2010 reports/MARCH...Contents Invicta Holdings Limited • Annual report 2010 Profile Invicta Holdings Limited is an investment holding and management company, controlling and managing

Annual report

2010

Contents

Invicta Holdings Limited • Annual report 2010

Profile

Invicta Holdings Limited is an investment holding and management company, controlling and managing assets of

R5 937 million (2009: R6 005 million). Its operations comprise:

• import and distribution of a comprehensive range of bearings, seals, power transmission components,fasteners, drives, belting, filtration and hydraulics;

• import and sale of machinery and related spare parts for the agriculture, earthmoving, turf grooming and golf-car markets;

• the distribution of a niche range of spare parts to the automotive industry and niche products to the motorcycle industry;

• the distribution of excavators, wheel loaders, skid steer loaders and hydraulic hammers;

• import and distribution of wall and floor tiles and related sanitary ware; and

• import and distribution of leading materials handling equipment and related spare parts.

Financial highlights 1

Group at a glance 2

Board of directors 4

Joint report of the chairman and

chief executive officer 6

Corporate structure 9

Humulani Investments board 10

Humulani Investments structure 11

Map of BMG distribution network 12

Map of CED distribution network 13

Review of operations 14

Corporate governance 25

Value added statement 34

Approval of the annual financial statements 35

Certification by the company secretary 35

Report of the independent auditors 36

Report of the directors 37

Statements of comprehensive income 40

Statements of financial position 41

Statements of changes in equity 42

Statements of cash flows 43

Notes to the annual financial statements 44

Share information 80

Shareholders’ diary 81

Notice of annual general meeting

of shareholders 82

Form of proxy Attached

Corporate information ibc

Financial highlights

2010 2009 2008 2007 2006 2005 2004 2003 2002R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Revenue 3 968 872 4 523 535 3 335 496 2 663 398 1 907 754 1 937 593 2 069 163 1 907 317 1 352 311

Operating profit before finance

costs, interest and dividends

received 453 293 497 356 360 379 281 229 197 843 231 957 229 451 230 123 122 405

Profit for the year 365 389 362 812 300 856 217 724 125 165 108 507 99 631 96 502 45 991

Ordinary shareholders’ interest 1 442 966 1 206 055 1 025 591 886 161 716 296 365 075 312 339 343 665 268 783

Dividends per share (cents) 151 138 138 104 68 77 66 45 24

Earnings per share (cents) 453 437 356 292 170 190 164 133 60

Diluted earnings per share (cents) 441 437 354 288 169 190 160 130 58

Share price at the year-end (cents) 2 879 2 000 2 550 2 750 1 850 1 550 935 550 310

2002 2003 2004 2005 2006 2007 2008 2009 20100

50

100

150

200

250

300

350

400

450

500

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

Earnings per share (cents) Dividends per share (cents) Share price at year-end (cents)

for the year ended 31 March 2010

Share price

(cents)

EPS/DPS

(cents)

1Invicta Holdings Limited • Annual report 2010


Group at a glance

2

BMG BEARINGS

BEARING MAN GROUP (BMG) PROFILE

BMG SEALSBMG POWER

TRANSMISSION BMG DRIVES BMG BELTING AUTOBAX

BMG FASTENERS BMG FILTRATION BMG HYDRAULICSBMG TECHNICAL

RESOURCES

Importer and distributor of timingchains, timing belts,timing components

and oil pumps to theautomotive industry

and similar niche products to the

motorcycle industry.

Southern Africa’s leading distributor of bearings, seals, power transmission components, drives, belting, fasteners, filtration and hydraulics.


CAPITAL EQUIPMENT DIVISION (CED) TILETORIA

NORTHMEC

Distributor of leading agricultural

machinery,implements and

related spare parts.

CSE

Distributor of construction and

earthmoving machinery, turf

grooming machinery, golf

cars, utility vehicles and related

spare parts.

DOOSAN SA

Distributor of excavators, wheel loaders, skid steer

loaders and hydraulic hammers.

NEW HOLLAND SA

Importers and wholesalers of NewHolland agricultural

equipment and specialised Braud grape harvesters.

CRITERION

Importer and distributor of leading

materials handlingequipment and

related spare parts.

A leading importerand distributor of wall and floor tiles

and sanitary ware in the

Western Cape andKwaZulu-Natal.


Board of directors

CH Wiese (68)Non-executive chairman

BA, LLB, DCom(h.c.)

Non-executive chairman of Invicta Holdings Limited fromOctober 1997 to April 2000 and anon-executive director since April2000, re-appointed non-executive chairman in January 2006.Chairman of Tradehold Limited,Shoprite Holdings Limited, Brown& Jackson plc (listed on the LondonStock Exchange) and Pepkor. Non-executive director of KWV.

AM Sinclair (56)Executive director

Joined JI Case in 1982 and wasappointed branch manager in1986. Joined CSE in 1989 and wasappointed a divisional managingdirector in 1993. In 1998 appointedmanaging director of CSE and inSeptember 2006 appointed as analternate director of InvictaHoldings Limited. Appointed executive director of InvictaHoldings Limited on 7 June 2007.

DI Samuels (70)Non-executive independentdirector

CA(SA)

Joined Trade and IndustryAcceptance Corporation Limited in1971 and was appointed directorfrom 1980 to 1984. From 1989 to2000 was managing director ofStenham (Pty) Limited. In 1996 wasappointed non-executive directorof Invicta Holdings Limited.Appointed non-executive directorof Bearing Man Limited in 2001and chairman in 2002.

A Goldstone (49)Chief executive officer

BSc (Mech Eng), BCom (Hons),CA(SA)

Worked as a management consultant at KPMG prior to joining the Invicta Group inJanuary 1990 as financial manager.Appointed financial director inAugust 1991. Appointed chiefexecutive officer of InvictaHoldings Limited in April 2000.

The Group tookadvantage of weak market conditions and made a number ofstrategic acquisitions.


RE Sherrell (77)Non-executive director

Served as non-executive directorof Bearing Man Limited for 20years until it was delisted in 2006. During that period he also servedas the chairman of Bearing Manfor a number of years. Most of hisbusiness life was spent in merchantbanking and corporate financewith his final active years being inthe Rand Merchant Bank group.Appointed as a non-executivedirector of Invicta HoldingsLimited in September 2006.

AK Masuku (40)Alternate non-executive independent director to J Mthimunye

MCom, MDP (University of New York)

Mr Masuku has ten years’ experience with both local andinternational banks (SCMB, JPMorgan and Real Africa Durolink)structuring and concluding transactions with some of SouthAfrica’s top 200 corporates, parastatals and BEE players.Appointed managing director ofaloeCap (Pty) Limited in May 2007.Appointed non-executive directorof Invicta Holdings Limited on 7 June 2007 and appointed alternate director to J Mthimunyeon 31 July 2009.

J Mthimunye (45)Non-executive independent director

CA(SA)

Appointed financial accountantDepartment of Finance in 1993. Afounding partner of Gobodo Incand established the corporate advisory service in 1997. Appointedfinancial manager at NampakTissue in 1995. Previously appointed managing director ofaloeCap (Pty) Limited and appointed executive chairman inMay 2007. Appointed alternatedirector to AK Masuku on theInvicta Holdings Limited board on7 June 2007 and appointed as non-executive director on 31 July 2009.

CE Walters (42)Executive director

BSC (Mech Eng), BCom, MDP (Harvard)

Joined Anglo AmericanCorporation in 1986 as CorporateGraduate Engineering traineewhere he held numerous positionsin both the Anglo group and DeBeers. Appointed marketing andsales manager – Pulp for Mondi SA in 1996 and appointed managing director of Mondi SalesInternational in 2002. Appointed managing director of Bearing Man(Pty) Limited in September 2006.Appointed alternate director to DI Samuels on the Invicta HoldingsLimited board on 7 June 2007 andappointed as executive director on31 July 2009.

C Barnard (46)Financial director

CA(SA), MBA, ACIS

Joined Sappi as managementaccountant in 1993, joined Group Five in their commercial development subsidiary in 1996and was appointed commercialmanager in 1997. In 1998 joinedthe Invicta Group as financial manager, appointed director ofCSE Equipment Company (Pty)Limited in 1999 and company secretary of Invicta HoldingsLimited in 2002. Appointed executive director of InvictaHoldings Limited on 7 June 2007.

LR Sherrell (44)Alternate non-executive director to RE Sherrell

Appointed as alternate director toMr RE Sherrell on 27 May 2009 andhas been nominated as director of Invicta Holdings Limited witheffect from the 2010 annual general meeting, upon the retirement of Mr RE Sherrell. Mr LR Sherrell studied commerceat UCT and has been involved in the hospitality and motor trade industries with interests in franchise dealerships. Mr LR Sherrell represented SouthAfrica as a rugby player in 1994.


Joint report of chairman and chief executive officer

A GoldstoneChief executive officer

CH WieseNon-executive chairman

GROUP OVERVIEW

The Group has again produced outstanding results in a very challenging economic environment. The market was characterised by weak demand forproduct, a global liquidity crisis, a strong Rand and generally tough economicconditions.

Notwithstanding, turnover declined by only 12,3% to R3 969 million.Acquisitions accounted for R202 million of turnover.

Good margin management and tight cost controls resulted in operating profitdeclining by a modest 8,9% to R453 million. Improved financing costs and dividends received led to profit for the year increasing by 0,7% to R365 million.A reduction in the weighted average number of shares in issue resulted in earnings per share increasing by 3,7% to 453 cents per share.

Particular emphasis was placed on working capital management, resulting incash generated from operations of R590 million being achieved, the highestever.

The Group took advantage of weak market conditions and made a number ofstrategic acquisitions. The more significant of these was the acquisition of100% of Criterion Equipment (Pty) Limited and 70% of Wegezi Power Holdings(Pty) Limited subsequent to year-end. Criterion Equipment operates in thematerials handling sector with TCM forklifts being its primary product. WegeziPower Holdings manufactures and repairs transformers, electric switch gears,panels and pumps.

BMG (Bearing Man Group)

BMG continues to be the core profit base of the Group. Trading conditions inthe industrial consumable sector were particularly challenging. Commodityprices were under pressure due to the global recession. Key market segmentsof mining and manufacturing also showed substantial declines. Margins wereunder pressure as the Rand strengthened. The competitive market environment, the strengthening of the Rand and the clearing of higher pricedinventory received at weaker exchange rates contributed to lower margins. Inspite of these adverse conditions, BMG achieved turnover for the year of R2 018 million, a decline of only 5,5% and operating profit declined by 10,1% to R293million. The operating margin was a pleasing 14,5%.

The BMG brand (launched last year) has now been firmly entrenched as beingrepresentative of the market leader in the industrial consumables sector. BMGHydraulics was successfully established during the year with the re-branding ofGoldquest Hydraulics. BMG continued to invest in staff training and educationand in strategic acquisitions, the most important of which was Wegezi PowerHoldings, effective 1 April 2010. Wegezi Power Holdings’ core business is

The Invicta Group hasproven its resilience inthe worst recession theworld has experiencedin living memory. Inspite of the enormouschallenges in the market, Group revenuedeclined only modestlywhile earnings pershare increased modestly.

INVICTA HAS AGAIN PRODUCED OUTSTANDINGRESULTS IN A VERY CHALLENGING ECONOMIC ENVIRONMENT. ...

• Earnings per share grew by 3,7% to 453 cents per share

• Dividend increased by 9,4%

• The only JSE Company ever to achieve TOP 100 STATUS15 years in a row


Joint report of chairman and chief executive officer continued

electric motor rewinding and it manufactures andrepairs transformers, electric switch gear, panels andpumps and the company offers an all round on siterepair or replacement partnership with the end user.The Wegezi group operates from a 6 000 m2 facilityand has a total staff compliment of 200.

Most divisions in BMG experienced a decline indemand for product. Management focussed on margin preservation, cost control and reduction ofworking capital. These efforts paid off handsomelyand BMG produced a very respectable profit performance, which combined with excellent workingcapital management enabled it to generate R370 million in cash during the year.

BMG continued to invest in staff training and development, product development and expansion,with its World Class Production Efficiency programgaining momentum. The division is well positioned togrow as markets return to normal.

Capital Equipment Division (CED)

CED, being the more cyclical of the Group operations, experienced large declines in volumes inthe markets in which it operates. Notwithstanding,CED managed to limit its decline in revenue to R1 750million, a reduction of 22,4% compared to last year.Acquisitions accounted for 8,2% of turnover.Exceptional margin management and cost controlresulted in this segment’s profit declining by only12,8% to R123 million. Good control of working capital resulted in an excellent return on working capital being achieved by CED.

The construction equipment divisions suffered themost in CED. Demand for product in this sector hasdeclined dramatically in the face of the recent recession and has been compounded by the completionof the 2010 Soccer World Cup and government

infrastructure projects. Although it suffered losses during the year, CSE managed to cut costs and restructure its operations sufficiently to ensure that itreturned to profitability by year-end. In contrast tothis, Doosan SA managed to remain profitable duringthe year, and increased its market share in excavatorsby 17,6% and loaders by 14,6%.

Criterion Equipment, which was acquired on 1 June2009, has been restructured and is operating profitably. It did not contribute meaningfully to segment profits in CED during the year under review,but helped to absorb some of the overheads in theconstruction equipment divisions. It is expected tomake a significant contribution to CED profits in thecoming year.

The agricultural equipment divisions experienced challenging conditions, with total market sales of tractors for the period under review declining by 33%from 8 045 units to 5 406 units. Despite this, the agricultural machinery divisions improved marketshares in key sectors and through tight margin andcost management, produced the bulk of CED’s segment profits. The major influencing factors whichaffected the agricultural machinery markets were lowgrain prices and a strong Rand. Although volumesdeclined in both Northmec and New Holland SA, bothoperations enjoyed good demand for spare parts,which helped to offset the effect of reduced unit sales.

Other Operations

Although not yet a significant contributor to thegroup, Tiletoria managed to increase its revenue, avery credible achievement under difficult trading conditions in the building industry. Operating incomealso increased. Tiletoria is in the process of relocating its Durban branch to bigger premises andintends opening an outlet in Gauteng in the comingyear.


Joint report of chairman and chief executive officercontinued

The Group successfully concluded some smaller property acquisitions during the year and aims toinvest further in strategic properties for Group use.

PROSPECTS

Trading conditions in the sectors in which the Groupoperates appear to have stabilised. The currentstrength of the Rand is however a source for concernas it could lead to a reduction in the price of Groupproducts and reduce the income of key customerswhich operate in export orientated sectors.

Volumes in BMG appear to have stabilised, but tradingis still subdued. The macro global environment indicates a return to normal trading in the mediumterm. This should, in turn, result in increased demandfor BMG products and services.

In CED, agricultural machinery conditions are expectedto continue to be challenging. Low grain prices areexpected to keep the demand for agricultural machinery at current muted levels. Conditions in theconstruction equipment market are still depressed andmanagement does not expect this to improve in thenext 12 months. The division has successfully reducedits costs to ensure profitable trading and working capital is carefully managed. The acquisition ofCriterion Equipment has been bedded down and theCompany is now profitable. It should make a meaningful contribution to CED in the coming yearand will help to spread the construction equipmentsections overheads.

In light of the more stable trading conditions and better economic expectations, the Board has declareda final dividend of 102 cents per share resulting intotal dividends for the year of 151 cents per share, up9,4% on last year. This is a 3,0 times dividend coverratio, which the Board intends to maintain until market conditions have returned to normal.

CONCLUSION

The Invicta Group has proven its resilience in the worstrecession the world has experienced in living memory.In spite of the enormous challenges in the market,Group revenue declined only modestly, while earningsper share increased modestly. Particularly noteworthywas the exceptional working capital managementwhich resulted in cash generated from operations ofR590 million being achieved, the highest ever. AllGroup operations contributed to this achievement.

The Group was again awarded Top 100 status on theJSE, the only JSE-listed company to have achieved thisfor 15 years in a row. This is a team effort and wethank all our loyal staff members for their contribution.

Mr RE Sherrell is retiring from the board at this year’sannual general meeting. He has been associated withBMG since 1986 and served as its chairman for manyyears when BMG was listed separately. He has servedas a non-executive director of Invicta since BMG wasde-listed in 2006. The Board wishes to thank Mr RE Sherrell for his devoted service to the Groupand wishes him well in his retirement.

The Board of Directors is very appreciative of theimmense hard work put in by all staff members duringthis very tough past year, especially for the laudableway in which the Group was de-risked through suchexcellent reduction in working capital. We look forward to markets settling down, which shouldenable the Group to return to its profit growth record.

A Goldstone CH WieseChief Executive Officer Chairman

25 May 2010


Corporate structure

100% 60%100%

Humulani

Investments

Share Incentive

Trust

aloeCap

(Pty) Limited

Humulani

Marketing

(Pty) Limited

Tiletoria

(Pty) Limited

Goldquest

International

Hydraulics SA

(Pty) Limited

Disa

Equipment

(Pty) Limited

(Doosan SA)

Criterion

Equipment

(Pty) Limited

Invicta

Properties

(Pty) Limited

5%

20%

75%100%

Investments

Humulani

Investments

(Pty) Limited

Divisions


Humulani Investments board

A Goldstone

J Mthimunye C Barnard

AK Masuku

Particular emphasiswas placed on working capital management, resulting in cashgenerated fromoperations of R590 million beingachieved, the highestever.


HUMULANI INVESTMENTS

CHARLES WALTERSBMG

Abe BekkerChief Operating Officer

Rod WatsonManaging Director: CSE

Paul ViljoenSales Director: Northmec

Peter AskewManaging Director: New Holland SA

Neville WhiteheadSales Director

Allan DuckworthFinancial Director

Mohammud MohuideenOperations Director

Alex AckronCartcom and Turf

Steve KiteNational Service

Brenton KempManaging Director: Criterion Equipment

Ben GroblerNational Parts Director

Geoff BalshawFinancial Director

Johan van der MerweManaging Director:Northmec

Wayne TaylorFinancial Director

Paul McKinlayDirector: Bearings, Seals and Power Transmission

Gavin PelserDirector: Drives, Belting and OST

Dave RussellGroup Technical Director

Ian KingGroup Sales and Marketing Director

ANTHONY SINCLAIRCED

FREDERICK HALLAutobax

PATRICK THONISSENTiletoria

CED DIVISIONAL DIRECTORS

DIVISIONAL DIRECTORS

BMG DIVISIONAL DIRECTORS

André StruwigManaging Director: Doosan SA

NATIONAL MANAGERS

Humulani Investments structure

Humulani Marketing Tiletoria


Map of BMG distribution network

Autobax/Motosport branches

BMG

BMG Automotive

BMG Belting

Invicta Bearings

BMG Engineering Hubs

BMG Springset

BMG Fasteners

BMG Sealco

BMG Trade

BMG Hydraulics

Alpha Bearings

GAUTENG


Map of CED distribution network

GAUTENG

Criterion branches

Cartcom branches

Northmec branches

Northmec dealers

Doosan SA branches

New Holland SA branches

New Holland SA dealers

Doosan SA dealers

CSE branches


CE WaltersChief executive officer

W TaylorFinancial director

Review of operations

BMG – BEARING MAN GROUPFINANCIAL REVIEW

BMG experienced an extremely challenging economic environment with its key

market segments of mining and manufacturing showing substantial declines.

Given these market conditions which prevailed during the year, BMG has

produced a very pleasing result.

Turnover decreased by 5,5% to R2,018 billion (2009: R2,137 billion). Gross

margins reduced as excess inventory that was received at weak exchange rates

during the previous financial year was traded out. Margins were also

pressurised by the competitive market environment and the strengthening of

the Rand during the year. Good cost management resulted in an absolute

reduction in overhead expenses. Operating profit declined 10,1% to R293

million (2009: R326 million) at an operating margin of 14,5% (2009: 15,2%).

Inventory reduced significantly from the overstocked position of last year and

debtors were well managed in a difficult market. The respectable profit

performance combined with excellent working capital management saw BMG

generate R370 million in cash during the year. This enables BMG to fund its

exciting growth plans from internal resources.

Over a three year period, despite the recession, BMG’s turnover has increased

by 41,5%.

INVESTMENT IN CAPABILITIES

BMG strengthened its position as a market leader in the industrial sector

during the year in spite of the difficult trading conditions. Several initiatives

were undertaken during the year to entrench the BMG brand in the

marketplace.

BMG enhanced their focus on marketing of the BMG package offering to

customers through a dedicated key account management team.

BMG Technical Resources was established to offer enhanced technical advice

and support to branches and customers. Through this division, BMG now offers

application consulting, draughting and design, on-site services, and the

provision of maintenance products and instrumentation.

BMG has also strengthened the quality control of its product range with the

recent appointment of a full time quality inspector resident in China.

The BMG Academy of Excellence has been established to provide training

courses to staff and customers. The online and classroom training is

augmented by lectures and practical, hands-on training delivered by the

Technical Resources team.

The hydraulics acquisition (Goldquest International Hydraulics) was rebranded

as BMG Hydraulics during the year and several steps were taken to expand the

company’s hydraulic offering to customers.

