CHAIRMAN’S REPORT GROUP ACTIVITIES THE PAST YEAR HAS BEEN AN OUTSTANDING YEAR WITH THE GROUP REPORTING RECORD RESULTS. THESE RESULTS ARE THE  OUTCOME  OF THE  STRATEGIC  DECISION TAKEN  SOME YEARS AGO TO  DIVEST  OR  CLOSE  OUR  CONTAINER LINER SERVICES (WITH THE EXCEPTION OF THE SOUTHERN AFRICAN COAST) AND TO CONCENTRATE ON PRODUCT AND CHEMICAL TANKERS AND  BULK  CARRIERS. THE  CATALYST  FOR  OUR  DEVELOPMENT  IN THE  LATTER  FIELD WAS THE ACQUISITION  OF  ISLAND VIEW  SHIPPING WITH  ITS TEAM  OF  KNOWLEDGEABLE AND TALENTED  OPERATORS  IN THE 30   000   DWT   BULK   CARRIER   FIELD,   TOGETHER   WITH   THE   ACQUISITION   OF   A   SMALL   TEAM   WITH   SPECIALISED KNOWLEDGE OF THE CAPESIZE AND PANAMAX VESSELS. These markets were at their all time highs at the start of  the year and,  although there was some volatility during the year, markets   at   the   end   of    the   year   were   at   similar   levels. The income generated as a result of  the high markets and the low  cost  of   vessels  contributed  substantially  to  the  group’s earnings growth. The group has continued to manage its exposure to shipping markets conservatively through the fixing out of  a significant portion  of   its  fleet.  The  fixing  out  of   further  ships  in  high markets  and  the  investment  in  South  African  based  freight management  businesses  will  position  the  group  to  achieve continued earnings growth in the years ahead. ECONOMIC ENVIRONMENT The local economic environment has been dominated by the strength of  the Rand which has indirectly led to lower interest rates,  higher  consumer  confidence  and  consequently  strong growth in certain sectors of  the economy. In spite of  the effect of  the  Rand  on  resource  and  other  export  driven  industries, the  economy  has  still  reflected  a  favourable  growth  rate. The strong Rand has a negative impact on the group’s results through the translation of  US Dollar earnings and assets and through   lower   export   volumes   affecting   the   local   freight management operations. Although  the  growth  in  the  economies  of  the  United  States, Europe  and  Japan  has  been  muted  over  the  last  few  years, the   gross   domestic   product   growth   in   China   has   had   a significant impact on the global economy.  The huge demand for  iron  ore  by  China  to  fuel  its  growth  and  the  spin-off demand  for  other  commodities  have  caused  prices  to  rise sharply    and    trade    patterns    to    change    substantially. This  demand,   together  with  longer  shipping  voyages,   port congestion   and   a   shortage   in   the   supply   of   ships,   have resulted in the high shipping markets of  the last 18 months. In  the  view  of  most  market  analysts  the  expected  continued growth in China,  signs of  good economic growth in India and anticipated   recovery   of   the   other   major   world   economies should ensure that shipping markets stay relatively strong for some time.