I have reviewed a part of the annual report and find some of the...

I have reviewed a part of the annual report and find some of the information IMO to be misleading:

In the Chairman's letter it states that:

1. Net Profit after tax of $75 million plus change. Previous information has led one to believe that they were engaged in some kinnd of tax minimisation scheme to reduce the tax. Apparently not so.

2. The letter further states that the sale was a 'cash' sale when in fact it was not - it was a sale for a note.

3. It crows about the sale being at a premium of 35% to 'comparable sales' yet ignores all the blather put out by a company official that led people to believe that the sale would be in the range of $12,000 plus per acre.

4. The letter states that AZZ has cancelled 20.5 million shares when in fact only 16,333,110 shares have been cancelled.

Further explnation is needed for the huge amount of $51,230,000 spent on "exploration, evaluation, and development activities". In note 12 on page 39 this amount is given as $53 million without any explanation.

What in the world did AZZ spend $51 or $52 or 53 million on during the year? How many wells did they drill?

Cash Balances:

The Statement of Financial Position at 31 December shows cash and cash equivalents at $77 million and trade and other at $58 million.

However the quarterly report shows cash in the bank of $4.4 million and the note at $131 million for a total of $136 million.

You can't account for the same amount of 'cash' under different methods in financial statements ending on the same date. One of those reports is wrong.

The definition used for 'cash and equivalents' differs in the annual report as well. On page 30 of the report in Note 1j it is "cash at bank and in hand and short term DEPOSITS..." and on page 37 the report under note 7 the note is included ($73 million). And again the cash and equivalents is given as $77 million which differs from the quarterly at which time the note had that value of $131 million.

And then again in Note 8 there is another 'promissory note carried for the value of $57 million. This note is non- interest bearing and is payable on 15 December 2011.

So yes the amounts are in total the same, but accounted for under a definition that does not match the instrument and then again differently in the quarterly.

Again it appears that the sale of the asset was not a cash sale and the company lumped together two different types of notes onto the December quarterly without regard to the fact they are different instruments.

Other:

The basis for the sold asset was apparently $60 million and the effective tax rate on the acounting profit was about 17% after applying some $14 million in deferred tax assets.

So did AZZ blow soem 450 million plus on getting the asset ready for sale? None of this $51, $52, or $53 million was ever divulged to shareholders.