Our Risk Services business in Africa showed excellent revenue and profit growth through a combination of expense controls and a better focus on revenue growth and revenue collection. Growth prospects for this business remain positive.

Our Volume Business in South Africa went through a major restructuring process in 2000 that impacted negatively on profitability. It is now, however, in good shape for market share expansion and profitable improvement during the course of 2001.

In South Africa we were successful in securing a short-term licence and a long-term insurance licence. These licences will be used to develop innovative products for our clients. We are cautious towards assuming underwriting risk and any business written under the insurance licences will carry reinsurance protection.

Investment Solutions had another outstanding year with a 60% increase in headline earnings per share. The principal objectives for Investment Solutions for the current year will be to expand its business base into the UK whilst continuing to grow market share in South Africa.

UK/Europe

In the UK, the Financial Services and Risk Services retail businesses are confident of increasing market share through organic growth and cross selling across our substantial UK retail client base.

Our Financial Services business in the UK is also poised for significant growth in revenue and profit through the Stakeholder initiatives that were launched last year and through the business rationalisation process that was completed in the last quarter of the year under review.

The Retail Risk Services business experienced strong new business growth and a significant increase in profitability. One of the reasons for this was our success in the UK Solicitors professional indemnity insurance programme. Our retail broking acquisitions also made a contribution to profit growth.

Global Broking Services (wholesale broking) in the UK had an excellent year and should continue to show strong growth in a hardening and consolidating worldwide insurance market.

Media Insurance Services (MIS), our mass marketing business in the UK, launched a new product range last year that impacted on short-term earnings but is positive for future earnings. MIS is also expanding into other territories and should launch in Europe later this year. The prospects for this business remain excellent and MIS will continue to be an important component of our international expansion.

Asia

In Asia, we continue to target acquisitions to build our business base across all the Asian territories and in all lines of business. Our Asian businesses showed significant improvement in profitability over the previous year and this trend is expected to continue in the forthcoming year.

During the course of the year, John Percy-Davis was appointed Group deputy chief executive of Alexander Forbes. John is the regional head for the UK and is based in London. John was invited to join the Alexander Forbes Limited board as was Quintin Heaney who is our Group development director, based in London.

In June 2000, we concluded the sale of our minority shareholding in NBC Consultants & Actuaries to Worldwide African Investment Holdings. As a result of this sale, Max Maisela and Phuthuma Nhleko resigned from the board of Alexander Forbes. Anton Botha has also resigned from the board of Alexander Forbes. No new non-executive directors have been appointed to the board at this stage.

Alexander Forbes’ future prospects are encouraging, although the slowdown in world economies and the threat of a world economic recession are of concern.

When we acquired Nelson Hurst PLC in 1997, approximately 5% of our revenue and profit was earned outside Africa. By the end of 2001/2002 we expect to earn at least 60% of revenue and profit outside Africa. As a result of this, our profile with the international investment community has improved considerably and our inclusion in the MSCI Index has meant that more international investors are likely to become shareholders in future.

This should assist us in obtaining additional capital for international expansion, should we target any major acquisitions after we have utilised our current debt facilities. As a South African listed company, however, it is still difficult to raise acquisition capital on competitive terms and conditions while South African exchange controls remain in place.

With our advisors, we are investigating all potential sources of acquisition capital for the future as we believe that Alexander Forbes is uniquely poised to become one of the larger international risk and benefits companies, provided we can continue to make strategic acquisitions outside Africa.

Alexander Forbes has had another excellent year in difficult trading conditions. Our focus for the business is unchanged. We will continue to expand our presence as an international group and to grow our international revenues through a combination of acquisitions and organic growth. Whilst it will be difficult to achieve, in future, the level of earnings per share growth we have achieved historically, we will continue to manage the business to produce above-average earnings growth for our shareholders.

Over the past twelve months our top management team has remained intact, which is gratifying in the highly competitive skills market worldwide where we compete for intellectual capital. We believe that the quality and skills of our people will be the key to the future success of Alexander Forbes and will differentiate us from our competitors.

Finally, I would like to thank all our clients for their support. We are totally committed to excellent client service and to ensuring that the skills, expertise and service commitment required by our clients throughout the world, will always be available from Alexander Forbes.