MANAGING DIRECTOR’S REPORT The  group  has  a  base  of   low  cost,  young,  state-of-the-art ships  either  owned  or  on  long  term  charter,  some  of   which have  been  fixed  out  on  medium  term  charters  to  provide  a solid platform of  earnings into the future. In  addition  the  group  has  been  able  to  take  advantage  of strong   shipping   markets   worldwide,   mainly   as   a   result   of substantial expansion in China.  Together with good earnings, an  increasing  fleet  of   low  cost  vessels  and  an  expanding landbased logistics operation, it has developed the platform to become an even more extensive player in world shipping and Southern African logistics markets into the future. During   the   year   the   group   repurchased   approximately 8,9  million  shares  and  the  ordinary  and  “N”  ordinary  shares were consolidated into a single class of  ordinary share which has created more liquidity for investors. The  interest  bearing  debt  equity  ratio  has  reduced  to  49%, which  is  well  within  the  100%  guideline  set  by  the  group, as  a  result  of   the  strong  cash  flows  generated  from  group operations and an increase in our equity base.  This reduction in  debt  equity  occurred  despite  a  substantial  investment  in new ships and the conversion of  our Dollar assets at R5,65/$1 at year end. The market value of  the group’s assets is substantially higher than reflected in our balance sheet as a result of  much higher US Dollar values of  our owned ships,  ship charters and ship purchase options and the substantial increase in value of  the going concern. SHIPPING SERVICES Our shipping services through Island View Shipping (IVS) and Unicorn Shipping (Unicorn) had a record year with earnings of R501 million. IVS   was   the   outstanding   performer   producing   substantial earnings from its fleet of  handysize and capesize bulk carriers. It  benefited  from  the  fleet  being  chartered  in  at  favourable rates  when  shipping  markets  were  low  and  is  continuing  to benefit  from  the  strong  dry  bulk  markets  which  were  seen during 2004. REVIEW OF THE YEAR GRINDROD HAS ENJOYED THE MOST SUCCESSFUL YEAR IN ITS HISTORY WITH PROFITS SOARING TO R550 MILLION AFTER FIVE YEARS OF GOOD GROWTH,  RESULTING IN COMPOUND GROWTH IN EARNINGS OF 76% OVER THE PERIOD. WITH A 230% INCREASE IN US DOLLAR EARNINGS AND A SUBSTANTIAL US DOLLAR ASSET BASE,  THE GROUP HAS WEATHERED THE STORM OF A STRONG RAND AND ITS EFFECTS ON THE EXPORT DRIVEN BUSINESSES. GRINDROD  IS  NOW  A  FAR  LARGER  COMPANY  THAN  IT  WAS  FIVE  YEARS  AGO  AND  BOASTS  A  CURRENT  MARKET CAPITALISATION OF OVER R4 BILLION. IT RECENTLY ANNOUNCED A COLLECTIVE INVESTMENT OF OVER R2 BILLION IN SHIP PURCHASES AND PLANS TO SPEND R1 BILLION IN EXPANDING ITS LOGISTICS OPERATIONS IN SOUTHERN AFRICA.