Act. All three companies submitted their reports by the required 31 October 2010 deadline.

The same three Rio Tinto entities have obligations under the Australian Energy Efficiency Opportunities Act 2006 (EEO). All three completed the required annual public reporting for 2010. Eight operations undertook EEO assessments in 2010. This completed the first five year cycle of assessments for Rio Tinto corporations. EEO requirements continue to be communicated to all sites covered by the Act, with internal reporting and compliance systems augmented.

Further information in respect of the Group's environmental performance is included throughout this Annual report, and in the Sustainable development section.

Legal proceedings

Neither Rio Tinto plc nor Rio Tinto Limited nor any of their subsidiaries is a defendant in any proceedings which the directors believe will have a material effect on either Company’s financial position or profitability. Contingencies are disclosed in note 35 to the financial statements.

Exploration, research and development

The Group carries out exploration and research & development in support of its activites as described more fully under Exploration, and Technology & Innovation. Amounts charged for the year net of any gains on disposal generated a net loss for exploration and evaluation of US$72 million (2009: net gain US$380 million). Research and development costs were US$187 million (2009: US$193 million).

Auditors

PricewaterhouseCoopers LLP and PricewaterhouseCoopers are the auditors of Rio Tinto plc and Rio Tinto Limited respectively. PricewaterhouseCoopers LLP have indicated their willingness to continue in office as auditors of Rio Tinto plc and a resolution to reappoint them as auditors of Rio Tinto plc will be proposed at the 2011 annual general meetings. The resolution will also seek authority for the Audit committee to determine their remuneration. PricewaterhouseCoopers will continue in office as auditors of Rio Tinto Limited.

A copy of the declaration given by PricewaterhouseCoopers as the Group’s external auditors to the directors in relation to the auditors’ compliance with the independence requirements of the Australian Corporations Act 2001 and the professional code of conduct for external auditors is set out in the Auditors independence declaration in the financial statements.

No person who was an officer of Rio Tinto during 2010 was a director or partner of the auditors at a time when the auditors conducted an audit of the Group.

Each person who held the office of director at the date the board resolved to approve this report makes the following statements:

• so far as the directors are aware, there is no relevant audit information of which the auditor is unaware;
• the directors have taken all steps that he or she ought to have taken as a director to make him or herself aware of any relevant audit information and to establish that the auditor is aware of that information.

Principal auditor – audit and non audit fees and services

The amounts payable to the Group’s principal auditors, were:

	2010 US$m	2009 US$m
Audit fees(a)	16.7	23.2
Audit services in connection with divestment programme(b)	9.1	22.0
Tax fees	0.4	2.1
All other fees(c)	7.1	14.8
	33.3	62.1

1. (a) Audit fees relating to statutory audits.
2. (b) Represents fee for audit of carve out financial statements
3. (c) All other fees in 2010 include those relating to the bond issues, divestment programme and similar corporate projects.

Further information on audit and non audit fees is set out in note 43 to the financial statements.

A description of Rio Tinto’s policies to uphold the independence of the Group’s principal auditiors is set out in Auditors and internal assurance in the corporate governance section. Based on advice provided by the Audit committee as set out in the Report of the Audit committee, the directors are satisfied that the provision of non audit services by PricewaterhouseCoopers is compatible with the general standard of independence for auditors and the standards imposed by the Australian Corporations Act 2001 and US legislation.

Financial instruments

Details of the Group’s financial risk management objectives and policies and exposure to risk are described in note 33 to the 2010 financial statements.

Value of land

Most of the Group’s interests in mining properties and leases, and in other land and buildings have been included in the financial statements at cost in accordance with its accounting policies. It is not possible to estimate the market value of such interests in land as this will depend on product prices over the long term which will vary with market conditions.

Creditor payments

It is the Group’s policy to agree terms of payments with suppliers when entering into contracts and to meet its obligations accordingly. The Group does not follow any specific published code or standard on payment practice.

At 31 December 2010, there were 23 days’ (2009: 24 days) purchases outstanding in respect of the Group based on the total invoiced by suppliers during the year.

UK Financial Reporting Review Panel

Following discussions with the UK Financial Reporting Review Panel (FRRP), Rio Tinto has agreed to include certain additional information in the 2010 Annual report at the FRRP’s request. This information includes in the Social wellbeing section, additional details of the potential health risks posed by exposure to workers and communities surrounding uranium mines and details of the sensitivities the Group faces in dealing with local communities, such as at the La Granja copper development in Peru and the Eagle project in Michigan in the United States; in the Environmental stewardship section, an example of the potential for the Group's projects to impact on biodiversity, with information relating to biodiversity projects associated with the Group’s activities in Madagascar; in the Economic prosperity section, additional details of the nature of the Group’s interests in the non-managed Grasberg mine in Indonesia, the nature of the environmental risks and social issues relating to that mine; and reference to the sale of shares by the Norwegian Government Pension Fund in 2008 as an example of the possible impact of the reputational risks faced by the Group in relation to its non-managed operations.

Going concern

The directors, having made appropriate enquiries, have satisfied themselves that no material uncertainties that cast significant doubt about the ability of the Companies and the Group to continue as a going concern have been identified, and they have a reasonable expectation that the Group has adequate financial resources to continue in operational existence for the foreseeable future. Therefore, these financial statements have been prepared on a going concern basis.

The Directors’ report is made in accordance with a resolution of the board.

Jan du Plessis, chairman
4 March 2011

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