African Overseas Enterprises 2012 Annual Report

AfricAn & overseAs INTEGRATED ANNuAl REpoRT

2012

Scope, boundary and approval of integrated annual report Financial highlights Group profileCorporate profileMission and visionStrategyBusiness model Five-year review Share performanceDefinitions Financial director’s report Human capital and remuneration reportDirectorateAdministrationCorporate governance reportSocial and ethics committee reportCompanies Act noticeDirectors’ responsibility statementCompany secretary’s certificateDirectors’ reportAudit committee reportIndependent auditor’s reportStatements of financial positionStatements of comprehensive incomeStatements of changes in equityStatements of cash flows Notes to the annual financial statementsShareholders’ informationNotice of annual general meetingAnnexuresForm of proxy (attached)Shareholders’ calendar

02 03 03 04 04 04 05 07 08 09 10 12 13 14 18 21 21 21 22 24 27 28 29 30 32 33 46 47 51

55

01

[email protected]/queensparksa

Contents

Scope, boundary and approval of integrated annual report

The African & Overseas Enterprises group is pleased to present its integrated annual report to stakeholders in line with the requirements of the King Code on Governance for South Africa 2009 (“King III”).

REPORT CONTENTThis integrated annual report covers the annual financial reporting period 1 July 2011 to 30 June 2012. Due to African & overseas’ investment in Rex Trueform Clothing Company limited (“Rex”) this report is limited to matters which are not addressed in the Rex integrated annual report. This report should be read in conjunction with the Rex integrated annual report.

We have included only a general narrative on strategy, risks, opportunities and sustainability issues identified. All financial information provided, which is supported by the annual financial statements, has been prepared in terms of IFRS, while financial KpI’s and ratios calculated using non-financial information have been provided based on internal management information, and are defined within the report.

The main stakeholders of the company are the shareholders, who are provided relevant timeous information by means of profit announcements, integrated annual reports and the annual general meeting.

EXTERNAL ASSURANCEAssurance on the annual financial statements has been provided by the external auditors, KpMG Inc. These annual financial statements form the basis of the financial disclosure in the integrated annual report.

APPROVAL OF INTEGRATED REPORTThe board of directors (“the board”) acknowledges its responsibility to ensure the integrity of the integrated annual report. The board has accordingly applied its mind to the integrated annual report and in its opinion the integrated annual report addresses all material issues, and presents fairly the integrated performance of the organisation and its impacts. The integrated annual report has been prepared pursuant to the recommendations of King III (principle 9.1). The board authorises the integrated annual report for release on 18 September 2012.

Michael Krawitz Patricia shub Chairman Chief executive officer

Cape Town 18 September 2012

1

2

Turnover FRoM CoNTINuING opERATIoNS (R’000)

415.5

466.2 460.9

508.1530.6

20122008 2009 2010 2011

oPerATing ProfiT MArgin FRoM CoNTINuING opERATIoNS (%)

8.2

5.9

8.18.5

4.7

20122008 2009 2010 2011

Financial highlights

Turnover from continuing operations up 4.4%

Headline earnings per share from continuing operations down 37.0%Operating profit from continuing operations down 42.0%

AFRICAN & OVERSEAS INTEGRATED ANNuAl REpoRT 2012

3

Group profile

African & Overseas Enterprises Limited has been listed on the JSE Limited since 1945. The company has controlling interests in Rex Trueform Clothing Company Limited which in turn is invested in the retail and property industries.

Corporate profile

qUEENSPARk DISTRIbUTION CENTRE PROPRIETARy LImITED

Owns and manages the distributiOn centre prOperty

company operating segments:

PROPERTy owns andsmanages the distribution centre property which is leased to Queenspark proprietary limited

100% OwNED

qUEENSPARk PROPRIETARy LImITED

main Operating cOmpany Of the grOup

company operating segments:

RETAIL Full retail operations

operates in the clothing retail sector

ANGLO AmERICAN EXPORT & ImPORT COmPANy LImITED

dOrmant

sharehOLding:

Ordinary shares 2 110 169 (72.62%)‘n’ ordinary shares 9 212 565 (51.94%)(translates into an economic interest of 55.15% in rex trueform)

AfricAn & overseAs enTerPrises LImITEDinvestment in rex truefOrm cLOthing cOmpany Limited

cOmpany Operating segments:

RETAIL Investment in Queenspark proprietary limited

PROPERTy owns and manages a property portfolio directly in the company and indirectly through its investment in Queenspark Distribution Centre proprietary limited

GROUP SERVICES Manages the group’s corporate responsibility

reX TrueforM cLoTHing coMPAnY LiMiTeDinvestment in retaiL and prOperty hOLdings

Business model

Mission and visionAfrican & Overseas’ mission is to operate as an investment holding company while providing a fair return to its shareholders.

strategy/business model

– owns controlling share in subsidiary

– Receives investment income

Strategy The company strategy is to maintain its investment in Rex Trueform Clothing Company Limited in the long term.

4 AFRICAN & OVERSEAS INTEGRATED ANNUAL REPORT 2012

Five-year reviewGROUP RESULTS

Five-year growth

(%)2012

r'000 2011

R’000 2010

R’000 2009

R’000 2008

R’000 STATEmENTS OF COmPREHENSIVE INCOmEContinuing operationsTurnover 7.8 530 593 508 078 460 939 466 200 415 504

Cost of sales (246 182) (221 987) (200 760) (249 345) (211 723)Gross profit 11.0 284 411 286 091 260 179 216 855 203 781 other income 2 564 1 614 1 123 1 526 3 511 Trading expenses 11.4 (261 996) (244 612) (224 111) (190 961) (173 080)Operating profit 6.5 24 979 43 093 37 191 27 420 34 212 Dividends received 13 12 16 23 22 Interest income 8 140 8 802 8 761 10 215 7 926 Interest expense (331) (367) (359) (446) (540)profit on disposal of associate – – – – 671 Share of losses from associated company – – – – (59)Profit before tax 8.7 32 801 51 540 45 609 37 212 42 232 Income tax expense (10 713) (16 117) (15 223) (11 798) (6 297)Profit for the year from continuing operations 9.4 22 088 35 423 30 386 25 414 35 935 profit/(loss) from discontinued operation (net of income tax) – 3 135 (1 073) (968) 1 873 Profit for the year 8.7 22 088 38 558 29 313 24 446 37 808 Profit attributable to ordinary and ‘N’ ordinary shareholders 23.5 21 920 38 410 29 175 12 936 21 102

STATEmENTS OF CASH FLOwSoperating profit before working capital changes 5.3 43 793 65 291 52 040 45 085 53 950 Working capital changes 4 874 (11 619) 11 425 (2 720) (16 269)Cash generated by operating activities 17.9 48 667 53 672 63 465 42 365 37 681 Interest income 8 140 8 802 8 761 10 215 7 926 Interest expense (331) (367) (359) (446) (540)Dividends paid (8 583) (7 001) (6 162) (6 162) (3 951)Dividends received 13 12 16 23 22 Normal tax paid (10 258) (17 004) (12 609) (8 994) (7 130)Secondary tax on companies paid (1 073) (826) (723) (722) (516)Net cash inflows from operating activities 36 575 37 288 52 389 36 279 33 492 Net cash outflows from investing activities (24 474) (30 519) (24 991) (21 231) (12 564)Net cash inflows/(outflows) from financing activities 309 443 – – (15)Net increase in cash and cash equivalents 12 410 7 212 27 398 15 048 20 913

STATEMENTS oF FINANCIAl poSITIoNAssetsNon-current assets 90 263 81 331 71 070 62 586 57 246 Current assets 10.7 238 727 243 580 222 447 201 962 185 660 Total assets 10.3 328 990 324 911 293 517 264 548 242 906 Equity and liabilitiesordinary shareholders’ interest 153 785 146 458 129 525 116 789 106 661 preference share capital 550 550 550 550 550 Non-controlling interest 126 416 119 934 104 799 94 438 86 211 Total equity 11.9 280 751 266 942 234 874 211 777 193 422 Non-current liabilities 15 681 14 320 16 486 13 755 11 688 Current liabilities 32 558 43 649 42 157 39 016 37 796 Total equity and liabilities 328 990 324 911 293 517 264 548 242 906

compound

5

6

Five-year review continued

GROUP RATIOSFive-year

growth (%)

or five-year average

(Av.) 2012 2011 2010 2009 2008

RETURNSReturn on equity (%) Av. 14.0 8.0 15.3 13.1 11.6 21.8

Return on capital (%) Av. 19.6 12.1 22.4 19.9 17.9 25.7

Return on assets (%) Av. 15.8 10.1 18.2 15.9 14.3 20.4

PRODUCTIVITyTotal asset turn (times) Av. 1.8 1.6 1.8 1.7 1.9 2.0

Gross margin from continuing operations (%) Av. 52.4 53.6 56.3 56.4 46.5 49.0

operating margin from continuing operations (%) Av. 7.1 4.7 8.5 8.1 5.9 8.2

EBITDA margin from continuing operations (%) Av. 12.2 10.3 13.3 12.9 10.7 13.7

profit margin before tax (%) Av. 8.9 6.2 10.1 9.9 8.0 10.2

Inventory turn (times) Av. 3.9 3.7 3.9 3.5 4.1 4.5

Effective tax rate on continuing operations (%) Av. 28.8 32.7 31.3 33.4 31.7 14.9

SOLVENCy AND LIqUIDITyTotal liabilities to total equity (%) Av. 22.9 17.2 21.7 25.0 24.9 25.6

Current ratio :1 Av. 5.7 7.3 5.6 5.3 5.2 4.9

Acid test ratio :1 Av. 4.0 5.4 4.0 3.9 3.4 3.2

Dividend cover (times) Av. 5.1 3.0 5.7 5.1 4.5 7.3

ANNUAL GROwTH ON CONTINUING OPERATIONSTurnover (%) (%) 7.8 4.4 10.2 (1.1) 12.2 14.2

operating profit (%) (%) 6.5 (42.0) 15.9 35.6 (19.9) 87.9

profit for the year (%) (%) 9.4 (37.6) 16.6 19.6 (29.3) 155.1

compound

AFRICAN & OVERSEAS INTEGRATED ANNuAl REpoRT 2012

7

Five-yearcompoundgrowth (%) 2012 2011 2010 2009 2008

Earnings per share (cents) 8.0 98.8 180.6 137.1 113.6 185.3

Headline earnings per share (cents) 9.6 106.3 183.2 141.6 111.9 181.5 proposed dividend per ordinary share (cents) 20.1 35.0 32.0 28.0 25.0 25.0 Dividend declared per ordinary share (cents) 18.0 32.0 28.0 25.0 25.0 14.0 Dividend cover – based on headline earnings (cents) 3.0 5.7 5.1 4.5 7.3

Total No. of shares in issue (000’s) 11 387 11 387 11 387 11 387 11 387 Weighted average shareholders’ return (%) 39.2 15.3 24.8 21.1 43.8

Net asset value per share (cents) 11.9 2 466 2 344 2 063 1 860 1 699

Ratio closing price/net asset value

– ordinary shares 0.7 0.4 0.4 0.4 0.4

– ’N’ ordinary shares 0.7 0.5 0.5 0.5 0.4

Ordinary shares

Market price per share

– at year-end (cents) 23.5 1 650 930 900 750 750

– high (cents) 1 650 930 1 000 1 099 750

– low (cents) 930 900 800 750 605

Shares traded

– value (R’000) 40 15 84 77 1 587

– volume (000’s) 3 2 9 9 261

Shares in issue (000’s) 1 250 1 250 1 250 1 250 1 250

percentage traded (%) 0.2 0.1 0.7 0.7 20.9

Closing price/earnings (ratio) 15.5 5.1 6.4 6.7 4.1 Closing dividend yield – proposed dividend (%) 2.1 3.4 3.1 3.3 3.3

‘N’ ordinary shares

Market price per share

– at year-end (cents) 25.8 1 660 1 250 1 100 900 750

– high (cents) 1 660 1 250 1 100 1 000 750

– low (cents) 1 100 1 000 810 501 526

Shares traded

– value (R’000) 1 575 338 3 890 1 637 22 852

– volume (000’s) 99 31 431 196 3 767

Shares in issue (000’s) 10 137 10 137 10 137 10 137 10 137

percentage traded (%) 1.0 0.3 4.3 1.9 37.2

Closing price/earnings (ratio) 15.6 6.8 7.8 8.0 4.1 Closing dividend yield – proposed dividend (%) 2.1 2.6 2.5 2.8 3.3

market capitalisation

– ordinary shares (R million) 23.5 20.6 11.6 11.3 9.4 9.4

– ‘N’ ordinary shares (R million) 25.8 168.3 126.7 111.5 91.2 76.0

Total (R million) 25.6 188.9 138.3 122.8 100.6 85.4

Share performance

Definitions

return on equity: Earnings attributable to ordinary and ‘N’ ordinary shareholders divided by average ordinary shareholders' interest

return on capital: Total group profit before interest expense and tax divided by average total net assets

return on assets: Total group profit before interest expense and tax divided by average total assets

Total asset turn: Total group turnover divided by average total assets

gross margin from continuing operations: Gross profit from continuing operations divided by turnover from continuing operations

operating margin from continuing operations: operating profit from continuing operations divided by turnover from continuing operations

ebiTDA margin from continuing operations: Earnings before interest expense, tax, depreciation and amortisation from continuing operations divided by turnover from continuing operations

inventory turn: Total group cost of sales for the year divided by average inventory

effective tax rate on continuing operations: Income tax expense on continuing operations divided by profit before tax on continuing operations

Total liabilities to equity: Total closing liabilities divided by total closing equity

current ratio: Total closing current assets divided by total closing current liabilities

Acid test ratio: Total closing current assets less inventories divided by total closing current liabilities

Dividend cover: Headline earnings per share divided by total ordinary dividends proposed for the year

Weighted average number of shares in issue: The number of shares in issue at the beginning of the year increased by shares issued during the year, and decreased by shares repurchased during the year, weighted on a time basis for the period during the year in which they were in issue

Weighted average shareholder return: Weighted average share price at the end of the year minus the weighted average share price at the beginning of the year plus dividends declared, divided by the weighted average share price at the beginning of the year

net asset value per share: Net assets divided by the number of shares in issue (net of treasury shares) at the end of the reporting period

Market capitalisation: The closing share price at year-end as per the JSE multiplied by the total number of shares in issue at the end of the year

8 AFRICAN & OVERSEAS INTEGRATED ANNuAl REpoRT 2012

The total profit for the year decreased by 42.7% to R22.1 million (2011: R38.5 million), translating into a decreased return on equity from 15.3% (in 2011) to 8.0% for the year.