Despite these bold investments in BMG’s future capabilities, products and

services, most of management’s focus during the year was placed on working

capital management and operational efficiencies.

Having weatheredthe recent stormadmirably, BMG iswell set to regain itsgrowth momentum.

BEARING MAN GROUP

CONTINUES TO LEAD THE WAY

BMG continues to expand its operations to maintain its role as

Africa’s largest specialist distributor of bearings, seals, power

transmission components, electric and geared motors,

belting, fasteners, filtration and hydraulics.

The company took important steps to develop

and entrench the BMG brand as Africa’s

most competitive offering of quality

components, technical expertise and

superior service from a single

reliable source.


Review of operationscontinued

BMG

BM

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OPERATIONAL REVIEW

The Bearings division performed well during the year.

Sales reduced modestly but margins came under

pressure due to the strengthening of the Rand. Great

emphasis was placed on inventory management with

both suppliers and branches. Unfortunately, the

recessionary conditions saw an increase in imported

counterfeit product during the year with customers

being lured by inferior quality at cheaper prices. BMG

continues to work with its suppliers and customers to

help reduce the threat posed to the industry by this

problem. On a positive note, BMG secured the rights

to the SNR brand during the year, a well respected

European brand. Sales to the steel industry and to

export markets picked up in the second half of the

year.

The Seals division managed to hold sales, margins and

profitability at the same level as the previous period.

While the market was competitive, BMG’s

stockholding and service levels saw unit sales increase.

The two dedicated seals branches did exceptionally

well and managed to offset the loss in revenue from

the severe downturn experienced by a major capital

equipment builder.

The Power Transmission division held up very well

during the downturn. Overall sales were down.

The Chain business unit performed exceptionally well

and managed to show growth in profitability. This was

offset by a fall in profitability of the division’s

commodity products which experienced both volume

declines and margin pressure. In addition, the division

felt the impact of the significant reduction in sales of

larger-sized engineered items as a result of the

substantial reduction in project-related work in the

industry during the year.

The Automotive division did very well. Sales increased

and margins were maintained which led to an

increase in profitability. The division continues to look

at ways to enhance BMG’s automotive offering.

The Fasteners division saw a decline in sales and

margins during the year on the back of falling input

steel prices and the strengthening Rand. A

cost reduction exercise helped slow the reduction in

profitability. BMG is now a leading player in the

southern African fastener market.

The Drives division suffered a decline in sales during

the year. The main contributors to the drop in sales

were the delay or cancellation of capital projects and

the suspension of operations at many diamond and

platinum mines where historically the division had

done well. Profitability decreased as many customers

looked at repairs as an alternative to the purchase of

new drives. There are, however, encouraging signs of

a pick-up in demand for drive systems. BMG’s range of

gearboxes is unsurpassed in quality and breadth and

this augurs well for the expected resumption of

demand.

The electric motor market in South Africa dropped by

approximately 30% in the period and this had a

marked impact on the electric motors business unit.

The shrinking of the market and the overstocked

position of most local motor suppliers led to a price

war.

On a positive note, sales of BMG EFF1 (energy

efficient) motors are increasing on a monthly basis and

fluid coupling sales grew year-on-year. An important

project for BMG Drives in the year was the supply

of complete drives for the overland conveyors

supplied to Kumba Iron Ore for the Sishen South

project.

BMG Drives’ repair facility in Durban started operation

in the year and has completed numerous high

value projects for plants in various sectors. It is BMG’s

intention to grow its repair capabilities to be able to

service customers’ gearboxes, bearings, electric

motors, pumps and hydraulic systems.

The Belting division had a much improved second half

but sales still finished down on the previous period.

The division suffered margin degradation which was

mitigated by cost reductions and improved

purchasing. Market share was maintained and its

offering broadened through forming strategic

alliances with other companies.

The Drives and Belting divisions underwent a process

of rationalising and consolidating their respective

support infrastructures (hubs). The synergies and cost

savings of this programme will be realised in the

current year.

Oscillating Systems (OST) had a tough year. The

product range of this business is sold into mining and

manufacturing applications. The loss of project work

in the industry hit OST particularly hard. Nevertheless,

the business survived well and managed a respectable

profit and return for the year.

The Hydraulics division held up exceptionally well during the downturn. Sales reduced marginally, whichis very positive given the division’s exposure to systembuilding and project work. Emphasis was placed oncost reductions and enhancing working capital management during the year, both of which yielded


BM

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very positive results. The business was rebranded during the year from Goldquest to BMG Hydraulics.This had a positive impact both internally with thestaff and also in the marketplace where BMG’s growthinto this new sector has been noted. The division hastaken several steps to strengthen its market presenceand enhance its branch network. The acquisition ofFluid Power Systems in Port Elizabeth and TurnkeyHydraulics in KwaZulu-Natal will strengthen the capabilities of the division and service to the marketconsiderably. In addition, extensions to the productrange are planned to include hose and fittings andpneumatics.

The BMG Filtration division increased sales in a

competitive market. Due to margins coming under

pressure from customers and the key supplier, profit

growth was muted. The range of products was

extended during the year to include magnetic as well

as air filtration in the range. This market presents BMG

with interesting growth opportunities.

WORLD CLASS PRODUCTION EFFICIENCY

BMG is uniquely positioned to combine energy

efficiency with reliability engineering through its

‘World Class Production Efficiency’ programme.

The aim of the programme is to combine BMG’s

energy efficient products in a way that compounds the

energy savings available. Further payback is then

achieved for customers by coupling the range of

energy efficient products with reliability engineering

to improve plant output. By providing engineering

solutions and technical services that optimise

productivity, BMG can make a difference to the

efficiencies of every plant.

NEW ACQUISITIONS

BMG’s strategy is to expand its business through a

combination of organic growth and select

value-adding acquisitions.

BMG has concluded a sale of share agreement for the

purchase of 70% of the shares of Wegezi Power

Holdings (Pty) Ltd, effective 1 April 2010. The

company’s management team retains the balance of

the shares.

Wegezi, which was established as a motor rewinding

company, has diversified into the manufacture and

repair of transformers, electric switch gear and panels.

The company also offers an on-site repair service.

It is envisaged that the company will add between 3%

to 4% to BMG’s turnover and profitability in the new

financial year. The acquisition presents some exciting

growth opportunities for BMG.

OUTLOOK

Having weathered the recent storm admirably, BMG is

well set to regain its growth momentum. Profitability

of the existing operation will improve in the coming

year. BMG continues to review several interesting

acquisition opportunities which would help build the

BMG brand offering and competitiveness further still,

as well as provide enhanced growth in profitability.


BM

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The Capital Equipment Division comprises:

NORTHMEC: CaseIH Agricultural Equipment and

other related implement brands

NEW HOLLAND SA: New Holland Agricultural

Equipment and other related implement brands

CSE: Case Construction Equipment, Club Car and

Jacobsen Turf Equipment

DOOSAN SA: Doosan Construction Equipment

CRITERION EQUIPMENT: TCM forklifts

FINANCIAL REVIEW

CED has had a difficult trading year due to the

impact of the world recession on the South African

economy. Each capital equipment market segment’s

performance fluctuated at different levels throughout

the year, depending on the factors influencing the

different sectors. Notwithstanding the challenging

conditions, CED as a whole achieved very acceptable

levels of turnover and profitability, albeit that the

figures were lower than last year. The division’s

infrastructures have been built over the years to

withstand cyclical market fluctuations and CED has

weathered the worst global recession in living

memory, and has emerged even stronger than before.

Turnover dropped by 22,4% to R1,750 billion (2009:

R2,255 billion). Acquisitions accounted for 8,2% of

turnover. Maintenance of good gross margins and

stringent cost control resulted in operating profit

declining by only 12,8% to R123 million (2009: R142

million).

Inventory levels have reduced significantly due to

focused management control during the year. High

value inventory, which was on hand at the beginning

of the financial year (landed at a much weaker Rand),

is now largely out of the system and current inventory

is well priced and competitive. Manufacturers

overseas are largely still overstocked and are clearing

excess inventory, but because of their cut-back in

production, lead times have once again moved out for

non-inventory items.

Debtors have been well managed over this period with

minimum bad debts, which is most commendable

under the circumstances.

Gearing in CED has been reduced substantially and

management is continuing its acute focus on positive

cash flow.



CED

With the worst behind it, CED is set to take advantage of the opportunities that have been created by the weak markets, with cashflows and profitability being the main focus.

A SinclairChief executive officer

G BalshawFinancial director

CED – CAPITAL EQUIPMENT DIVISION

CED is one of South Africa’s leading importers and distributors of capital

equipment in a range of different markets including agriculture,

construction and materials handling.



CED

CED




CED’s operating return on capital employed was at a very satisfactory level

and this, coupled with acceptable levels of profitability, has ensured that this

division has outperformed its competitors and has made a meaningful

contribution to the Invicta Group.

QUALITY MANAGEMENT AND SUCCESSION

CED has progressively raised its standard of service, after sales support and

internal controls over the past few years. The division complies with ISO9001

and is audited annually to ensure continuous compliance. The division is

currently working toward ISO14001 environmental certification.

To ensure stability and succession in the divisional management for future

operational requirements and acquisitions, a talent pool has been established

from within staff ranks. Participants are put through a three- to five-year

management training program to prepare them for future roles.

OPERATIONAL REVIEW

In general, the capital equipment markets have been in a depressed state

during the year under review, with volumes in all sectors declining year-on-year

as follows: construction equipment (in the sectors served by CED) 50%,

agricultural tractors 32,8%, combine harvesters 33,3% and forklift trucks 52%.

These factors forced all distributors in South Africa to approach the markets

very aggressively, resulting in pressure on margins.

NORTHMECNorthmec, predominantly a retail distributor of agricultural equipment,

experienced tough trading conditions as a direct result of national markets

falling by 32,8% on tractors from 8 045 units to 5 406 units, 33,3% on combine

harvesters from 378 units to 252 units and demand for implements reducing in

line with the market contraction. Implement sales, however, contributed

significantly to the profit of the division. The baler market was the exception,

which showed positive growth with a 9,5% increase from 388 units to 425 units.

Northmec’s turnover dropped by less than that of the overall market, which is

commendable. Northmec’s meaningful contribution to CED’s profits was

achieved by maintaining margins and controlling expenses. It has also displayed

its resilience to major market demand fluctuations. Spare parts turnover and

profitability both increased.

A major influence on this sector of the market has been the large reduction of

soft commodity prices due to good crop yields, the strong Rand and high

production over the last three years.

A highlight of the past year is that Northmec gained market share in the

second half of the year in all sectors that it traded in. This was achieved by

sourcing more competitive product and through good foreign exchange

management. Inventory was at an acceptable level and well under

control.

Tractors sourced from China by competitors appear, at this stage, to have had

little impact on the market.


NEW HOLLAND SANew Holland SA is predominantly a wholesale

distributor of agricultural equipment in Southern

Africa and was acquired by the Invicta Group four

years ago. New Holland SA performed exceptionally

well, despite the major drop in unit sales in all sectors

of the agricultural markets, as indicated under the

Northmec review. Turnover dropped but profit

increased and a good return on capital employed was

achieved.

Overheads are fully covered by spare parts and service

without the necessity of having to sell any equipment,

which positions the company well to take advantage

of the improvements in the markets in the future.

Spare parts turnover and profitability both increased.

New Holland SA is in the process of sourcing New

Holland tractors manufactured by New Holland in

China. This should provide a new source of well priced

New Holland tractors for the South African market.

CSECSE distributes Case construction equipment, Club Car

golf cars and Jacobsen turf equipment in South Africa.

The construction equipment and golf course

equipment sectors of the market performed in

complete contrast to each other. Total construction

equipment market volumes in the sectors in which CSE

trades declined by 50% in volume from 5 101 units to

2 556 units and there are few signs of recovery in the

new year. The golf car and turf market, by contrast,

remained stable, with CSE gaining market share and

profitability.

CSE construction equipment division trades

predominantly in the plant hire and construction

sectors of the markets. Turnover has been affected by

the drop in demand for equipment due to the

completion of major contracts related to FIFA 2010

World Cup Soccer and completion of government

infrastructure projects, with no major contracts in the

future to fill the gap. The mining sector, especially coal

and platinum, are showing promising signs of recovery

which is good for the front-end loader materials

handling sector, an important market for CSE as the

Case product is well accepted here.

Despite the slowdown in golf course development, the

need for upgrading of golf car fleets and turf

equipment led to customers turning to CSE for supply

because of good quality products, after sales service

and stability. Cartcom, the golf car rental division, has

done well, exceeding last year’s profit and generating

good cash flow.

Despite the decline in turnover in CSE, it did not

negatively impact CED’s overall profitability. Improved

sourcing, better inventory levels and good cost control

will result in CSE being profitable in the new

financial year.


CED

Invicta Holdings Limited • Annual report 201022C

ED

DOOSANDoosan distributes the Doosan range of excavators,

loaders and Everdigm breaker hammers, all

manufactured in South Korea. The company was

acquired two years ago and has performed beyond

expectations considering the market conditions, and

has been profitable throughout the year, as well as

being cash generative.

Doosan’s target market is mining and construction,

and through good management in these difficult

times, Doosan has increased market share in

excavators by 17,6% and loaders by 14,6%.

The increased activity in coal and platinum mining is

positive for Doosan.

The Chinese equipment influence in the construction

market has almost disappeared because of poor

quality, market resistance to the products and

suppliers not having the resources to continue

importing.

CRITERION EQUIPMENTCriterion is the distributor of TCM forklift trucks

imported from TCM in Japan.

The company was purchased in June 2009 and was in

a very depressed financial state, which necessitated

significant restructuring, resulting in a number of staff

being retrenched and branches closed around the

country. By October 2009 (five months after

acquisition) the company was trading profitably and

has continued to do so.

The company has great potential to make a

meaningful contribution to the division’s profits in the

future.

CED FUTUREWith the worst behind it, CED division is set to take

advantage of the opportunities that have been

created by the weak markets, with cash flow and

profitability being the main focus. The division is

continuously looking at acquisition opportunities,

particularly consumables and complementary

capital equipment-related businesses, to strengthen

CED’s base.

Management would like to thank all staff who helped

to make these good results possible.



Established in Cape Town in 1995, Tiletoria has grown to become the

single biggest distributor of wall and floor tiles, sanitary ware,

bathroomware and accessories in the Western Cape. The

company’s product range includes ceramics and porcelains,

natural stones such as travertine and slate, sanitary ware,

bathroomware, spas, spa baths and bathroom accessories.


Tile

tori

a

Tiletoria


Invicta Holdings Limited • Annual report 201024Ti

leto

ria


Tiletoria is a specialist company which trades in floor

and wall tiles, baths and sanitary ware. Products

include ceramic and porcelain wall and floor tiles,

bathroom ware, (sanitary ware, bathroom accessories,

bathroom cabinets, bathroom furniture, basin

cabinets, spas and taps), imported natural stone such

as sandstone and travertines, tilers’ tools and specialist

tile adhesives. The company was established in 1995

and Invicta acquired a 60% share in June 2007.

The building industry was very negatively affected by

the economic downturn in the past financial year.

Despite this, Tiletoria grew its turnover. Tough

trading conditions put pressure on margins, resulting

in operating profit growth being limited. The

exceptional sales performance was achieved by

improving the newly opened KwaZulu-Natal branches,

more aggressive buying, more aggressive advertising,

new product ranges, improved staff training, better

service and innovative ideas being applied. The

Tiletoria motto “We lead others follow” has been

proven over and over again.

Despite the downturn, Tiletoria has continued to grow

its infrastructure to accommodate national growth.

Durban is in the process of expanding its showroom

from 300 m2 to 1 000 m2 and is growing its

warehouse from 2 500 m2 to 6 000 m2. The real growth,

however, is expected to be in Gauteng where Tiletoria

will open at least one store during the coming year.

The platform has been set and management’s goal

now is to grow Tiletoria as rapidly as possible so that it

can become a meaningful contributor to the Invicta

Group.

Despite the downturn, Tiletoria has continued to grow its infrastructureto accommodate national growth.

P ThonissenManaging director

A DuckworthFinancial director


Invicta endorses the Code of Corporate Practices and Conduct, as well as the King II Report on CorporateGovernance. Ongoing enhancement of corporate governance principles is a global movement and is fully supported by the Board and management. Invicta will continue to adopt, as appropriate, existing and new principles, which advance good practical corporate governance and add value to the Group’s business activities.

The Board is of the opinion that the Group has, in all material respects and where relevant, complied with the Codeduring the year under review.

KING III RECOMMENDATIONS

The King Code of Governance for South Africa 2009 (King III) and its Code of Governance Principles were launchedon 1 September 2009 and came into effect and replaced King II on 1 March 2010. The proposed new CompaniesAct, also contains governance requirements. King III has adopted an “apply or explain” approach. The AuditCommittee is in the process of reviewing and amending its corporate governance practices with a view to complying with the requirements of the new Companies Act and the King III recommendations.

INTRODUCTION

The Group’s policy is to conduct its business with honesty and integrity and with the highest standard of personal and corporate ethics. This includes the promotion, enhancement, development and protection of thebusiness interests, reputation and goodwill of the Group.

CODE OF ETHICS

The Board adopted a formal code of ethics during 2004, which seeks to ensure that a relationship of trust andshared values is built up with both employees and external stakeholders. The key pillars of the code include adherence to the legal framework of the country and ensuring that the Group is not brought into disrepute,against the overriding background of transparency in all transactions.

BOARD OF DIRECTORS

Composition

The names and brief resumès of the directors appear on pages 4 and 5 of this 2010 Annual Report.

The Board currently comprises of eight directors and two alternate directors. Four directors qualify as non-executive directors, of whom two also qualify as independent directors in terms of the King II Report.

The Company’s Articles of Association provide for the retirement of not less than one third of the directors basedon longest service. This year Mr C Barnard, Mr AM Sinclair and Mr RE Sherrell retire in terms thereof. MessrsBarnard and Sinclair, being eligible, offer themselves for re-election. Mr Sherrell, has, due to ill-health, decided notto offer himself for re-election.

Mr LR Sherrell and Adv JD Wiese both accepted nomination to the Board and have offered themselves for election.

The directors have considerable business experience and an excellent understanding of the Group’s business.

Board effectiveness reviews were conducted during the year under review, and further reviews will be conducted at appropriate intervals.

Chairman and CEO

The roles of chairman and CEO are separate. The managing directors and CEOs of the operating subsidiaries anddivisions report to the Group CEO of Invicta, who in turn reports to the Board.

The Board is satisfied that no one individual director or block of directors has undue power over decision-making.

Professional advice

All directors have access to the company secretary and management and are entitled to obtain independent professional advice at the Company’s expense if required.

Corporate governance


Meetings

The Board meets regularly on a scheduled basis and at such other times as circumstances may require. The table ofmeetings and attendance is as follows:

12 Feb 2 Apr 27 May 20 Aug 6 Nov 12 Feb2009 2009 2009 2009 2009 2010

CH Wiese (Chairman)• x √ √ √ √ √DI Samuels•# √ √ √ √ √ √RE Sherrell• √ x x x x xJ Mthimunye•# x √ √ √ √ xA Goldstone^ √ √ √ √ √ √AM Sinclair^ √ √ √ √ √ √CE Walters^ √ √ √ √ √ √C Barnard^ √ √ √ √ √ √AK Masuku*•# x x x x x xLR Sherrell*• x x x √ √ √* Alternate • Non-executive # Independent ^Executive

Board papers are issued to all directors prior to each meeting and contain relevant detail to inform members ofthe financial and trading position of the company and each of its operating subsidiaries, as well as covering material issues pertaining to the Group.

Non-executive directors also maintain regular contact with executive directors to ensure that they are kept abreastof material matters that may require their input and guidance.

INTERNAL CONTROL

The directors have responsibility for the Group’s systems of internal controls. These are designed to provide reasonable assurance of effective and efficient operations, internal financial control and compliance with laws andregulations.

The Group’s system of internal controls are designed to provide reasonable, but not absolute, assurance againstthe risk of material errors, fraud or losses occurring.

Furthermore, because of changes in conditions, the effectiveness of an internal control system may vary over timeand must be continually reviewed and adapted.

The system of internal controls is monitored throughout the Group by the audit committees, the Group internalaudit department, management and employees as an integrated approach. The Board reports that:

• to the best of its knowledge and belief, no material malfunction of the Group’s internal control systemoccurred during the period under review;

• it is satisfied with the effectiveness of the Group’s internal controls and risk management;

• it has no reason to believe that the Group’s code of ethics has been transgressed in any material respect; and

• to the best of its knowledge and belief, no material breaches have occurred during the period under review,of compliance with any laws and regulations applicable to the Group.

INFORMATION SECURITY

Compliance with legislative requirements contributes towards the protection of corporate information, but initself only addresses a small part of the total number of threats posed to the business arising from its dependencies on information technology and the internet. Security policies and procedures for employees and theuse of technologies such as enterprise and personal firewalls, antivirus systems, intrusion monitoring and detection are applied, as well as frequent application of software security “patches” issued by vendors as andwhen vulnerabilities are discovered. An overhaul and upgrade of the systems applicable to the capital equipmentoperations is planned for the new year.

