NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005

1. These consolidated condensed annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) for the first time. Other than for the treatment of goodwill and share options granted to employees, the accounting policies used in the preparation of the financial statements are consistent with those used in the annual financial statements for the year ended 31 December 2004. In terms of IFRS 3: Business combinations, goodwill may not be amortised. Share options granted to employees have been accounted for in terms of IFRS 2: Share-based payment. The accounting treatment of the derivative instruments taken out by Textainer to hedge economic risk has also been changed (refer note 10).
20052004
R MILLION   RESTATED
2.  Revenue
Invoiced sales – goods and services126,960,1
Leasing income1 552,91 210,3
Management fees97,9193,2
 Finance income49,86,9
1 827,51 470,5
 Discontinued operations – container manufacturing–43,1
1 827,51 513,6
  Realised and unrealised exchange differences272,1(393,7)
  2 099,61 119,9
3.Discontinued operations – container manufacturing
Profit6,27,2
  Interest expense–0,4
Profit before taxation6,26,8
 Income tax0,97,0
 Net profit/(loss) after taxation5,3(0,2)
4.Net interest expense
Interest expense300,2195,1
– Textainer176,685,9
– TrenStar103,885,4
– Other19,823,8
Interest income(30,7)(9,4)
– Textainer(6,9)(2,5)
   – Other(23,8)(6,9)
  269,5185,7
5.Exceptional items
Loss on sale of investment properties–(2,2)
Net gain on dilution of interest in subsidiaries3,69,1
Premium paid on shares acquired from minorities(8,3)–
Profit on disposal of investment0,2–
Loss on sale of interest in associate–(38,1)
 Impairment of available-for-sale investment–(8,5)
  (4,5)(39,7)
6.Headline earnings
Profit attributable to ordinary equity holders of the parent entity434,186,1
Impairment of goodwill–1,9
Impairment of plant and equipment2,3–
Profit on sale of property, plant and equipment(26,8)(9,0)
Exceptional items (Note 5)4,539,7
Discontinued operations (Note 3)(5,3)0,2
 Minority share of exceptional items(2,3)1,6
 Headline earnings406,5120,5
Weighted average number of shares in issue (million)155,0153,8
Headline earnings per share (cents)262,378,3
Adjusted undiluted headline earnings
Circular 07/02 issued by The South African Institute of Chartered Accountants requires that profits and losses on the sale of property, plant and equipment be excluded from the calculation of headline earnings. The directors consider that, given the nature of Textainer's business model, this treatment of profits and losses on sales of containers from its leasing fleet is not appropriate for a proper understanding of the results of the group. Accordingly, adjusted undiluted headline earnings per share, which includes profits and losses on the sale of containers, is also presented for information.
20052004
R MILLION   RESTATED
Headline earnings (as above)406,5120,5
Profit on sale of containers29,518,2
 Adjustment for unrealised gain on derivative instruments in Textainer (Note 10)(22,6)(27,2)
 Adjusted undiluted headline earnings413,4111,5
 Adjusted undiluted headline earnings per share (cents)266,772,5
7.Segmental reporting
 Revenue  
Continuing operations
Containers – finance (including exchange differences)292,6(387,3)
Containers – owning, leasing and management1 394,21 103,6
Mobile asset management services411,5358,9
 Other1,31,6
2 099,61 076,8
 Discontinued operations–43,1
   2 099,61 119,9
Profit from operations
Continuing operations
Containers – finance283,2(82,6)
Containers – owning, leasing and management715,4532,9
Mobile asset management services43,8(13,7)
 Other(24,8)7,2
1 017,6443,8
 Discontinued operations6,27,2
  1 023,8451,0
8.Current assets
Inventories29,69,3
Trade and other receivables610,3546,6
Taxation prepaid16,1–
Cash and cash equivalents710,1439,7
   Restricted cash balances214,3156,8
   Unrestricted cash balances495,8282,9
  1 366,1995,6
9.Current liabilities
Trade and other payables424,4834,7
Provisions58,642,4
Taxation60,937,9
Current portion of interest-bearing borrowings506,3347,5
Deferred income25,423,1
 Short-term borrowings13,4–
  1 089,01 285,6
10. Reporting changes
Textainer, 73% owned by Trencor, has determined that under the stricter application of International Accounting Standard 39, it may not use hedge accounting for certain interest rate swaps taken out to hedge economic risk, notwithstanding that the swaps were economically effective. It is therefore required to account on the basis that the net result of the marked-to-market valuation of these instruments is flowed through the income statement. In the past, these adjustments have been charged or credited direct to equity in accordance with the principles of hedge accounting. The net result of this non-cash change is an increase in Textainer's 2004 earnings of US$5,8 million, with a corresponding reduction in the derivative reserve previously recorded in equity. The effect on Trencor is to increase undiluted headline earnings per share in 2004 by 17,6 cents from 60,7 cents to 78,3 cents. Comparative figures for 2004 have been amended accordingly. No changes were required to Trencor's 2004 net asset position. The unrealised gain reported in Textainer on marking these instruments to market at 31 December 2005 is US$4,9 million.

Comparative information has been restated for the effects of adopting IFRS and the above change in derivative accounting. The aggregate effect of the restatements is as follows:
PREVIOUSLY
STATEDADJUSTMENTRESTATED
As at 31 December 2003
Retained earnings1 293,6(42,3)1 251,3
Non-distributable reserves43,940,684,5
 Deferred taxation276,81,7278,5
As at 31 December 2004
Intangible assets and goodwill30,41,531,9
Retained earnings1 345,0(15,3)1 329,7
Non-distributable reserves(34,5)16,2(18,3)
 Deferred taxation295,10,6295,7
Other changes to comparatives as at 31 December 2004
Other investments38,4(16,1)22,3
 Long-term loans8,316,124,4

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