The group’s performance during the last five years is reflected in the following table:

2007 2012

Five-year CAGR (%)

or average

Return on equity (“RoE”) (%) 9.1 8.0 Avg. 14.0

Headline earnings per share (cents) 67.1 106.3 % 9.6

Share price –ordinary shares (closing) (cents) 575 1 650 % 23.5

Share price – ‘N’ ordinary (closing) (cents) 526 1 660 % 25.8

FINANCIAL PERFORmANCEThis review of the group’s consolidated financial performance for the year ended 30 June 2012 should be read in conjunction with the annual financial statements.

GROUP STATEmENT OF COmPREHENSIVE INCOmEContinued operations Profit for the year The profit for the year decreased by 37.6% to R22.1 million (2011: R35.4 million).

STATEmENT OF FINANCIAL POSITIONEquity and reservesThe group’s capital and reserves increased by 5.2% to R280.8 million (2011: R266.9 million) resulting in a net asset value per share of R24.66 (2011: R23.44).

Cash on hand/cash utilisationThe group remains cash-generative. The group generated cash flow from operations of R48.7 million compared to R53.7 million in 2011. The cash and cash equivalents increased to R161.3 million at year-end (2011: R148.9 million).

SHAREHOLDER DISTRIbUTIONordinary and ‘N’ ordinary shareholders received a total dividend of 32 cents per share during the year, an increase of 14.3% over the previous year. The preference shareholders received a total of 61 cents per share during the year.

The board of directors has recommended a dividend of 35 cents per share for the year under review. Dividend cover in respect of the ordinary and ‘N’ ordinary shares was 3.0 times the headline earnings per share.

Damian Johnson Financial director

18 September 2012

As the group consolidated results are directly impacted by the Rex Trueform financial results, this report is to be read in conjunction with the Rex Trueform Clothing Company Limited integrated annual report.

Financial director’s report

9

REmUNERATION POLICyAfrican & overseas Enterprises limited does not employ persons other than in the capacity as directors. Non-executive directors receive directors’ fees as noted below. Executive directors do not receive directors’ fees.

NON-EXECUTIVE DIRECTORS’ REmUNERATIONNon-executive directors are paid a base fee for their services as directors. Fees are based on an assessment of the non-executive directors’ time commitment and increased regulatory and governance obligations.

Fees paid to the non-executive directors for the 2012 reporting period are outlined in note 12 of the annual financial statements. The remuneration of non-executive directors is reviewed annually by the remuneration committee and recommended to shareholders for approval at the annual general meeting. The proposed fees for the period 1 July 2012 to 30 June 2013 are set out below and will be submitted to shareholders for approval as per the Notice of Annual General Meeting.

Human capital and remuneration report

Fees for the current year and proposed for next year are as follows:

2013R

2012r

Chairman of the board 273 000 255 000

lead independent director 59 000 55 000

Director 43 000 40 000


11

Catherine Radowsky

Michael Krawitz

Patrick Naylor

Roger Rees

Patricia Shub

Romain Orlin

Damian Johnson


Directorate

Michael Laurence Krawitz (73)

dip in Law and higher dip in tax Law

non-executive chairman

Member of remuneration, nomination and social and ethics committees

Non-executive chairman of Rex Trueform Clothing Company limited and Queenspark proprietary limited

Appointed to the board 2003

catherine elizabeth Anne radowsky (45)

ba

executive director

Director of Rex Trueform Clothing Company limited, Queenspark proprietary limited and Queenspark Distribution Centre proprietary limited


Patricia eve shub (68)

ba

chief executive officer

Director of Queenspark proprietary limited


Patrick Martin naylor (66)

bsc (eng)

independent non-executive director

Chairman of audit committee and member of remuneration and nomination committees

Director of Rex Trueform Clothing Company limited and Queenspark proprietary limited


roger William rees (59)

bsc (econ) (hons), fca


Member of audit committee



romain victor orlin (70)

ba (econ) wits


Member of audit, remuneration and nomination committees



Damian steven Johnson (44)

bcompt (hons), ca (sa)

executive financial director



registered officeRex Buildings263 Victoria Road Salt River, Cape Town, 7925po Box 1856, Cape Town, 8000Tel: 021 460 9400 Fax: 021 460 9575

company secretarySM lawrenceRex Buildings 263 Victoria Road Salt River, Cape Town, 7925po Box 1856, Cape Town 8000

Transfer secretariesComputershare Investor Services proprietary limited70 Marshall StreetJohannesburg, 2001po Box 61051, Marshalltown, 2107Tel: 011 370 5000 Fax: 011 688 7716

sponsorsJava Capital proprietary limited2 Arnold RoadRosebank, 2196po Box 2087, parklands, 2121

AuditorsKpMG Inc.MSC House 1 Mediterranean StreetForeshore, Cape Town 8001

Principal bankerThe Standard Bank of South Africa limited

AttorneysMichael Krawitz & Co.25 Bompas Road Dunkeld West 2196

Website addresseshttp://www.rextrueform.comhttp://www.queenspark.com

Administration

13

report, and the integrity of the integrated report as a whole. In this regard the board has accepted the recommendation of the group’s audit committee regarding the reliability of these documents and has approved the integrated report for the year ended 30 June 2012.

DIRECTORATEStructureThe company has a unitary board structure which consisted, during the year under review, of four non-executive directors, three of whom are independent, and three executive directors. The chief executive officer and the financial director are included amongst the executive directors.

board charterThe board has adopted a charter which regulates the manner in which the business of the board is conducted in accordance with the principles of good corporate governance.

The charter defines the role of the board and the board committees, the roles of the chairman, the chief executive officer and the board members, the composition and appointment of the board, governance procedures, the board’s responsibility for management and control, board evaluation and performance, the role of the company secretary and the board’s relationship with shareholders.

The board charter was recently reviewed and revised so as to align the board’s functioning and regulation more closely with the requirements of King III and the Companies Act. As at the date of issue of this integrated annual report, the revised board charter has been adopted by the board.

Role of the boardThe board is responsible for setting the direction of the group through the establishment of strategic objectives and policies, and takes overall accountability for the group by taking responsibility for its management. It retains full and effective control over the group and accordingly decisions on material matters are reviewed and approved by the board prior to implementation.

In addition, the board ensures that the company has an effective and independent audit committee, assumes responsibility for the governance of risk, is responsible for information technology governance, ensures compliance with applicable laws, ensures a risk-based internal audit and ensures the integrity of the company’s integrated report.

LeadershipThe chairman, Michael Krawitz, leads the board and is responsible for its efficient operation and for representing the board to shareholders. The chairman is a non-executive director and is elected by the board.

kING III The directors are committed to those principles of corporate governance enumerated in the third King Report on Governance (“King III”). The directors are also committed to the application of the highest ethical standards in the conduct of the business, and accordingly the board endeavours to ensure either application of the King III principles, or explanation, in accordance with the “apply or explain” approach contemplated in King III.

Where the board has elected not to apply a particular recommendation, or where an alternative practice has been applied which achieves a similar result, the board is able to explain the reasons therefor.

Where principles which the board considers appropriate and useful have not yet been addressed, however, action is being taken to ensure future compliance.

The company is continually engaged in assessing its compliance with the principles of corporate governance contained in King III, and working to improve compliance where necessary. The board is of the opinion that the group is substantially compliant with those aspects of King III material to the effective corporate governance of the group.

The 2012 financial year saw a review of the company’s board charter so as to incorporate the principles contained in King III and so as to align with the Companies Act. At the time of issue of this integrated annual report, the revised and updated board charter has been adopted by the board.

In addition, the process of developing a board evaluation framework has commenced. The evaluation framework under consideration will enable directors to identify areas in which their contribution to the board could be improved upon.

INTEGRATED REPORTINGKing III recommends that annual reporting to stakeholders be in the form of an integrated report, so as to provide a holistic and integrated representation of the performance of the group, in terms of both finances and sustainability.

The report for the financial year ended June 2012 has benefited from our ongoing efforts to improve compliance, and the board is satisfied that the integrated annual report for the current year will enable our stakeholders to obtain insight into the operations of the group’s business, business strategy and the financial and sustainability performance of the group.

The board acknowledges its ultimate responsibility for ensuring the accuracy and completeness of the sustainability report, which forms part of the integrated

Corporate governance report


The non-executive chairman, Michael Krawitz, does not qualify as an independent director, and as a consequence a lead independent director has been appointed.

board meetingsThe board meets at least quarterly to consider performance, to monitor issues of strategic direction and to consider any other issues having a material effect on the group. Certain executives attend board meetings by invitation, specifically where their contribution is required in order to assist the board in its deliberations.

A formal agenda is prepared for each board meeting, and comprehensive board packs containing the information required, to enable directors to make informed decisions are forwarded to directors and invitees prior to board meetings.

RemunerationRemuneration payable to the non-executive directors is proposed by the remuneration committee and approved by shareholders on an annual basis.

In terms of the Companies Act, remuneration for the coming financial year will be approved by the shareholders in advance at the annual general meeting.

Details of the remuneration paid to the executive and the non-executive directors are disclosed in the remuneration report and also in note 12 to the annual financial statements.

Interests in contracts The company has a formal disclosure process in terms of which directors are required to disclose any interests which they may have, either directly or indirectly, in contracts concluded or to be concluded with the company.

During the year under review, it was established that none of the directors had a significant interest in any contract or arrangement entered into by the company or its subsidiaries.

Shareholdings and share dealingsDirectors, officers and their associates are prohibited from trading in the listed shares of the company during “closed periods” as defined in the JSE limited listings Requirements. This prohibition is extended to any employee within the group who is in possession of sensitive information. prior to the commencement of a “closed period” all relevant parties are informed of their responsibilities with regard to dealing in the shares of the company.

All dealings in the shares of the company by directors are reported on the JSE limited News Service within 48 hours of the trade having been made.

Directors are required to obtain clearance from the company prior to dealing in shares of the company.

Since the non-executive chairman is not independent, as that term is defined in King III, patrick Naylor, an independent non-executive director, has been appointed as lead independent director.

The chief executive officer, patricia Shub, is responsible for ensuring the day-to-day business affairs of the group are properly managed.

The roles of chairman and chief executive officer are separated, with a clear division of duties.

Composition and appointment The current composition of the board complies with the requirements of the Companies Act and King III, in that the board comprises a majority of non-executive directors. The majority of the non-executive directors are independent.

The appointment of new directors is approved by the board on the recommendation of the nomination committee in compliance with the board appointment policy. The process in terms of which such appointments are made is formal and transparent. In appointing a director, the board assesses the knowledge, experience, ability to lead and independence of the candidate against the corresponding requirements of the board position concerned.

In accordance with the company’s Articles of Association, all directors are subject to retirement by rotation and re-election by shareholders at least once every three years. Directors appointed during the financial year hold office until the next annual general meeting, at which they retire and become available for re-election by shareholders. No executive director has a long-term service contract with the group, and life directorships are not permitted.

The directors bring to the board a wide range of expertise and experience and, in the case of non-executive directors, an independent perspective and judgement on issues of policy, strategy and performance. There is a clear division of responsibilities at board level to ensure a balance of power and authority, such that no individual has unfettered powers of decision-making.

No changes were made to the directorate during the year under review.

Details of the directors and their credentials appear on pages 12 and 13 of the integrated annual report.

Independence assessmentThe board annually assesses the independence of the non-executive directors and has ascertained that patrick Naylor, Romain orlin and Roger Rees all satisfy the criteria for independence as set out in the Companies Act and King III.

15

Corporate governance report continued

Details of the direct and indirect holdings of directors in the company’s shares as at 30 June 2012 are given in the directors’ report.