Corporate governancecontinued


RESTRICTION ON TRADING IN SECURITIES

A formal policy, implemented some years ago, prohibits directors, officers and employees with accessto financial information from dealing in theCompany’s securities, from the date of the end of aninterim reporting period until after the interim resultshave been published and similarly from the end of thefinancial year until after the audited annual resultshave been published. Directors and employees arereminded of this policy prior to the commencement ofany restricted period.

In addition, no dealing in the Company’s securities ispermitted by any director, officer or employee whilstin possession of information which could affect theprice of the Company's securities and which is not inthe public domain.

Directors of the Company and of its subsidiaries arerequired to obtain clearance from Invicta’s chairman(and in the case of the chairman, or in the absence ofthe chairman, from the chairman of the AuditCommittee), or his nominee, prior to dealing in theCompany's securities, and to timeously disclose to the Company full details of any transaction for notification to and publication by the JSE.

All participants in the long-term equity-settled bonusshare incentive scheme may not exercise these rightsduring a closed period.

STAKEHOLDER COMMUNICATION

Members of the Board meet on an ad-hoc basis withinstitutional investors, investment analysts, individualsand members of the financial media. Discussions atsuch meetings are restricted to matters that are in thepublic domain.

Shareholders are informed, by means of pressannouncements and releases in South Africa and/orprinted matter sent to such shareholders, and/orannouncements on SENS, of all relevant corporatematters and financial reporting as required in terms of prevailing legislation. In addition, such announcements are communicated via a broad rangeof channels in both the electronic and print media.The company maintains a corporate websitehttp://www.invictaholdings.co.za containing financialand other information, including interim and annualresults. The site has links to the websites of each majoroperating subsidiary company.

The Group will look at ways of allowing electronicshareholder participation with its transfer secretariesonce the new Companies Act takes effect.

EMPLOYMENT EQUITY

In compliance with the Employment Equity Act, theGroup's operating entities had previously each developed their own employment equity policies andplans in consultation with their employees. The

elected employment equity committees at the respective operations are responsible for ensuring andmonitoring the achievement of the employment equity goals within their business units. The Groupremains fully committed to providing equal opportunities to its 2 240 employees (2009: 2 110employees) and the intention is to improve the effectiveness of the human resource (“HR”) functionwithin the Group.

TRAINING EDUCATION AND DEVELOPMENT OF STAFF

Invicta Group Bursary Scheme

The Group bursary scheme has now settled down withthree candidates granted bursaries in the 2010 financial year, with a further five bursaries to be granted in the 2011 financial year. The bursaries arespread across all the business disciplines.

Staff Training Development

Staff training continues to be a primary focus withinthe Group with business specific (technical), businessrelated and general skills training taking place.

Staff training participants per division

CED 229BMG 764Autobax division 9Tiletoria division 25

BLACK ECONOMIC EMPOWERMENT (“BEE”)

Invicta has requested BEESA as its consultants in termsof Broad Based Black Economic Empowerment(“BBBEE”) as well as the BEESCORE to re-certify theBEE status of its various operations. The Group envisages at least maintaining its BEE status as a Levelfive contributor in terms of the Broad Based RatingScorecard.

CORPORATE SOCIAL INVESTMENT (“CSI”)

The Group participates in a number of CSI activities at

a subsidiary level, where it is felt that the interaction

with the community and environment in which the

Group exists is the most relevant. The primary

activities have been in the area of supporting

educational and career development institutions as

well as providing resources for sporting activities

which are seen as a positive support and cohesive

influence in both the work and community

environment.

Education and Career Development

As well as the extensive staff training which is dealtwith elsewhere in this report, the Group sees



education as a primary area of focus for the futuregrowth of the country.

Funding is provided to centres providing education toeducators, which are based in 25 rural under-resourced schools.

A further major funding project is in respect of a non-profit technological career development program, focusing on quality of mathematics and science. The Group acknowledges that a holisticapproach is necessary, of which academic support isbut one element.

Sport Development

Sporting sponsorship is given to the traditional bigsports in South Africa, namely soccer and rugby. Notonly do most operations have their own divisional soccer teams, but with the World Cup in 2010, soccersponsorship is used to support underprivileged sportsclubs and to take children off the streets.

General

All the Group operations, no matter how small, havecontributed to supporting the destitute and underprivileged in the communities in which they existand function.

QUALITY MANAGEMENT AND OCCUPATIONAL HEALTH AND SAFETY

The consistent supply of both quality products andservice to customers is key to the Group’s successes. Tothis end, the Group continues to focus on the ISO quality system to assist in achieving this. CED has maintained their ISO certification with TUV Rheinlandin all its divisions, except the newly acquired CriterionEquipment division, which is scheduled for ISO certification in August 2010.

The Autobax division has maintained its ISO certification with Lloyds.

BMG’s Quality Management Systems (QMS) certified in2003, is now well established, with re-certification tothe updated ISO 9001:2008 standard completed inDecember 2009. BMG’s commitment to a safe andhealthy working environment for customers andemployees is demonstrated by the implementation ofthe OHSAS 18001 standard.

The Group continues to progress the development andimplementation of the OHSAS 18001 OccupationalHealth and Safety Management System in its majoroperations with CED aiming to achieve certification ofthis standard in the 2011 financial year.

ACCESS TO INFORMATION

The Company and all its subsidiaries are compliantwith the provisions of the Promotion of Access to

Information Act. The manual in terms of this legislation is available from the registered office of theCompany and on the Company’s website.

SUSTAINABILITY REPORT

The Board is committed to creating long-term valuefor all its stakeholders by providing sustainable businesses in an integrated approach to the communities in which it operates.

The sustainability objectives of the Group are:

• Act in the best interests of Group shareholders andGroup principals, by representing them in a manner which brings credit to their products andbrands.

• Ensuring that customers receive an integrated andenvironmentally sound solution that meets theirspecific needs.

• Providing employees with an environment andwork relationship which allows them to achieve asmuch as possible and to have a fulfilled workingcareer.

• Delivering sustainable returns to shareholderswhich are not at the expense of the Group’s ethical standards.

• The Group continues to measure its expenditureon consumable resources and to eliminate anyunnecessary or inefficient processes.

• The primary areas of consumption in the Groupare those of transport fuel and electricity. The Group continually looks at optimising its warehouse locations and inventory holdings in abid to minimise transport cost and fuel consumption.

• As customers continue to search for more efficientand productive products, the Group, through itsvarious operations, continues to develop thesewith its various principals around the world and tooffer solutions to the market.

The Board wishes to take this opportunity to thank allthe stakeholders in the Group for their ongoing commitment and loyalty to the development of a sustainable business and relationships.

Arnold Goldstone

Chief Executive Officer

Invicta Holdings Limited



AUDIT COMMITTEE REPORT

Background

The Audit Committee’s operation is guided by a charter that is informed by the Companies Act and isapproved by the Board as and when it is amended. The revised charter includes the specificrequirements as set out in the proposed newCompanies Act, pertaining to audit committees.

Purpose

The purpose of the Committee is:

• To assist the Board in its evaluation of the adequacy and efficiency of the internal control systems, accounting practices, information systemsand auditing processes applied in the day-to-daymanagement of the business in compliance withall applicable legal requirements, corporate governance and accounting standards.

• To provide a forum for communication betweenthe Board, management, and the internal andexternal auditors.

• To review and confirm the independence of theinternal and external auditors, and to review andapprove the engagement of the external auditorsfor non-audit work.

• To introduce such measures as in the Committee’sopinion may serve to enhance the reliability,integrity and objectivity of financial information,statements and affairs of the Group.

• To provide support to the Board on the riskappetite and risk management of the Group.

• To review the management of financial risk. Priorto the establishment of a separate Risk Committee,the Audit Committee will perform the function ofthe Risk Committee, whereby identified risks willbe monitored and discussed at the AuditCommittee meetings.

• To monitor the compliance of the Group with legalrequirements and the Group’s code of ethics.

• To ensure a high standard of CorporateGovernance is adhered to at all times within theGroup.

• To review and monitor the Internal Audit function.

Membership

The Committee is currently appointed by the Board.The Committee comprises solely of non-executive,independent directors. The members are:

DI Samuels (Chairman)

J Mthimunye

In order to meet the requirements of King III, of having an audit committee of three non-executive

directors, the Board has further requested a non-executive director, LR Sherrell, to serve on the AuditCommittee. The Audit Committee members are considered to be independent of executive management.

Shareholders will be requested to approve theappointment of the members of the Audit Committeeat the annual general meeting scheduled for 29 July2010.

Attendance at meetings during the year was as follows:

11 Feb 26 May 19 Aug 5 Nov2009 2009 2009 2009

J Mthimunye* √ x √ √DI Samuels* √ √ √ √C Barnard• √ √ √ √A Goldstone• √ √ √ √AM Sinclair• √ √ √ √SBF Carter# √ √ x √B Smith# x √ x xB Sacks^ √ x √ xA Govindsamy^ x x √ x* Members

• Group Directors

# External Audit

^ Internal Audit

In addition to members, the chairman may requestpersonal or written representation from Group andCompany directors as well as internal and externalaudit.

External audit

In terms of section 269A of the Companies Act, thecommittee had nominated Deloitte & Touche as theindependent auditor and SBF Carter as the designatedpartner, who is a registered independent auditor, forappointment for the 2010 audit. This appointmentwas approved by shareholders at the annual generalmeeting on 31 July 2009. The Committee has satisfieditself through enquiry that the auditor of Invicta isindependent as defined by the Companies Act, asamended or replaced, and as per the standards stipulated by the auditing profession.

Requisite assurance was sought and provided by theauditor that internal governance processes within theaudit firm support and demonstrate the claim to independence.

The Committee in consultation with executive management, agreed to the engagement letter, terms,nature and scope of the audit function and audit planfor the 2010 financial year. The budgeted fee is considered appropriate for the work that could reasonably have been foreseen at that time. The final



adjusted fee will be agreed on completion of theaudit. Audit fees are disclosed in note 4 on page 53 ofthe 2010 Annual Report.

There is a formal procedure that governs the processwhereby the auditor is considered for non-audit services, and each engagement letter for such work isreviewed and approved by the Committee. Meetingsare held with the auditor where management is notpresent and no matters of concern were raised.

The Committee has again nominated, for approval atthe annual general meeting, Deloitte & Touche as theexternal auditor and SBF Carter as the designatedauditor for the 2011 financial year. The Committeeconfirms that the auditor and designated auditor areaccredited by the JSE.

Risk Committee

Responsibility for managing the Group risk lies ultimately with the Board. However, the boards ofsubsidiary companies, executive committees and management at operational level assist the Board indischarging its responsibilities in this regard by identifying, monitoring and managing risk on anongoing basis.

Risk management specifically includes the consideration of:

• the risk profile and management of operationalrisk within the Group;

• the risk profile and risk management of majorprojects and acquisitions; and

• the adequacy of self-insurance and external insurance programs.

Risk management

The Board through the Risk Committee, which is a sub-committee of the Audit Committee, has identifieda number of key risk areas which it believes require monitoring and detailing to stakeholders, these aresummarised below –

Strategic risk review

The Group has with the guidance of external consultants performed a strategic risk review at bothGroup and divisional level. The results of this exercisehas allowed management and the Board to focus onrisk mitigation strategies and processes. The Committee monitors the progress of the implementation of the above processes, with writtensubmissions and presentations being done by management at least annually.

Exchange rate fluctuations

Most of the Group’s businesses involve the importation of product and, accordingly, changes inexchange rates can and do significantly affect the

performance of operations. To date the Board hasadopted the policy of hedging all its material foreignexchange exposures.

Product supply

Based on the highly competitive markets in which theGroup operates, specific focus is given to sourcingcompetitively priced quality products around theworld. Directors and senior management have specificprograms on an annual basis, including the visiting ofselected international trade fairs and supplier functions to benchmark existing product ranges andto source new lines.

Distribution network and infrastructure

The distribution of the Group’s products is critical to itssales performance and takes place through a wide andentrenched network of its own outlets as well as thirdparty distributors. The support, communication andbusiness model used to govern these relationships,enjoys primary focus at the operating entities’ executive committee meetings, and involves direct liaison with the relevant parties by the non-executivedirectors of the Board.

Trade and funding facilities

The availability of both trade and funding facilities arestrategic to the ongoing performance and success ofthe Group. The Board monitors and controls these onan ongoing basis. This has become a greater focussince the global liquidity crunch and its resultantimpact on the world banking system and consequently on the Group’s customers and suppliers.

Annual financial statements

In view of the Audit Committee having fulfilled itsmandate, it recommended the financial statements for approval to the Board. The Board subsequentlyapproved the financial statements, which will be openfor discussion at the forthcoming annual generalmeeting.

Group financial director

As required by the JSE Listings Requirements, the committee confirms that the Company’s finance director, Craig Barnard, has the necessary expertiseand experience to carry out his duties.

David Samuels

Chairman of the Audit Committee



REMUNERATION REPORT

Role of the remuneration committee and terms of

reference

The Remuneration Committee is a committee of the

Board of directors and is responsible for:

• making recommendations to the Board on the

general policy on executive remuneration,

benefits, conditions of service and staff retention;

• determining the specific remuneration packages

of executive directors and senior management of

the Group including, but not limited to, basic

salary, performance-based short- and long-term

incentives, pensions and other benefits; and

• the design and operation of the Group’s share

incentive schemes.

The full terms of reference of the Committee have

been agreed by the Board.

Members of the Remuneration Committee during 2010

• CH Wiese (Chairman)

• DI Samuels

• A Goldstone Attendance ex Officio

All members of the Committee are non-executive

directors.

The Committee met once during 2010. The chief

executive officer attends the Committee meetings by

invitation and assists the Committee in its

deliberations, except when issues relating to his own

compensation are discussed. No director is involved in

deciding his or her own remuneration. In 2010 the

Committee was advised by the Group’s finance and

human resources divisions on the implementation of

the executive incentive schemes.

The Company’s auditors, Deloitte & Touche, have not

provided advice to the Committee. However, in their

capacity as Group auditors, they perform normal audit

procedures on the remuneration of directors.

The Remuneration Committee meets at least annually

and the attendance at meetings held was as follows:

29 May

2009

CH Wiese √DI Samuels √A Goldstone √

Remuneration policy and executive remuneration

Principles of executive remuneration

The Group’s remuneration policy aims to attract andretain high-calibre executives and to motivate them todevelop and implement the Group’s business strategyin order to optimise long-term shareholder value creation. The policy conforms with King III and is basedon the following principles:

• Total rewards are set at levels that are competitivewithin the relevant market.

• Incentive-based rewards are earned through theachievement of demanding performance conditions consistent with shareholder interestsover the short, medium and long term.

• Incentive plans, performance measures and targetsare structured to operate effectively throughoutthe business cycle.

• The design of long-term incentives is prudent anddoes not expose shareholders to unreasonablefinancial risk.

Elements of executive remuneration

The four elements of executive remuneration consistof a base salary, benefits, an annual incentive andlong-term incentives. The Committee seeks to ensurean appropriate balance between the fixed and performance-related elements of executive remuneration, and between those aspects of the package linked to short-term financial performanceand those aspects linked to longer-term shareholdervalue creation. A further consideration has been theneed to retain critical skills in the Group. The Committee considers each element of remunerationrelative to the market and takes into account the performance of the Group and the individual executive in determining both quantum and design.

The policy relating to each component of remuneration is summarised below:

Base salary

The base salary of the executives is subject to annualreview. It is set to be competitive at the median level,with reference to market practice in companies comparable in terms of size, market sector and business complexity. Group and Company performance, individual performance and changes inresponsibilities are also taken into consideration whendetermining annual base salaries.

Benefits

Benefits for executives include membership of a retirement fund and a medical aid, to which contributions are made by the executives and theGroup.



Short-term incentive

All executives are eligible to participate in a short-term incentive with payment levels based on either

corporate or individual performance or both. Incentive potentials are set on an individual basis each year. The

incentive plan is contractual but not pensionable. The Committee retains the discretion to make positive

adjustments to bonuses earned at the end of the year on an exceptional basis, taking into account both Group

performance and the overall and specific contribution of individual executives to meeting the Group’s objectives.

The Committee reviews measures annually, to ensure that the targets set are appropriate, given the

economic context and the performance expectations for the Group.

Long-term incentive

Invicta Holdings long-term bonus and share incentive scheme

In order to attract and retain key staff the Group requires appropriate long-term incentive schemes. Many of the

Group’s operations require key technical skills which are often difficult to replace. In trying to address the critical

factor, the Committee, in consultation with industry professionals, has designed a long-term bonus incentive

scheme for key executives. In terms of the scheme, executives will be rewarded on their performance, with

reference to the growth in the Invicta share price over a period of three to five years. The bonus, as determined

by the formula, will be settled with equity in Invicta by the relevant operational entity or on terms of the existing

Invicta Holdings Limited Share Trust. The bonus scheme will constantly be reviewed by the Committee for its

effectiveness and will be amended from time to time, if necessary. The intention is to move divisional senior

executives and management on to a cash-based bonus bank over the next year, to ensure they are rewarded for

performance in those areas over which they have direct influence. Details of the Invicta Holdings Long-Term Bonus

and Share Incentive Scheme are below.

Equity-settled bonus share incentive right scheme

The Group has implemented a long-term bonus equity-settled share incentive right scheme (“LBSIR scheme”) for

key executives. In terms of the LBSIR scheme executives are granted a bonus share incentive right (“the bonus

right”) calculated with reference to a specified number of shares at a price equal to the weighted average

five-day closing market price on the date of grant. The bonus right vests after a period of one year, (subject to the

performance conditions set for the executive being met), and the bonus right becomes exercisable after a further

two-year period, after which the executive has a further two-year period in which to take up the bonus right

before it lapses. Due to the prevailing economic climate, the expiry dates for tranche 1 (grant date: 13 March 2006)

and tranche 2 (grant date: 1 September 2006) have been extended by two years.

The bonus right is determined based on the difference between the grant price and the weighted average

five-day closing price on the exercise date. The bonus, as determined by the formula, will be settled with shares.

The bonus right expense has been calculated using a Black Scholes valuation model and is expensed over a

three-year period from the grant date and is recorded in the Share Appreciation Reserve.

2010 2009

Weighted Weightedaverage average

Number incentive Number incentiveof rights cost of rights cost

incentives Rand incentives Rand

Outstanding at the beginning of the year 11 506 458 7 327 458Awarded during the year 4 360 000 4,44 4 179 000 7,13Exercised during the year (256 000) –

Outstanding at the end of the year 15 610 458 11 506 458




Tranch 1 Tranch 2 Tranch 3 Tranch 4 Tranch 5 Tranch 6

Number of grants 3 514 000 250 000 3 814 000 4 104 000 75 000 4 360 000Grant date 13 Mar 06 1 Sep 06 26 Mar 07 14 Mar 07 30 Sep 08 13 Mar 09Grant price R17,20 R20,00 R27,97 R24,84 R26,87 R18,48

3 years 3 years 3 years 3 years 3 years 3 years% % % % % %

Expected volatility (daily) 2,1 2,0 2,1 2,2 2,2 2,1Dividend yield 5,6 5,3 6,4 3,5 3,8 4,2Risk-free rate 7,2 8,17 8,17 9,4 8,7 6,43

Executive directors’ interests in the LBSIR scheme are set out in note 34 on page 73 of the 2010 Annual Report.

External appointments

Executive directors are not permitted to hold external directorships or offices without the approval of the Board.If such approval is granted, directors may retain the fees payable from such appointments.

Directors’ fees

Directors’ payments for services as directors and other emoluments are set out in note 34 on pages 72 and 73 ofthe 2010 Annual Report. Members will be requested to consider an ordinary resolution approving these emoluments at the annual general meeting.

Non-executive directors’ fees

The annual fees payable to non-executive directors of the Company are based on a fee for attendance per meeting of the Board and, where applicable, per meeting of sub-committees. An additional fee is paid to theChairman of both the Board and the Audit Committee.

Non-executive directors do not participate in the Company’s annual bonus plan, or in any of its share incentiveschemes.

Directors’ and executive management’s service contracts

None of the directors are bound by service contracts. All executive directors, who are also directors of subsidiary companies, have an engagement letter which provides for a notice period of between one and threemonths to be given by either party.

The Group chief executive officer has no service contract.

None of the non-executive directors have a contract of employment with the Group.

In terms of the Articles of Association, not less than one-third of the directors are required to retire by rotation ateach annual general meeting of the Company and may offer themselves for re-election. The appointment of newdirectors during the year is required to be confirmed at the next annual general meeting and such new directorsare required to retire at such annual general meeting, but may offer themselves for re-election.

Approval

This remuneration report has been approved by the Board of directors of Invicta.

Signed on behalf of the Remuneration Committee.

