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2011

An

nu

al r

epo

rt

1 Financial highlights

2 Group at a glance

4 Board of directors

6 Joint report of the chairman and chief executive officer

9 Corporate structure

10 Humulani Investments board

11 Humulani Investments structure

12 Map of BMG distribution network

13 Map of CEG distribution network

14 Review of operations

25 Corporate governance

34 Integrated report

36 Value added statement

37 Approval of the annual financial statements

37 Certification by the company secretary

38 Report of the independent auditors

39 Report of the directors

42 Audit Committee report

44 Statements of comprehensive income

45 Statements of financial position

46 Statements of changes in equity

47 Statements of cash flows

48 Notes to the annual financial statements

87 Share information

88 Shareholders’ diary

89 Corporate information

90 Notice of annual general meeting of shareholders

Form of proxy (Attached)

CONTENTS

PROFILE

Invicta Holdings Limited is an investment holding and management company,

controlling and managing assets of R6 889 million (2010: R5 937 million). Its

operations comprise:

>> import and distribution of a comprehensive range of bearings, seals, power

transmission components, fasteners, drives, belting, filtration and hydraulics;

>> import and sale of machinery and related spare parts for the agriculture,

earthmoving, turf grooming and golf-car markets;

>> the distribution of a niche range of spare parts to the automotive industry

and niche products to the motorcycle industry;

>> import and distribution of wall and floor tiles and sanitary ware; and

>> import and distribution of leading materials handling equipment and

related spare parts.

Invicta Holdings Limited • Annual report 2011

FINANCIAL HIGHLIGHTS

for the year ended 31 March 2011

1Invicta Holdings Limited • Annual report 2011

2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

50

100

150

200

250

300

350

400

450

500

550

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

5 500

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

Share price

(cents)

EPS/DPS

(cents)

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Revenue 4 533 801 3 968 872 4 523 535 3 335 496 2 663 398 1 907 754 1 937 593 2 069 163 1 907 317 1 352 311

Operating profit

before finance costs,

interest and dividends

received 505 493 453 293 497 356 360 379 281 229 197 843 231 957 229 451 230 123 122 405

Profit for the year 426 222 365 389 362 812 300 856 217 724 125 165 108 507 99 631 96 502 45 991

Ordinary shareholders’

interest 1 611 265 1 442 966 1 206 055 1 025 591 886 161 716 296 365 075 312 339 343 665 268 783

Dividends per

share (cents) 183 151 138 138 104 68 77 66 45 24

Earnings per

share (cents) 504 453 437 356 292 170 190 164 133 60

Diluted earnings per

share (cents) 480 441 437 354 288 169 190 160 130 58

Share price at the

year-end (cents) 4 350 2 879 2 000 2 550 2 750 1 850 1 550 935 550 310


GROUP AT A GLANCE

BMG (BEARING MAN GROUP) PROFILE

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

BMG BEARINGS BMG SEALSBMG POWER

TRANSMISSION BMG DRIVES BMG BELTING AUTOBAX

BMG FASTENERS BMG FILTRATION BMG HYDRAULICSBMG TECHNICAL

RESOURCES BMG SUBSIDIARIES


CAPITAL EQUIPMENT GROUP (CEG) TILETORIA

A leading importerand distributor of wall and floor tiles

and sanitary ware in the

Western Cape andKwaZulu-Natal.

NORTHMEC CSE DOOSAN SANEW

HOLLAND SA

Importer and distributor of leading

materials handlingequipment and


CRITERION

Distributor of leading agricultural

machinery,implements and


Distributor of construction and

earthmoving machinery, turf

grooming machinery, golf

cars, utility vehicles and related

spare parts.

Distributor of excavators, wheel loaders, skid steer

loaders and hydraulic hammers.

Importers and wholesaler of New

Holland agriculturalequipment and

specialised Braud grape harvesters.

LANDBOU PART


BOARD OF DIRECTORS

Dr CH Wiese (69)Non-executive chairman

BA, LLB, DCom(h.c.)

Non-executive chairman of Invicta Holdings Limited from October 1997 to April 2000 and anon-executive director since April 2000, re-appointed non-executive chairman in January 2006.Chairman of Tradehold Limited, Shoprite Holdings Limited, and Pepkor Holdings Limited. Non-executive director of KWV Holdings Limited.

A Goldstone (50)Chief executive officer

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

Worked as a management consultant at KPMG prior to joining the Invicta Group in January1990 as financial manager. Appointed financial director in August 1991. Appointed chief executive officer of Invicta Holdings Limited in April 2000.

C Barnard (47)Financial director

CA(SA), MBA, ACIS

Joined Sappi as management accountant in 1993, joined Group Five in their commercial development subsidiary in 1996 and was appointed commercial manager in 1997. In 1998joined the Invicta Group as financial manager, appointed director of CSE Equipment Company(Pty) Limited in 1999 and company secretary of Invicta Holdings Limited in 2002. Appointed executive director of Invicta Holdings Limited on 7 June 2007.

AK Masuku (41)Alternate non-executive independent director to JS Mthimunye

MCom, MDP (University of New York)

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

JS Mthimunye (46)Non-executive independent director

CA(SA)

Appointed financial accountant Department of Finance in 1993. A founding partner of GobodoInc and established the corporate advisory service in 1997. Appointed financial manager atNampak Tissue in 1995. Previously appointed managing director of aloeCap (Pty) Limited and appointed executive chairman in May 2007. Appointed alternate director to AK Masuku on theInvicta Holdings Limited board on 7 June 2007 and appointed as non-executive director on 31 July 2009.


BOARD OF DIRECTORSCONTINUED

DI Samuels (71)Independent non-executive director

CA(SA)

Joined Trade and Industry Acceptance Corporation Limited in 1971 and was appointed directorfrom 1980 to 1984. From 1989 to 2000 was managing director of Stenham (Pty) Limited. In 1996was appointed non-executive director of Invicta Holdings Limited. Appointed non-executivedirector of Bearing Man Limited in 2001 and chairman in 2002.

LR Sherrell (45)Non-executive director

Appointed as alternate director to Mr RE Sherrell on 27 May 2009 and has been nominated asdirector of Invicta Holdings Limited with effect from 29 July 2010, upon the retirement of Mr RE Sherrell. Mr LR Sherrell studied commerce at UCT and has been involved in the hospitality and motor trade industries with interests in franchise dealerships. Mr LR Sherrellrepresented South Africa as a rugby player in 1994.