SuccessionThe nomination committee is responsible to ensure adequate succession planning in respect of directors, members of board sub-committees, the chairman and the chief executive officer.

The group has not previously had formal written succession plans in place. The process of developing formal succession plans has commenced and will receive special attention over the following twelve months.

Attendance at meetingsThe attendance of directors at board meetings and at meetings of the audit committee and the social and ethics committee held during the financial year ending June 2012 was as follows:

board Audit

Social and

ethics

Number of meetings 4 2 1

Non-executive directors

Ml Krawitz 4 2* 1

pM Naylor 4 2 n/a

RV orlin 4 2 n/a

R Rees 4 2 n/a

Executive directors

pE Shub 4 n/a n/a

CEA Radowsky 4 2* n/a

DS Johnson 4 2* 1

* = By invitation

bOARD COmmITTEESThe board has established audit, remuneration, nomination, risk, and social and ethics committees to assist the board in performing its duties. These committees are detailed below.

Audit committeepM Naylor (Appointed 11/02/2006)

RV orlin (Appointed 19/05/2009)

RW Rees (Appointed 01/04/2010)

The company’s audit committee performs all the functions of the audit committee for each of the companies in the group, in terms of section 94 of the Companies Act.

The audit committee is comprised of three independent non-executive directors of the holding company, each of whom is also an independent non-executive director of the company. The committee is chaired by patrick Naylor, the lead independent non-executive director of the group.

The board is of the view that the audit committee members possess the skills, knowledge and understanding of the company necessary for them to carry out their duties and responsibilities.

The committee meets at least twice a year, specifically prior to the publication of the group’s interim and final results. These meetings are attended by the external auditors, the internal auditor, the chairman of the board and, where appropriate, senior executives of the group by invitation.

The committee is governed by formal terms of reference which set out the role of the committee, its processes and procedures.

Full details regarding the functioning of the audit committee are set out in the Audit Committee Report, which is included in the annual financial statements.

Remuneration committeepM Naylor (Appointed 01/07/2006)

Ml Krawitz (Appointed 04/06/2004)

RV orlin (Appointed 19/05/2009)

The remuneration committee is responsible for reviewing and approving the remuneration of directors and senior executives. The committee comprises patrick Naylor and Romain orlin, both independent non-executive directors, together with Michael Krawitz, a non-executive director.

Nomination committee The members of the remuneration committee also constitute the nomination committee, which identifies and evaluates potential candidates for appointment to the board and the board committees, and considers succession plans. The deliberations of this committee are regulated by a board appointment policy document which sets guidelines on the skills and qualities required of potential appointees.

Risk committee The board is responsible for the governance of risk and is assisted by the audit committee.

The material risks arising for the group relate to Rex Trueform, and are accordingly discussed in detail in the Rex Trueform integrated annual report.


COmPANy SECRETARyThe board has appointed a company secretary whose responsibilities include:

• assisting the chairman in co-ordinating and administering the operation of the board;

• providing guidance on the discharge of director responsibilities and the implementation of governance procedures; and

• assisting the group to comply with such statutory requirements as may be applicable to it.

All directors have unlimited access to the advice and services of the company secretary.

Alan Hodgkinson, who served as the company secretary of the group for the better part of the year under review, stepped down as company secretary on 16 April 2012, and Sarah lawrence was appointed as group company secretary in his stead.

Alan Hodgkinson retired on 30 June 2012, after 48 years of service to the group in various capacities, including as director. His in-depth knowledge and understanding of the group and its business will be greatly missed.

COmPLIANCEThe board is committed to high standards of integrity and fair dealing in the conduct of its business, and also the preservation of the group’s integrity and reputation. It thus requires all business units, departments and subsidiaries within the group to have a good understanding of and to comply with those laws, regulations and standards applicable to the environment within which they operate.

The requirements of the Companies Act, which came into force in May 2011 and which brought certain significant changes to the South African corporate landscape, have

been noted and the group’s compliance with the provisions of the Companies Act as they apply in practice is the subject of constant assessment and attention.

CODE OF ETHICSA formal code of ethics has been developed, and applies across every level of the company and its business. The code provides an ethical framework within which every employee is expected to behave. The code, which is communicated annually to all staff and to non-executive directors, embodies the company’s expectation that all employees share a commitment to high moral, ethical and legal standards.

INTERNAL AUDITIn compliance with the recommendation of King III, the group internal audit function is considered essential to maintaining the integrity, adequacy, efficiency and effectiveness of the group’s financial and non-financial controls.

The audit committee, with the assistance of the external auditors, reviews and approves the internal audit charter and internal audit plans, and evaluates the independence, effectiveness and performance of the internal audit function.

STAkEHOLDER RELATIONSHIPS The board recognises its responsibility to report and communicate matters of material significance to stakeholders.

In addition, the board appreciates that stakeholders’ perceptions affect the company’s reputation and ultimately the economic value of both the company and the group. Accordingly, all communication received from stakeholders is dealt with courteously, timeously and in an appropriate manner.

17

Social and ethics committee report

INTRODUCTION This report is made to shareholders in compliance with the requirements of the Companies Act No. 71 of 2008 (“the Companies Act”) and the King Report on Governance for South Africa 2009 (“King III”).

SOCIAL AND ETHICS COmmITTEE mANDATE The committee is governed by formal terms of reference which incorporate the requirements of the Companies Act.

ROLE OF THE COmmITTEEThe committee is broadly responsible to monitor the company’s activities, having regard to relevant legislation, other legal requirements or prevailing codes of best practice, with regard to matters relating to:

• social and economic development;

• good corporate citizenship;

• consumer relationships, including the company’s advertising, public relations and compliance with consumer protection laws; and

• labour and employment.

The committee is further responsible to assist in the implementation of an ethics management programme within the company, and to assess, monitor and report to the board and the shareholders thereon.

COmPOSITION AND ATTENDANCE AT mEETINGSThe committee, which is due to meet twice per year, is comprised of one non-executive director, Michael Krawitz (who chairs the meetings), one executive director, Damian Johnson and the company secretary, Sarah lawrence.

Meetings of the committee are also attended by Sharon Stubbs, the group’s human resources executive, and may be attended by any other executive by invitation.

The committee was established on 20 April 2012 and held one meeting during the 2012 financial year, at which every member and invitee was in attendance.

Details of fees paid to social and ethics committee members are disclosed in the remuneration report of Rex Trueform Clothing Company limited on page 28 of the Rex Trueform Clothing Company limited annual integrated report.

COmmITTEE FUNCTIONINGThe main focus of the committee’s inaugural meeting was to establish its areas of focus for the next twelve months and to prioritise specific areas for immediate attention.

Areas of focus identified for the next 12 months and beyond include:

• consideration of greening initiatives in the context of group property development;

• a review of the company’s compliance with consumer protection legislation;

• formalisation of the company’s corporate social responsibility and donations policy;

• a review of the company’s existing ethics policy with the view to incorporate possible improvements thereto, including an ethics management programme; and

• a review of the efficiency of the company’s anti-corruption policies, including its anti-fraud hot line, in relation to the oECD’s recommendations regarding corruption.

Meeting dates and agendas are agreed in advance and each meeting is preceded by the distribution to each attendee of an information pack comprising:

• a detailed agenda;

• the minutes of the previous meeting; and

• any documentation and/or information relevant to the matters on the agenda.

ML Krawitz Social and ethics committee chairman

18 September 2012

The social and ethics committee (“the committee”) is pleased to present its first report to the shareholders of African & Overseas Enterprises Limited (“African & Overseas”), which report is for the financial year ended 30 June 2012.


19


Companies Act noticeThese annual financial statements have been audited in terms of the Companies Act of South Africa. These annual financial statements have been prepared under the supervision of the group financial director, Damian Johnson (CA (SA)).

Company secretary’s certificate

Directors’ responsibility statementThe directors are responsible for the preparation and fair presentation of the consolidated and separate annual financial statements of African & Overseas Enterprises Limited, comprising the statements of financial position at 30 June 2012, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements which include a summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa. In addition, the directors are responsible for preparing the Directors’ Report.The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and for maintaining adequate accounting records and an effective system of risk management, as well as the preparation of the supplementary schedules included in these financial statements.

The directors have made an assessment of the ability of the company and its subsidiaries to continue as a going concern and have no reason to believe that the business will not be a going concern in the year ahead.

The auditor is responsible for reporting on whether the consolidated and separate annual financial statements are fairly presented in accordance with the applicable financial reporting framework.

ApprovAl of consolidAted And sepArAte AnnuAl finAnciAl stAtementsThe consolidated and separate annual financial statements of African & Overseas Enterprises Limited as identified in the first paragraph, were approved by the board of directors on 18 September 2012 and signed by

ML Krawitz PE Shub Chairman Chief executive officer

I certify that African & Overseas Enterprises Limited has filed all returns and notices as required by a public company in terms of the Companies Act, of South Africa and that all such returns and notices appear to be true, correct and up to date.

SM Lawrence Company secretary

18 September 2012

21

Directors’ report

corporAte GovernAnceThe directors subscribe to the principles of corporate governance as set out in the third King Report on Governance for South Africa 2009 (“King III”). Specific disclosure requirements are dealt with on pages 14 to 17 of this integrated annual report.

nAture of businessAfrican & Overseas Enterprises Limited (“the company”) is a holding company listed on the JSE Limited under the Sector: Consumer Services – Retail – General Retailers – Apparel Retailers.

The business of the company is that of a holding company in that the company holds 72.62% of the ordinary shares and 51.94% of the ‘N’ ordinary shares of Rex Trueform Clothing Company Limited (“Rex Trueform’’).

The subsidiary, Rex Trueform, continued its activity of retailing clothing and fashion accessories in South Africa and the franchising of Queenspark retail stores in Namibia and Botswana.

Rex Trueform has embarked on the development of its property portfolio. The group’s approach to development of its properties is a conservative one, having regard to prevailing financial and market conditions.

finAnciAl resultsThe financial results of the company and the group for the year are set out in the annual financial statements accompanying this integrated annual report.

shAre cApitAlThe share capital of the company, both authorised and issued, is set out in note 5 to the annual financial statements.

dividendsDetails of dividends paid during the year are as follows:

2012R’000

2011 R’000

dividends on ordinary and ‘n’ ordinary shares:

No. 59 on ordinary shares 400 350

No. 17 on ‘N’ ordinary shares 3 244 2 838

dividends on 6% cumulative preference shares:

No. 152 for half-year to 31 December 2011 16 16

No. 153 additional dividend 136 116

No. 154 for half-year to 30 June 2012 16 16

3 812 3 336

The directors have recommended a distribution of 35 cents per share (2011: 32 cents) on the ordinary and ‘N’ ordinary shares. Shareholders will be asked to approve this recommendation of the board at the annual general meeting of the company to be held on 14 November 2012.

subsidiAriesThe required information relating to subsidiary companies is set out in note 2 to the annual financial statements.

investmentsFull details of the company’s investments are set out in notes 5 and 6 to the annual financial statements of Rex Trueform Clothing Company Limited.

directorAteThe names of the directors of the company are reflected on pages 12 and 13 of this integrated annual report.

The following changes in the composition of the board of directors occurred during the year:

director event date

PM Naylor Retired by rotation Reappointed

16 November 2011 16 November 2011

RW Rees Retired by rotation Reappointed


CEA Radowsky

Retired by rotation Reappointed


RV Orlin, DS Johnson and PE Shub retire at the annual general meeting in accordance with the Articles of Association but, being eligible, offer themselves for re-election.

The emoluments of the executive and non-executive directors are set out in note 12 to the annual financial statements.

directors’ interest in shAresThe interest of directors in the shares of the company at 30 June 2012, as recorded in the register thereof kept by the company was:

Beneficial 30 June

201230 June

2011

ordinary and ‘n’ ordinary shares

held directly:

PE Shub 36 281 36 281

CEA Radowsky 263 263

36 544 36 544

held indirectly:

* The Stewart and Pat Shub Family Trust 1 394 101 1 394 101

* The beneficiaries of the Stewart and Pat Shub Family Trust (‘the Trust”) include Ms PE Shub and Ms CEA Radowsky.


The company had not been advised of any changes in

holdings between 30 June 2012 and the date of approval

of the financial statements by the board of directors.

employee shAre incentive schemeThe Rex Trueform Share Trust was created in 1997 and was

issued with 500 000 ‘N’ ordinary shares in Rex Trueform to

facilitate an employee share incentive scheme. Subsequent

capitalisation share awards totalling 56 798 ‘N’ ordinary

shares were received and placed in reserve in the Trust.

The purpose of this scheme is to afford eligible full-time

employees, including directors holding full-time salaried

employment or office in the company or any of its

subsidiaries, the opportunity to acquire an interest in the

share capital of Rex Trueform.

Since inception of the Trust payment and delivery has

been effected in respect of 445 420 ‘N’ ordinary shares

which were acquired by the Trust.

As at the beginning of the financial period under review,

options in respect of 175 450 ‘N’ ordinary shares held by

the Trust had been granted to employees and exercised

on a deferred delivery basis, and the Trust held no shares

in reserve for future utilisation.