CH Wiese

Chairman of the remuneration committee


Value added statementfor the year ended 31 March 2010

GROUP

2010 2009R’000 % R’000 %

Income from goods and services 3 968 872 4 523 535

Less: Cost of goods and services (3 096 365) (3 636 259)

Value added from trading operations 872 507 887 276

Add: Dividends received on investments 210 056 134 270

Add: Interest received on investments 198 442 225 845

Total value added 1 281 005 100,0 1 247 391 100,0

Utilised as follows:

Employees

Salaries and benefits 430 712 33,6 411 308 33,0

Providers of capital

Interest on borrowings 432 886 33,8 382 719 30,6

Government – Company tax 64 155 5,0 111 940 9,0

Current 19 480 35 123

Foreign 53 460 91 511

Deferred (9 593) (15 649)

Secondary tax on companies 808 955

927 753 72,4 905 967 72,6

Retained for reinvestment

Depreciation and amortisation 32 356 2,5 28 612 2,3

Income retained in the business 320 896 25,1 312 812 25,1

353 252 27,6 341 424 27,4

Total utilisation of value added 1 281 005 100,0 1 247 391 100,0

2010 2009

Employees Providers of capital Government Retained for reinvestment

33%

30%

9%

27%

33%

34%

5%

28%


Approval of the annual financial statements

TO THE MEMBERS OF INVICTA HOLDINGS LIMITED

It is the directors’ responsibility to prepare annual financial statements that fairly present the state of affairs of the

Company and the Group at the end of the financial year and the profit or loss for the year. The external auditors

are responsible for independently reviewing and reporting on these annual financial statements.

The annual financial statements set out in this report have been prepared by management in accordance with

International Financial Reporting Standards and in the manner required by the Companies Act of South Africa.

They are based on appropriate accounting policies which have been consistently applied and which are supported

by reasonable and prudent judgements and estimates.

Dr CH Wiese A Goldstone

Chairman Chief executive officer

25 May 2010

Certification by the company secretary

I certify in accordance with Section 268G(d) of the Companies Act, that the Company has lodged with the Registrar

all such returns as are required by a public company in terms of the Act and that all such returns are true, correct

and up to date.

C Barnard

Secretary

Cape Town

25 May 2010

Invicta Holdings Limited • Annual report 201036 Invicta Holdings Limited • Annual report 201036

Report of the independent auditors

TO THE MEMBERS OF INVICTA HOLDINGS LIMITED

Report on the annual financial statements

We have audited the Group annual financial

statements and annual financial statements of Invicta

Holdings Limited, which comprise the audit committee’s

report on page 29, the consolidated and Company

statements of financial position as at 31 March 2010,

and the consolidated and Company statements of

comprehensive income, changes in equity and cash

flows for the year then ended, and a summary of

significant accounting policies and other explanatory

notes, and the directors’ report, as set out on pages

37 to 79.

Directors’ responsibility for the financial statements

The Company’s directors are responsible for the

preparation and fair presentation of these financial

statements in accordance with International Financial

Reporting Standards and in the manner required by

the Companies Act of South Africa. This responsibility

includes: designing, implementing and maintaining

internal control relevant to the preparation and fair

presentation of financial statements that are free from

material misstatement, whether due to fraud or error;

selecting and applying appropriate accounting

policies; and making accounting estimates that are

reasonable in the circumstances.

Auditors’ responsibility

Our responsibility is to express an opinion on these

financial statements based on our audit. We

conducted our audit in accordance with International

Standards on Auditing. Those standards require that

we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance

whether the financial statements are free from

material misstatement.

An audit involves performing procedures to obtain

audit evidence about the amounts and disclosures in

the financial statements. The procedures selected

depend on the auditor’s judgement, including the

assessment of the risks of material misstatement of the

financial statements, whether due to fraud or error. In

making those risk assessments, the auditor considers

internal control relevant to the entity’s preparation

and fair presentation of the financial statements in

order to design audit procedures that are appropriate

in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the

entity’s internal control. An audit also includes

evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates

made by management, as well as evaluating the

overall presentation of the financial statements.

We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our

audit opinion.

Opinion

In our opinion, the financial statements present fairly,

in all material respects, the consolidated and Company

financial position of Invicta Holdings Limited as at

31 March 2010, and its consolidated and Company

financial performance and cash flows for the year then

ended in accordance with International Financial

Reporting Standards and in the manner required by

the Companies Act of South Africa.

Deloitte & Touche

Registered Auditors

Per SBF Carter

Partner

25 May 2010

Buildings 1 and 2, Deloitte Place, The Woodlands,

Woodlands Drive, Woodmead, Sandton

National executive: GG Gelink (Chief Executive),

AE Swiegers (Chief Operating Officer), GM Pinnock

(Audit), DL Kennedy (Tax & Legal and Risk Advisory),

L Geeringh (Consulting), L Bam (Corporate Finance),

CR Beukman (Finance), TJ Brown (Clients & Markets),

NT Mtoba (Chairman of the Board) and CR Qually

(Deputy Chairman of the Board)

A full list of partners and directors is available on

request.

37Invicta Holdings Limited • Annual report 2010 37Invicta Holdings Limited • Annual report 2010

Report of the directorsfor the year ended 31 March 2010

INVICTA HOLDINGS LIMITED

The directors have pleasure in presenting their annualreport, which forms part of the annual financial statements and the 2010 Annual Report of the Groupand of the Company for the year ended 31 March2010.

In the context of the financial statements, the term“Group” refers to the Company, its subsidiaries and associates.

Nature of business

The Company is an investment holding and management company. The various operations of theGroup are summarised below with an expanded explanation of the various businesses detailed in thereview of operations.

Humulani Investments

Operational holding company of all the Invicta Groupoperations.

Humulani has 25% of its ordinary shares under thecontrol of BEE parties.

20% of Humulani’s ordinary shares are held byaloeCap Private Equity Investments 1 (Pty) Limited, awholly-owned subsidiary of aloeCap (Pty) Limited.aloeCap is a 100% black-owned and managed company.

5% of Humulani’s ordinary shares are held by theHumulani Investments Share Incentive Trust. The beneficiaries of the trust are the black employees ofthe Group.

In terms of SIC 12, the 5% of the ordinary issued sharecapital of Humulani Investments (Pty) Limited ownedby the Humulani Investments Share Incentive Trust(“the trust”) has been consolidated. Deconsolidationthereof and the recognition of the profit attributableto the issue of the shares to the trust will commenceonce the residual risks attributable to the loan financeprovided by Invicta to the trust to acquire the sharesdissipate through repayment or the investment valueincreases.

Bearing Man Group (BMG)

Southern Africa’s leading distributor of bearings, seals,power transmission components, drives, belting, fasteners, filtration and hydraulics.

Autobax

Importer and distributor of timing chains, timing belts,timing components and oil pumps to the automotiveindustry, and similar niche products to the motorcycleindustry.

Capital Equipment Division (CED)

Northmec

Distributor of a full range of leading agricultural

machinery, implements and related spare parts.

CSE

Wholesale and retail distributor of light earthmoving

machinery, turf-grooming machinery, golf cars, utility

vehicles and related spare parts.

New Holland

Wholesale distributor of leading brand agricultural

machinery, implements and related spare parts.

Doosan SA

Doosan SA supplies predominately heavy earthmoving

machinery for construction and mining applications.

Criterion

Importer and distributor of leading materials handling

equipment and related spare parts.

Tiletoria

A leading importer and distributor of tiles and related

sanitary ware in the Western Cape and KwaZulu-

Natal.

Compliance with accounting standards

The Group’s and the Company’s annual financial

statements comply with International Financial

Reporting Standards, the South African Companies Act

and the JSE’s Listings Requirements.

Group results

2010 2009

R'000 R'000

Revenue 3 968 872 4 523 535

Profit for the year 365 389 362 812

Management philosophy

Invicta adopts a hands-on approach to managing its

subsidiaries. Each subsidiary is self contained and has

its own managing director and a complete

complement of financial and administration

infrastructure. The Invicta Group chief executive

officer is, however, actively involved in the executive

committees of both the capital equipment and

engineering consumable operations, with executive


Report of the directors continued


directors of the Group actively controlling and

participating on the boards of subsidiaries. Cash flow

is always a major focus of the Group, even more so

under the current economic conditions. The Board

aims to add value by providing expertise and guidance

to subsidiary management teams, where feasible, and

by pooling best practices within the Group.

Share capital and share premium

The authorised share capital of the Company

remained unchanged at 134 000 000 ordinary shares

of 5 cents each.

During the year, the Company’s issued ordinary share

capital and share premium remained unchanged

(2009: unchanged).

Dematerialising of shares (STRATE)

Shareholders are again requested to note that, as a

result of clearing and settlement of trades through the

STRATE system, the Company’s share certificates are

no longer good for delivery for trading.

Dematerialisation of the Company’s share certificates

is now a prerequisite when dealing in its shares.

Auditors

Deloitte & Touche continued in office as auditors of

the Company and its subsidiaries for 2010.

At the annual general meeting, shareholders will be

requested to reappoint Deloitte & Touche as auditors

of Invicta Holdings Limited and to confirm that

SBF Carter will be the designated auditor for the 2011

financial year.

Sponsor

Deloitte & Touche Sponsor Services (Pty) Limited

acts as sponsor to the Company in terms of the

requirements of the JSE Limited.

Transfer Secretaries

Computershare Investor Services (Pty) Limited serves as

the registrar and transfer secretaries of the Company.

Invicta Holdings long-term bonus and share incentive

scheme

In order to attract and retain key staff the Group has

implemented a long-term bonus and share incentive

scheme. The Remuneration Report contains details of

the scheme.

Subsidiaries and associate

Details of the Company’s interests in its material

subsidiaries and associate are set out in the attached

annual financial statements in notes 15 and 16 on

pages 62 and 63 of the 2010 Annual Report.

Dividends

Details of the ordinary dividends paid are reflected in

note 23 on page 66 of the 2010 Annual Report.

The Company’s current dividend policy is to consider

an interim dividend at a 3,5 times dividend cover ratio,

with a final dividend being considered to bring the

annual dividend cover ratio to no less than 3,0 times.

Historically the dividend cover ratio has been 3,0 times

at interim stage and 2,5 times annual dividend cover

ratio at the final dividend stage, but this was changed

last year in light of the world recession.

Events subsequent to year-end

The Group took advantage of weak market conditions

and made a number of strategic acquisitions, one of

the most significant of which was the acquisition of a

70% share of Wegezi Power Holdings (Pty) Limited

effective 1 April 2010.

Directors

Details of the directors and company secretary during

the year and at the date of this report are reflected on

pages 4 and 5 and on the inside back cover of the 2010

Annual Report.

Directors’ contracts

No material contracts have been entered into between

the Company and the Group and the directors during

the year under review.

Directors’ fees

Directors’ payments for services as directors and other

emoluments are set out in note 34 on pages 72 and 73

of the 2010 Annual Report. Members will be requested

to consider an ordinary resolution approving these

emoluments at the annual general meeting.

Directors‘ interest in shares in the Company

The total direct and indirect interest declared by the

directors in the issued share capital of the Company at

31 March 2010 was 60% (2009: 62%).

The details of the directors’ shareholding are reflected

in note 38 on page 78 of the 2010 Annual Report.


Report of the directors continued


Unissued share capital

The unissued ordinary shares are the subject of a

general authority granted to the directors in terms of

Section 221 and 222 of the Companies Act (Act 61 of

1973) as amended (“the Companies Act”), and the JSE

Limited (“JSE”) Listings Requirements. As this general

authority remains valid only until the next annual

general meeting, which is to be held on 29 July 2010,

members will be requested at the meeting to consider

an ordinary resolution placing the said ordinary shares

under the control of the directors until the 2011

annual general meeting.

Repurchase of shares

It makes sound business sense for a Company to

acquire its own shares under certain circumstances.

Thus, the directors consider it appropriate to secure a

general authority for the Company to repurchase

shares on the open market of the JSE in order to

provide the Company with maximum flexibility

regarding the repurchase of shares.

The Group has over the years repurchased shares

which are held at subsidiary level. The treasury shares

are eliminated on consolidation and are thus treated

as cancelled from a financial reporting perspective.

The directors consider it appropriate to secure a

specific authority for the Company to repurchase its

shares held by its subsidiary.

The Company’s Articles of Association allow the

Company to purchase its own shares if shareholders

have, by way of special resolution, either given the

Company a general authority to effect such purchase

or a specific authority to effect a specific purchase of

its own shares, subject to the requirements of the

Companies Act and the JSE Listings Requirements.

Members will be required to consider special

resolutions at the annual general meeting giving the

directors general authority to permit the Company or

a subsidiary of the Company to acquire the Company’s

shares and to permit the Company to acquire its shares

held by subsidiary companies.

Notice of annual general meeting

Notice to shareholders detailing all necessary

resolutions relating to the Company’s affairs is set out

on pages 82 to 86 of the 2010 Annual Report.

A Goldstone CH Wiese

Chief Executive Officer Chairman

Cape Town

25 May 2010


Statements of comprehensive incomefor the year ended 31 March 2010

GROUP COMPANY

2010 2009 2010 2009Notes R’000 R’000 R’000 R’000

Revenue 3 968 872 4 523 535 – –

Cost of sales (2 886 154) (3 417 181) – –

Gross profit 1 082 718 1 106 354 – –

Selling, administration and distribution costs (629 425) (608 998) 958 563

Operating profit before finance costs, interest

and dividends received 4 453 293 497 356 958 563

Finance costs 5 (432 886) (382 719) (2) (30)

Dividends received from subsidiaries – – 96 990 122 404

Dividends received from investments 210 056 134 270 49 044 49 548

Share of profits of associate 16 639 – – –

Interest received 6 198 442 225 845 23 68

Profit before taxation 429 544 474 752 147 013 172 553

Taxation 7 (64 155) (111 940) (368) (567)

Profit for the year 365 389 362 812 146 645 171 986

Other comprehensive income

Exchange differences on translating

foreign operations (7 649) (3 079) – –

Total comprehensive income for the year 357 740 359 733 146 645 171 986

Attributable to:

Owners of the Company 320 896 312 812 146 645 171 986

Minority interest 44 493 50 000 – –

365 389 362 812 146 645 171 986

Total comprehensive income attributable to:

Owners of the Company 315 196 309 733 146 645 171 986

Minority interest 42 544 50 000 – –

357 740 359 733 146 645 171 986

Dividends per share (cents) 23 151 138

Earnings per share (cents) 8 453 437

Diluted earnings per share (cents) 8 441 437


Statements of financial positionas at 31 March 2010

GROUP COMPANY

2010 2009 2010 2009Notes R’000 R’000 R’000 R’000

ASSETSNon-current assetsProperty, plant and equipment 9 312 860 228 997 – –Investment in subsidiaries 15 – – 502 264 502 264Investment in associate 16 2 119 – – –Financial investments 10 2 880 087 1 195 100 443 000 443 000Goodwill 11 245 403 242 491 – –Other intangible assets 12 9 923 11 158 – –Financial asset 13 179 549 232 512 – –Long-term receivable 14 – 1 527 875 – –Long-term loans 6 721 – – –Deferred taxation 7.1 69 852 57 177 – –

3 706 514 3 495 310 945 264 945 264

Current assetsLoans to subsidiaries 17 – – 401 136 254 481Inventories 18 1 298 795 1 645 913 – –Trade and other receivables 19 670 979 688 106 7 146 7 008Taxation prepaid 273 50 340 – –Bank balances and cash 32 260 553 125 061 12 681 11 134

2 230 600 2 509 420 420 963 272 623

TOTAL ASSETS 5 937 114 6 004 730 1 366 227 1 217 887

EQUITY AND LIABILITIESCapital and reservesOrdinary share capital 20 3 724 3 724 3 724 3 724 Share premium 21 282 715 282 715 282 715 282 715Treasury shares 22 (96 570) (94 247) – –Share appreciation reserve 55 339 33 294 – –Revaluation reserve 5 025 8 194 – –Foreign currency translation reserve (6 149) (449) – –Retained earnings 1 198 882 972 824 857 021 810 180

Equity attributable to the equity holders 1 442 966 1 206 055 1 143 460 1 096 619 Minority interest 170 297 130 196 – –

SHAREHOLDERS’ EQUITY 1 613 263 1 336 251 1 143 460 1 096 619

Non-current liabilitiesLong-term borrowings 24 3 026 890 2 846 638 688 688 Financial liabilities 25 182 168 236 434 – –Deferred taxation 7.1 14 289 13 276 – –

3 223 347 3 096 348 688 688

Current liabilitiesTrade and other payables 26 947 777 1 191 155 2 431 2 440Provisions 27 72 571 103 410 – –Tax liabilities 13 287 14 935 665 34Loan from subsidiary 28 – – 218 344 117 541Shareholders for dividends 2 967 565 639 565Current portion of long-term borrowings 24 18 056 5 546 – –Bank overdrafts and bankers’ acceptances 32 45 846 256 520 – –

1 100 504 1 572 131 222 079 120 580

TOTAL LIABILITIES 4 323 851 4 668 479 222 767 121 268

TOTAL EQUITY AND LIABILITIES 5 937 114 6 004 730 1 366 227 1 217 887


Statements of changes in equityfor the year ended 31 March 2010

Foreign Attribu-Share currency table to

appre- Re- trans- equityShare Share Treasury ciation valuation lation Retained share- Minority

capital premium shares reserve reserve reserve earnings holders interest TotalR’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

GROUP

Balance at 1 April 2008 3 724 282 715 (49 393) 14 024 8 194 2 630 763 697 1 025 591 92 147 1 117 738

Total comprehensive

income for the year – – – – – (3 079) 312 812 309 733 50 000 359 733

Dividends paid – – – – – – (103 685) (103 685) (8 999) (112 684)

Share appreciation rights

issued – – – 19 270 – – – 19 270 – 19 270

Net acquisition of

minorities – – – – – – – – (2 952) (2 952)

Treasury shares acquired – – (44 854) – – – – (44 854) – (44 854)

Balance at 31 March 2009 3 724 282 715 (94 247) 33 294 8 194 (449) 972 824 1 206 055 130 196 1 336 251

Total comprehensive

income for the year – – – – – (5 700) 320 896 315 196 42 544 357 740

Dividends paid – – – – – – (94 838) (94 838) (3 953) (98 791)

Share appreciation rights

issued – – – 22 045 – – – 22 045 – 22 045

Minority interest arising

on acquisition of

subsidiary – – – – – – – – 1 510 1 510

Revaluation reserve

written off on liquidation

of Group company – – – – (3 169) – – (3 169) – (3 169)

Treasury shares acquired – – (2 323) – – – – (2 323) – (2 323)

Balance at 31 March 2010 3 724 282 715 (96 570) 55 339 5 025 (6 149) 1 198 882 1 442 996 170 297 1 613 263

COMPANY

Balance at 1 April 2008 3 724 282 715 – – – – 745 446 1 031 885 – 1 031 885

Total comprehensive

income for the year – – – – – – 171 986 171 986 – 171 986

Dividends paid – – – – – – (107 252) (107 252) – (107 252)

Balance at 31 March 2009 3 724 282 715 – – – – 810 180 1 096 619 – 1 096 619

Total comprehensive

income for the year – – – – – – 146 645 146 645 – 146 645

Dividends paid – – – – – – (99 804) (99 804) – (99 804)

Balance at 31 March 2010 3 724 282 715 – – – – 857 021 1 143 460 – 1 143 460


Statements of cash flowsfor the year ended 31 March 2010

GROUP COMPANY

2010 2009 2010 2009Notes R’000 R’000 R’000 R’000

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 29 590 226 87 972 811 973

Finance costs (432 886) (382 719) (2) –

Dividends paid to Group shareholders 30 (92 436) (103 627) (99 730) (107 194)

Dividends paid to minorities (3 953) (8 999) – –

Taxation (paid) refunded 31 (25 329) (194 445) 263 (567)

Interest and dividends received 408 498 360 115 146 057 171 990

Net cash inflow (outflow) from operating activities 444 120 (241 703) 47 399 65 202

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds on sale of property, plant and equipment 9 872 11 910 – –

Proceeds on sale of investment – 435 – –

Expansion to property, plant and equipment and

intangible assets (46 914) (48 310) – –

Replacement of property, plant and equipment (37 416) (46 416) – –

Acquisition of subsidiaries (32 964) (89 323) – –

Acquisition of associate (1 480) – – –

Investment in treasury shares (2 323) (44 854) – –

Disposal of (increase in) investment in partnership 1 527 875 (177 875) – –

Increase in long-term loans (6 721) – – –

Increase in loans to subsidiaries – – (146 655) (131 923)

Investment in preference shares (1 684 987) – – –

Net cash outflow from investing activities (275 058) (394 433) (146 655) (131 923)

CASH FLOWS FROM FINANCING ACTIVITIES

Increase in long-term borrowings 164 594 296 585 – –

Increase in loan from subsidiary – – 100 803 46 046

Increase (decrease) in current portion of

long-term borrowings 12 510 (1 779) – –

Net cash inflow from financing activities 177 104 294 806 100 803 46 046

Net increase (decrease) in cash and cash equivalents 346 166 (341 330) 1 547 (20 675)

Cash and cash equivalents at the beginning of the year (131 459) 209 871 11 134 31 809

Cash and cash equivalents at the end of the year 32 214 707 (131 459) 12 681 11 134


Notes to the annual financial statementsfor the year ended 31 March 2010

1. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

During the year, the Company adopted all of the new and revised Standards and Interpretations issued bythe International Accounting Standards Board (the IASB) and the International Financial ReportingInterpretations Committee (IFRIC) of the IASB that are relevant to its operations and effective for the Company’s reporting period. The adoption of IFRS 7 Financial Instruments: Disclosure (amendments), IFRS 8Operating Segments and related amendments to IAS 1 Presentation of Financial Statements has not resulted in any significant changes to the Company’s accounting policies and the effects on the amountsreported for the current or prior years have been disclosed.