AM Sinclair (56)Executive director

Joined JI Case in 1982 and was appointed branch manager in 1986. Joined CSE in 1989 and wasappointed a divisional managing director in 1993. In 1998 appointed managing director of CSEand in September 2006 appointed as an alternate director of Invicta Holdings Limited.Appointed executive director of Invicta Holdings Limited on 7 June 2007.

Adv JD Wiese (30)Non-executive director

BA(Value and Policy Studies), LLB, MIEM (Bocconi, Italy)

Adv JD Wiese has been appointed as director of Invicta Holdings Limited with effect from 29 July 2010. Adv JD Wiese obtained his BA degree after which he worked at Lourensford WineEstate, helping to initiate events partnerships. Adv JD Wiese subsequently obtained hisMaster’s Degree in International Economics and Management and completed this degree as a participant in the MBA program. After returning to Lourensford for a brief period, Adv JD Wiese graduated as a Bachelor of Law student in 2008. In 2009 Adv JD Wiese completed his pupilage at the Cape Bar and was admitted as an Advocate of the High Courton 8 May 2009.

CE Walters (43)Executive director

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

Joined Anglo American Corporation in 1986 as Corporate Graduate Engineering trainee wherehe held numerous positions in both the Anglo group and De Beers. Appointed marketing andsales manager – Pulp for Mondi SA in 1996 and appointed managing director of Mondi SalesInternational in 2002. Appointed managing director of Bearing Man (Pty) Limited in September2006. Appointed alternate director to DI Samuels on the Invicta Holdings Limited board on 7 June 2007 and appointed as executive director on 31 July 2009.

Ages as at year-end


HEADLINE EARNINGS PER SHARE

grew by

12,5%to 496 cents per share

REVENUE

grew by

14,2%

FINAL DIVIDEND

increased by

23,5%

• Invicta has deliveredgood results

• Increased demand forproducts

JOINT REPORT OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Dr CH WieseNon-executive chairman

A GoldstoneChief executive officer

The only JSE Company ever to achieve TOP 100 STATUS – 16 years in a row


GROUP OVERVIEW

The Group has once again delivered good results.

Global markets have started to recover from the

recent financial crisis, leading to increased demand for

products supplied by the Group. The strong Rand

continues, however, to put pressure on margins.

Group revenue grew by 14,2% to R4,534 billion, of

which R227 million (5,0%) was from acquisitions. As a

result of continued margin and inflationary pressures,

operating income increased by only 11,5% to R505

million, still an acceptable performance.

Profit for the year increased by 16,6% to R426 million,

resulting in headline earnings per share increasing by

12,5% to 496 cents per share. Good working capital

management resulted in cash generated from

operations reaching a record R627 million, an increase

of 6,2% over the prior year.

The Group continued to take advantage of growth

opportunities and made a number of strategic

acquisitions totalling R135 million. The most

significant of these were the acquisitions by BMG of

some of its strategic agency outlets, 70% of Wegezi

Power Holdings (Pty) Limited and a number of smaller

hydraulics businesses. Wegezi manufactures and

prepares transformers, electric switch gears, panels

and pumps.

BMG (Bearing Man Group)

BMG continues to be the core profit contributor to the

Invicta Group, contributing 63,2% of the operating

income for the year. The industrial consumables

trading environment continued to prove challenging,

with areas of improvement in some sectors offset by

weakness in others. Under the circumstances, BMG has

produced a most satisfactory set of results.

Volumes have generally increased, but the strong

Rand resulted in a decline in gross margins. Revenue

increased by 18,3% from R2,018 billion to R2,387

billion; 7,6% (R154 million) from organic growth and

10,7% (R215 million) from acquisitions. Reduced gross

margins and higher operating costs resulted in

operating income increasing by only 9,2%. During the

year, a strategic decision was taken to increase

selected inventory categories which has resulted in

BMG being well stocked at year-end and, as a result,

the earthquake in Japan has had a relatively minor

impact on BMG’s operations.

CEG (Capital Equipment Group)

The CEG continued to face challenging conditions.

There has been a gradual recovery of volumes in the

construction equipment sector, albeit from a very low

base. However, the steps taken by CEG in its

construction equipment division following the global

financial crisis have resulted in a material

improvement in its contribution to CEG’s operating

profit. Volumes in the agricultural machinery sector

have improved marginally over last year, ensuring

consistent performance in this division. The materials

handling division (Criterion Equipment) also made a

good contribution to profits.

Total revenue of the Capital Equipment Group

increased by 7,3% to R1,877 billion.

A minor acquisition was made during the year, but did

not have any impact on the results.

A greater contribution from spares and service

revenue combined with good cost control resulted in

operating profit increasing by 27,6% to R158 million.

The segment’s annualised operating profit return on

capital employed continued to be at excellent levels,

an overall pleasing result.

OTHER OPERATIONS

Tiletoria expanded its distribution network by moving

to new premises in Durban and opening a branch in

Johannesburg. The Group has continued to invest in

the infrastructure of Tiletoria and, whilst not

contributing in any significant way to earnings at

present, Tiletoria should grow substantially in the next

few years.

PROSPECTS

Trading conditions in the sectors in which the Group

operates appear to be improving gradually. The

current strength of the Rand continues to be a source

of concern as it is likely to maintain pressure on

margins and reduce the income of key customers who

operate in export orientated sectors. The Group will

continue to focus on improving operational

efficiencies and to make acquisitions to grow steadily.

BMG has grown its base by making strategic

acquisitions and will continue to do so as and when

opportunities arise.


CONTINUED

REVIEW OF OPERATIONSCONTINUED


In the CEG, agricultural equipment conditions are

better than anticipated. Grain prices have recovered

from last year’s lows and should support a steady

demand for agricultural equipment. Conditions in the

construction equipment market are gradually

improving, albeit off a low base.

The recent earthquake in Japan has affected some of

the Group’s suppliers, but not materially. The resultant

effect on the Group has been minimal. About 21% of

the Invicta Group’s revenue is from Japanese products.

The Group’s supplier factories are, in the main, based

in the southern part of Japan, which is well away from

the north-eastern area which was affected by the

disaster. Some have been affected by disruption in

supply to them from component manufacturers, but

disruption to supply to the Invicta Group has so far

been minimal. The Invicta Group is well stocked and

does not anticipate any material disruption due to the

consequences of the earthquake in Japan.

In keeping with its intention of growing the Group,

the Board has decided to strike a balance between

retaining cash for growth and paying dividends. In the

result, the annual dividend cover has henceforth been

fixed at 2,75 times earnings per share, resulting in a

final dividend of 126 cents per share, an increase of

23,5%.

The Board remains confident of the continued success

of the Group.