As at 30 June 2012 options have been exercised in respect

of 111 378 ‘N’ ordinary shares in total, 51 018 of which

have been exercised by directors of the company.

Full details of options granted and exercised are reflected in

note 21.2 to the annual financial statements of Rex Trueform.

speciAl resolutionsA special resolution was passed on 16 November 2011, which authorised the company and/or its subsidiaries by way of a general authority to acquire its own issued shares on such terms and conditions and in such amounts determined from time to time by the directors of the company.

At the next annual general meeting to be held on 14 November 2012, shareholders will be asked to renew the above general authority to acquire issued shares.

A further special resolution was passed on 16 November 2011, approving the remuneration to be paid to non-executive directors of the company for the financial year ending 30 June 2012. At the next annual general meeting, to be held on 14 November 2012, shareholders will be asked to approve the remuneration to be paid to non-executive directors for the upcoming financial year.

secretAryOn 16 April 2012 SM Lawrence replaced AA Hodgkinson as company secretary.

The secretary’s business and postal address is that of the company’s registered office as shown on page 13 of this integrated annual report.

events subsequent to the reportinG dAte No events material to the understanding of this integrated annual report, have occurred between the financial year-end and the date hereof.

23

Audit committee report for the year ended 30 June 2012

The audit committee (“the committee”) is pleased to present its report to the shareholders of African & Overseas Enterprises Limited (“AOE”) for the financial year ended 30 June 2012.

introductionThis report is in compliance with the requirements of the Companies Act No. 71 of 2008 (“the Companies Act”) and the King Report on Governance for South Africa 2009 (“King III”).

Audit committee mAndAte The committee is governed by formal terms of reference which regulate the committee’s functioning, processes and procedures.

The committee performs the audit committee functions required for the company and its subsidiaries in terms of section 94 of the Companies Act.

role of the committee General The primary role of the committee is to assist the board of Rex Trueform in discharging its responsibilities with regard to safeguarding assets, maintaining adequate accounting records, developing and maintaining an effective system of internal control and the governance of risk.

external auditorsDuties and responsibilities of the committee with regard to the external auditors include the following:

– to recommend and monitor the independence, effectiveness, and performance of the external auditors;

– to obtain assurance that adequate accounting records are being maintained and appropriate accounting principles are in place which have been consistently applied;

– to recommend the appointment of the external auditors on an annual basis;

– to approve the audit fee and fees in respect of any non-audit services;

– to review and approve the external audit plan; and

– to ensure that the scope of the external audit has no limitations imposed by management and that there is no impairment to the independence of the external auditor.

internal control and internal auditDuties and responsibilities of the committee with regard to internal control and internal audit include the following:

– to review the effectiveness of the group’s systems of internal control, including financial control and risk management, and to ensure that effective internal control systems are maintained;

– to ensure the adequacy and effectiveness of the group’s systems of internal control;

– to monitor and supervise the effective functioning and performance of the internal auditors;

– to review and approve the annual internal audit plan and the internal audit charter; and

– to ensure that the scope of the internal audit function has no limitations imposed by management and that there is no impairment on its independence.

finance functionThe committee is tasked to consider the appropriateness of the expertise and experience of the financial director and to satisfy itself as to the expertise, resources and experience of the finance function generally.

financial resultsThe committee has the following duties in respect of the financial results:

– to consider any accounting treatments, significant unusual transactions, or accounting judgements that could be contentious;

– to review the integrated report, as well as annual financial statements, interim reports, preliminary reports or other financial information prior to submission and approval by the board; and

– to provide, as part of the integrated report, a report by the audit committee.


composition And AttendAnce At meetinGs The committee is comprised of three independent non-executive directors and is chaired by Patrick Naylor.

The committee held two meetings during the 2012 financial year and attendance was as follows:

Name of member Qualifications 05/09/2011 06/03/2012PM Naylor BSc (Eng) √ √RV Orlin BA (Econ)

Wits √ √RW Rees BSc (Econ)

(Hons), FCA √ √

Following each meeting, the chairman of the audit committee provided a report to the board summarising the committee’s deliberations and recommendations. Audit committee minutes are circulated to all directors.

The chief executive officer, the financial director, the head of internal audit, the company secretary and the external auditors regularly attend meetings at the invitation of the committee. Members of executive management are invited to attend meetings where required.

Details of fees paid to audit committee members are disclosed in the remuneration report, on page 28 of the Rex Trueform integrated annual report.

re-election of committee membersThe re-election of the following independent non-executive directors has been recommended by the nomination committee and will be proposed to shareholders at the forthcoming annual general meeting:

PM Naylor

RW Orlin

RW Rees

The chairman of the committee will be appointed from within the committee.

committee functioninGThe committee has in the past met twice per year, with the main focus of each respective meeting being as follows:

– approval of annual results (in September each year); and

– approval of interim results (in March each year).

Meeting dates and agenda are agreed in advance and each meeting is preceded by the distribution to each attendee of an audit committee pack comprising:

– a detailed agenda;

– the minutes of the previous meeting;

– the external auditor’s report;

– the internal audit report;

– the enterprise risk management report; and

– any other relevant documentation.

specific responsibilitiesinternal financial controlThe committee is of the opinion that the internal financial controls of the company are effective and form the basis for the preparation of reliable financial statements in respect of the year under review.

complianceNo material breaches of any laws or legislation, nor material breaches of internal controls or procedures, came to the attention of the committee during the 2012 financial year.

risk managementWhilst the board is ultimately responsible for the maintenance of an effective risk management process, the audit committee, together with the risk committee, assists the board in assessing the adequacy of the risk management process. The audit committee fulfils an oversight role regarding financial reporting risks, internal financial controls, fraud risk as it relates to financial reporting and information, and information technology risks as they relate to financial reporting.

During the course of the 2012 financial year, the committee considered the risk management approach, as well as key control risks, and the committee is of the view that the approach is relevant and that all key control risks are being adequately addressed by management.

Further detail on the risk management approach and process is included in the corporate governance and risk reports of Rex Trueform Clothing Company Limited.

25

eXternAl Auditors

The group’s external auditors are KPMG Inc., and the designated partner is Mr H du Plessis.

The external auditor is afforded unrestricted access to the group’s records and to management. Any significant issues arising from the annual audit are brought to the committee’s attention.

The committee confirmed the appointment of KPMG Inc. as the group’s external auditor for the past year and approved the terms of engagement and fees to be paid.

The nature and extent of any non-audit services which the external auditor provides to the company have been agreed by the committee.

Due consideration has been given to the independence of the external auditor and in this regard the committee is satisfied that KPMG Inc. is independent of the group and management, and is therefore able to express an independent opinion of the group’s annual financial statements.

The committee has nominated, for approval at the annual general meeting, KPMG Inc. as the external auditor, and Mr I Jeewa as the designated auditor, for the 2013 financial year.

finAnciAl stAtements The committee has reviewed the financial statements of the company and the group and is satisfied that they comply with International Financial Reporting Standards, the AC 500 Standards and the requirements of the Companies Act.

inteGrAted reportThe committee fulfils an oversight role in respect of the group’s integrated annual report. In this regard the committee gave due consideration to the need for

Audit committee report continued

assurance on the sustainability information contained in this report, and concluded that obtaining independent external assurance in respect thereof would not be of additional benefit to stakeholders.

The committee has considered the information disclosed in the integrated annual report and has assessed its consistency with the annual financial statements. The committee is satisfied that the information is in no way contradictory to that disclosed in the annual financial statements.

The committee recommended the approval of the integrated annual report to the board.

eXpertise of finAnciAl director And finAnce functionThe committee has considered the appropriateness of the expertise and experience of the financial director and the finance function.

In this regard, the committee is of the view that Mr Damian Johnson, the financial director, possesses the appropriate expertise and experience to fulfil his responsibilities in that position.

The committee furthermore considers that the expertise, resources and experience of the finance function are appropriate to the nature, complexity and size of the group’s operations.

PM Naylor Audit committee chairman

18 September 2012


report on the finAnciAl stAtementsWe have audited the consolidated and separate annual financial statements of African & Overseas Enterprises Limited, which comprise the statements of financial position at 30 June 2012, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements which include a summary of significant accounting policies and other explanatory notes, as set out on pages 28 to 45.

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 the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s 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 about 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.

Independent auditor’s report

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, these financial statements present fairly,

in all material respects, the consolidated and separate

financial position of African & Overseas Enterprises

Limited at 30 June 2012, and its consolidated and

separate financial performance and consolidated and

separate cash flows for the year then ended in

accordance with International Financial Reporting

Standards and the requirements of the Companies

Act of South Africa.

other reports required by the companies Act As part of our audit of the financial statements for the year

ended 30 June 2012, we have read the directors’ report,

the audit committee’s report and the company secretary’s

certificate for the purpose of identifying whether there are

material inconsistencies between these reports and the

audited financial statements. These reports are the

responsibility of the respective preparers. Based on

reading these reports we have not identified material

inconsistencies between these reports and the audited

financial statements. However, we have not audited these

reports and accordingly do not express an opinion on

these reports.

KPMG Inc.

Registered Auditor

Per Henry du Plessis

Chartered Accountant (SA)

Registered Auditor

Director

18 September 2012

MSC House

Mediterranean Street

Cape Town

8001

to the shareholders of African & Overseas Enterprises Limited

27

Statements of financial position as at 30 June 2012

GROUP COMPANY

Note2012

R’0002011

R’0002012

R’0002011

R’000

ASSETS

non-current assets

Property, plant and equipment 74 910 69 328 – –

Investment property 5 662 5 776 – –

Intangible assets 4 510 1 455 – –

Investment in subsidiary companies 2 – – 17 400 17 400

Other investments 524 576 – –

Deferred taxation 4 657 4 196 – –

90 263 81 331 17 400 17 400

current assets

Inventories 61 881 71 099 – –

Trade and other receivables 3 11 700 21 562 – –

Forward exchange contracts 1 072 – – –

Income tax receivable 2 795 2 050 15 15

Cash and cash equivalents 4 161 279 148 869 95 20

238 727 243 580 110 35

total assets 328 990 324 911 17 510 17 435

equity And liAbilities

equity

Ordinary share capital 5 650 650 650 650

Preference share capital 5 550 550 550 550

Share premium 6 076 6 076 6 616 6 616

Share-based payment reserve 301 275 – –

Other reserves 6 234 263 – –

Retained earnings 146 524 139 194 8 797 8 413

Equity attributable to equity holders 154 335 147 008 16 613 16 229

Non-controlling interest 126 416 119 934 – –

total equity 280 751 266 942 16 613 16 229

non-current liabilities

Post-retirement liability 7 3 101 3 996 720 745

Accrued operating lease liability 11 150 9 577 – –

Deferred taxation 1 430 747 – –

15 681 14 320 720 745

current liabilities

Accounts payable to subsidiary companies 2 – – – 282

Provisions – 467 – –

Trade and other payables 8 32 534 42 461 177 178

Forward exchange contracts – 602 – –

Income tax payable 24 119 – 1

32 558 43 649 177 461

total equity and liabilities 328 990 324 911 17 510 17 435


Statements of comprehensive income for the year ended 30 June 2012

GROUP COMPANY

Note 2012

R’0002011

R’0002012

R’0002011

R’000

continuinG operAtions

revenue 10 541 310 518 506 5 895 4 533

Turnover 530 593 508 078 – –

Cost of sales (246 182) (221 987) – –

Gross profit 284 411 286 091 – –

Employment costs (97 915) (91 982) (400) (310)

Occupancy costs (76 447) (70 729) – –

Depreciation and amortisation (21 338) (15 595) – –

Other operating costs (66 296) (66 306) (1 238) (1 000)

Rental income 1 526 605 – –

Royalties 1 038 1 009 – –

operating profit/(loss) 11 24 979 43 093 (1 638) (1 310)

Dividends received 13 13 12 5 888 4 529

Interest income 8 140 8 802 7 4

Interest expense (331) (367) (59) (65)

profit before tax 32 801 51 540 4 198 3 158

Income tax expense 14 (10 713) (16 117) (2) (1)

profit for the year from continuing operations 22 088 35 423 4 196 3 157

profit from discontinued operation (net of income tax) – 3 135 – –

profit for the year 22 088 38 558 4 196 3 157

other comprehensive income

Net change in fair value of available-for-sale financial assets (52) – – –

total comprehensive income for the year 22 036 38 558 4 196 3 157

profit attributable to:

Ordinary and ‘N’ ordinary shareholders of the parent 11 246 20 562 4 028 3 009

Preference shareholders 168 148 168 148

Profit attributable to equity holders of the parent 11 414 20 710 4 196 3 157


profit for the year 22 088 38 558 4 196 3 157

total comprehensive income attributable to:

Ordinary and ‘N’ ordinary shareholders of the parent 11 217 20 562 4 028 3 009

Preference shareholders 168 148 168 148

Profit attributable to equity holders of the parent 11 385 20 710 4 196 3 157


total comprehensive income for the year 22 036 38 558 4 196 3 157

basic earnings per ordinary share (cents) 15 98.8 180.6

Continuing operations 98.8 165.3

Discontinued operation – 15.3

29

Statements of changes in equity for the year ended 30 June 2012

Ordinary share

capital R’000

Preference share

capital R’000

Share premium

R’000

Other reserve

R’000

Share-based payments

reserveR’000

Retained earnings

R’000

Non-controlling

interestR’000

TotalR’000

Group

balance as at 30 June 2010 650 550 6 076 263 237 122 299 104 799 234 874

total comprehensive income for the yearProfit for the year – – – – – 20 710 17 848 38 558

total comprehensive income for the year – – – – – 20 710 17 848 38 558

contributions by and distributions to owners recognised directly in equityPreference dividends – – – – – (148) (17) (165)

Ordinary dividends – – – – – (3 189) (3 647) (6 836)

Share-based payment expense – – – – 38 – 30 68

Subsidiary shares repurchased – – – – – (6) (5) (11)

Proceeds from delivery of employee share options – – – – – 251 203 454

Change in degree of control – – – – – (723) 723 –

total contributions by and distributions to owners recognised directly in equity – – – – 38 (3 815) (2 713) (6 490)

balance as at 30 June 2011 650 550 6 076 263 275 139 194 119 934 266 942 total comprehensive income for the yearProfit for the year – – – – – 11 414 10 674 22 088 other comprehensive income for the yearFair value adjustment of available for sale financial assets – – – (29) – – (23) (52)total comprehensive income for the year – – – (29) – 11 414 10 651 22 036 contributions by and distributions to owners recognised directly in equityPreference dividends – – – – – (168) (17) (185)Ordinary dividends – – – – – (3 644) (4 754) (8 398)Share-based payment expense – – – – 26 – 21 47 Proceeds from delivery of employee share options – – – – – 171 138 309 Change in degree of control – – – – – (443) 443 – total contributions by and distributions to owners recognised directly in equity – – – – 26 (4 084) (4 169) (8 227)balance as at 30 June 2012 650 550 6 076 234 301 146 524 126 416 280 751

compAnybalance as at 30 June 2010 650 550 6 616 – – 8 593 – 16 409

total comprehensive income for the yearProfit for the year – – – – – 3 157 – 3 157

total comprehensive income for the year – – – – – 3 157 – 3 157

contributions by and distributions to owners recognised directly in equityPreference dividends – – – – – (148) – (148)

Ordinary dividends – – – – – (3 189) – (3 189)

total contributions by and distributions to owners recognised directly in equity – – – – – (3 337) – (3 337)

balance as at 30 June 2011 650 550 6 616 – – 8 413 – 16 229 total comprehensive income for the yearProfit for the year – – – – – 4 196 – 4 196 total comprehensive income for the year – – – – – 4 196 – 4 196 contributions by and distributions to owners recognised directly in equityPreference dividends – – – – – (168) – (168)Ordinary dividends – – – – – (3 644) – (3 644)

total contributions by and distributions to owners recognised directly in equity – – – – – (3 812) – (3 812)balance as at 30 June 2012 650 550 6 616 – – 8 797 – 16 613


Ordinary share

capital R’000

Preference share

capital R’000

Share premium

R’000

Other reserve

R’000

Share-based payments

reserveR’000

Retained earnings

R’000

Non-controlling

interestR’000

TotalR’000

Group

balance as at 30 June 2010 650 550 6 076 263 237 122 299 104 799 234 874

total comprehensive income for the yearProfit for the year – – – – – 20 710 17 848 38 558

total comprehensive income for the year – – – – – 20 710 17 848 38 558

contributions by and distributions to owners recognised directly in equityPreference dividends – – – – – (148) (17) (165)

Ordinary dividends – – – – – (3 189) (3 647) (6 836)

Share-based payment expense – – – – 38 – 30 68

Subsidiary shares repurchased – – – – – (6) (5) (11)

Proceeds from delivery of employee share options – – – – – 251 203 454

Change in degree of control – – – – – (723) 723 –

total contributions by and distributions to owners recognised directly in equity – – – – 38 (3 815) (2 713) (6 490)

balance as at 30 June 2011 650 550 6 076 263 275 139 194 119 934 266 942 total comprehensive income for the yearProfit for the year – – – – – 11 414 10 674 22 088 other comprehensive income for the yearFair value adjustment of available for sale financial assets – – – (29) – – (23) (52)total comprehensive income for the year – – – (29) – 11 414 10 651 22 036 contributions by and distributions to owners recognised directly in equityPreference dividends – – – – – (168) (17) (185)Ordinary dividends – – – – – (3 644) (4 754) (8 398)Share-based payment expense – – – – 26 – 21 47 Proceeds from delivery of employee share options – – – – – 171 138 309 Change in degree of control – – – – – (443) 443 – total contributions by and distributions to owners recognised directly in equity – – – – 26 (4 084) (4 169) (8 227)balance as at 30 June 2012 650 550 6 076 234 301 146 524 126 416 280 751

compAnybalance as at 30 June 2010 650 550 6 616 – – 8 593 – 16 409

total comprehensive income for the yearProfit for the year – – – – – 3 157 – 3 157

total comprehensive income for the year – – – – – 3 157 – 3 157

contributions by and distributions to owners recognised directly in equityPreference dividends – – – – – (148) – (148)

Ordinary dividends – – – – – (3 189) – (3 189)

total contributions by and distributions to owners recognised directly in equity – – – – – (3 337) – (3 337)

balance as at 30 June 2011 650 550 6 616 – – 8 413 – 16 229 total comprehensive income for the yearProfit for the year – – – – – 4 196 – 4 196 total comprehensive income for the year – – – – – 4 196 – 4 196 contributions by and distributions to owners recognised directly in equityPreference dividends – – – – – (168) – (168)Ordinary dividends – – – – – (3 644) – (3 644)

total contributions by and distributions to owners recognised directly in equity – – – – – (3 812) – (3 812)balance as at 30 June 2012 650 550 6 616 – – 8 797 – 16 613

31

Statements of cash flows for the year ended 30 June 2012

GROUP COMPANY

Note 2012

R’0002011

R’0002012

R’0002011

R’000

cash flows from operating activities

Operating profit before working capital changes 16.1 43 793 65 291 (1 663) (1 336)

Working capital changes 16.2 4 874 (11 619) (283) 201

cash generated by operating activities 48 667 53 672 (1 946) (1 135)


Interest expense (331) (367) (59) (65)

Dividends paid 16.3 (8 583) (7 001) (3 812) (3 337)

Dividends received 13 12 5 888 4 529

Normal tax paid 16.4 (10 258) (17 004) (3) (2)

Secondary tax on companies paid 16.4 (1 073) (826) – –

net cash inflows/(outflows) from operating activities 36 575 37 288 75 (6)

cash flows from investing activities

Additions to property, plant and equipment (30 115) (31 191) – –

Proceeds from disposal of property, plant and equipment 229 672 – –

Proceeds from disposal of discontinued operation 5 412 – – –

net cash outflows from investing activities (24 474) (30 519) – –

cash flows from financing activities

Proceeds on delivery of shares by share trust 309 454 – –

Subsidiary shares repurchased – (11) – –

net cash inflows from financing activities 309 443 – –

net increase in cash and cash equivalents 12 410 7 212 75 (6)

Cash and cash equivalents at the beginning of the year 148 869 141 657 20 26

cash and cash equivalents at the end of the year 4 161 279 148 869 95 20


Notes to the annual financial statements

1. Except as presented below, the accounting policies and notes to the annual financial statements and consolidated annual financial statements for African & Overseas Enterprises Limited are identical to those disclosed for Rex Trueform Clothing Company Limited on pages 53 to 83 of its integrated annual report.

ISSUEDCAPITAL

SHARE-HOLDING

SHARES AT COST INDEBTEDNESS

R %2012

R’0002011

R’0002012

R’0002011

R’000

2. investment in subsidiAry compAnies

Rex Trueform Clothing Company Limited

Ordinary shares 1 452 903 72.62 2 187 2 187 – –

‘N’ ordinary shares 44 341 51.94 15 212 15 212 – –

6% cumulative preference shares 280 000 0.59 1 1 – –

Current account payable* – – – (282)

17 400 17 400 – (282)

* This current account is unsecured, interest free and is settled during the normal trading cycle of the company.

The interest of the company in the profits after taxation of its subsidiaries for the year is as follows:

Aggregate profits 13 106 22 020

Further indirect subsidiaries are set out in note 5 to the Rex Trueform Clothing Company annual financial statements.

GROUP COMPANY

2012R’000

2011R’000

2012R’000

2011R’000

3. trAde And other receivAbles

Trade receivables 1 026 590 – –

Prepayments 7 993 7 152 – –

Other receivables 2 681 2 448 – –

Trade and other receivables from continuing operations 11 700 10 190 – –

Trade and other receivables – discontinued operation – 5 203 – –

Proceeds receivable on sale of discontinued operation – 6 169 – –

At the end of the year 11 700 21 562 – –

The carrying amount of financial assets represents the maximum credit exposure.

4. cAsh And cAsh equivAlents

Bank balances 19 340 12 793 95 20

Call deposits 141 939 136 076 – –

At the end of the year 161 279 148 869 95 20

33

GROUP COMPANY

2012R’000

2011R’000

2012R’000

2011R’000

5. shAre cApitAl

Authorised share capital

ordinary shares

1 250 000 ordinary shares of 50 cents each 625 625 625 625

20 000 000 ‘N’ ordinary shares of 0.25 cent each 50 50 50 50

675 675 675 675

preference shares

275 000 6% cumulative participating

preference shares of R2 each 550 550 550 550

total authorised share capital 1 225 1 225 1 225 1 225

issued share capital

ordinary shares

1 250 000 ordinary shares of 50 cents each 625 625 625 625

10 137 441 ‘N’ ordinary shares of 0.25 cent each 25 25 25 25

650 650 650 650

preference shares

275 000 6% cumulative participating preference shares of R2 each 550 550 550 550

total issued share capital 1 200 1 200 1 200 1 200

The unissued shares are under the control of the directors until the annual general meeting.

6. other reserves

Revaluation of share investment 234 263 – –

At the end of the year 234 263 – –

Notes to the annual financial statements continued


7. post-retirement liAbility

Employees participate in defined contribution retirement funds which are subject to the Pension Funds Act No. 24 of 1956 as amended. These funds exist for the purpose of providing retirement benefits for employees and are funded by member contributions and employer contributions which are charged to profit or loss as they are incurred.

The group provides medical aid and pension gratuities in respect of certain retired employees. No current employees will receive a gratuity after retirement. The latest valuation of the obligation was performed as at 30 June 2012 at which time there were 21 members receiving benefits. The obligation is unfunded.

GROUP COMPANY

2012R’000

2011R’000

2012R’000

2011R’000

Reconciliation of liability

At the beginning of the year 3 996 4 122 745 771

(Profit)/loss amount (472) 322 69 64

Benefits paid (423) (448) (94) (90)


Amount included in profit or loss

Interest cost 319 350 59 65

Actuarial (gain)/loss (791) (28) 10 (1)

(472) 322 69 64

The following assumptions have been used in the valuation of the obligation:

Discount rate 7.8% 8.5% 7.8% 8.5%

Medical aid contribution inflation 6.8% 7.5% 6.8% 7.5%

Salary and related benefit inflation 5.8% 6.5% 5.8% 6.5%

2012R’000

2011R’000

2010R’000

2009R’000

2008R’000

Group

historical information

Present value obligation 3 101 3 996 4 122 4 122 4 277

compAny

historical information

Present value obligation 720 745 771 790 778

GROUP COMPANY

2012R’000

2011R’000

2012R’000

2011R’000

8. trAde And other pAyAbles

Trade payables 10 249 11 728 – –

Accrued operating lease liability 377 2 112 – –

Other payables and accruals 21 908 25 509 177 178

Trade and other payables from continuing operations 32 534 39 349 177 178

Trade and other payables – discontinued operation – 3 112 – –


35

9. finAnciAl instruments

9.1 Fair values

The carrying values of financial assets and financial liabilities together with the carrying amounts shown in the statements of financial position, are as follows:

GROUP COMPANY

carrying amount carrying amount

2012R’000

2011R’000

2012R’000

2011R’000

Available-for-sale financial assets 524 576 – –

Receivables 3 707 14 410 – –

Cash and cash equivalents 161 279 148 869 95 20

Trade and other payables (27 746) (36 207) (177) (178)

Forward exchange contracts 1 072 (602) – –

138 836 127 046 (82) (158)

valuation of financial instruments

The group measures fair values using the following fair value hierarchy that reflects the significance of each input used in making these measurements:

level 1: Quoted market price (unadjusted) in an active market for an identical instrument.

level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the observable inputs have a significant effect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Level 1R’000

Level 2R’000

Level 3R’000

TotalR’000

Other investments – – 524 524

Forward exchange contract – 1 072 – 1 072

– 1 072 524 1 596

Fair value of other investments was based on the latest market price of the invested shares.