At the date of authorisation of these financial statements, the following Standards applicable to the Groupand Company were in issue but not yet effective:

• IFRS 2 Share-based Payments (Amendments)• IFRS 3 Business Combinations (Amendments)• IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (Amendments)• IFRS 8 Operating Segments (Amendments)• IFRS 9 Financial Instruments – Classification and Measurement• IAS 1 Presentation of Financial Statements (Revised)• IAS 7 Statement of Cash Flows (Amendments)• IAS 17 Leases (Amendments)• IAS 24 Related Party Disclosures (Revised)• IAS 27 Consolidated and Separate Financial Statements (Amendments)• IAS 28 Investments in Associates (Amendments)• IAS 31 Interests in Joint Ventures (Amendments)• IAS 32 Financial Instruments: Presentation (Amendments)• IAS 36 Impairment of Assets (Amendments)• IAS 38 Intangible Assets (Amendments)• IAS 39 Financial Instruments: Recognition and Measurement (Amendments)

The directors anticipate that the adoption of these Standards in future periods will have no material impacton the financial statements of the Group and Company.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with International Financial Reporting Standardsand in the manner required by the Companies Act of South Africa. The financial statements have been prepared on the historical cost basis, except for the revaluation of certain properties and financial instruments. The principal accounting policies adopted are set out below.

2.1 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has thepower to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date ofdisposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring theiraccounting policies into line with those used by the Group.

All intra-Group transactions, balances, income and expenses are eliminated on consolidation. Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Minority interests consist of the amount of those interests at the date of the originalbusiness combination and the minority’s share of changes in equity since the date of the combination.Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.

2.2 Business combinations

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisitionis measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilitiesincurred or assumed, and equity instruments issued by the Group in exchange for control of theacquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable


Notes to the annual financial statements continued


assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 arerecognised at their fair values at the acquisition date, except for non-current assets (or disposalGroups) that are classified as held for sale in accordance with IFRS 5 Non-Current Assets Held for Saleand Discontinued Operations, which are recognised and measured at fair value less costs to sell.Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excessof the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’sinterest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilitiesexceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

The interest of minority shareholders in the acquiree is initially measured at the minority’s proportionof the net fair value of the assets, liabilities and contingent liabilities recognised.

2.3 Goodwill

Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the excessof the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary or jointly controlled entity recognised at the dateof acquisition.

Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to eachof the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, ormore frequently when there is an indication that the unit may be impaired. If the recoverable amountof the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to theother assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. Animpairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

2.4 Investments in associates

The results and assets and liabilities of associates are incorporated in the consolidated financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment inthe value of individual investments. Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s netinvestment in the associate) are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

2.5 Non-current assets held for sale

Non-current assets and disposal groups are classified as held-for-sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regardedas met only when the sale is highly probable and the asset (or disposal Group) is available for immediate sale in its present condition. Management must be committed to the sale, which should beexpected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held-for-sale are measured at the lower of theassets’ previous carrying amount and fair value less costs of disposal.

2.6 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and representsamounts receivable for goods and services provided in the normal course of business, net of discountsand sales-related taxes. Sales of goods are recognised when goods are delivered and title has passed.

Interest income is accrued on the time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receiptsthrough the expected life of the financial asset to that asset’s net carrying amount.

Dividend income from investments is recognised when the shareholders’ rights to receive paymenthave been established.




2.7 Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risksand rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessor

Rental income from operating leases is recognised on the straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are addedto the carrying amount of the leased asset and recognised on the straight-line basis over the leaseterm.

The Group as lessee

Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Leasepayments are apportioned between finance charges and a reduction of the lease obligation so as toachieve a constant rate of interest on the remaining balance of the liability. Finance charges arecharged to profit or loss.

Rentals payable under operating leases are charged to profit or loss on the straight-line basis over theterm of the relevant lease. Benefits received and receivable as an incentive to enter into an operatinglease are also spread on the straight-line basis over the lease term.

2.8 Foreign currencies

The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in currency units, which is the functional currency of the Company, and the presentation currency for theconsolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other thanthe entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailingon the dates of the transactions. At each balance sheet date, monetary items denominated in foreigncurrencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured interms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period. Exchange differences arising on theretranslation of non-monetary items carried at fair value are included in profit or loss for the periodexcept for differences arising on the retranslation of non-monetary items in respect of which gains andlosses are recognised directly in equity. For such non-monetary items, any exchange component of thatgain or loss is also recognised directly in equity.

In order to hedge its exposure to certain foreign exchange risks, the Group enters into forward contracts and options. For the purpose of presenting consolidated financial statements, the assets andliabilities of the Group’s foreign operations are expressed in currency units using exchange rates prevailing on the balance sheet date. Income and expense items are translated at the averageexchange rates for the period, unless exchange rates fluctuated significantly during that period, inwhich case the exchange rates at the dates of the transactions are used. Exchange differences arising,if any, are classified as equity and transferred to the Group’s translation reserve. Such translation differences are recognised in profit or loss in the period in which the foreign operation is disposed of.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated asassets and liabilities of the foreign operation and translated at the closing rate.

2.9 Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

2.10 Government grants

Government grants towards staff re-training costs are recognised in profit or loss over the periods necessary to match them with the related costs and are deducted in reporting the related expense.




2.11 Retirement benefit costs

Defined contribution pension and provident funds

Current contributions to the defined contribution pension and defined contribution provident funds registered in terms of the Pension Fund Act, 1956 are based on current service and current salaries andare charged against income for the year. Payments to defined contribution retirement benefit plansare charged as an expense as they are incurred.

Other post retirement obligations

The Group provides a post-retirement medical aid subsidy to some of its retirees. The entitlement tothese benefits is conditional on the employee having pensionable service from a particular date andcontinuous medical aid membership of a qualifying scheme from the same date. The expected costs ofthese benefits are accrued over the period of employment.

2.12 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable ordeductible in other years and it further excludes items that are never taxable or deductible. TheGroup’s liability for current tax is calculated using tax rates that have been enacted or substantivelyenacted at the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, andis accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extentthat it is probable that taxable profits will be available against which deductible temporary differencescan be utilised.

Such assets and liabilities are not recognised if the temporary difference arises from goodwill or fromthe initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to controlthe reversal of the temporary difference and it is probable that the temporary difference will notreverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated atthe tax rates that are expected to apply in the period when the liability is settled or the asset realised.Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off taxassets against tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends, and is able to, settle its tax assets and liabilities on a netbasis.

2.13 Property, plant and equipment

Land is stated at cost whilst other fixed assets are stated at cost, less accumulated depreciation and any accumulated impairment losses.

Buildings are stated at cost less accumulated depreciation and any accumulated impairment losses,with the exception of certain buildings which are stated at deemed cost less accumulated depreciationand accumulated impairment losses. Deemed cost was determined in terms of an election made as permitted by IFRS 1.

Assets held under finance leases are depreciated over their expected useful lives on the same basis asowned assets or, where shorter, the term of the relevant lease.

Depreciation is calculated on the straight-line basis, so as to write the cost of the assets down to their residual values, at the following per annum rates, which are considered to approximate the estimated useful lives of the assets concerned.




Buildings 1 – 10%Plant and equipment 10 – 20%Leasehold improvements Over the period of the leaseMotor vehicles 20 – 25%Furniture and fittings 20%Office equipment 10 – 33,3%Computer equipment 20 – 33,3%Golf cars 20%Forklifts 25%

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

2.14 Other intangible assets

Other intangible assets consist of computer software and are amortised on the straight-line basis overa period of three to ten years.

2.15 Impairment of tangible and intangible assets excluding goodwill

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangibleassets to determine whether there is any indication that those assets have suffered an impairment loss.

If any such indication exists, the recoverable amount of the asset is estimated in order to determinethe extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amountof an individual asset, the Group estimates the recoverable amount of the cash-generating unit towhich the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value inuse, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risks specific to the asset.If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverableamount.

An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) isincreased to the revised estimate of its recoverable amount, but so that the increased carrying amountdoes not exceed the carrying amount that would have been determined had no impairment loss beenrecognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, inwhich case the reversal of the impairment loss is treated as a revaluation increase.

2.16 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and,where applicable, direct labour costs and those overheads that have been incurred in bringing theinventories to their present location and condition. Cost is calculated using the first-in first-outmethod.

Net realisable value represents the estimated selling price less all estimated costs of completion andcosts to be incurred in marketing, selling and distribution.

2.17 Financial instruments

Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Groupbecomes a party to the contractual provisions of the instrument.

Trade receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method as reduced by appropriate allowances for estimated irrecoverable amounts. These allowances are recognised in profit or loss when there isobjective evidence that the asset is impaired. The allowance recognised is measured as the differencebetween the asset’s carrying amount and the present value of estimated future cash flows discountedat the effective interest rate computed at initial recognition.




Investments

Investments are recognised and derecognised on a trade date basis where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, plus directly attributable transaction costs.

At subsequent reporting dates, debt securities that the Group has the expressed intention and abilityto hold to maturity (held-to-maturity debt securities) are measured at amortised cost using the effective interest rate method, less any impairment loss recognised to reflect irrecoverable amounts.An impairment loss is recognised in profit or loss when there is objective evidence that the asset isimpaired, and is measured as the difference between the investment’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Impairment losses are reversed in subsequent periods when an increase in the investment’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the investment at the date theimpairment is reversed, shall not exceed what the amortised cost would have been had the impairment not been recognised.

Investments other than held-to-maturity debt securities are classified as either investments held fortrading or as available-for-sale, and are measured at subsequent reporting dates at fair value. Wheresecurities are held for trading purposes, gains and losses arising from changes in fair value are included in profit or loss for the period. For available-for-sale investments, gains and losses arisingfrom changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equityis included in the profit or loss for the period. Impairment losses recognised in profit or loss for equity investments classified as available-for-sale are not subsequently reversed through profit or loss.Impairment losses recognised in profit or loss for debt instruments classified as available-for-sale aresubsequently reversed if an increase in the fair value of the instrument can be objectively related toan event occurring after the recognition of the impairment loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highlyliquid investments that are readily convertible to a known amount of cash and are subject to aninsignificant risk of changes in value.

Financial liabilities and equity

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability andan equity instrument. An equity instrument is any contract that evidences a residual interest in theassets of the Group after deducting all of its liabilities. The accounting policies adopted for specificfinancial liabilities and equity instruments are set out below.

Bank borrowings

Interest-bearing bank loans and overdrafts are initially measured at fair value, and are subsequentlymeasured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised overthe term of the borrowings in accordance with the Group’s accounting policy for borrowing costs.

Trade payables

Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issuecosts.

Derivative financial instruments and hedge accounting

The Group’s activities expose it primarily to the financial risks of changes in foreign exchange rates and interest rates. The Group uses derivative financial instruments (primarily foreign currency forward contracts and interest rate swaps) to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments, forecast transactions and interest rate fluctuations relating to




bank loans. The use of financial derivatives is governed by the Group’s policies approved by the boardof directors, which provide written principles on the use of financial derivatives consistent with theGroup’s risk management strategy.

The Group does not use derivative financial instruments for speculative purposes.

Derivative financial instruments are initially measured at fair value on the contract date, and areremeasured to fair value at subsequent reporting dates.

Derivatives embedded in other financial instruments or other non-financial host contracts are treatedas separate derivatives when their risks and characteristics are not closely related to those of the hostcontract and the host contract is not carried at fair value with unrealised gains or losses reported inprofit or loss.

2.18 Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event, and itis probable that the Group will be required to settle that obligation. Provisions are measured at thedirectors’ best estimate of the expenditure required to settle the obligation at the balance sheet date,and are discounted to present value where the effect is material.

The warranty provision represents warranty income that has been deferred and which is recognisedon a systematic basis over the warranty term. It is expected that the majority of warranty claims willbe incurred within two years after the reporting period.

2.19 Share-based payments

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vestingconditions) at the date of the grant. The fair value determined at the grant date of the equity-settledshare-based payments is expensed on the straight-line basis over the vesting period, based on theGroup’s estimate of the shares that will eventually vest and is adjusted for the effect of non market-based vesting conditions. Fair value is measured using the Black-Scholes pricing model. Theexpected life used in the model is adjusted, based on management’s best estimate, for the effects ofnon-transferability, exercise restrictions and behavioural considerations.

2.20 Key judgements made by management

Preparing financial statements in conformity with IFRS requires judgements and assumptions thataffect reported amounts and related disclosures. Actual results could differ from these estimates.Certain accounting policies have been identified as involving particularly complex or subjective judgements or assessments as follows:

Asset lives and residual values

Property, plant and equipment is depreciated over its useful life taking into account residual values,where appropriate. The actual lives of the assets and residual values are assessed annually and mayvary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual valueassessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

Intangible assets other than goodwill

Intangible assets other than goodwill are amortised over their useful lives. The actual lives of theintangible assets are assessed annually and may vary depending on a number of factors. In reassessingintangible asset lives, factors such as technological innovation are taken into account.

Provisions

Management bases their estimation for warranty provision on the number of products under warranty at year-end, the age of these products and the remaining period under warranty. Actual warranty costs may vary depending on a number of factors.

Valuation of derivatives

Derivatives valuations are determined by discounting the contractual stream of payments/receiptsusing appropriate discount rates at the valuation date.

Valuation of investments

Investments are carried at cost or fair value. The directors determine the fair value on an annual basisby assessing the future cash flows associated with the investment.




3. BUSINESS SEGMENTS

3.1 Adoption of IFRS operating segments

The Group has adopted IFRS 8 Operating Segments with effect from 1 April 2009. IFRS 8 requires

operating segments to be identified on the basis of internal reports about components of the Group

that are regularly reviewed by the chief operating decision maker in order to allocate resources to the

segments and to assess their performance. The adoption of IFRS 8 has resulted in the Group’s

reportable segments remaining fundamentally the same as the prior year.

3.2 Segment revenues and results

The following is an analysis of the Group’s revenue and results from operations by reportable segments:

Segment revenue Segment profit

2010 2009 2010 2009

R’000 R’000 R’000 R’000

Engineering consumables* 2 018 304 2 136 572 292 673 325 567

Capital equipment* 1 749 538 2 254 606 123 441 141 510

Group, financing and other operations 201 030 132 357 37 179 30 279

3 968 872 4 523 535 453 293 497 356

Share of profits of associate 639 –

Finance costs (432 886) (382 719)

Interest and dividends received 408 498 360 115

Profit before taxation 429 544 474 752

Taxation (64 155) (111 940)

Profit for the year 365 389 362 812

The accounting policies of the reportable segments are the same as the Group’s accounting policies.

Segment profit represents the profit earned by each segment without allocation of profits of

associates, finance costs and income tax expense. This is the measure reported to the chief operating

decision maker for the purposes of assessment of segment performance.

* The Autobax division has been reclassified from the Capital Equipment to the Engineering Consumables segment

in the current year and the comparatives have been accordingly restated.

3.3 Segment assets and liabilities

2010 2009

R’000 R’000

Segment assets

Engineering consumables 1 233 928 1 258 015

Capital equipment 884 232 1 165 573

Group, financing and other operations 3 818 954 3 581 042

Total segment assets 5 937 114 6 004 730




3. BUSINESS SEGMENTS CONTINUED

3.3 Segment assets and liabilities continued

2010 2009

R’000 R’000

Segment liabilities

Engineering consumables 300 217 521 607

Capital equipment 631 884 967 168

Group, financing and other operations 3 391 750 3 179 704

Total segment liabilities 4 323 851 4 668 479

For the purposes of monitoring segment performance and allocating resources between segments:

• all assets are allocated to reportable segments other than investments in associates and tax assets.

• all liabilities are allocated to reportable segments other than current and deferred tax liabilities.

3.4 Other segment information

Depreciation and Additions to

amortisation non-current assets

2010 2009 2010 2009

R’000 R’000 R’000 R’000

Engineering consumables 16 006 11 040 10 523 27 226

Capital equipment 22 993 10 847 25 815 14 329

Group, financing and other operations 4 464 6 725 47 992 50 429

43 463 28 612 84 330 91 984

Geographical segments

The Group has not reported segment information by geographical location as the operations occur

substantially within Southern Africa.

Customers

The Group has not reported segment information by customer as no customer contributes in excess

of 10% of the Group’s total revenue.




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

4. OPERATING PROFIT BEFORE FINANCE COSTS, INTEREST AND DIVIDENDS RECEIVED

Operating profit before finance costs, interest

and dividends received is arrived at after taking

into account the following items:

Income

Profit on disposal of property, plant and equipment 3 762 3 271 – –

Profit on disposal of investment – 232 – –

Release of deferred profit on issue of shares

by subsidiary 3 870 3 870 – –

Negative goodwill recognised on acquisition

of subsidiaries 7 952 – – –

Credit default swap derivative (52 963) 14 239 – –

Interest rate swap derivative 1 303 – –

Expenses

Auditors’ remuneration – audit fees 3 557 2 967 – –

– Current year 3 123 2 442 – –

– Prior year 150 225 – –

– Other services 284 300 – –

Depreciation 30 215 25 700 – –

– Buildings 3 420 2 915 – –

– Plant and equipment 3 404 3 195 – –

– Leasehold improvements 1 449 748 – –

– Motor vehicles 4 144 3 690 – –

– Furniture and fittings 2 058 1 053 – –

– Office equipment 4 064 3 890 – –

– Computer equipment 6 630 4 806 – –

– Golf cars 5 039 5 403 – –

– Forklifts 7 – –

Amortisation of intangible assets 2 141 2 912 – –

Put option/credit default swap derivative (52 963) 14 239 – –

Impairment of property, plant and equipment 190 4 000 – –

Goodwill impaired 3 442 638 – –

Interest rate swap derivative – 3 922 – –

Loss on disposal of property, plant and equipment 30 39 – –

Employment costs 430 712 411 308 – 111

Operating lease expenses 14 390 29 896 92 86

– Premises 13 271 29 349 92 86

– Equipment 407 547 – –

– Other 712 – – –

Pension and provident fund contributions 20 491 13 066 – –

Share options expense 22 045 19 270 – –




GROUP COMPANY

2010 2009 2010 2009

R’000 R’000 R’000 R’000

5. FINANCE COSTS

Bank overdrafts and loans 22 631 5 249 2 30

Foreign exchange premiums 9 496 20 676 – –

Finance leases 827 1 270 – –

Debentures, promissory notes and other

long-term borrowings 399 932 355 524 – –

Total 432 886 382 719 2 30

6. INTEREST RECEIVED

Bank balances and cash 2 419 10 167 23 68

Partnership income 123 035 210 736 – –

Foreign exchange gains 5 240 1 687 – –

Long-term receivables 67 748 3 255 – –

Total 198 442 225 845 23 68

7. TAXATION

South African normal taxation

Current tax

– current year 18 044 35 126 433 567

– prior year 1 436 (3) (65) –

Deferred tax

– current year (4 466) (15 526) – –

– prior year (5 127) (123) – –

Secondary tax on companies 808 955 – –

Foreign tax 53 460 91 511 – –

Total 64 155 111 940 368 567

Reconciliation of tax rate % % % %

Statutory tax rate 28,0 28,0 28,0 28,0

Permanent differences and exempt income (25,3) (21,4) (27,7) (28,3)

Secondary tax on companies 0,2 0,2 – –

Utilisation of tax losses (0,7) (1,7) – –

Prior year underprovision 0,3 (0,5) – –

Foreign tax 12,4 19,0 – –

Effective tax rate 14,9 23,6 0,3 (0,3)

Estimated tax losses in the Group amount to R59 403 245 (2009: R12 534 831). A deferred tax asset of

R2 970 595 (2009: Rnil) was raised with respect to certain of these tax losses.