EVENTS AFTER REPORTING PERIOD

Theramanzi Investments (Pty) Limited (“Trust

Subsidiary”) (a 100% held subsidiary of a new

broad-based trust, Humulani Empowerment Trust,

with its beneficiaries including Invicta employees, their

immediate families, communities and other

broad-based initiatives as determined by trustees)

(“Trust”) and aloeCap (Pty) Limited, have entered into

an agreement effective 1 June 2011, in terms of which

the Trust Subsidiary acquired aloeCap’s 20% equity

stake in Humulani. By the time this report reaches

shareholders, details of the transaction will have

been announced. We refer shareholders to this

announcement.

CONCLUSION

The Group has continued its growth track record and

is set to continue along this path. Invicta was again

awarded Top 100 status on the JSE, the only JSE-listed

company to have achieved this for 16 years in a row.

This is a fantastic team effort and we thank all our

loyal staff members for their contribution. We are

immensely proud of our achievements and look

forward to more of the same in the future.

Dr CH Wiese A Goldstone

Chairman Chief Executive Officer

31 May 2011


CONTINUED


100% 60%100%

Humulani

Employee

Investment

Trust

aloeCap

(Pty) Limited

5%

20%

75%100%

INVESTMENTS

HUMULANI

INVESTMENTS

(PTY) LIMITED

Divisions

CORPORATE STRUCTURE

Humulani

Marketing

(Pty) Limited

Goldquest

International

Hydraulics SA

(Pty) Limited

Tiletoria

(Pty) Limited

Disa

Equipment

(Pty) Limited

(Doosan SA)

Criterion

Equipment

(Pty) Limited

Invicta

Properties

(Pty) Limited


DEL ZondoJS Mthimunye

The Group will continue to focus on

improving operationalefficiencies and to make

acquisitions to grow steadily.

HUMULANI INVESTMENTS BOARD

C BarnardA Goldstone AK Masuku


HUMULANI INVESTMENTS STRUCTURE

HUMULANI INVESTMENTS

CHARLES WALTERSBMG

Abe BekkerChief Operating Officer

Rod WatsonManaging Director: CSE

Paul ViljoenSales Director: Northmec

Peter AskewManaging Director: New Holland SA

Alex AckronCartcom and Turf

Steve KiteNational Service

Brenton KempManaging Director: Criterion Equipment

Ben GroblerNational Parts Director

Geoff BalshawFinancial Director

Johan van der MerweManaging Director:Northmec

Wayne TaylorChief Financial Officer

Paul McKinlayDirector: Bearings, Seals and Power Transmission

Gavin PelserDirector: Drives, Belting and OST

Dave RussellGroup Technical Director

Ian KingGroup Sales and Marketing Director

ANTHONY SINCLAIRCEG

CEG DIVISIONAL DIRECTORSBMG DIVISIONAL DIRECTORS

André StruwigManaging Director: Doosan SA

NATIONAL MANAGERS

Humulani Marketing Tiletoria

Allan DuckworthFinancial Director

Mohammud MohuideenOperations Director

PATRICK THONISSENTiletoria


MAP OF BMG DISTRIBUTION NETWORK

Autobax/Motosport branches

BMG

BMG Automotive

BMG Belting

Invicta Bearings

BMG Engineering Hubs

BMG Springset

BMG Fasteners

BMG Sealco

BMG Trade

BMG Hydraulics

Alpha Bearings

GAUTENG



MAP OF CEG DISTRIBUTION NETWORK


GAUTENG

CSE branches

Northmec branches

Northmec dealers

New Holland SA branches

New Holland SA dealers

Doosan SA branches

Doosan SA dealers

Cartcom branches

Criterion branches


BMG – Bearing Man Group

BEARING MAN GROUP MAINTAINS ITS LEAD

BMG has worked hard to maintain its position as Africa’s largest specialist distributor ofbearings, seals, power transmission components, electric and geared motors, belting, fasteners, filtration and hydraulics.

BMG’s success can be attributed to a carefully structured expansion programme, where newproducts are launched to satisfy exact market demand. Strategies to maintain the company’s leading position include setting benchmarks for the company locally, to meetstringent international standards.

As part of BMG’s programme to develop and fulfil strategic objectives, BMG has openedspecialist engineering hubs throughout the country. These engineering hubs have beenformed by the consolidation of BMG Drives and BMG Belting’s business to support the company’s recently launched World Class Production Efficiency initiative.

REVIEW OF OPERATIONS

BM

G

W TaylorChief financial officer

CE WaltersChief executive officer

BMG has opened specialist engineering

hubs throughout the country



BM

G

FINANCIAL REVIEW

The economic environment continued to prove challenging during the year with areas of improvement in some sectors offset by weakness inothers. Despite these tough trading conditions BMGhas produced a satisfactory set of results.

Turnover from existing businesses increased by 7,6%to R2,172 billion (2010: R2,018 billion). Acquisitionsadded a further R215 million to turnover. Turnover,including acquisitions, increased by 18,3%. Gross margins remained under pressure due to the continued strength of the Rand. Operating profit fromexisting businesses was marginally lower, at R286,3million (2010: R292,7 million) at an operating marginof 13,2% (2010: 14,5%). Operating profit, includingacquisitions, increased by 9,2% to R319,7 million, at anoperating margin of 13,4%.

In key geographic areas, BMG has acquired the

majority interest of the agency back from the owner

manager for a number of reasons, inter alia, key

account management and succession planning.

In April 2010 Wegezi Power Holdings (Pty) Limited was

acquired on a profit target basis, with targets to be

met over the three-year period to 31 March 2013. This

acquisition has enabled BMG to expand its product

offering to include electric motor rewinding and

transformers.

A number of smaller acquisitions were made during

the year to improve the geographic footprint of BMG’s

hydraulics business. The more significant of these were

Turnkey Hydraulics in KwaZulu-Natal and Hi-Quip

Hydraulics in Mpumalanga.

In July 2010, a strategic decision was taken to increase

stock orders due to pending supplier price increases

arising from escalating commodity prices. BMG is well

prepared for extended supplier lead times.

The short-term implication has been a significant

increase in inventory, but management is confident

this decision will benefit BMG in the ensuing year due

to product availability at lower costs. Inventory in

existing businesses increased by 32% to R790 million

and inventory in acquired businesses amounted to R22

million at year-end. The cost of acquisitions, combined

with increases in inventory, resulted in cash balances

reducing by R86 million to R91 million at year-end.

ACQUISITIONS

During the year BMG spent R128 million on acquiring

businesses and buying back certain of the company’s

strategic agency outlets. Many of BMG’s retail

branches are owner managed on an agency basis.