Fair value of the forward exchange contract was determined by comparing the contracted forward rate to the present value of the current forward rate of an equivalent contract with the same maturity date.

level 3 reconciliation

Other investments

R’000

opening balance 576

Loss included in other comprehensive income (52)

closing balance 524



9. finAnciAl instruments (continued)

9.2 Credit risk The risk arising on accounts receivable is managed through a stringent group policy on the granting of credit limits

along with continual review and monitoring of these limits. Credit risk is minimised through an initial new client acceptance procedure whereby potential customers are

individually assessed before an appropriate credit limit is allocated to them. The material recurring trade debtors related to receivables are due from franchise stores and rentals due from third

party tenants, as detailed below. Credit risk is managed by applying strict payment terms and monitoring of any overdue amounts. There are also

securities in place for each franchisee in the form of bank guarantees, and personal suretyships signed by the individual franchisees.

Listings of overdue customer balances are reviewed monthly against their credit terms/limits. Any customer exceeding their credit terms/limits must settle their overdue balances before further credit is extended. Appropriate action is taken to recover long overdue debts. An impairment provision is raised if there is objective evidence that the outstanding debt may not be collectible.

The credit risk on cash and cash equivalents is managed through dealing with well-established financial institutions with high credit standings.

GROUP COMPANY2012

R’0002011

R’0002012

R’0002011

R’000

exposure to credit risk The carrying amount of financial assets represents

the maximum credit exposure.

The maximum exposure to credit risk at the reporting date was:

Trade receivables 1 026 590 – – Other receivables 2 681 2 448 – – Trade and other receivables –

discontinued operations – 5 203 – – Proceeds receivable on sale of

discontinued operations – 6 169 – – Cash and cash equivalents 161 279 148 869 95 20

164 986 163 279 95 20 The maximum exposure to credit risk for trade

receivables at the reporting date by type of customer was:

Rentals to be received from tenants 254 29 – – Amounts receivable from franchisees 772 505 – – Wholesale customers – 5 259 – –

1 026 5 793 – –

GROUP COMPANY

Gross2012

Impair-ment2012

Gross2011

Impair-ment 2011

Gross2012

Impair-ment 2012

Gross2011

Impair-ment2011

impairment lossesThe ageing of trade receivables at the reporting date was:

Not past due 928 – 5 360 (131) – – – –

Past due 0 – 30 days – – 443 (38) – – – –

Past due 31 – 60 days 141 (43) 36 (2) – – – –

Past due > 61 days 7 (7) 374 (249) – – – –

1 076 (50) 6 213 (420) – – – –

37

GROUP COMPANY

2012R’000

2011R’000

2012R’000

2011R’000


9.2 Credit risk (continued)

The movement in the impairment allowance in respect of trade receivables during the year was as follows:

Balance at the beginning of the year 420 100 – –

Impairment loss (reversed)/recognised (370) 320 – –

Balance as at the end of the year 50 420 – –

9.3 Liquidity risk

Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due.

The group’s approach to managing liquidity risk is to ensure that sufficient liquidity is available to meet its liabilities when due.

The risk is managed through cash flow forecasts and the optimisation of daily cash management.

Note 17 of the Rex Trueform Clothing Company Limited annual financial statements discloses cash flows relating to future non-cancellable minimum lease rentals.

The expected cash flow related to the trade payables and other payables and accruals will occur as follows:

Trade payables 10 249 11 728 – –

Other payables and accruals 21 908 25 509 177 178

Trade and other payables – discontinued operation – 3 112 – –

Contractual cash flows 32 157 40 349 177 178

Less than one year 32 157 40 349 177 178

The expected cash flows related to forward exchange contracts will occur as follows:

Carrying amount (1 072) 602 – –

Contractual cash flows 53 460 39 330 – –

Less than one year 53 460 39 330 – –

9.4 Interest rate risk

The financial assets that are sensitive to interest rate risk are cash and cash equivalents. The risk is managed by maintaining an appropriate mix of fixed and daily call placements with reputable financial institutions.

The interest rates applicable to these financial instruments are keenly negotiated and generally vary in response to the prime overdraft rate. Current effective interest rate is 5.3% (2011: 5.3%). Floating rate financial assets include cash at bank and cash equivalents. The group has no fixed rate financial assets or liabilities.

sensitivity analysis

A 1% movement in the effective interest rate would have increased equity and profit or loss by the amounts shown below. This analysis assumes all other variables remain constant. The analysis is performed on the same basis for 2011.

Profit or lossR’000

30 June 2012 1 613

30 June 2011 1 489




9.5 Currency risk

The group incurs currency risk as a result of transactions which are denominated in a currency other than the group entity’s functional currency.

The settlement of these transactions takes place within a normal business cycle. The group has policies for the management of foreign currency risks. No uncovered foreign exchange commitments exist at reporting date.

This risk is covered by entering into forward foreign exchange contracts. These contracts are matched with anticipated future cash outflows in foreign currencies. The group does not use forward foreign exchange contracts for speculative purposes. No hedge accounting is applied. The currency in which the group primarily deals is US dollars.

GROUP COMPANY

2012R’000

2011R’000

2012R’000

2011R’000

Included in trade payables:

Foreign suppliers – USD 4 106 8 121 – –

The principal or contract amounts of foreign exchange contracts outstanding at reporting date relating to specific items appearing on the statement of financial position were:

currency

Foreign amount

‘000

Average forward

cover rate

Rand amount

‘000

2012

imports US dollar 6 600 R8.10 53 460

2011

Imports US dollar 5 750 R6.84 39 330

The following significant exchange rates applied during the year:

Average rate 30 June spot rate

2012 2011 2012 2011

US dollar R7.77 R7.09 R8.19 R6.85

sensitivity analysis

A 10% percent strengthening/weakening in the rand against the US dollar at 30 June would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2011.

Profit or lossR’000

30 June 2012

US dollar 5 346

30 June 2011

US dollar 3 933

39

GROUP COMPANY

2012R’000

2011R’000

2012R’000

2011R’000

10. revenue

Turnover 530 593 508 078 – –

Rental income 1 526 605 – –


Dividends received 13 12 5 888 4 529

Royalties 1 038 1 009 – –

541 310 518 506 5 895 4 533

11. operAtinG profit/(loss) is stAted After the folloWinG:

Duty credit certificate benefit – (14 301) – –

expenses

Net loss/(profit) from disposal of plant and equipment 25 935 – –

– plant (70) (118) – –

– equipment and shopfitting 30 1 030 – –

– vehicles 65 23 – –

Net foreign exchange loss/(gain) (4 737) 4 734 – –

– realised (3 665) 4 132 – –

– unrealised (1 072) 602 – –

Amortisation 807 1 406 – –

Depreciation 18 395 14 189 – –

– land and buildings 173 155 – –

– vehicles 605 560 – –

– equipment and shopfittings 17 617 13 474 – –

Impairment loss on equipment and shopfittings 2 136 – – –

Leasing charges 72 873 67 192 – –

– operating leases – properties 72 860 67 138 – –

– plant, vehicles and equipment 13 54 – –

Lease amortisation (162) 746 – –

Managerial, technical, administrative and secretarial fees 1 943 2 123 1 128 895

employment costs

Directors’ emoluments 10 144 9 449 390 310

– non-executive – for services as directors 1 545 1 197 390 310

– for other services 270 224 – –

– executive – paid for managerial services 7 319 6 430 – –

– retirement fund contributions 432 349 – –

– bonuses and performance- related payments 578 1 249 – –

Other employment costs 87 771 82 533 10 –

Employee costs – other 84 905 78 805 – –

Share-based payment expense 47 68 – –

Retirement funding costs 3 610 3 688 – –

Post-retirement liability – actuarial (gain)/loss (791) (28) 10 –

total employment costs 97 915 91 982 400 310



GROUP COMPANY

2012R’000

2011R’000

2012R’000

2011R’000

13. dividends received

Dividends from subsidiaries – – 5 888 4 529

Dividends from investments 13 12 – –

13 12 5 888 4 529

Directors’fees

(R’000)

Basic salary(R’000)

Bonusesand

perfor-mance- related

payments(R’000)

Value of

otherbenefits5

(R’000)

Retire-ment fund

contri-butions

(R’000)

Fees for

other services6

(R’000)

Total 2012

(R’000)

Total 2011

(R’000)

IFRS 2 expense

2012 (R’000)

12. directors’ emoluments

executive directors

DS Johnson4 – 1 230 111 12 92 – 1 445 1 423 15

JC O’Brien1 – 682 53 221 – – 956 692 –

CEA Radowsky3 – 2 965 275 461 222 – 3 923 4 064 5

PE Shub2 – 1 539 139 209 118 – 2 005 1 849 –

– 6 416 578 903 432 – 8 329 8 028 20 non-executive directors

ML Krawitz4 735 – – – – 105 840 800 –

PM Naylor4 290 – – – – 65 355 276 –

RV Orlin4 260 – – – – 50 310 276 –

RW Rees4 260 – – – – 50 310 69 –

1 545 – – – – 270 1 815 1 421 –

total 1 545 6 416 578 903 432 270 10 144 9 449 20

summary

Paid by company 390 – – – – – 390 310 Paid by subsidiary company 1 155 6 416 578 903 432 270 9 754 9 139

1 545 6 416 578 903 432 270 10 144 9 449

1 Director on the board of the Rex Trueform Clothing Company Limited and Queenspark Proprietary Limited.

2 Director on the board of African & Overseas Enterprises Limited and Queenspark Proprietary Limited. 3 Director on the board of the African & Overseas Enterprises Limited, Rex Trueform Clothing Company Limited,

Queenspark Proprietary Limited and Queenspark Distribution Centre Proprietary Limited.

4 Director on the Board of African & Overseas Enterprises Limited, Rex Trueform Clothing Company Limited and Queenspark Proprietary Limited.

5 Other benefits include use of a company car, other benefits, company contributions to medical aid schemes and insurance policies paid on behalf of the directors.

6 These are fees rendered in respect of the audit and retirement fund committees.

41

GROUP COMPANY

2012R’000

2011R’000

2012R’000

2011R’000

14. income tAX eXpense

South African normal tax 9 418 14 481 2 1

– current year 9 273 14 481 2 1

– prior year 145 – – –

Deferred tax 222 810 – –

– current year 463 810 – –

– prior year (241) – – –

Total normal tax 9 640 15 291 2 1

Secondary tax on companies 1 073 826 – –

10 713 16 117 2 1

reconciliation of south African normal tax rate % % % %

Statutory tax rate 28.0 28.0 28.0 28.0

Exempt income (1.0) – (39.3) (40.2)

Expenses disallowed – non-deductible expenses 2.4 1.6 11.3 12.2

Change in capital gains tax rate 0.2 – – –

Capital gains tax 0.1 0.1 – –

Secondary tax on companies 3.3 1.6 – –

Prior year adjustments (0.3) – – –

Effective tax rate 32.7 31.3 (0.0) (0.0)

15. eArninGs per shAre

Basic earnings per share is derived by dividing profit for the year attributable to ordinary and ‘N’ ordinary shareholders of the parent by the weighted average number of ordinary shares.

2012R’000

2011R’000

basic and headline earnings per ordinary share Profit attributable to equity holders 11 246 20 562

Continuing operations 11 246 18 828

Discontinued operation – 1 734

Adjusted for:

Loss from disposal of property, plant and equipment 10 372

Impairment loss on equipment and shopfittings 848 –

Profit on sale of discontinued operation – (68)

Headline earnings 12 104 20 866

Continuing operations 12 104 19 200

Discontinued operation – 1 666

Number of sharesWeighted average number of ordinary and ‘N’ ordinary shares in issue 11 387 000 11 387 000

Basic earnings per ordinary share (cents) 98.8 180.6



Headline earnings per ordinary share (cents) 106.3 183.2



There are no dilutionary instruments.