GROUP

2010 2009

R’000 R’000

7. TAXATION CONTINUED

7.1 Deferred taxNet balance at the beginning of the year 43 901 22 647 Arising on acquisition of subsidiaries 2 069 5 605 Income statement charge 9 593 15 649

Net balance at the end of the year 55 563 43 901

Comprising:Capital allowances (10 422) (17 520) Tax losses 2 971 – Provisions 45 272 52 612 Other temporary differences 18 252 8 936 Prepayments (510) (127)

Total 55 563 43 901

Disclosed as:Deferred taxation asset 69 852 57 177 Deferred taxation liability (14 289) (13 276)

Total 55 563 43 901

8. EARNINGS PER SHARE

Basic earnings per share (cents) 453 437 Diluted earnings per share (cents) 441 437

8.1 Basic earnings per share

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

Profit for the year attributable to owners of the company 320 896 312 812

Weighted average number of ordinary shares for the purposes of basic earnings per share 70 779 71 536

8.2 Diluted earnings per share

The earnings used in the calculation of diluted earnings per share are as follows:

Earnings used in the calculation of diluted earnings per share 320 896 312 812

Weighted average number of ordinary shares used in the calculation of diluted earnings per share 72 767 71 536




GROUP

Attributableto equity

Gross Taxation Minorities holdersR’000 R’000 R’000 R’000

8. EARNINGS PER SHARE CONTINUED

8.3 Headline earnings per share

This calculation is based on the weighted

average number of 70 779 151

(2009: 71 536 181) ordinary shares in issue

during the year. It is derived, after taxation

and minority interest, as follows:

2010

Earnings attributable to ordinary shareholders 429 544 (64 155) (44 493) 320 896

Adjusted for:

Release of deferred profit on issue of

shares by subsidiary (3 870) 624 – (3 246)

Net profit on disposal of property, plant

and equipment (3 732) 1 045 537 (2 150)

Negative goodwill on business combinations (7 952) – 1 590 (6 362)

Impairment of property, plant and equipment 190 (53) (27) 110

Impairment of goodwill 3 442 – (688) 2 754

Headline earnings for purposes of headline

earnings per share 417 622 (62 539) (43 081) 312 002

2009

Earnings attributable to ordinary shareholders 474 752 (111 940) (50 000) 312 812

Adjusted for:

Release of deferred profit on issue of

shares by subsidiary (3 870) 624 – (3 246)

Profit on disposal of investment (232) 32 40 (160)


and equipment (3 232) 905 465 (1 862)

Impairment of property, plant and equipment 4 000 (560) (688) 2 752

Impairment of goodwill 638 – (128) 510

Headline earnings for purposes of headlineearnings per share 472 056 (110 939) (50 311) 310 806

GROUP

2010 2009R’000 R’000

Headline earnings for purposes of diluted headline

earnings per share 312 002 310 806

Headline earnings per share (cents) 441 434

Diluted headline earnings per share (cents) 429 434




GROUP

2010 2009R’000 R’000

9. PROPERTY, PLANT AND EQUIPMENT

Land and buildings 196 784 151 040

– Gross carrying amount 225 213 176 523– Accumulated depreciation and impairment 28 429 25 483

Plant and equipment 14 991 13 307


Leasehold improvements 4 448 3 275

– Gross carrying amount 6 809 4 219– Accumulated depreciation 2 361 944

Motor vehicles 10 430 10 657


Furniture and fittings 8 347 9 112

– Gross carrying amount 15 556 13 865 – Accumulated depreciation 7 209 4 753

Office equipment 16 392 16 567

– Gross carrying amount 49 402 45 740 – Accumulated depreciation and impairment 33 010 29 173

Computer equipment 9 229 11 953

– Gross carrying amount 48 876 51 823 – Accumulated depreciation and impairment 39 647 39 870

Golf cars 11 586 13 086

– Gross carrying amount 26 010 27 835– Accumulated depreciation 14 424 14 749

Forklifts 40 653 –

– Gross carrying amount 93 728 –– Accumulated depreciation and impairment 53 075 –

Net carrying value 312 860 228 997

Total gross carrying amount 534 058 381 027Total accumulated depreciation and impairment 221 198 152 030

9.1 Details of land and buildings

A register containing details of land and buildings is available for inspection during business hours at

the registered office of the Company by members or their duly authorised agents.

9.2 Encumbrances

The Group has encumbered land and buildings, motor vehicles and golf cars having a carrying value

of R155 million (2009: R173 million) to secure banking financing facilities as detailed in note 24.




GROUP

2010 2009R’000 R’000

9. PROPERTY, PLANT AND EQUIPMENT CONTINUED

9.3 Reconciliation of movement in carrying value

Land and buildings

Balance at the beginning of the year 151 040 101 280

Additions 47 227 48 310

Acquisitions of subsidiaries – 10 635

Impairment reversed 4 000 (4 000)

Depreciation for the year (3 420) (2 915)

Disposals (2 063) (2 270)

Balance at the end of the year 196 784 151 040

Plant and equipment


Additions 4 207 6 325

Acquisitions of subsidiaries 983 5 890

Impairment (97) –


Disposals (5) (2 473)


Leasehold improvements

Balance at the beginning of the year 3 275 125


Depreciation for the year (1 449) (748)


Motor vehicles



Acquisitions of subsidiaries 4 2 945

Impairment (12) –


Disposals (258) (1 031)


Furniture and fittings



Acquisitions of subsidiaries 110 447


Disposals (20) –





GROUP

2010 2009R’000 R’000

9. PROPERTY, PLANT AND EQUIPMENT CONTINUED

9.3 Reconciliation of movement in carrying valuecontinued

Office equipmentBalance at the beginning of the year 16 567 13 807Additions 4 037 7 616Acquisitions of subsidiaries 51 121 Impairment (189) –Depreciation for the year (4 064) (3 890)Disposals (10) (1 087)


Computer equipmentBalance at the beginning of the year 11 953 9 002Additions 3 508 7 427Acquisitions of subsidiaries 614 357Impairment (158) –Depreciation for the year (6 630) (4 806)Disposals (58) (27)


Golf carsBalance at the beginning of the year 13 086 14 207Additions 4 798 6 072 Depreciation for the year (5 039) (5 403)Disposals (1 259) (1 790)


ForkliftsBalance at the beginning of the year – –Additions 11 639 –Acquisitions of subsidiaries 46 329 –Impairment (3 734) –Depreciation for the year (11 114) –Disposals (2 467) –

Balance at the end of the year 40 653 –

TotalBalance at the beginning of the year 228 997 154 996Additions 83 424 91 984Acquisitions of subsidiaries 48 091 20 395Net impairment (190) (4 000)Depreciation for the year* (41 322) (25 700)Disposals (6 140) (8 678)


* Depreciation relating to the forklift hire fleet is included in cost of sales.




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

10. FINANCIAL INVESTMENTS

Unlisted securitiesBusiness Venture Investments No. 1048 (Pty)

Limited – 50 000 redeemable non-cumulative preference shares 752 100 752 100 – –

The shares are redeemable from 8 August 2011 to 8 February 2016 in semi-annual instalments.Dividends are received at a rate of 10,9% per annum compounded semi-annually. The preference shares are pledged as security to the debenture holders under a credit default swap (refer note 24).

Business Venture Investments No. 1057 (Pty) Limited – 50 000 redeemable non-cumulative preference shares 443 000 443 000 443 000 443 000

The shares are redeemable from 8 August 2011 to 8 February 2016 in semi-annual instalments.Dividends are received at a rate of 10,9% per annum compounded semi-annually. The preference shares are pledged as security to the debenture holders under a credit default swap (refer note 24).

Gryphon Financial Engineering (Pty) Limited preference shares 1 684 987 – – –

Dividends are received at a rate of 10,35% perannum compounded quarterly. Government bondshave been pledged as security via a put optionwith Gryphon Support Services (Pty) Limited(refer note 25).

Total 2 880 087 1 195 100 443 000 443 000

Directors’ valuation 2 880 087 1 195 100 443 000 443 000

11. GOODWILL

Goodwill arising on acquisition of subsidiaries

At the beginning of the year 242 491 219 087 – –

Acquisition of subsidiaries 6 354 13 476 – –

Acquisition of minority interest in a subsidiary – 10 566 – –

Goodwill impaired during the year (3 442) (638) – –

At the end of the year 245 403 242 491 – –




GROUP

2010 2009R’000 R’000

11. GOODWILL CONTINUED

Goodwill arising on acquisition of subsidiaries continued

The carrying amount of the goodwill has been allocated as follows:

Cartcom (Pty) Limited – 2 901Bearing Man Group 213 615 208 000Goldquest International

Hydraulics SA (Pty) Limited 1 683 1 683Disa Equipment (Pty) Limited 11 793 11 793Tiletoria Cape Group 13 292 13 094Humulani Marketing (Pty) Limited 5 020 5 020

Total 245 403 242 491

The directors assess the carrying value of goodwill with reference to the future cash flows of the cash generating unit.

12. OTHER INTANGIBLE ASSETS

Computer software– Gross carrying value 18 529 17 623– Accumulated amortisation 8 606 6 465

Net carrying value 9 923 11 158

Reconciliation of movement in carrying value

Balance at the beginning of the year 11 158 11 327Additions 906 2 743Amortisation for the year (2 141) (2 912)


13. FINANCIAL ASSET

Credit default swap derivative 179 549 232 512

The fair value of the credit default swap derivative was determined by discounting the contractual stream of receipts on the long-term receivable using the zero swap curve at the valuation date.

14. LONG-TERM RECEIVABLE

Opening balance 1 527 875 1 350 000Capitalisation of net income from partnership 73 789 177 875Disposal of partnership interest (1 601 664) –

Closing balance – 1 527 875

The investment generated an interest return of 14,62% per annum and was secured by a forward sale agreement with Morgan Stanley Vaal LLC. Morgan Stanley Vaal LLC gave notice to exercise the forward saleagreement on the long-term receivable during the year. The settlement took place on 15 October 2009.




GROUP

2010 2009R’000 R’000

15. INVESTMENT INSUBSIDIARIES

Details of the Company’s subsidiaries at 31 March 2010 are as follows:

Shares at cost 502 264 502 264

Total 502 264 502 264

Proportion ofownership interest

and votingpower held

Principal Place of 2010 2009

Name of subsidiary activity operation % %

Direct holdings

Bearing Man 1955 Limited Investment holding company South Africa 100 100

Humulani Investments (Pty) Ltd* Investment holding company South Africa 80 80

Indirect holdings

Bearing Man (Botswana)

(Pty) Ltd Trading company Botswana 80 80

Bearing Man (Namibia)

(Pty) Ltd Trading company Namibia 80 80

Bearing Man (Swaziland)

(Pty) Ltd Trading company Swaziland 80 80

Bearing Man (Mozambique) LDA Trading company Mozambique 80 80

Bearing Man (Zambia)

(Pty) Ltd Trading company Zambia 80 80

Invicta Properties (Pty) Ltd Property holding company South Africa 80 80

Oscillating Systems Technology

Africa (Pty) Ltd Trading company South Africa 80 80

Mangold Turf Equipment

Company (Pty) Ltd Trading company South Africa 80 80

Disa Equipment (Pty) Ltd Trading company South Africa 80 80

Criterion Equipment (Pty) Ltd Trading company South Africa 80 –

Goldquest International

Hydraulics SA (Pty) Ltd Trading company South Africa 80 80

Humulani Marketing (Pty) Ltd Trading company South Africa 80 80

Farmmac (Pty) Ltd Trading company South Africa 80 80

Tiletoria Cape (Pty) Ltd Trading company South Africa 48 48

Spring Lights 149 (Pty) Ltd Trading company South Africa 48 48

* The 5% of the ordinary issued share capital of Humulani Investments (Pty) Ltd owned by the Humulani Investments Share

Incentive Trust has been consolidated in terms of SIC12. Refer to the Report of the Directors on page 37 of the 2010 Annual

Report for further details.




GROUP

2010 2009R’000 R’000

15. INVESTMENT IN SUBSIDIARIES CONTINUED

The Group acquired 100% of the share capital of Criterion Equipment (Pty) Ltd, effective 1 June 2009.

A register containing details of the other direct and indirect subsidiaries is available for inspection during business hours at the registered office of the Company by members or their duly authorised agents.

The Company’s attributable interest in the aggregate profits and losses(after taxation and minority interest) of its subsidiaries is as follows:

Profits 272 077 267 571

Losses 41 4 022

16. INVESTMENT IN ASSOCIATE

Proportion of

ownership interest

and voting

power held

Principal Place of 2010 2009

Name of associate activity operation % %

Compact Computers Solutions

(Pty) Ltd Trading company South Africa 40 –

The Group acquired a 40% interest in Compact Computers Solutions (Pty) Limited, effective 1 April 2009.

Summarised financial information in respect of the Group’s associate is set out below.

GROUP

2010 2009R’000 R’000

Total assets 2 018 –Total liabilities 1 406 –

Net assets 612 –

Group’s share of net assets of associateRevenue for the year 17 890 –Profit for the year 1 599 –

Group’s share of profits of associate 639 –

Reconciliation of carrying amount:Acquisition of associate 2 080 –Equity accounted earnings, net of taxation 639 –Dividends received (600) –

Carrying value at the end of the year 2 119 –




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

17. LOANS TO SUBSIDIARIES

Bearing Man 1955 Limited – – 223 872 141 894

Humulani Investments (Pty) Limited – – 177 264 112 587

– – 401 136 254 481

The loans are unsecured, bear no interest and no

fixed terms of repayment have been negotiated.

18. INVENTORIES

Merchandise 1 358 838 1 790 555 – –Work-in-progress 38 932 5 949 – –Obsolescence provision (98 975) (150 591) – –

Total 1 298 795 1 645 913 – –

Inventory carried at net realisable value 159 151 107 118 – –

Inventory write-down expensed 3 062 4 666 – –

Inventory recognised in the income statement 2 886 154 3 417 181 – –

19. TRADE AND OTHER RECEIVABLES

Trade receivables 598 856 599 890 – –

Provision for doubtful debts (39 925) (35 827) – –

Prepayments 3 367 45 312 121 –

Other receivables 108 681 78 731 7 025 7 008

Total 670 979 688 106 7 146 7 008

The directors consider that the

carrying value of trade and other

receivables approximates fair

value at year-end.

Movement in provision for

doubtful debt

Opening balance 35 827 18 231 – –


Amounts written off during the year, net

of recoveries (1 487) (5 380) – –

Net provision (released) raised during the year (5 998) 15 682 – –

Closing balance 39 925 35 827 – –




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

19. TRADE AND OTHER RECEIVABLESCONTINUED

Trade receivables past due and not impairedAll past due receivable balances have been assessed for recoverability and it is believed that their credit quality remains intact. An ageing analysis of these past due trade receivables, is as follows:60 days 4 754 11 087 – –90 days 2 343 5 180 – –More than 120 days – 4 414 – –

Total 7 097 20 681 – –

Trade receivables past due and impaired

60 days 1 280 3 164 – –90 days 12 349 7 942 – –More than 120 days 26 296 24 721 – –

Total 39 925 35 827 – –

20. ORDINARY SHARE CAPITAL

Authorised

134 000 000 (2009: 134 000 000)

ordinary shares of 5 cents each 6 700 6 700 6 700 6 700

Issued

74 480 555 (2009: 74 480 555)

ordinary shares of 5 cents each 3 724 3 724 3 724 3 724

Number of shares Number of shares

2010 2009 2010 2009

‘000 ‘000 ‘000 ‘000

Unissued shares

The unissued ordinary shares are under the control

of the directors in terms of a resolution of

members passed at the last annual general

meeting. This authority remains in force until

the next annual general meeting. 63 288 63 199 63 288 61 297

At the Company’s annual general meeting held on 31 July 2009, a special resolution was passed giving the

directors general authority to repurchase shares not exceeding 20% of the issued share capital on the open

market. This authority remains in force until the next annual general meeting.




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

21. SHARE PREMIUM

The ordinary share premium is made up as follows:

Balance at the end of the year 282 715 282 715 282 715 282 715

22. TREASURY SHARES

3 768 261 (2009: 3 679 062) ordinary shares

of 5 cents each (188) (184) – –

Share premium (96 382) (94 063) – –

Balance at the end of the year (96 570) (94 247) – –

23. ORDINARY DIVIDENDS*

Final

85 cents paid on 13 July 2009 (2009: 91 cents)

to shareholders registered in the books of the

Company on 10 July 2009 63 308 67 777 63 308 67 777

Interim

49 cents paid on 7 December 2009 (2009: 53 cents)

to shareholders registered in the books of the

Company on 4 December 2009 36 496 39 475 36 496 39 475

Dividends received on treasury shares (4 966) (3 567) – –

Total 94 838 103 685 99 804 107 252

* In accordance with IAS 10 the final dividend of 102 cents per share (2009: 85 cents) proposed by the directors has not been

reflected in the financial statements as it had not been declared at the year-end.




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

24. LONG-TERM BORROWINGS

24.1 Secured borrowingsFinance lease agreements 27 368 10 073 – –The lease agreements are repayable between 36 and 60 months and bear interest at fixed rates between 11% and 13,8% per annum. The leases are repaid in equal monthly instalments. No arrangements have been entered into for contingent rental payments. The borrowings are secured by certain motor vehicles and golf cars as detailed in note 9.2.

Mortgage bonds 125 620 108 549 – –The mortgage bonds are repayable over 120 months. The mortgage bonds attract interest at JIBAR plus 2,05% per annum. The capital on the JIBAR linked bonds are repayable from the third year onwards. The JIBAR linked variable rates bonds have been swapped for fixed rate loans for a period of two years. These bonds are secured by certain land and buildings as referred to in note 9.2.

Debentures 1 195 100 1 195 100 – –The debentures bear interest at 12,5% per annum and are redeemable in semi-annual instalments from 8 August 2011 to 8 February 2016. The rights of the debenture holders to the repayment of interest and capital are subordinated in favour of the claims of the creditors of certain of the Group’s companies. The debentures are secured by certain preference share investments by means of a credit default swap transaction entered into with Standard Bank of South Africa Limited as detailed in note 10.

Serec Capital (Pty) Limited loan 1 686 001 1 529 269 – –The loan bears interest at a compounded quarterly fixed rate of 11,73% per annum. The fixed date of repayment is 15 August 2018. The Group may however elect to repay the loan at an earlier date without premium or penalty. The loan is secured by a credit default swap as referred to in note 13.

Balance carried forward 3 034 089 2 842 991 – –




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

Balance brought forward 3 034 089 2 842 991 – –

24.2 Unsecured borrowings

Other borrowings 10 857 9 193 – –

The amounts payable are unsecured, interest-free and no fixed repayment terms have been negotiated. The loans are long-term in nature.

Invicta Share Trust loan – – 688 688The loan is unsecured, interest-free and no fixed repayment terms have been negotiated. The loan is long-term in nature.

Total borrowings 3 044 946 2 852 184 688 688

Less: Current portion of long-term

borrowings disclosed in current liabilities (18 056) (5 546) – –

Total long-term borrowings 3 026 890 2 846 638 688 688

Borrowings are repayable as follows:

On demand or within one year 18 056 5 546 – –

In second to fifth year inclusive 145 789 236 452 – –

After five years 2 881 101 2 610 186 688 688

Total 3 044 946 2 852 184 688 688

There is no limit on the Group’s

borrowings and guarantees in terms of

the Company’s Articles of Association.

25. FINANCIAL LIABILITIES

Put option/credit default swap derivative 179 549 232 512 – –

Interest rate swap derivative 2 619 3 922 – –

182 168 236 434 – –

The fair values of the put option/credit default swap derivative and the interest rate swap derivative were

determined by discounting the contractual stream of payments using the zero swap curve at the valuation

date.




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

26. TRADE AND OTHER PAYABLES

Trade payables 561 786 959 854 – –

Other payables 373 007 215 071 2 431 2 440

Deferred income 12 984 16 230 – –

Total 947 777 1 191 155 2 431 2 440

27. PROVISIONS

Employee benefit provisions 42 885 86 439 – –

Warranties and service provisions 29 686 16 971 – –

Total 72 571 103 410 – –

Movements in provisions

Employee benefit provisions

Balance at the beginning of the year 86 439 47 999 – –

(Credited) charged to income (46 024) 36 038 – –


Balance at the end of the year 42 885 86 439 – –

Warranties and service provisions

Balance at the beginning of the year 16 971 14 743 – –

Charged (credited) to income 10 884 (1 556) – –


Balance at the end of the year 29 686 16 971 – –

The provision has been recognised for expected

warranty claims on certain products sold during

the last three financial years.

28. LOAN FROM SUBSIDIARY

Humulani Marketing (Pty) Limited – – 218 344 117 541

Total – – 218 344 117 541

The loan is unsecured, bears no interest and no fixed terms of repayment have been negotiated.