CONSUMABLE PRODUCTS DIVISION –BEARINGS, SEALS, POWER TRANSMISSIONPRODUCTS AND FASTENERS

The Consumables Division performed satisfactorily

overall, with positive sales and volume growth

compared to the previous year.

Gross margin on bearing sales remained under

pressure, mainly due to the competitive situation

resulting from the strong Yen. Sales and volume

growth were positive, although the magnitude of the

growth tapered off in the last quarter.

Power transmission products recovered well with sales,

volume and gross margin improvement in most

product lines.

A highlight of the year included the formalisation of a

distribution agreement with the Gates Corporation of

the USA. Gates is a global leader in the supply of

premium quality drive belts and hoses.

BM

GInvicta Holdings Limited • Annual report 201116

Performance from BMG’s seals products was ahead of

expectations, with sales, volume and gross margin

results showing pleasing growth. The addition of a

new seal manufacturing facility towards the end of

the financial year will improve the company’s ability to

provide customers with a broader range of products.

BMG pioneered the introduction of professional

specialised seal manufacturing machines more than

twenty years ago. This investment, which strengthens

BMG’s leading position in the local seals market,

enables the company to increase the size range of

non-standard seals to over 500 mm.

The Fasteners Division saw positive growth during the

year; however, the dynamics in this sector resulted in

continued pressure on margins. A supply agreement

was finalised with Gedore, which extends BMG’s range

to include a full portfolio of quality tool products.

ENGINEERED PRODUCTS DIVISION –DRIVES, BELTING, OST AND WEGEZI

The Drives Division experienced a slow recovery in

sales in the first six months, as major projects remained

on hold in key mining sectors, including diamonds,

platinum and chrome.

In the second half of the year the Drives Division was

awarded several strategic project orders, including

replacement gearboxes for the Richards Bay coal

terminal and two large Dorstener units for Illovo

Sugar.

Daily replacement sales increased during the year and

the availability of strategic stocks resulted in increased

market share for BMG Drives. The division remains

focussed on becoming the leader in the southern

African market in this highly competitive sector.

The electric motor market in southern Africa remained

depressed in the first six months and competitive

throughout the year. Nevertheless, BMG’s Electric

Motors Division performed satisfactorily relative to the

previous year.

Highlights for the division were the launch of new IE2

high efficiency motors and the award of an Eskom

contract for the supply of high voltage and low

voltage motors.

The Belting Division experienced a slow recovery from

the recession and faced the challenges of responding

to skills shortages and raw material price increases.

The belting technical platform was enhanced by the

employment of four product technical specialists who

concentrate on training, technical expertise and

superior service.

Oscillating System Technology (OST) experienced

another tough year. Focus was placed on reducing

costs and the profitability of the business was

improved. The niche product offering of this business

has seen it weather the storm well and it is well set to

benefit from the anticipated improvement in its

markets.

The acquisition in April 2010 of Wegezi Power

Holdings has made a meaningful contribution to BMG.

Wegezi consists of five divisions – transformers,

electric motor repair and sales, remanufacturing and

site work, pump repair and sales.

The Wegezi transaction is in line with BMG’s strategy

to expand its business through select value-adding

acquisitions. BMG continues to differentiate its

business through specialist services that include

technical advice on energy savings and production

efficiency, condition monitoring and maintenance

advice, on-site maintenance support, repair services

for bearings, gearboxes, electric motors, hydraulic

systems and pumps, as well as customer training.

BMG has also extended its interests in the electronics

sector, with the recent acquisition of Velo Control,

distributors of Danfoss drives and instrumentation.

With this key addition under BMG Drives, BMG is set

to become a leader in variable speed drives in

southern Africa.

TECHNICAL RESOURCES DIVISION

BMG’s growing influence as a source of competitive

advantage and profit maximisation for South African

industry is spearheaded by its Technical Resources

Division.

During the year, the technical team has added world

leading reliability systems, advanced instrumentation

and recording devices and energy efficiency

programmes to boost the effectiveness of its World

Class Production Efficiency initiative.

Aligned with this is a continuing expansion into field

services to deliver these benefits on the ground, at the

customer’s plant and machinery, where skills shortages

are negatively affecting the profitability of the South

African economy.




BM

G

The company has invested significantly in the control

of product quality, both locally and abroad. The recent

establishment of a high power, low energy test facility

has enabled BMG in South Africa to make a

meaningful contribution to the research and

development work of one of the company’s largest

global suppliers, at the same time delivering total

reliability confidence to local customers.

Future plans are geared at increasing BMG’s ability to

partner its customers by expanding further into field

services, technical training, reliability based

maintenance and integrated technical process

solutions involving the entire BMG product range.

OUTLOOK

Although trading conditions have improved

somewhat from the recession in the past two years,

trading conditions are likely to remain fairly

challenging. The local currency is expected to remain

relatively strong while ongoing upward cost pressure

is expected from product suppliers due to availability

challenges and commodity price increases. Increases in

local labour and distribution costs are also expected.

While BMG will have to pass product price increases on

to its customers, management remains very focused

on ensuring all input costs are effectively managed

and that customer value is created by providing

assistance with the correct selection of product and

the introduction of services to assist with the

management of maintenance programmes and costs.

BMG is well positioned to continue to provide quality

components, technical expertise and superior service

to diverse industries, thereby ensuring it continues on

its exciting growth path.


G BalshawFinancial director

A SinclairChief executive officer

CEG – Capital Equipment Group

The CEG has producedexcellent results, with most

markets in which it operatesshowing signs of recovery

from the global recession.

CEG is one of South Africa’s leading importers and distributors of capital equipment in a

range of different markets including agriculture, construction and materials handling.


CEG



CEG

FINANCIAL REVIEW

The CEG has faced challenging conditions during the

year. The year started off with the country

struggling out of the recession with muted demand

for new equipment and a strong Rand, which put

pressure on margins. The CEG implemented various

strategies during the recession and was better

prepared than most to perform well as the markets

started recovering. It rose to the occasion and

delivered improved profits and cash flow.

By the end of the financial year, each market

segment serviced by the CEG had shown an

improvement over last year, with the only exception

being the plant hire sector of the construction

equipment market.

The CEG’s structures have been built over the years to

enable it to weather cyclical market corrections.

Therefore, in years where all divisions of CEG

simultaneously perform, the profits and cash flow

contributions are rewarding.