GROUP COMPANY

2012R’000

2011R’000

2012R’000

2011R’000

16. notes to the stAtements of cAsh floWs16.1 Cash generated by operations Profit before taxation 32 801 55 894 4 198 3 158 Continuing operations 32 801 51 540 4 198 3 158 Discontinued operation – 4 354 – – Adjusted for: Amortisation 807 1 406 – – Depreciation 18 395 14 448 – – Continuing operations 18 395 14 189 – – Discontinued operation – 259 – – Impairment loss 2 136 – – – Dividends from subsidiary company – – (5 888) (4 529) Interest income (8 140) (8 802) (7) (4) Interest expense 331 367 59 65 Loss on disposal of property, plant and equipment 25 935 – – Profit on disposal of discontinued operation – (142) – – Dividends from investments (13) (12) – – Accrued operating lease liability (162) 746 – – Share options expensed 47 68 – – Unrealised foreign exchange (gains)/losses (1 072) 602 – – Movement in provisions (467) (93) – – Decrease in post-retirement liability (895) (126) (25) (26)

43 793 65 291 (1 663) (1 336)

16.2 Working capital changes Decrease/(increase) in inventories 9 218 (18 191) – – Decrease in trade and other receivables 4 450 5 633 – 21 Movement in forward exchange contracts (602) 522 – – (Decrease)/increase in trade and other payables (8 192) 417 (1) (2) (Decrease)/increase in amount owed to

subsidiary company – – (282) 182 4 874 (11 619) (283) 201

16.3 Dividends paid Dividend on ordinary and ‘N’ ordinary shares (8 398) (6 836) (3 644) (3 189) Dividend on 6% cumulative preference shares

paid 31 December 2011 (160) (140) (152) (132) Dividend on 6% cumulative preference shares

paid 30 June 2012 (25) (25) (16) (16) (8 583) (7 001) (3 812) (3 337)

16.4 Taxation paid Amounts unpaid at the beginning of the year (119) (621) (1) – Amounts overpaid at the beginning of the year 2 050 1 248 15 13 Amounts charged to profit or loss (10 491) (16 526) (2) (1) Continuing operations (10 491) (15 307) (2) (1) Discontinued operation – (1 219) – – Amounts unpaid at the end of the year 24 119 – 1 Amounts overpaid at the end of the year (2 795) (2 050) (15) (15)

(11 331) (17 830) (3) (2)Comprising:Normal tax paid (10 258) (17 004) (3) (2)Secondary taxation on companies paid (1 073) (826) – –

(11 331) (17 830) (3) (2)

43

GROUP

2012R’000

2011R’000

17. seGmentAl AnAlysis

revenue

Total external retail revenue 531 631 509 087

Retail segment revenue 533 815 511 307

Intersegment revenue earned from continuing operations (2 184) (1 548)

Intersegment revenue earned from discontinued operation – (672)

Total external property revenue 1 526 605

Property segment revenue 5 388 4 758

Intersegment revenue earned from continuing operations (3 862) (3 635)

Intersegment revenue earned from discontinued operation – (518)

Dividends received 13 12

Interest received 8 140 8 802

Segment revenue from continuing operations 541 310 518 506

Total external manufacturing revenue* – 34 990

Manufacturing segment revenue – 35 067

Less: intersegment revenue – (77)

Segment revenue from discontinued operation – 34 990

total revenue 541 310 553 496

segment operating profit/(loss)

Retail segment profit – continuing operations 28 681 46 906

Retail segment operating profit 28 681 47 578

Intersegment operating loss from discontinued operation – (672)

Property segment profit – continuing operations 1 287 1 331

Property segment operating profit 1 287 1 849

Intersegment operating loss from discontinued operation – (518)

Group services operating loss – continuing operations (4 989) (5 144)

Group profit from continuing operations 24 979 43 093

Manufacturing operating profit – discontinued operation* – 4 354

Manufacturing segment operating profit – 3 164

Intersegment operating profit from discontinued operation – 1 190

total group operating profit 24 979 47 447

depreciation and amortisation

Retail 21 113 15 416

Property 225 179

Segment depreciation and amortisation from continuing operations 21 338 15 595

Manufacturing – discontinued operation* – 259

Included in operating expenses – 99

Included in cost of sales – 160

total depreciation and amortisation 21 338 15 854



GROUP

2012R’000

2011R’000

17. seGmentAl AnAlysis (continued)

segment assets

Retail 214 762 201 102

Property 15 286 11 751

Group services 98 942 100 686

Segment assets from continuing operations 328 990 313 539

Manufacturing – discontinued operation* – 11 372

Total segment assets 328 990 324 911

segment liabilities

Retail 42 389 48 986

Property 2 099 1 931

Group services 3 751 3 940

Segment liabilities from continuing operations 48 239 54 857

Manufacturing – discontinued operation* – 3 112

Total segment liabilities 48 239 57 969

capital expenditure

Retail 26 991 30 559

Property 3 124 602

Capital expenditure from continuing operations 30 115 31 161

Manufacturing – discontinued operation* – 30

Total capital expenditure 30 115 31 191

Finance income and expenses are not attributable to operating segments.

The group has identified the following divisions as the group’s reportable segments:

retail trading division – comprises the Queenspark ladieswear, J CREW, Queenspark Plus and franchise divisions

property division – comprises the Rex Trueform group property portfolio, which includes both its investment properties and the properties used in operations

The board, identified as the chief operating decision-maker, reviews the results of these business divisions on a monthly basis for the purpose of allocating resources and evaluating performance.

Performance is measured based on segmental operating profit, as included in the monthly management reports reviewed by the chief operating decision-maker.

* The manufacturing division was sold at the end of the previous financial year and was classified as a discontinued operation. This is no longer a reportable segment in the current financial year and has been included for comparative purposes only.

45

ordinary n’ ordinary preference

Number of share-

holders

% of share-

holders

Number of share-

holders

% of share-

holders

Number of share-

holders

% of share-

holders

public 43 89.6 128 95.5 35 94.6 Insurance companies,

nominees and trusts 8 16.7 22 16.4 6 16.2

Individuals 25 52.1 81 60.4 27 73.0 Companies and close

corporations 10 20.8 23 17.2 2 5.4 Mutual funds and

pension funds – – 2 1.5 – –

non-public 5 10.4 6 4.5 2 5.4 Stewart and Pat Shub

Family Trust 1 2.1 1 0.7 – – Brimstone Investment

Corporation Limited 1 2.1 1 0.7 – –

Directors 2 4.1 3 2.4 – –

Ceejay Trust 1 2.1 1 0.7 1 2.7

PRS Shotter – – – – 1 2.7

48 100.0 134 100.0 37 100.0

Number of shares

% of share

capital

Number of shares

% of share

capital

Number of shares

% of share

capital

public 100 451 8.0 1 734 328 17.1 99 550 36.2 Insurance companies,

nominees and trusts 31 998 2.6 660 096 6.5 11 900 4.3

Individuals 29 644 2.4 472 715 4.7 75 850 27.6 Companies and close

corporations 38 809 3.0 596 869 5.9 11 800 4.3 Mutual funds and

pension funds – – 4 648 – – –

non-public 1 149 549 92.0 8 403 113 82.9 175 450 63.8 Stewart and Pat Shub

Family Trust 718 000 57.4 676 101 6.7 – – Brimstone Investment

Corporation Limited 254 026 20.3 3 684 257 36.3 – –

Directors 8 600 0.7 27 944 0.3 – –

Ceejay Trust 168 923 13.6 4 014 811 39.6 120 400 43.8

PRS Shotter – – – – 55 050 20.0

1 250 000 100.0 10 137 441 100.0 275 000 100.0

Number of

shares

% of share

capital

Number of

shares

% of share

capital

Number of

shares

% of share

capitalshareholder holding in excess of 5% of share capital at 30 June 2012 Stewart and Pat Shub

Family Trust 718 000 57.4 676 101 6.7 – – Brimstone Investment

Corporation Limited 254 026 20.3 3 684 257 36.3 – –

Ceejay Trust 168 923 13.5 4 014 811 39.6 120 400 43.8

PRS Shotter – – – – 55 050 20.0

DK Dreyer – – – – 16 800 6.1

1 140 949 91.2 8 375 169 82.6 192 250 69.9

Shareholders’ informationAnalysis of shareholders as at 30 June 2012


Notice of annual general meeting

AfricAn & overseAs enterprises limited(Incorporated in the Republic of South Africa)(Registration number 1947/027461/06)Share codes: AOO – AONISIN: ZAE000000485 – ZAE000009718 (“AOE” or “the company”)

Notice is hereby given that the sixty-fifth annual general meeting of shareholders of AOE will be held in the boardroom, Rex Buildings, 263 Victoria Road, Salt River, Cape Town, on Wednesday, 14 November 2012 immediately after the annual general meeting of Rex Trueform Clothing Company Limited, which is to be held at 10:00 (which meeting AOE shareholders are invited to attend) for the purpose of dealing with such business as may be transacted at an annual general meeting and specifically to consider, and if deemed fit, to pass with or without modification, the following ordinary and special resolutions. The record date for determining which shareholders are entitled (i) to receive notice of the annual general meeting is 14 September 2012 and (ii) to participate in and vote at the annual general meeting is 2 November 2012 in terms of section 62(3)(a) as read with section 59 of the Companies Act, (Act No. 71 of 2008) (the “Companies Act”).

ordinAry resolution number 1Approval of annual financial statementsTo consider and adopt the annual financial statements of the company and its subsidiaries, for the year ended 30 June 2012, together with the reports of the directors, audit committee and auditors contained therein as presented in pages 21 to 45 of the integrated annual report to which this notice is attached.

ordinAry resolution number 2Approval of dividendTo approve the declaration of a dividend of 35 cents per share for the year on the ordinary and ‘N’ ordinary shares.

ordinAry resolution number 3re-election of directorsTo re-elect individually as directors of the company the following directors, who retired in terms of the company’s Articles of Association, but who are eligible and offer themselves for re-election:

3.1 Romain Victor Orlin (Independent non-executive)

3.2 Damian Steven Johnson (executive)

3.3 Patricia Eve Shub (executive)

Abbreviated curricula vitae in respect of the above directors are provided in Annexure A to this notice.

ordinAry resolution number 4election of audit committeeOn the recommendation of the board, to elect individually the following who are independent non-executive directors of the company and its subsidiary, as members of the group audit committee:

4.1 PM Naylor

4.2 RV Orlin

4.3 RW Rees

Abbreviated curricula vitae in respect of the above directors are provided in Annexure B to this notice.

ordinAry resolution number 5Appointment of auditorsTo reappoint KPMG Inc. (and Mr I Jeewa as the designated partner) as the auditors of the company for the ensuing year.

ordinAry resolution number 6non-binding advisory vote on remuneration policyTo endorse, by way of a non-binding advisory vote, the company’s remuneration policy as detailed in the remuneration report set out on page 10 of the integrated annual report.

In order for the above ordinary resolutions to be adopted, the support of more than 50% (fifty percent) of the total number of votes exercisable by shareholders, present in person or by proxy, is required.

speciAl resolution number 1Approval of non-executive directors’ fees To approve the annual remuneration to be paid to the non-executive directors of the company for the period 01 July 2012 to 30 June 2014, details of which are as follows:

Annual R

Chairman of the board 273 000

Lead independent director 59 000

Director 43 000

47

reason for and effect of special resolution number 1In terms of section 66(8) of the Companies Act the company may remunerate its directors for their services as directors. Furthermore section 66(9) provides that such remuneration may only be paid by the company in accordance with a special resolution passed by shareholders within the previous 2 (two) years.

The effect of this special resolution is that the directors will be entitled to receive the fees so approved on an annual basis for the period 1 July 2012 to 30 June 2014.

speciAl resolution number 2General authority to acquire sharesTo resolve that the company and/or any subsidiary of the company be and is hereby authorised by way of a general authority in accordance with the provisions of section 48(8)(a) of the Companies Act to acquire issued ordinary and/or ‘N’ ordinary shares of the company (“the securities”) upon such terms and conditions and in such numbers 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 Companies Act and the Listings Requirements of the JSE Limited, where applicable, and provided that:

(a) the repurchase of securities will be effected through the main order book operated by the JSE trading system and done without any prior understanding or arrangement between the company and the counterparty;

(b) this general authority shall only be valid until the company’s next annual general meeting, provided that it shall not extend beyond fifteen months from the date of passing of this special resolution;

(c) in determining the price at which the securities are acquired by the company in terms of this general authority, the maximum premium at which such securities may be acquired will be 10% (ten percent) of the weighted average of the market price at which such securities are traded on the JSE, as determined over the 5 (five) trading days immediately preceding the date of the acquisition of such securities by the company;

(d) the acquisitions of securities in any one financial year does not exceed 20% (twenty percent) in the aggregate of the company’s combined issued share capital in the securities from the date of the grant of this general authority;

(e) the directors, after considering the effect of the maximum repurchase, are of the opinion that:

(i) the company and the group will be in a position to repay their debt in the ordinary course of business for a period of 12 (twelve) months from the company first acquiring securities under this general approval and subject to (f) below;

(ii) the consolidated assets of the company, being fairly valued in accordance with International Financial Reporting Standards, will be in excess of the consolidated liabilities of the company at the time of the company first acquiring securities under this general approval and subject to (f) below;

(iii) the ordinary capital and reserves of the company and the group will be adequate for a period of 12 (twelve) months from the company first acquiring securities under this general approval and subject to (f) below; and

(iv) the available working capital will be adequate to continue the operations of the company and the group for a period of 12 (twelve) months from the company first acquiring securities under this general approval and subject to (f) below;

(f) prior to entering the market to proceed with the repurchase, the company’s sponsor will have complied with its responsibilities contained in Schedule 25 of the JSE Listings Requirements;

(g) the company will comply with any specific JSE Limited requirements concerning shareholder spread;

(h) the company or its subsidiaries will not repurchase securities during a prohibited period as defined in paragraph 3.67 of the JSE Listings Requirements, unless there is a repurchase programme in place, the dates and quantities of securities to be repurchased during the prohibited period are fixed, and full details thereof have been disclosed in an announcement on SENS prior to commencement of the prohibited period;

(i) where the company has cumulatively repurchased 3% (three percent) of the initial number of the relevant class of securities, an announcement will be made, and announcements shall likewise be made for each 3% (three percent) in aggregate of the initial number of that class acquired thereafter; and

(j) the company only appoints one agent to effect any repurchase(s) on its behalf.

Notice of annual general meeting continued


disclosures required in terms of section 11.26 of the Jse listings requirements (a) The JSE Listings Requirements require the following

disclosures, some of which are disclosed in the integrated annual report of which this notice forms part, as set out below:

– Directors and management – pages 12 and 13

– Major shareholders of the company – page 46

– Directors’ interests in the company shares – pages 22 and 23

– Share capital of the company – page 34

(b) 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.