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

29. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Profit before taxation 429 544 474 752 147 013 172 553Adjusted for:Depreciation 30 215 25 700 – – Amortisation of intangible assets 2 141 2 912 – –

Impairment of property, plant and equipment 190 4 000 – –

Interest rate swap gain (1 303) – – –


and equipment (3 732) (3 232) – –

Profit on disposal of investment – (232) – –

Finance costs 432 886 382 719 2 30

Dividends received (210 056) (134 270) (146 034) (171 952)

Share of profits of associate (639) – – –

Interest received (198 442) (225 845) (23) (68)

Negative goodwill on acquisition of subsidiaries (7 952) – – –

Goodwill impairment 3 442 638 – –

Currency translation of foreign operations (7 649) (3 079) – –

Revaluation reserve reversed on liquidation of

Group company (3 169) – – –

Share appreciation rights charge 22 045 19 270 – –

Cash generated before movements in

working capital 487 521 543 333 958 563

Working capital changes: 102 705 (455 361) (147) 410

Decrease (increase) in inventories 391 825 (393 269) – –

Decrease (increase) in trade and other receivables 60 925 69 292 (138) 294

(Decrease) increase in trade and other payables

and provisions (350 045) (131 384) (9) 116

Cash generated from operations 590 226 87 972 811 973

30. DIVIDENDS PAID TO GROUP SHAREHOLDERS

Amounts unpaid at the beginning of the year 565 507 565 507

Final dividend paid 13 July 2009 (2009: 7 July 2008) 63 308 67 777 63 308 67 777

Interim dividend paid 7 December 2009

(2009: 8 December 2008) 36 496 39 475 36 496 39 475

Dividends received on treasury shares (4 966) (3 567) – –

Amounts unpaid at the end of the year (2 967) (565) (639) (565)

Total 92 436 103 627 99 730 107 194




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

31. TAXATION PAID (REFUNDED)

Amounts (prepaid) unpaid at the beginning

of the year (35 405) 25 925 34 34

Acquisition of subsidiaries – 5 526 – –

Charged to the income statement 73 748 127 589 368 567

Amounts (unpaid) prepaid at the end of the year (13 014) 35 405 (665) (34)

Total 25 329 194 445 (263) 567

32. CASH AND CASH EQUIVALENTS

Bank and cash balances 260 553 125 061 12 681 11 134

Bank overdrafts and bankers’ acceptances (45 846) (256 520) – –

Total 214 707 (131 459) 12 681 11 134

GROUP

Bank Trading

R’000 R’000

Banking and trading facilities

Gross facility balances 443 964 1 544 009

Facilities utilised 8 981 636 844

Facilities available 434 983 907 165

These facilities are callable on demand.

The directors are of the view that there are adequate facilities in place to operate for the next twelve

months.

33. CONTINGENT LIABILITIES

The Group has guaranteed certain finance facilities granted to customers of ABSA Bank. At the year-end, the

finance facilities guaranteed were R313 233 (2009: R1 428 112).




Audit and

Remuneration Salary Retire- Total

Directors’ Committee and ment emolu-

fees fees benefits benefits Bonus ments

R’000 R’000 R’000 R’000 R’000 R’000

34. DIRECTORS’ EMOLUMENTS

2010

Executive directors

C Barnard – – 1 099 170 1 200 2 469

A Goldstone – – 1 400 201 5 000 6 601

AM Sinclair – – 1 656 103 470 2 229

CE Walters – – 1 871 166 498 2 535

– – 6 026 640 7 168 13 834

Non-executive directors

CH Wiese 635 22 – – – 657

J Mthimunye 84 80 – – – 164

DI Samuels 332 262 – – – 594

LR Sherrell 63 – – – – 63

1 114 364 – – – 1 478

Total 1 114 364 6 026 640 7 168 15 312

* With effect from 31 March 2009, a portion of the cumulative total of the bonuses paid to the directors will be deducted

from the benefit accrued to the directors under the long-term bonus share incentive right (“LBSIR”) scheme. The relevant

percentages and cumulative portion of the bonuses to be deducted from the benefits accrued are reflected below:

Cumulative

bonus paid

subject to

deduction

from LBSIR

Relevant scheme benefit

percentage R

C Barnard 20 480 000

A Goldstone 70 14 984 900

AM Sinclair 40 1 200 000

CE Walters 40 1 297 200




34. DIRECTORS’ EMOLUMENTS CONTINUED

Audit andRemuneration Salary Retire- Total

Directors’ Committee and ment emolu-fees fees benefits benefits Bonus ments

R’000 R’000 R’000 R’000 R’000 R’000

2009Executive directorsC Barnard – – 1 057 178 2 400* 3 635A Goldstone – – 1 463 216 5 580* 7 259AM Sinclair – – 1 304 98 3 000* 4 402CE Walters – – 1 866 161 3 243* 5 270

– – 5 690 653 14 223 20 566

Non-executive directorsCH Wiese 540 20 – – – 560AK Masuku – – – – – –J Mthimunye 40 54 – – – 94DI Samuels 304 198 – – – 502RE Sherrell 80 – – – – 80

964 272 – – – 1 236

Total 964 272 5 690 653 14 223 21 802

* With effect from 31 March 2008, a portion of the cumulative total of the bonus paid to the directors will be deductedfrom the benefit accrued to the directors under the long-term bonus share incentive right (“LBSIR”) scheme. The relevant percentages and cumulative portion of the bonuses to be deducted from the benefits accrued are reflected below:

Cumulativebonus paid

subject todeduction

from LBSIRRelevant scheme benefit

percentage R

C Barnard 20 480 000A Goldstone 70 11 484 900AM Sinclair 40 1 200 000CE Walters 40 1 297 200

Number ofTotal number rights Weighted

of grants awarded averageawarded during incentive Grant

Share appreciation rights awarded to date the year cost date

2010A Goldstone 4 000 000 1 000 000 4,44 13 March 2009AM Sinclair 1 399 375 400 000 4,44 13 March 2009C Barnard 1 254 000 400 000 4,44 13 March 2009CE Walters 1 450 000 400 000 4,44 13 March 2009

2009A Goldstone 3 000 000 1 000 000 7,13 14 March 2008AM Sinclair 999 375 360 000 7,13 14 March 2008C Barnard 854 000 300 000 7,13 14 March 2008CE Walters 1 050 000 500 000 7,13 14 March 2008




GROUP COMPANY

2010 2009 2010 2009R’000 R’000 R’000 R’000

35. RETIREMENT BENEFITS

The Group contributes to a defined contribution

pension plan and a defined contribution provident

plan which are governed by the Pension Funds Act,

1956. No actuarial valuation of the plans is required.

All staff are members of a fund and the costs of

providing retirement benefits are charged to the

income statement as they are incurred. Refer to

note 4 for contributions made to retirement funds

during the year.

36. COMMITMENTS

Commitments in respect of unexpired

rental agreements for premises:

– Payable within twelve months 30 861 41 964 54 210

– Payable thereafter 43 618 154 500 – 54

74 479 196 464 54 264

Commitments in respect of unexpired rental

agreements for motor vehicles:

– Payable within twelve months 12 624 8 485 – –

– Payable thereafter 14 904 11 678 – –

27 528 20 163 – –

Commitments in respect of unexpired rental

agreements for office equipment:

– Payable within twelve months 231 550 – –

– Payable thereafter 113 1 201 – –

344 1 751 – –

Commitments in respect of contracted

capital expenditure 988 7 026 – –

Expenditure will be financed from existing cash facilities.




37. FINANCIAL RISK MANAGEMENT

The Group is considered to be exposed to interest rate, credit, liquidity and foreign currency risk. TheCompany has limited exposure to interest rate, credit and foreign currency risk.

Interest rate managementThe interest rate profile of total borrowings is as follows:

Redemption Interest 2010 2009Description Currency period rate % p.a. R’000 R’000

Bank overdrafts ZAR N/A 8,25 – 10,50 45 846 256 520Fixed rate borrowings ZAR 2006 – 2012 11,00 – 13,80 1 222 468 1 205 173 Variable rate borrowings ZAR 2006 – 2017 8,50 – 14,10 1 804 422 1 641 465

The Group is exposed to interest rate risk on its variable rate borrowings. The exposure to interest rate risk is managed using derivatives, where it is considered appropriate, and through a closely monitored cash management system. The impact of a change in the interest rate of 2% will have an effect of approximately R36 million (2009: R33 million) on the income statement.

Credit risk managementPotential areas of credit risk consist of trade accounts receivable and short-term cash investments. Tradeaccounts receivable consist mainly of a large, widespread customer base. Group companies monitor thefinancial position of their customers on an ongoing basis. Where considered appropriate, use is made ofcredit guarantee insurance. The granting of credit is controlled by application and account limits. Provisionis made for specific bad debts and at the year-end management did not consider there to be any materialcredit risk exposure that was not already covered by credit guarantee or a bad debt provision (refer to note19 for further detail in this regard). It is Group policy to deposit short-term cash investments with only themajor banks.

Liquidity risk managementThe Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are maintained.

The following table details the Group’s contractual maturities on its financial liabilities (excluding the put option/credit default swap derivatives and interest rate swap derivatives):

Less than 2 to 5 More than

1 year years 5 years Total

R’000 R’000 R’000 R’000

2010

Mortgage bonds 2 804 65 815 57 001 125 620

Serec Capital loan – – 1 686 001 1 686 001

Debentures – 566 477 628 623 1 195 100

Finance lease liabilities and unsecured borrowings 15 252 8 736 3 380 27 368

Trade and other payables 947 777 – – 947 777

965 833 641 028 2 375 005 3 981 866

2009

Mortgage bonds 331 1 571 106 647 108 549

Serec Capital loan – – 1 529 269 1 529 269

Debentures – 222 289 972 811 1 195 100

Finance lease liabilities and unsecured borrowings 5 215 12 592 1 459 19 266

Trade and other payables 1 191 155 – – 1 191 155

1 196 701 236 452 2 610 186 4 043 339




37. FINANCIAL RISK MANAGEMENT CONTINUED

Foreign currency risk management

All the Group’s monetary assets and liabilities are denominated in South African Rand, with the exception

of those assets and liabilities of BMG foreign entities which are fairly insignificant from a Group perspective.

The Group utilises currency derivatives to eliminate or reduce the exposure to its foreign currency

denominated assets and liabilities, and to hedge future transactions. The Group has entered into certain

forward exchange contracts in various currencies which do not relate to specific liabilities appearing on the

balance sheet at the year-end. These contracts will be utilised for settlement of orders already placed on

suppliers and which are due for payment in the coming year. It is the Group’s policy not to speculate in

foreign exchange contracts.

At year-end, open forward exchange contracts are marked-to-market and the profits and losses arising on

the contracts are recognised in the income statement. The estimated net fair values have been

determined at the year-end, using available market information and appropriate valuation methodologies.

As at year-end, no uncovered foreign exchange denominated transactions were in existence.

The forward exchange contracts in place at the year-end, are as follows:

Foreign Average

currency exchange Rand

’000 rate ’000

2010

US Dollar 40 490 7,6181 308 455

Euro 20 188 10,8838 219 723

Yen 786 602 11,6117 67 742

Australian Dollar 19 5,6842 108

Singapore Dollar 327 1,0734 351

British Pound 112 11,8036 1 322

Swiss Franc 17 7,5882 129

2009

US Dollar 43 847 10,5719 463 544

Euro 21 141 13,5172 285 768

Yen 1 065 974 8,8864 119 955

Australian Dollar 6 6,8333 41

Singapore Dollar 6 6,1667 37

British Pound 63 13,5714 855

Swiss Franc 29 8,5172 247

The forward exchange contracts mature within twelve months.




37. FINANCIAL RISK MANAGEMENT CONTINUED

Capital risk management

Capital is managed to ensure that operations are able to continue as a going concern, whilst maximising

return to stakeholders through an appropriate debt and equity structure. The capital structure of the Group

consists of debt, which includes borrowings, cash and cash equivalents, preference shares, debentures, a

put option/credit default swap and equity. Capital risk was reviewed in detail by the board in the corporate

restructure process and assessment of new acquisitions.

Financial instruments

Financial instruments as disclosed in the balance sheet include trade receivables and payables, other

receivables and payables, long-term debtors, overdrafts and short-term borrowings, long-term borrowings

and shareholders for dividend.

GROUP

2010 2009R’000 R’000

Categories of financial instruments

Financial assets

Investments at cost or fair value

Financial investments 2 880 087 1 195 100

Financial assets at fair value

Financial asset 179 549 232 512

Loans and receivables at amortised cost

Long-term receivable – 1 527 875

Long-term loans 6 721 –

Trade and other receivables 667 612 688 106

Bank balances and cash 260 553 125 061

3 994 522 3 768 654

Financial liabilities

Financial liabilities at fair value

Financial liabilities 182 168 236 434

Financial liabilities at amortised cost

Borrowings 3 044 946 3 083 072

Trade and other payables 947 777 1 191 155

Bank overdrafts and bankers’ acceptances 45 846 256 520

4 220 737 4 767 181




38. DIRECTORS’ INTERESTS IN THE SHARES OF THE COMPANY

Number of shares held

2010 2009

Direct Indirect Direct Indirect

interest interest interest interest

C Barnard 100 000 25 000 100 000 25 000

A Goldstone 588 966 3 749 008 588 966 5 023 686

DI Samuels 800 460 4 000 000 800 460 4 000 000

RE Sherrell 3 760 018 6 253 400 3 960 018 6 253 400

AM Sinclair 137 000 – 145 000 –

CE Walters 300 000 – 300 000 –

CH Wiese – 25 113 992 – 25 093 992

No material changes in the above shareholdings have been reported between 31 March 2010 and the date

of this report.

39. RELATED PARTY TRANSACTIONS

Transactions between the Company and its subsidiaries, which are related parties, are limited to dividends

received from subsidiaries of R97 million (2009: R122 million).

Remuneration of key management personnel

The remuneration of the directors of the subsidiaries, who are the key management personnel of the Group,

is set out below:

GROUP

2010 2009R’000 R’000

Short-term employee benefits 33 521 23 930

Retirement benefits 1 279 1 114

34 800 25 044

Services provided by Bravura Equity Services (“Bravura”)

Bravura is a related entity to one of the directors and major shareholders in the Group. Bravura has

provided financial services to the Group with regard to its BEE transaction in 2006, giving rise to certain

investments and borrowings (refer notes 10 and 24 respectively). During the current and prior year, Bravura

provided financial services to the counterparty in the transaction giving rise to the investments and

derivative instruments (refer notes 10, 13 and 14) and borrowings (refer notes 24 and 25).




GROUP

2010 2009R’000 R’000

40. ACQUISITION OF SUBSIDIARIES

Acquisition of subsidiaries during the current year

The significant acquisition included below is the acquisition of 100% of the share capital of Criterion Equipment (Pty) Limited, effective 1 June 2009.

Fair value of assets acquired:

Property, plant and equipment 48 091 20 395Other assets 77 398 208 148Deferred tax 2 069 5 605Long-term borrowings (15 658) (7 585)Other liabilities (75 828) (164 234)Minority interest (1 510) –

Net asset value 34 562 62 329Minority interest acquired in existing subsidiary – 9 942

Fair value of net assets acquired 34 562 72 271Cash outflow on acquisitions 32 964 89 323

Net goodwill (1 598) 17 052

Positive goodwill 6 354 17 052Negative goodwill (7 952) –

Profit after tax since acquisition date included in the consolidated results for the year 10 350 25 008

Revenue since acquisition date included in the consolidated results for the year 202 506 329 616

(Loss) profit after tax should the business combinations have been included for the entire year (33 270) 29 825

Revenue should the business combinations have been included for the entire year 189 865 372 910


Share informationas at 31 March 2010

SHAREHOLDER SPREAD

Number of Number

shareholding % of shares %

1 – 1 000 shares 902 54,93 279 647 0,38

1 001 – 10 000 shares 520 31,67 1 954 217 2,62

10 001 – 100 000 shares 154 9,38 5 048 034 6,78

100 001 – 1 000 000 shares 51 3,11 15 806 487 21,22

1 000 001 shares and over 15 0,91 51 392 170 69,00

1 642 100,00 74 480 555 100,00

DISTRIBUTION OF SHAREHOLDERS

Banks 8 0,49 1 801 362 2,42

Close corporations 21 1,28 88 285 0,12

Endowment funds 7 0,43 305 490 0,41

Individuals 1 283 78,14 13 848 266 18,59

Insurance companies 8 0,49 1 171 711 1,57

Investment companies 13 0,79 3 477 848 4,67

Medical aid schemes 2 0,12 14 337 0,02

Mutual funds 48 2,92 10 248 161 13,76

Nominees and trusts 135 8,22 23 346 859 31,34

Other corporations 11 0,67 98 950 0,13

Own holdings 1 0,06 3 768 261 5,06

Private companies 44 2,68 12 204 712 16,39

Public companies 6 0,37 1 337 165 1,80

Retirement funds 55 3,35 2 769 148 3,72

1 642 100,00 74 480 555 100,00

PUBLIC AND NON-PUBLIC SHAREHOLDERS

Public shareholders 1 615 98,36 25 884 450 34,75

Non-public shareholders 27 1,64 48 596 105 65,25

Directors and associates of the Company holdings 26 1,58 44 827 844 60,19

Treasury stock 1 0,06 3 768 261 5,06

1 642 100,00 74 480 555 100,00

Beneficial shareholders holding 5% or more

Titan Shareholders 15 066 992 20,23

Dorsland Diamante (Pty) Limited 10 027 000 13,46

The Sherrell Family Trust 6 253 400 8,40

RE Sherrell 3 760 018 5,05

35 107 410 47,14

JSE LIMITED STATISTICS

2010 2009

Ordinary shares

Traded 10 127 369 13 094 880

High (cents) 2 900 3 080

Low (cents) 2 000 1 825

Market price at year-end (cents) 2 879 2 000


Shareholders’ diary

Financial year-end 31 March 2010

Declaration of final dividend 25 May 2010

Publication of financial results for the year 25 May 2010

Last day to trade “CUM” dividend 2 July 2010

Trading “EX” dividend commences 5 July 2010

Record date 9 July 2010

Dividends payable 12 July 2010

Annual report posted to shareholders 30 June 2010

Annual general meeting 29 July 2010

Publication of interim results November 2010


Notice of annual general meeting of shareholders

Invicta Holdings Limited

(Registration number 1966/002182/06)

(Incorporated in the Republic of South Africa)

Share code: IVT • ISIN: ZAE000029773

(“Invicta” or “the Company” or “the Group”)

NOTICE OF ANNUAL GENERAL MEETINGOF SHAREHOLDERS FOR THE YEAR ENDED 31 MARCH 2010

Notice is hereby given that the annual general

meeting of shareholders of Invicta Holdings Limited

will be held in the boardroom, Invicta Holdings

Limited, 3rd Floor, Pepkor House, 36 Stellenberg Road,

Parow Industria, Cape Town on Thursday, 29 July 2010

at 12:00 for the following purposes:

Special Resolution 1

To consider and if deemed fit, to pass with or without

amendment, the following resolution as a special

resolution:

“RESOLVED THAT, the Company and/or any subsidiary

of the Company be and is hereby authorised by way of

a general approval as contemplated in sections

85(2) and 85(3) of the Companies Act 61 of 1973, as

amended (“Existing Companies Act”) or as

contemplated in section 48 of the Companies Act 71 of

2008, as amended (“New Companies Act”) (the

Existing Companies Act and the New Companies Act

being hereinafter collectively referred to as “the Act”),

to acquire from time to time any of the issued ordinary

shares of the Company, upon such terms and

conditions and in such amounts as the directors of the

Company may from time to time determine, but

subject to the Articles of Association of the Company,

the provisions of the Act and the Listings

Requirements of the JSE Limited (“JSE”), when

applicable, and provided that:

• the repurchase of securities will be effected

through the order book operated by the JSE

trading system and done without any prior

understanding or arrangement between the

Company and the counterparty;

• this general authority shall only be valid until the

Company’s next annual general meeting, provided

that it shall not extend beyond 15 (fifteen) months

from the date of passing of this special resolution;

• in determining the price at which the Company’s

ordinary shares are acquired by the Company in

terms of this general authority, the maximum

premium at which such ordinary shares may be

acquired will be 10% (ten percent) of the

weighted average of the market price at which

such ordinary shares are traded on the JSE, as

determined over the 5 (five) trading days

immediately preceding the date of the repurchase

of such ordinary shares by the Company;

• the acquisitions of ordinary shares in the

aggregate in any one financial year do not exceed

20% (twenty percent) of the Company’s issued

ordinary share capital from the date of the grant

of this general authority;

• the Company and the Group are in a position to

repay their debt in the ordinary course of business

for the following year;

• the consolidated assets of the Company, being

fairly valued in accordance with International

Financial Reporting Standards, are in excess of the

consolidated liabilities of the Company for the

following year;

• the ordinary capital and reserves of the Company

and the Group are adequate for the next twelve

months;

• the available working capital is adequate to

continue the operations of the Company and the

Group in the following year;

• upon entering the market to proceed with the

repurchase, the Company’s Sponsor has complied

with its responsibilities contained in Section 2.12

and Schedule 25 of the JSE Listings Requirements;

• after such repurchase the Company will still

comply with paragraphs 3.37 to 3.41 of the JSE

Listings Requirements concerning shareholder

spread requirements;

• the Company or its subsidiaries will not repurchase

securities during a prohibited period as defined in

paragraph 3.67 of the JSE Listings Requirements;

• when the Company has cumulatively repurchased

3% of the initial number of the relevant class of

securities, and for each 3% in aggregate of the

initial number of that class acquired thereafter, an

announcement will be made; and

• the Company only appoints one agent to effect

any repurchase(s) on its behalf.”

Other disclosure in terms of the JSE Listings

Requirements Section 11.26 and 11.23, required for

special resolutions 1 and 2.