The Capital Equipment Group comprises:

NORTHMEC: CaseIH Agricultural Equipment

and other related implement brands

NEW HOLLAND SA: New Holland

Agricultural Equipment and other related brands

CSE: Case Construction Equipment, Club Car and

Jacobsen/Ransomes Turf Equipment

DOOSAN SA: Doosan Construction Equipment

and Hammers

CRITERION EQUIPMENT: TCM Forklifts

CARTCOM: Golf car rental

LANDBOU PART: Replacement spare parts for

agricultural equipment

Revenue of the CEG increased by 7,3% to R1,877

billion. This small increase in turnover was expected,

owing to the very strong South African Rand having

the effect of lowering retail prices. Only one

acquisition was made during the year, which has not

yet had any impact on the results, but is expected to

do so in the future.

Good operational management and control of gross

margins, as well as continuous pressure to maintain

operating costs, have resulted in operating profit

increasing by 27,6% to R158 million. The operating

profit return on sales of 8,4% is particularly pleasing.

Equally pleasing was the operating profit return on

working capital which makes CEG an important

contributor to the Invicta Group.

The year ended with equipment stock levels in line

with the value on hand at the 2008 year-end. All stock

on hand is well within market-related pricing. Notably,

high valued inventory that resulted from currency

fluctuations at the beginning of the current year is out


of the system. Lead times from manufacturers during

the year of trading were within normal standards and

additional demand was well accommodated by the

factories.

QUALITY MANAGEMENT AND SOCIALRESPONSIBILITY

The CEG has maintained its standard of quality service,

after sales support and internal controls, by complying

with ISO9001 certification which is audited annually to

ensure continuous compliance. The division is

currently working toward ISO14001 environmental

certification.

To ensure stability and succession as well as up skilling

staff in the divisions, e-learning has been introduced,

which enables staff in remote locations to be trained

and educated electronically. The CEG also trains

artisans and has a university bursary scheme for

tertiary education.

The CEG contributes to a weekly feeding scheme

which reaches more than 200 children under the age

of eight years old. It has also invested in a

continuous chess education scheme “Moves for Life”

for school children, of which President Zuma, is the

Patron.

OPERATIONAL REVIEW

There has been a gradual recovery of volume demand

in the capital equipment markets throughout the year

with the construction sector still lagging behind

the agricultural and material re-handling markets.

Equipment volumes in the construction markets in

which the CEG trades have increased on 2009 calendar

year by 17,7%, agricultural tractors increased by 5,5%,

combine harvester volumes decreased by 8,0% and

forklift trucks increased by 58%.

All divisions performed well, with Doosan having an

exceptional year. Criterion performed well following

its restructuring after being acquired by the Group

in the prior year. All the agricultural machinery

operations performed well. Only the Case construction

equipment division, which trades predominately in

the plant hire market, struggled although it

continuous to be profitable.

NORTHMEC

CaseIH Agricultural Equipment and other related

implement brands

Northmec, predominantly a retail distributor of

agricultural equipment and implements, performed

above expectation. The total national market tractor

volumes in South Africa increased by 5,5% (excluding

exports) from 5 146 units to 5 432 units. Combine

harvesters decreased by 8,0% from 252 units to 210

units. The baler market has remained constant with a

2,3% increase from 388 units to 397 units, while

demand for implements was good.

Soft commodity prices were low at the beginning of

the year, but have increased steadily throughout the

year. This increase in prices has resulted in improved

farmer confidence despite a surplus of grain stock in

South Africa.

Northmec gained market share in all sectors in which

it trades. At year-end inventory was at an acceptable

level and was well priced.

Northmec is steadily increasing its importation of

tractors from India, owing to better pricing and

quality which is superior to Chinese product at this

stage. There is a continuous search for more products

to add to the range.

In a positive start to the 2012 year, Northmec has

secured a R90 million tractor order, the biggest ever

from a private farmer in South Africa.

NEW HOLLAND

New Holland Agricultural Equipment and other

related brands

New Holland is predominantly a wholesale distributor

of agricultural equipment but during the year it

ventured into opening retail stores in areas where

existing dealers were under-performing. This has

resulted in increased revenue and profits, although

operating costs have increased commensurately.

New Holland once again performed exceptionally

well. Its market share in tractors was maintained at

prior year levels despite difficulties in obtaining

popular models due to excessive world demand.

CEG




Turnover remained flat but profit increased and an

excellent return on capital employed was achieved.

Overheads were fully covered by profits made on parts

and service without the necessity of having to sell any

equipment.

New Holland has recently acquired two significant

implement franchises which should make a

meaningful contribution to the division in future.

LANDBOU PART

Landbou Part is a wholesale division which sources

and sells replacement spare parts for agricultural

equipment. It was acquired during the financial period

under review.

At this early stage the division does not make a

meaningful contribution to the CEG’s profit, but it has

enormous potential to do so within the next three

years.

CSE

Case Construction Equipment, Club Car and

Jacobsen/Ransomes Turf Equipment

The construction equipment division showed a marked

improvement on the last year, while the turf

markets were on par with last year. Total market

volumes of construction machinery in which CSE

operates in South Africa, increased by 17,7% from

2 653 units to 3 123 units, with signs of continued

recovery going forward. The golf car and turf markets

remained stable.

The CSE construction equipment division trades

predominantly in the plant hire and construction

sectors of the markets. Revenue increased over last

year, but demand was muted owing to the lack of

government spending on infrastructure and there

were no major contracts to fill the gap left after the

FIFA World Cup. Lack of bank financing was also a

major obstacle for financing of sales of equipment.

Mining sectors, especially coal and platinum, have

recovered, which is good for the front end loader

materials re-handling sectors.

Despite the slowdown in golf course development,

there is still a need for upgrading of golf car fleets and

turf equipment. The golf course market is a

replacement market with very few, if any, new golf

course developments in progress.

CSE’s revenue increased over last year, and it continues

to trade profitably. There are positive signs of a

gradual recovery in the market and CSE should

continue to make its contribution to the overheads of

the Group.

Cartcom, the golf car rental company, performed well

and generated good cash flow.

DOOSAN SA

Doosan excavators and loaders, Everdigm hammers

This company distributes Doosan construction

machinery (excavators and loaders) and Everdigm

breaker hammers, all products being sourced from

South Korea. The company was acquired three years

ago and has performed exceptionally well considering

the market conditions. It has delivered an outstanding

result with turnover and operating profit increasing,

generating healthy cash flow throughout the year and

providing an excellent return on working capital.

CEG


Invicta Holdings Limited • Annual report 201122C

EG

Doosan’s target market is mining and construction,

although it services other sectors as well. Doosan has

increased market share in both excavators and

loaders in a market which grew by 17,7% on average.

