the statement of financial position’s strength which impacts the Group’s credit rating for performance bonds and working capital
sound cash flows to support investment and growth
a formalised project procurement system which defines our risk appetite
the project order book relative to revenue

The year end net cash position was R2,6 billion (2009: R2,9 billion) after a 53% decrease in net capital expenditure to R1,1 billion (2009: R2,4 billion). Operating cash inflow for the year was down 56% at R691 million (2009: R1,6 billion) after a R0,9 billion increase in working capital (2009: R1,3 billion increase). The increase in working capital relates to funding on Gautrain and utilisation of advance payments.

Procurement of projects is the primary medium through which risk enters the Group. The group risk appetite sets the operational environment for risk. Prospects are filtered against criteria such as value, country, legal system and scope, and the level of authorisation required is indicated. The opportunity management system (OMS) supports the evaluation and approval of project opportunities in the context of the risk appetite. At 30 June 2010 opportunities in the active pipeline amounted to R61 billion (2009: R67 billion). During the year the system supported 1 019 (2009: 482) decisions and processed 7 065 (2009: 3 641) workflow transactions.

The Group’s order book grew marginally to R42 billion despite the challenging trading environment. The table below reflects order book development relative to construction and engineering revenues where global best practice indicates that for sustainable performance, the order book should be within the range 75% to 125% of current year revenues. Less than 75% would indicate stagnation.

Financial year	Order book	Relative to contracting revenue
30 June 2008	R55 billion	2,4 times 2008 revenue
30 June 2009	R40 billion	1,6 times 2009 revenue
30 June 2010	R42 billion	1,7 times 2010 revenue

Economic contribution

Value added is the measure of wealth the Group creates through its operations by adding value to the cost of raw materials, products and services purchased. The table below shows total wealth created and how it was shared between stakeholders who contributed to its creation. Also shown is the amount retained and reinvested in the Group for the replacement of assets and further development of people and operations.

Everything that is not the natural or agricultural environment is the built environment. This is where Murray & Roberts has played a significant role throughout its 108 year history, delivering the infrastructure and facilities required for sustainable growth of the economies within which it operates. One of our great human challenges is to satisfy the growing global demand for transport & logistics; power & energy; water & sanitation; telecommunications; health & education; and accommodation & facilities infrastructure.

The quantifiable benefits to society of our contribution are not easily identified, but considering the positive impact of an adequate built environment on socio-economic development and the scale required to make the difference measurable, the significance Murray & Roberts has attained in its market over more than 108 years, offers some testimony in this respect.

STATEMENT OF VALUE CREATED
for the year ended 30 June 2010

All monetary amounts expressed
in millions of Rands	2010	%	2009	%
Revenue	31 962		32 684
Less: Cost of materials, services and subcontractors	(20 530)		(19 513)
Exceptional items	101		8
Value created	11 533		13 179
Distributed as follows:
To employees – Payroll costs	8 673	75	9 428	72
To providers of finance
– Lease costs and net interest on loans	618	6	375	3
To government – Company tax	470	4	612	4
To maintain and expand the Group
– Reserves available to ordinary shareholders	1 098		2 018
– Depreciation	649		711
– Amortisation	25		35
	1 772	15	2 764	21
	11 533	100	13 179	100
Number of employees	40 413		38 981
State and local taxes charged to
the Group or collected on behalf
of governments by the Group
Company taxation	470		612
Indirect taxation	1 200		1 475
Employees’ tax	1 313		1 260
Rates and taxes	27		15
Customs and excise duty	9		11
	3 019		3 373