(c) The directors of the company collectively and individually accept full responsibility for the accuracy of the information pertaining to special resolution number 2 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 this resolution contains all such information.

(d) In terms of section 11.26 of the Listings Requirements of the JSE, the directors of the company are not aware of any legal or arbitration proceedings, including proceedings that are pending or threatened, that may have or may in the recent past, being at least the previous 12 (twelve) months, have had a material effect on the group’s financial position.

reason for and effect of special resolution number 2The reason for and effect of special resolution number 2 is to authorise the company and/or its subsidiaries by way of a general authority to acquire its own issued shares on such terms, conditions and for such amounts as may be determined from time to time by the directors of the company, subject to the limitations set out in special resolution number 2.

To have no specific intention to effect the provisions of special resolution number 2, but will continually review the company’s position, having regard to prevailing circumstances and market conditions, in considering whether to effect the provisions of special resolution number 2.

speciAl resolution number 3Adoption of new memorandum of incorporationTo approve and adopt as the new Memorandum of Incorporation (“MOI”) of the company, the proposed MOI made available from 1 November 2012 for inspection by shareholders at the registered office of the company and at the following web address: www.rextrueform.com, the new MOI to apply in substitution for and to the exclusion of the company’s existing Memorandum of Association and Articles of Association.

reason for and effect of special resolution number 3Special resolution number 3 is proposed to enable the company to adopt a new MOI that will be in line with the requirements of the Companies Act, the JSE Listings Requirements and any applicable legislation. In addition to the Companies Act, changes to the JSE Listings Requirements and related regulatory developments require a substantial number of changes to the existing Memorandum of Association and Articles of Association of the company.

Accordingly, it is considered more appropriate to adopt the proposed new MOI than to amend the existing Memorandum of Association and Articles of Association.

The effect of special resolution number 3 is that the new MOI will, with effect from the date of filing thereof with the Companies and Intellectual Property Commission, substitute the company’s existing Memorandum of Association and Articles of Association in their entirety.

In order for the above special resolutions to be adopted, the support of 75% (seventy-five percent) of the total number of votes exercisable by shareholders, present in person or by proxy, is required.

votinG And proXies All shareholders are encouraged to attend, speak and vote at the annual general meeting.

A shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend, speak and to vote in his/her stead.

The proxy need not be a shareholder of the company.

On a show of hands, every shareholder of the company present in person or represented by proxy shall have 1 (one) vote only. On a poll, every shareholder of the company present in person or represented by proxy shall have 200 (two hundred) votes for every ordinary share and 1 (one) vote for every ‘N’ ordinary share held in the company by such shareholder.

49

Notice of annual general meeting continued

A form of proxy is attached for the convenience of certificated and “own name” dematerialised shareholders holding shares in the company who cannot attend the annual general meeting, but who wish to be represented thereat. Forms of proxy may also be obtained on request from the company’s registered office. The completed forms of proxy must be deposited at, posted or faxed to the transfer secretaries at the address below, to be received by no later than 48 hours before the meeting, excluding Saturdays, Sundays and public holidays. Any shareholder who completes and lodges a form of proxy will nevertheless be entitled to attend and vote in person at the annual general meeting should the shareholder subsequently decide to do so.

Shareholders who have dematerialised their shares through a Central Securities Depository Participant (“CSDP”) or broker, other than “own name” registered dematerialised shareholders, who wish to attend the annual general meeting, must request their CSDP or broker to issue them with a letter of representation.

Should shareholders who have dematerialised their shares wish to vote by proxy, they must provide their CSDP or broker with their voting instructions in terms of the custody agreement entered into between the dematerialised shareholder and their CSDP or broker.

Dematerialised shareholders who have elected “own name” registration and who are unable to attend but wish to vote at the annual general meeting, should complete and return the attached form of proxy and lodge it with the transfer secretaries of the company.

By order of the board

SM LawrenceCompany secretary

18 September 2012

Registered office Rex Buildings, 263 Victoria Road Salt River, Cape Town, 7925 PO Box 1856, Cape Town, 8000 Fax No.: 021 460 9575

Transfer secretaries Computershare Investor Services Proprietary Limited Ground Floor, 70 Marshall Street Johannesburg, 2001 PO Box 61051, Marshalltown, 2107 Fax No.: 011 688 7716


AnneXure AAbridged curriculum vitae of director standing for re-election

RV Orlin (69) BA (Econ) Wits

Romain Orlin has served as an independent non-executive director of the company since March 2009.

He is an experienced company director and has been involved in the retail clothing industry in an executive capacity for many years.

Romain is a member of the audit, remuneration and nomination committees of the group.

He is also an independent non-executive director of Rex Trueform Clothing Company Limited and of Queenspark Proprietary Limited. Romain was appointed to the board of Queenspark Distribution Centre Proprietary Limited on 1 July 2012.

DS Johnson (44) BCompt (Hons), CA (SA)

Damian Johnson joined the group in 2004 and was appointed as the financial director in 2009.

Damian is a member of the risk committee and the social and ethics committee. He also serves as financial director on the boards of the company’s subsidiary, Rex Trueform Clothing Company Limited, and the group’s main operating subsidiary, Queenspark Proprietary Limited. Damian was appointed to the board of Queenspark Distribution Centre Proprietary Limited on 1 July 2012.

PE Shub (68) BA

Patricia Shub joined the group in 1975 and is the chief executive officer of the company.

Patricia has 30 years of experience in ladies’ fashion manufacturing and retail, and she has an in-depth knowledge of the group’s fashion retail business.

Patricia serves as an executive director on the boards of the company’s main operating subsidiary, Queenspark Proprietary Limited, and she was appointed to the board of Queenspark Distribution Centre Proprietary Limited on 1 July 2012.

Annexures

AnneXure bAbridged curricula vitae of directors proposed for re-election to the group audit committee

PM Naylor (66) BSc (Eng)

Patrick Naylor has served as an independent non-executive director of the company since 2003.

He is an experienced company director and trustee, having served on the boards of numerous companies and trusts outside of this group.

He is a practising partner in a firm of consulting civil engineers.

Patrick is chairman of the group’s audit committee and a member of the remuneration and nomination committees.

He is also an independent non-executive director of Rex Trueform Clothing Company Limited, of the operating subsidiary, Queenspark Proprietary Limited, and he was appointed to the board of a second subsidiary, Queenspark Distribution Centre Proprietary Limited, on 1 July 2012.

RV Orlin (69) BA (Econ) Wits

Romain Orlin has served as an independent non-executive director of the company since March 2009.

He is an experienced company director and has been involved in the retail clothing industry in an executive capacity for many years.

Romain is a member of the audit, remuneration and nomination committees of the group.

He is also an independent non-executive director of Rex Trueform Clothing Company Limited and of Queenspark Proprietary Limited. He was appointed to the board of a second subsidiary, Queenspark Distribution Centre Proprietary Limited, on 1 July 2012.

RW Rees (59) BSc (Econ) (Hons) FCA

Roger Rees was appointed as an independent non-executive director of the company on 1 April 2011.

He is highly skilled in finance, economics and in both domestic and international business.

Roger has served as a member of the audit committee since April 2011. He is also an independent non-executive director of Rex Trueform Clothing Company Limited, the operating subsidiary, Queenspark Proprietary Limited, and he was appointed to the board of a second subsidiary, Queenspark Distribution Centre Proprietary Limited, on 1 July 2012.

51

AfricAn & overseAs INTEGRATED ANNUAL REPORT 201252

Form of proxy

AfricAn & overseAs enterprises limited (Incorporated in the Republic of South Africa) (Registration number 1947/027461/06)Share codes: AOO and AON – ISIN NUMBERS: ZAE000000485 and ZAE000009718 (“AOE” or “the company”)

For use only by ordinary and ‘N’ ordinary certificated shareholders or dematerialised shareholders with “own name” registration, at the sixty-fifth annual general meeting of the company to be held in the boardroom, Rex Buildings, 263 Victoria Road, Salt River, Cape Town, on Wednesday, 14 November 2012, commencing immediately after the annual general meeting of Rex Trueform Clothing Company Limited,

which is to be held at 10:00.

I / We (full name/s in block letters) ______________________________________________________________________________________________

of (address) __________________________________________________________________________________________________________________

being a shareholder/shareholders of AOE and holding ___________________________________________ordinary shares in the company, and/or

____________________________________________________________________________’N’ ordinary shares in the company, do hereby appoint

1. _____________________________________________of __________________________________________________________or failing him/her

2. _____________________________________________ of _________________________________________________________ or failing him/her

3. the chairman of the annual general meeting,

as my/our proxy to act for me/us and on my/our behalf at the annual general meeting which will be held for the purpose of considering and, if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at any adjournment thereof, and to vote for and/or against the resolutions and/or abstain from voting in respect of the AOE ordinary shares and/or ‘N’ ordinary shares registered in my/our name(s), in accordance with the following instructions:

Ordinary shares* ‘N’ ordinary shares*

For Against Abstain For Against Abstain

Ordinary resolutions

1. Approval of annual financial statements

2. Approval of dividend

3. Re-election of the following directors:

3.1 RV Orlin

3.2 DS Johnson

3.3 PE Shub

4. Election of audit committee

4.1 PM Naylor

4.2 RV Orlin

4.3 RW Rees

5. Appointment of auditors

6. Remuneration policy

Special resolutions

1. Approval of future non-executive directors’ fees

2. General authority to acquire shares

3. Adoption of new Memorandum of Incorporation

* Please indicate with an “X”, or the number of shares applicable, in the appropriate spaces above how you wish your votes to be cast.

Unless otherwise instructed, my/our proxy may vote as he/she sees fit.

Signed at (place) ____________________________________on (date) _________________________________________________________ 2012

Shareholder’s signature _______________________________________________________________________________________________

Please read the notes on the reverse side hereof.

53

1. This form of proxy must only be used by certificated ordinary and ‘N’ ordinary shareholders or dematerialised ordinary and ‘N’ ordinary shareholders who hold dematerialised ordinary or ‘N’ ordinary shares with “own name” registration.

2. Dematerialised shareholders holding ordinary or ‘N’ ordinary shares other than with “own name” registration must:

2.1. inform their Central Securities Depository Participant (“CSDP”) or broker of their intention 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

2.2. provide their CSDP or broker with their voting instructions, should they not wish to attend the annual general meeting in person, but wish to be represented thereat.

These shareholders must not use this form of proxy.

3. Each shareholder is entitled to appoint one or more proxies (who need not be a shareholder(s) of the company) to attend, speak and, on a poll, vote in place of that shareholder at the annual general meeting.

4. A shareholder may insert the name of a proxy or the 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”. The person whose name stands first on the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of those whose names follow.

5. A shareholder’s voting instructions to the proxy must be indicated by the insertion of an “X” or, alternatively, the number of shares such shareholder wishes to vote, in the appropriate spaces provided on the previous page. Failure to comply with the above will be deemed to authorise the chairman of the annual general meeting, if the chairman is the authorised proxy, to vote in favour of the resolutions at the annual general meeting, or any other proxy to vote or to abstain from voting at the annual general meeting, as he/she deems fit, in respect of all the shareholder’s votes exercisable thereat.

6. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy, unless previously recorded by the company’s transfer office or waived by the chairman of the annual general meeting.

7. 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.

8. Any alterations or corrections to this form of proxy must be initialled by the signatory(ies).

9. The completion and lodging of this form of proxy 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 hereof, should such shareholder wish to do so.

10. 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.

11. Where there are joint holders of any shares:

11.1. any one holder may sign this form of proxy;

11.2. the vote(s) of the senior shareholders (for that purpose seniority will be determined by the order in which the names of the 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).

Forms of proxy must be lodged with the transfer secretaries at the address given below not later than 48 hours before the meeting, excluding Saturdays, Sundays and public holidays.

Registered office: Transfer secretaries: Rex Buildings, 263 Victoria Road Computershare Investor Services Proprietary Limited Salt River, Cape Town, 7925 Ground Floor, 70 Marshall Street, Johannesburg, 2001 PO Box 1856, Cape Town, 8000 PO Box 61051, Marshalltown, 2107 Fax No.: 021 460 9575 Fax No.: 011 688 7716

Notes to the form of proxy

Shareholders’ calendar

finAnciAl yeAr-end – 30 June

preliminAry Announcement 2012 – 7 September 2012

inteGrAted AnnuAl report 2012 – 28 September 2012

AnnuAl GenerAl meetinG – 14 November 2012

interim report (december 2012) – March 2013

dividendsordinAry And ‘n’ ordinAry shAres

Shareholders’ approval – Wednesday, 14 November 2012

Last day to trade – Friday, 7 December 2012

Trade ex-dividend – Monday, 10 December 2012

Record date – Friday, 14 December 2012

Payment date – Tuesday, 18 December 2012

6% CUMULATIVE PREFERENCE SHARES

Declared – half-year to December 2012

November 2012

– half-year to June 2013

May 2013

Payable – half-year to December 2012

end December 2012

– half-year to June 2013

end June 2013

55

Documents

African Overseas Enterprises 2012 Annual Report