The coming year looks positive, with the increase in

activity in coal and platinum mining providing a good

base for the business. The influence of Chinese

equipment in the local construction market has almost

disappeared because of poor support for the product.

On a sad note, Doosan SA mourns the passing of its

Managing Director, Andre Struwig, who passed away

unexpectedly in May 2011. Andre was a key driver of

the success of Doosan and he will be sorely missed. The

Group’s condolences go to his family and friends.

CRITERION

TCM forklifts

Criterion is the distributor of TCM forklift trucks

imported from Japan.

This is the second full trading year since acquisition by

the Group and after many challenges to restore the

company and brand confidence in the market place,

the TCM brand is rapidly regaining its position as one

of the leading forklift brands in the South African

market. Each year since acquisition the profits have

grown significantly with both revenue and operating

profit increasing, compared with last year.

A significant amount of funds have been invested to

upgrade the national service vehicle fleet and an

internal rental finance facility has been put in place to

finance sales of equipment by the Group.

a threat of rolling power blackouts in Japan, but

suppliers are prepared for this and it should not have

any material impact on supplies to Criterion.

The CEG will once again remain focussed on the core

fundamentals of its business of cash flow and

profitability. The division will also continue seeking

out acquisition opportunities.

Management would like to thank all staff who helped

to make these excellent results possible.

The company has made a good contribution to the

CEG and has good potential to make an even more

meaningful contribution to the division’s profits in

future.

PROSPECTS

The results are an indication that the markets are

gradually starting to recover, but management is

cautious going into the new financial year.

Management expects factory lead times to increase as

global demand for product grows and has taken

appropriate steps to counteract this. The tsunami in

Japan had a minimal impact on TCM and the company

is back to full production in Japan. There is, however,

Tile

tori

a



Tiletoria has expandedmaterially in a very tough

market. Consolidation ofactivities in the coming year

should result in it achievingmeaningful profits.

P ThonissenManaging director

A DuckworthFinancial director

Tiletoria




Tile

tori

a

Tiletoria specialises in ceramic and porcelain wall and

floor tiles. During the year it added to that basket by

broadening the range to include some granite and

marble. It also extended its range of taps, sanitary

ware, bathroom accessories, basin cabinets, etc.

Tiletoria opened in Johannesburg (DecoPark, North

Riding) in June 2010. The branch is gearing up to

become a major player in the Gauteng region. Initial

trading has been good and this branch shows

enormous potential.

In July 2010 Tiletoria relocated its branch in Durban to

larger premises. The resultant disruption to business

was greater than anticipated and turnover in the new

branch has been lower than expected. Steps have been

taken to improve the branch and management

expects an improved year there with all the new

facilities which are in place. Two factory shops have

also been opened – one in Cape Town and one in

Durban – to sell lower priced and discounted stock.

Trading conditions in the building materials sector

during the year have been tough. The construction

sector in South Africa is struggling to shake off the

effects of the recession. Notwithstanding this, Tiletoria

increased its turnover by 46% to over R250 million, but

profitability fell as once-off costs of the two new

branches in Johannesburg and Durban were expensed.

As a result, Tiletoria did not make a meaningful

contribution to the Invicta Group operating profit

during the year under review.

Trading conditions in the coming year are expected to

be as tough as in the past year. It will be a year of

consolidation for Tiletoria and management will focus

on ensuring that all branches are profitable and that

the business is cash positive.


Invicta endorses the Code of Corporate Practices and

Conduct, as well as the King Code of Governance for

South Africa 2009 (King III) and its Code of Governance

Principles that were launched on 1 September 2009

and came into effect and replaced King II on 1 March

2010. The new Companies Act, also contains

governance requirements. King III has adopted an

“apply or explain” approach. The Audit Committee

continuously reviews and amends its corporate

governance practices with a view to complying with

the requirements of the new Companies Act and the

King III recommendations. Invicta will continue to

adopt, as appropriate, existing and new principles,

which advance good practical corporate governance

and add value to the Group’s business activities.

The Board is of the opinion that the Group has, in all

material respects and where relevant, complied with

the King Code during the year under review.

INTRODUCTION

The Group’s policy is to conduct its business with

honesty and integrity and with the highest standard

of personal and corporate ethics. This includes

the promotion, enhancement, development and

protection of the business interests, reputation and

goodwill of the Group.

CODE OF ETHICS

The Board adopted a formal code of ethics during

2004, which seeks to ensure that a relationship of trust

and shared values is built up with both employees and

external stakeholders. The key pillars of the code

include adherence to the legal framework of the

country and ensuring that the Group is not brought

into disrepute, against the overriding background of

transparency in all transactions.

BOARD OF DIRECTORS

Composition

The names and brief résumés of the directors appear

on pages 4 and 5 of this 2011 Annual Report.

The Board currently comprises of nine directors and

one alternate director. Five directors qualify as non-

executive directors, of whom two also qualify as

independent directors in terms of the King III Code.

The Company’s Articles of Association provide for the

retirement of not less than one third of the directors

based on longest service. This year Dr CH Wiese,

Mr JS Mthimunye, Mr DI Samuels and Mr CE Walters

retire in terms thereof. Messrs Wiese, Mthimunye,

Samuels and Walters, being eligible, offer themselves

for re-election.

The directors have considerable business experience

and an excellent understanding of the Group’s

business.

Board effectiveness reviews were conducted during

the year under review, and further reviews will be

conducted at appropriate intervals.

Humulani Investments (Pty) Limited, the operational

holding company of the Invicta Group has further

appointed Diatile Lily Zondo as an independent

non-executive director with effect from 31 March

2011. Mrs Zondo previously held an executive position

at the Auditor General of South Africa and currently

holds an executive position at MTN South Africa.

Chairman and CEO

The roles of chairman and CEO are separate. The

managing directors and CEOs of the operating

subsidiaries and divisions report to the Group CEO of

Invicta, who in turn reports to the Board.

The Board is satisfied that no one individual

director or block of directors has undue power over

decision-making.

Professional advice

All directors have access to the company secretary and

management and are entitled to obtain independent

professional advice at the Company’s expense if

required.

CORPORATE GOVERNANCE


CORPORATE GOVERNANCECONTINUED

Board papers are issued to all directors prior to each

meeting and contain relevant detail to inform

members of the financial and trading position of the

company and each of its operating subsidiaries, as well

as covering material issues pertaining to the Group.

Non-executive directors also maintain regular

contact with executive directors to ensure that they

are kept abreast of material matters that may require

their input and guidance.