The JSE Listings Requirements require the following

disclosure, some of which are elsewhere in the annual

report of which this notice forms part as set out below:

– Directors and management – pages 4 and 5;

– Major beneficial shareholders – page 80;

– Directors’ interests in ordinary shares – page 78;

and

– Share capital of the Company – page 65.


Litigation statement

In terms of section 11.26 of the JSE ListingsRequirements, the directors, whose names are givenon pages 4 and 5 of the annual report of which thisnotice forms part, are not aware of any legal or arbitration proceedings, including proceedings thatare pending or threatened, that may have or have hadin the recent past, being at least the previous 12(twelve) months, a material effect on the Group’sfinancial position.

Directors’ responsibility statement

The directors, whose names are given on pages 4 and

5 of the annual report, collectively and individually

accept full responsibility for the accuracy of the

information pertaining to this special resolution and

certify that to the best of their knowledge and belief

there are no facts that have been omitted which

would make any statement false or misleading, and

that all reasonable enquiries to ascertain such facts

have been made and that these special resolutions

contain all information required by law and the JSE

Listings Requirements.

Material changes

Other than the facts and developments reported on in

the annual report, there have been no material

changes in the affairs or financial position of the

Company and its subsidiaries since the date of

signature of the audit report and the date of this

notice.

The reason for and the effect of the special resolution

is to grant to the Company a general approval in terms

of the Companies Act for the acquisition by the

Company of its own shares, which general approval

shall be valid until the earlier of the next annual

general meeting of the Company or the variation or

revocation of such general authority by special

resolution by a subsequent general meeting of the

Company, provided that the general authority shall

not extend beyond 15 (fifteen) months from the date

of this special resolution.

General authority for the repurchase of shares on the

open market

The board, at the date of this annual report, has no

definite intention of repurchasing shares in Invicta on

the open market of the JSE. It is, however, proposed,

and the board believes it to be in the best interest of

Invicta, that shareholders pass a special resolution

granting the Company a general authority to acquire

its own shares and permit subsidiary companies of

Invicta to acquire shares in the Company.

The Company may not enter the market to proceed

with the repurchase until Invicta’s Sponsor, Deloitte &

Touche Sponsor Services (Proprietary) Limited, has

confirmed the adequacy of Invicta’s working capital

for the purposes of undertaking a repurchase of shares

in writing to the JSE.

Pursuant to a general repurchase other than shares

repurchased by one or more of the subsidiary

companies to be held as treasury stock, application will

be made to the JSE for the cancellation and delisting

of the shares in question. The cancellation of the

shares will be effected by way of a reduction of the

ordinary share capital and a reduction of the ordinary

share premium.

Special Resolution 2

To consider and if deemed fit, to pass with or without

amendment, the following resolution as a special

resolution:

“RESOLVED THAT, the Company be and is hereby

authorised by way of a specific approval as

contemplated in sections 85(2) and 85(3) of the

Companies Act 61 of 1973, as amended (“Existing

Companies Act”) or as contemplated in section 48 of

the Companies Act 71 of 2008, as amended (“New

Companies Act”) (the Existing Companies Act and the

New Companies Act being hereinafter collectively

referred to as “the Act”), to acquire from time to time

any or all of the issued ordinary shares of the

Company, held by Humulani Marketing (Pty) Limited,

upon such terms and conditions and in such amounts

as the directors of the Company may from time to time

determine, but subject to the Articles of Association of

the Company and the provisions of the Act, when

applicable and provided that:

• this specific authority shall only be valid until the

Company’s next annual general meeting, provided

that it shall not extend beyond 15 (fifteen) months

from the date of passing of this special resolution;

• the repurchase price not be lower than the cost to

the subsidiary of acquiring the shares and will not

be more than 10% higher than the weighted

average price (R25,63) at which the shares were

acquired;

• the maximum number of shares that are to be

repurchased not to exceed 3 768 261;

• the Company and the Group are in a position to

repay their debt in the ordinary course of business

for the following year;

Notice of annual general meeting of shareholderscontinued

• the consolidated assets of the Company, being

fairly valued in accordance with International

Financial Reporting Standards, are in excess of the

consolidated liabilities of the Company for the

following year;

• the ordinary capital and reserves of the Company

and the Group are adequate for the next twelve

months;• the available working capital is adequate to

continue the operations of the Company and theGroup in the following year.

The shares which the Company wishes to obtain specific authority to repurchase are treasury sharesheld at subsidiary level, which are currently eliminatedon consolidation and are thus treated as cancelledfrom a financial reporting perspective to shareholdersand any internal repurchase will therefore have nofinancial effect.

Once shares have been repurchased in terms of thisauthority, these shares will be cancelled.

Reason and effect

In terms of the Company’s specific authority to repurchase shares granted at all the annual generalmeetings held for the years ended 2008, 2009 and2010, Invicta, through its wholly-owned subsidiaryHumulani Marketing (Pty) Limited has over the years purchased 3 768 261 shares in the company whichwere held as “treasury shares”.

Source of funding for the repurchase will be fromwithin the Group.

The effect of the special resolution and the reasontherefore is to grant directors of the Company a specific authority in terms of the Act, as amended, forthe acquisition by Invicta of 3 768 261 Invicta sharesheld by the Company’s wholly-owned subsidiary,Humulani Marketing (Pty) Limited.

Ordinary Resolution 1

To receive and consider the annual financial statements and the Group annual financial statementsfor the year ended 31 March 2010.


To re-elect as director Mr C Barnard who retires interms of the Company’s Articles of Association but,being eligible, offers himself for re-election.

Mr Barnard did his articles of clerkship at KPMG wherehe qualified as a chartered accountant. In 1993 hejoined Sappi as management accountant, in 1996 he joined Group Five in their commercial development subsidiary and in 1997 he was appointed

commercial manager. In 1998 he joined the InvictaGroup as financial manager, in 1999 he was appointeddirector of CSE Equipment Company (Pty) Limited andin 2002 company secretary of Invicta Holdings Limited.On 7 June 2007 he was appointed as executive directorof Invicta Holdings Limited.


To re-elect as director Mr AM Sinclair who retires interms of the Company’s Articles of Association but,being eligible, offers himself for re-election.

In 1982 Mr Sinclair joined JI Case and in 1986 he wasappointed branch manager. In 1989 he joined CSEEquipment Company (Pty) Limited and in 1993 he wasappointed a divisional managing director. In 1998appointed managing director of CSE and in September2006 appointed as an alternate director of InvictaHoldings Limited. On 7 June 2007 he was appointedexecutive director of Invicta Holdings Limited.


To elect as director Mr LR Sherrell who was an alternate to Mr RE Sherrell who now retires. Mr LR Sherrell will now therefore take up the positionof non-executive director and no longer as alternatedirector.

Mr LR Sherrell was appointed as alternate director toMr RE Sherrell on 27 May 2009 and has been nominated as director of Invicta Holdings Limited witheffect from the 2010 annual general meeting, uponthe retirement of Mr RE Sherrell. Mr LR Sherrell studied commerce at UCT and has been involved in thehospitality and motor trade industries with interests infranchise dealerships. Mr LR Sherrell representedSouth Africa as a rugby player in 1994.


To elect as director Adv JD Wiese.

Adv JD Wiese has been nominated as director ofInvicta Holdings Limited with effect from the 2010annual general meeting. Adv JD Wiese obtained hisBA degree after which he worked at Lourensford WineEstate, helping to initiate events partnerships. Adv JD Wiese subsequently obtained his Master’s Degree inInternational Economics and Management and completed this degree as a participant in the MBA program. After returning to Lourensford for a briefperiod, Adv JD Wiese graduated as a Bachelor of Lawstudent in 2008. In 2009 Adv JD Wiese completed hispupilage at the Cape Bar and was admitted as anAdvocate of the High Court on 8 May 2009.


To approve the directors’ emoluments for the year,which are set out in note 34 on pages 72 and 73 of the2010 Annual Report.






“RESOLVED THAT the authorised but unissued sharesin the capital of the Company be and are herebyplaced under the control and authority of the directorsof the Company and that the directors of theCompany be and are hereby authorised and empowered to allot, issue and otherwise dispose ofsuch shares to such person or persons on such termsand conditions and at such times as the directors ofthe Company may from time to time and in their discretion deem fit, subject to the provisions of theCompanies Act (Act 61 of 1973) as amended orreplaced (“the Act”), the Articles of Association of theCompany and the JSE Limited (“JSE”) ListingsRequirements, when applicable, such authority toremain in force until the next annual general meeting.”


“RESOLVED THAT the directors of the Company be andthey are hereby authorised by way of a generalauthority, to issue all or any of the authorised but unissued shares in the capital of the Company, forcash, as and when they in their discretion deem fit,subject to the Companies Act (Act 61 of 1973) asamended or replaced (“the Act”), the Articles ofAssociation of the Company, the Listings Requirementsof the JSE Limited (“JSE”), when applicable, and thefollowing limitations, namely that:• the equity securities which are the subject of the

issue for cash must be of a class already in issue, orwhere this is not the case, must be limited to suchsecurities or rights that are convertible into a classalready in issue;

• any such issue will only be made to “public shareholders” as defined in the JSE ListingsRequirements and not related parties, unless theJSE otherwise agrees;

• the number of shares issued for cash shall not in

the aggregate in any one financial year exceed

15% (fifteen percent) of the Company’s issued

share capital of ordinary shares. The number of

ordinary shares which may be issued shall be based

on the number of ordinary shares in issue, added

to those that may be issued in future (arising from

the conversion of options/convertibles) at the date

of such application, less any ordinary shares

issued, or to be issued in future arising from

options/convertible ordinary shares issued during

the current financial year, plus any ordinary shares

to be issued pursuant to a rights issue which has

been announced, is irrevocable and fully

underwritten, or an acquisition which has had

final terms announced;• this authority be valid until the Company’s next

annual general meeting, provided that it shall not

extend beyond 15 (fifteen) months from the datethat this authority is given;

• a paid press announcement giving full details,including the impact on the net asset value andearnings per share, will be published at the time ofany issue representing, on a cumulative basis within 1 (one) financial year, 5% (five percent) ormore of the number of shares in issue prior to theissue; and

• in determining the price at which an issue ofshares may be made in terms of this authority, themaximum discount permitted will be 10% (tenpercent) of the weighted average traded price onthe JSE of those shares over the 30 (thirty) businessdays prior to the date that the price of the issue isdetermined or agreed by the directors of theCompany.”

In terms of the JSE Listings Requirements, 75% (seventy-five percent) of the votes cast by shareholderspresent or represented by proxy at the annual generalmeeting must be cast in favour of ordinary resolution8 for it to be approved.


To confirm the reappointment of Deloitte & Touche,Registered Auditors, as independent auditors of theCompany and to appoint SBF Carter as the designatedauditor for the following year.


To elect as audit committee member Mr DI Samuels forthe financial year ending 31 March 2011.

Mr DI Samuels (CA(SA)) is a non-executive independentdirector of Invicta Holdings Limited. In 1971 he joinedTrade and Industry Acceptance Corporation Limitedand from 1980 to 1984 was appointed director. From1989 to 2000 he was the managing director ofStenham (Pty) Limited. In 1996 he was appointed non-executive director of Invicta. In 2001 he was appointednon-executive director of Bearing Man Limited and in2002 as chairman.


To elect as audit committee member Mr J Mthimunyefor the financial year ending 31 March 2011.

Mr J Mthimunye (CA(SA)) is a non-executive independent director of Invicta Holdings Limited. In1993 he was appointed financial accountant of theDepartment of Finance. In 1995 appointed financialmanager at Nampak Tissue. In 1997 he was a foundingpartner of Gobodo Inc and established the corporateadvisory service. Previously appointed managing director of aloeCap (Pty) Limited and in May 2007 hewas appointed executive chairman. On 7 June 2007 hewas appointed alternate director to Mr AK Masuku onthe Invicta board and on 31 July 2009 he was appointedas executive director of Invicta Holdings Limited.



To elect as audit committee member Mr LR Sherrell for

the financial year ending 31 March 2011.

Mr LR Sherrell studied commerce at UCT and has been

involved in the hospitality and motor trade industries

with interests in franchise dealerships. Mr LR Sherrell

represented South Africa as a rugby player in 1994.

Mr LR Sherrell was appointed as alternate director to

Mr RE Sherrell on the Invicta Holdings Limited board

on 27 May 2009 and has been nominated as director of

Invicta Holdings Limited with effect from the 2010

annual general meeting to be held on 29 July 2010,

upon the retirement of Mr RE Sherrell.

Voting instructions

In terms of the Companies Act (Act 61 of 1973) as

amended or replaced, any member entitled to attend

and vote at the above meeting may appoint one or

more persons as proxy, to attend and speak and vote

in his stead. A proxy need not be a member of the

Company. Forms of proxy must be deposited at the

office of the transfer secretaries not later than

48 hours before the time fixed for the meeting

(excluding Saturdays, Sundays and public holidays).

If your Invicta shares have been dematerialised and

are held in a nominee account, then your Central

Securities Depository Participant (“CSDP”) or broker, as

the case may be, should contact you to ascertain how

you wish to cast your vote at the annual general

meeting and thereafter cast your vote in accordance

with your instructions.

If you have not been contacted it would be advisable

for you to contact your CSDP or broker, as the case

may be, and furnish them with your instructions. If

your CSDP or broker, as the case may be, does not

obtain instructions from you, they will be obliged to

act in terms of your mandate furnished to them, or if

the mandate is silent in this regard to abstain from

voting.

Dematerialised shareholders whose shares are held in

a nominee account must not complete the attached

form of proxy.

Unless you advise your CSDP or broker timeously in

terms of the agreement between yourself and your

CSDP or broker by the cut-off time advised by them

that you wish to attend the annual general meeting or

send a proxy to represent you at the annual general

meeting, your CSDP or broker will assume you do not

wish to attend the annual general meeting or send a

proxy. If you wish to attend the annual general

meeting, your CSDP or broker will issue the necessary

letter of representation to you to attend the annual

general meeting.

Shareholders who have dematerialised their sharesthrough a CSDP or broker, other than “own name”registered dematerialised shareholders, who wish toattend the annual general meeting, must request theirCSDP or broker to issue them with a letter of representation, or they must provide the CSDP or broker with their voting instructions in terms of therelevant custody agreement/mandate entered intobetween them and the CSDP or broker.

By order of the board

C Barnard

Company secretary

Johannesburg

25 May 2010



Form of proxy

INVICTA HOLDINGS LIMITEDRegistration number 1966/002182/06 • Incorporated in the Republic of South Africa

Share code: IVT • ISIN: ZAE000029773 • (“Invicta” or “the Company”)

For use only by certificated shareholders or dematerialised shareholders with “own name” registration at the annual general meeting of shareholders to be held in the boardroom, Invicta Holdings Limited, 3rd Floor, Pepkor House, 36 Stellenberg Road,Parow Industria, Cape Town on Thursday, 29 July 2010 commencing at 12:00 ("the annual general meeting").

Dematerialised shareholders holding shares other than with “own name” registration, must inform their CSDP or broker of theirintention to attend the annual general meeting and request their CSDP or broker to issue them with the necessary letter of representation to attend the annual general meeting in person and vote or provide their CSDP or broker with their voting instructions should they not wish to attend the annual general meeting in person. These shareholders must not use this form ofproxy.

I/We (please print name in full)

of (address)

being a shareholder(s) of Invicta and holding shares hereby appoint (name in block letters)

1. or failing him

2. or failing him

3. The chairman of the annual general meeting as my/our proxy to act for me/us at the annual general meeting which will be heldon Thursday, 29 July 2010 at 12:00 in the boardroom of Invicta Holdings Limited at 3rd Floor, Pepkor House, 36 StellenbergRoad, Parow Industria, Cape Town for the purposes of considering and, if deemed fit, passing with or without modification, theresolutions to be proposed thereat and at each adjournment or postponement thereof, and to vote for and/or against the resolutions and/or abstain from voting in respect of the shares in the issued share capital of the Company registered in my/ourname(s) (see note 2).

Number of votes (one per share)

For Against Abstain

Special resolution 1General authority to repurchase shares

Special resolution 2Specific authority to acquire shares of the Company held byHumulani Marketing (Pty) Limited, a subsidiary company

Ordinary resolution 1Adoption of the annual financial statements

Ordinary resolution 2To re-elect as director Mr C Barnard

Ordinary resolution 3To re-elect as director Mr AM Sinclair

Ordinary resolution 4To elect as director Mr LR Sherrell

Ordinary resolution 5To elect as director Adv JD Wiese

Ordinary resolution 6Approval of directors’ emoluments

Ordinary resolution 7To place the authorised but unissued shares under the control of the directors

Ordinary resolution 8To authorise the directors to issue shares for cash

Ordinary resolution 9To confirm the reappointment of Deloitte & Touche as independent auditors of the Company and SBF Carter as the designated auditor for the following year

Ordinary resolution 10To elect as audit committee member Mr DI Samuels

Ordinary resolution 11To elect as audit committee member Mr J Mthimunye

Ordinary resolution 12To elect as audit committee member Mr LR Sherrell

Please indicate with an “X” in the appropriate spaces above how you wish your votes to be cast.Unless otherwise instructed, my/our proxy may vote as he/she thinks fit.

Signed at on 2010

Signature

Assisted by (where applicable)

Number of shares

Each shareholder is entitled to appoint one or more proxies (who need not be a shareholder of the Company) to attend, speak andvote in place of that shareholder at the annual general meeting.

Please read the notes overleaf.


Notes to the proxy form

1. A shareholder may insert the name or names of two alternative proxies of the shareholder’s choice in the space

provided, with or without deleting “the chairman of the annual general meeting” but any such deletion must

be initialled by the shareholder.

2. A shareholder’s instruction to the proxy must be indicated by the insertion of the relevant number of votes

exercisable by that shareholder in the space provided. Failure to comply with the above will be deemed to

authorise the proxy to vote or abstain from voting at the annual general meeting as he deems fit in respect of

all the shareholder’s votes exercisable thereat. A shareholder or his proxy is not obliged to use all the votes

exercisable by the shareholder or his proxy, or cast them in the same way.

3. Any alteration or correction made to this form must be initialled by the signatory/ies.

4. Documentary evidence establishing the authority of a person signing this form of proxy in a representative

capacity must be attached to this form unless previously recorded by the transfer secretaries or waived by the

chairman of the annual general meeting.

5. The completion and lodging of this form will not preclude the relevant shareholder from attending the

annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in

terms thereof, should such shareholder wish to do so.

6. The chairman of the annual general meeting may reject or accept any form of proxy which is completed and/or

received other than in accordance with these instructions, provided that he is satisfied as to the manner in

which a shareholder wishes to vote.

7. A minor must be assisted by his/her parent/guardian unless the relevant documents establishing his/her legal

capacity are produced or have been registered by the Company.

8. Where there are joint holders of any shares:

• any one holder may sign this form of proxy;

• the vote(s) of the senior shareholders (for that purpose seniority will be determined by the order in which

the names of shareholders appear in the company's register of shareholders) who tenders a vote (whether

in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint shareholder(s).

9. Forms of proxy must be lodged with or posted to the Company’s transfer secretaries’ offices in Johannesburg

(Computershare Investor Services (Pty) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001; PO Box

61051, Johannesburg, 2107) to be received by 12:00 on Tuesday, 27 July 2010.


Corporate information

Company registration number

1966/002182/06

Nature of business

Investment holding and management company

Secretary

C Barnard

PO Box 851, Isando, 1600

Business address

3rd Floor, Pepkor House, 36 Stellenberg Road

Parow Industria, 7493

Postal address

PO Box 6077, Parow East, 7501

Auditors

Deloitte & Touche

Registered Auditors

Deloitte & Touche Place, The Woodlands

Woodlands Drive, Woodmead, Sandton, 2196

Private Bag X6, Gallo Manor, 2052

Share transfer secretaries

Computershare Investor Services (Pty) Limited

Ground Floor, 70 Marshall Street, Johannesburg, 2001

PO Box 61051, Johannesburg, 2107

Sponsors

Deloitte & Touche Sponsor Services (Pty) Limited

Deloitte & Touche Place, The Woodlands

Woodlands Drive, Woodmead, Sandton, 2196

Private Bag X6, Gallo Manor, 2052

Bankers

Standard Bank of South Africa Limited

Absa Bank Limited

First National Bank (A division of FirstRand

Bank Limited)

Nedbank Limited

Citibank

HSBC

Attorneys

Bernadt, Vukic, Potash and Getz

10th Floor, BP Centre, Thibault Square,

Cape Town, 8001

PO Box 252, Cape Town, 8000

Website

www.invictaholdings.co.za

Audit Committee

DI Samuels – Chairman

J Mthimunye

Risk Committee

DI Samuels – Chairman

J Mthimunye

Remuneration Committee

CH Wiese – Chairman

DI Samuels

A Goldstone (ex officio)

GRAPHICULTURE 1915

www.invictaholdings.co.za

Documents

2010 reports/MARCH...Contents Invicta Holdings Limited • Annual report 2010 Profile Invicta Holdings Limited is an investment holding and management company, controlling and managing