INTERNAL CONTROL

The directors have responsibility for the Group’s

systems of internal controls. These are designed to

provide reasonable assurance of effective and efficient

operations, internal financial control and compliance

with laws and regulations.

The Group’s system of internal controls is designed to

provide reasonable, but not absolute, assurance

against the risk of material errors, fraud or losses

occurring.

Meetings

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

25 May 22 July 6 Sep 5 Nov 11 Feb2010 2010 2010 2010 2011

C Barnard^ √ √ √ √ √A Goldstone^ √ √ √ √ √AK Masuku*•# x x x x xJS Mthimunye•# √ √ √ √ √DI Samuels•# √ √ √ √ √LR Sherrell• √ √ x x √AM Sinclair^ √ √ √ √ √CE Walters^ √ x √ √ √CH Wiese (Chairman)• √ √ √ √ √JD Wiese• x √ √ √ x

* Alternate • Non-executive # Independent ^Executive

Furthermore, because of changing

internal and external factors, the

effectiveness of an internal control

system may vary over time and must be

continually reviewed and adapted.

The system of internal controls is

monitored throughout the Group by the

audit committee, the Group internal audit

department, management and employees as an

integrated approach. The Board reports that:

• to the best of its knowledge and belief, no

material malfunction of the Group’s internal

control system occurred during the period under

review;

• it is satisfied with the effectiveness of the Group’s

internal controls and risk management;

• it has no reason to believe that the Group’s code of

ethics has been transgressed in any material

respect; and

• to the best of its knowledge and belief, no

material breaches have occurred during the period

under review, of compliance with any laws and

regulations applicable to the Group.


INFORMATION SECURITY

Compliance with legislative requirements contributes

towards the protection of corporate information, but

in itself only addresses a small part of the total

number of threats posed to the business arising from

its dependencies on information technology and the

internet. Security policies and procedures for

employees and the use of technologies such as

enterprise and personal firewalls, antivirus systems,

intrusion monitoring and detection are applied, as

well as frequent application of software security

“patches” issued by vendors as and when

vulnerabilities are discovered. An overhaul and

upgrade of the systems applicable to the Capital

Equipment Group is planned for the new year.

RESTRICTION ON TRADING IN SECURITIES

A formal policy, implemented some years ago,

prohibits directors, officers and employees with access

to financial information from dealing in the

Company’s securities, from the end of an interim

reporting period until after the interim results have

been published and similarly from the end of the

financial year until after the audited annual results

have been published. Directors and employees are

reminded of this policy prior to the commencement of

any restricted period.

In addition, no dealing in the Company’s securities is

permitted by any director, officer or employee whilst

in possession of information which could affect the

price of the Company’s securities and which is not in

the public domain.

Directors of the Company and of its subsidiaries are

required to obtain clearance from Invicta’s chairman

(and in the case of the chairman, or in the absence of

the chairman, from the chairman of the Audit

Committee), or his nominee, prior to dealing in the

Company’s securities, and to timeously disclose to the

Company full details of any transaction for

notification to and publication by the JSE.

All participants in the long-term equity-settled bonus

share incentive scheme may not exercise these rights

during a closed period.

STAKEHOLDER COMMUNICATION

Members of the Board meet on an ad hoc basis with

institutional investors, investment analysts, individuals

and members of the financial media. Discussions at

such meetings are restricted to matters that are in the

public domain.

Shareholders are informed, by means of pressannouncements and releases in South Africa and/orprinted matter sent to such shareholders, and/orannouncements on SENS, of all relevant corporatematters and financial reporting as required in terms of prevailing legislation. In addition, such announcements are communicated via a broad rangeof channels in both the electronic and print media.The Group has also embarked on a more formalapproach to providing feedback in respect of the year-end results with interviews scheduled for both radio and television after the relevant media and SENS announcements have been made. The company maintains a corporate websitehttp://www.invictaholdings.co.za containing financialand other information, including interim and annualresults. The site has links to the websites of each majoroperating subsidiary company.

The Group will look at ways of allowing electronicshareholder participation with its transfer secretariesin the upcoming year as provided for in the newCompanies Act.

EMPLOYMENT EQUITY

Invicta Holdings is committed to providing a working

culture that is inclusive to all. It is Group policy to

acknowledge and support South Africa’s Employment

Equity drive in ensuring that equal opportunities are

directed at our staff, regardless of race, colour, sexual

orientation, sex, religion, creed or national origin. The

Group remains compliant with all aspects of the

Employment Equity Act by adhering to the basic

requirements of the timeous submission of an online

report and plan, consultation with employees and

communication of the report and progress is

monitored on an ongoing basis. Areas of strategic

focus include recruitment as well as the development

of in-house talent through coaching, mentoring and

succession planning. Included in this drive is a bursary

programme directed a young black students who

could potentially be groomed for future senior

positions once they join us after graduation, where

potential Employment Equity Barriers are identified.

HR implements processes to eliminate these barriers,

where possible. The Group remains fully committed to

providing equal opportunities to its 3 279 employees

(2010: 2 240 employees).




TRAINING EDUCATION AND DEVELOPMENT OF STAFF

In-house training and development:

The Group’s philosophy on training the right

employee, at the right time provides returns for the

employer in increased productivity, knowledge,

loyalty, and contribution to the Group. Ongoing

training and skills development also forms the basis of

transformation; therefore it is an imperative for any

company aiming to develop a competitive edge. In

order to create this passion within the Group’s staff,

Invicta needs to help its people reach their full

potential through ongoing training and development.

After the successful external re-branding by BMG, it

has embarked on a Brand Ambassador training

initiative that essentially transforms BMG employees

to BMG Brand Ambassadors with a renewed heart and

mind. The Group provides a broad range of initiatives,

including technical, management and sales training, as

well as softer skills programmes, with technical

courses being delivered via e-learning. E-learning

provides the major benefit being convenience and

flexibility. Staff can log in when convenient whilst

learning can be applied immediately and shared with

colleagues. Training via e-learning also enhances the

much needed computer skills. All theoretical training

is finished off with practical training sessions delivered

by the Group’s technical resource division.

Education and career development

As part of the Group’s holistic approach to employee

development, it also offers educational assistance to

employees who are keen to further their own

qualifications on a part-time basis by completing work

related courses.

Student bursaries

The Group also currently has eight bursars

participating in a bursary scheme as well as one

engineering graduate who is completing her practical

year within the Group.

The Group is committed to partnering projects that

are focused on developing the technical skills base of

the country as a requirement for its business, as well as

the economy as a whole.

Over the past three years BMG has funded CASME –

Centre for the Advancement for Science and Maths

Education. This project is training 50 educators from

25 rural, under-resourced schools in and around

Umgungundlovu in KwaZulu-Natal, and providing

learning and teaching resources through a Teachers’

Resource Centre based at the FET College. The project

includes ongoing school-based support for teachers, as

well as a learner support programme, which addresses

further education opportunities, with a focus on

technical and engineering programmes offered by the

FET College.

BMG also has a long-standing relationship with the

PROTEC branches in Tongaat and Inanda/ Kwa Mashu

in KwaZulu-Natal. Protec’s aim is to increase the

country’s technologically skilled human resource base

through the provision of educator-based training and

a Learner Excellence Programme (learner-based

education) to under-resourced schools in South Africa.

This holistic programme is aimed at Grade 10 learners

who participate until they reach Grade 12 and they are

supported through their tertiary education studies

and beyond. Research results clearly indicate that the

Protec branches are having a positive impact on

the academic performance of beneficiaries from

historically disadvantaged communities. At least 50%

of learners from Protec passed with University passes

between 2002 and 2010, significantly more than the

provincial averages.

Protec has a long and consistent track record of

helping learners improve their results and go on to

successful technological careers. They have expert staff

and experienced leadership who show great passion in

implementing every project. BMG will be extending

the Group’s commitment to Protec by partnering them

in the development of two new branches in key

trading areas of Steelpoort and Carletonville in the

year ahead.

BLACK ECONOMIC EMPOWERMENT (“BEE”)

Invicta has requested Bravura Consultancy to act as its

consultants in terms of Broad-Based Black Economic

Empowerment (“B-BBEE”) as well as the BEESCORE to

re-certify the BEE status of its various operations. The

Group envisages improving its BEE status from its

current Level Five contributor to a Level Four

contributor in terms of the Broad-Based Rating

Scorecard.



CORPORATE SOCIAL INVESTMENT (“CSI”)

As a responsible South African citizen, the Group hasmade commendable contributions towards enhancingbasic services at community level. The Group carefullyselects initiatives that will have the maximum impacton basic needs of South African’s and, where an immediate need arises, it also undertakes more ad hocprojects to address specific issues.

Some examples of initiatives the Group undertook areas follows:

• Supporting a feeding scheme where the Group’sfinancial as well as time contributions enabled the foundation to distribute food parcels to needyschool children and their families.

• Funding for the education of scholars in the critical areas of mathematics and science duringSaturday schooling initiatives.

• The Group supports a foundation that providesthe poor, who have sound micro-enterprise ideas,with capital and guidance to help them get themselves out of poverty.

• Scholarships to underprivileged and financially disadvantaged children.

• The Group is also supporting various homes, suchas a centre for abused and neglected children, ahome for young pregnant girls as well as a crèchein Khayelitsha.

• The Group also provide significant funding to an institution who supports people in providing a loving and stable home for orphans and vulnerable children, whether on a temporary basis,a foster parent or by adopting.

Education and career development

As well as the extensive staff training which is dealtwith elsewhere in this report, the Group sees education as a primary area of focus for the futuregrowth of the country.

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

A further major funding project is in respect of a non-profit technological career development programme,focusing on quality of mathematics and science. The Group acknowledges that a holistic approach isnecessary, of which academic support is but one element.

Sport development

Within the Group, sponsorship as well as dedicated

time is allocated to form a local soccer championship

league consisting of players from the community as

well as from the Company. By investing time and

energy into this initiative, the Group strongly believes

that people prefer to rather invest their energy in

community-related events where they can create a

sense of belonging rather than spending time on the

streets.

General

All the Group operations, no matter how small, have

contributed to supporting the destitute and

underprivileged in the communities in which they exist

and function.

QUALITY MANAGEMENT ANDOCCUPATIONAL HEALTH AND SAFETY

The consistent supply of both quality products and

service to customers is key to the Group’s successes. To

this end, the Group continues to focus on the ISO

quality system to assist in achieving this.

CEG has maintained their ISO certification with TUV

Rheinland in all its divisions, including the Criterion

Equipment Division.

The Autobax Division has maintained its ISO

certification with Lloyds.

BMG’s Quality Management Systems (QMS) certified in

2003, is now well established, with their current ISO

9001:2008 standard only due for re-certification in

December 2012. BMG’s commitment to a safe and

healthy working environment for customers and

employees is demonstrated by the implementation of

the OHSAS 18001:2007 standard.

The Group continues to progress the development and

implementation of the OHSAS 18001 Occupational

Health and Safety Management System in its major

operations, with CEG aiming to achieve certification of

this standard in the 2011 calendar year.

ACCESS TO INFORMATION

The Company and all its subsidiaries are compliant

with the provisions of the Promotion of Access to

Information Act. The manual in terms of this

legislation is available from the registered office of the

Company and on the Company’s website.



SUSTAINABILITY REPORT

The Board is committed to creating long-term value

for all its stakeholders by providing sustainable

businesses in an integrated approach to the

communities in which it operates.

The sustainability objectives of the Group are:

• Act in the best interests of Group shareholders and

Group principals, by representing them in a

manner which brings credit to their products and

brands.

• Ensuring that customers receive an integrated and

environmentally sound solution that meets their

specific needs.

• Providing employees with a working environment

and encouraging a culture which allows them to

achieve as much as possible and to have a fulfilled

working career.

• Delivering sustainable returns to shareholders

which are not at the expense of the Group’s

ethical standards.

• The Group continues to measure its expenditure

on non-renewable resources and to eliminate any

unnecessary or inefficient processes. The primary

areas of consumption in the Group continue to be

transport, fuel and electricity. The Group

continually looks at optimising its warehouse

locations and inventory holdings in a bid to

minimise transport cost and fuel consumption,

with consolidation of certain locations planned for

the new year.

• As customers continue to search for more efficient

and productive products, the Group, through its

various operations, continues to develop these

with its various principals around the world and to

offer solutions to the market.

The Board wishes to take this opportunity to thank all

the stakeholders in the Group for their ongoing

commitment and loyalty to the development of a

sustainable business and relationships.

Arnold GoldstoneChief Executive Officer Invicta Holdings Limited

REMUNERATION REPORT

Role of the Remuneration Committee and terms of

reference

The Remuneration Committee is a committee of the

Board of Directors and is responsible for:

• making recommendations to the Board on the

general policy on executive remuneration,

benefits, conditions of service and staff retention;

• determining the specific remuneration packages

of executive directors and senior management of

the Group including, but not limited to, basic

salary, performance-based short- and long-term

incentives, pensions and other benefits; and

• the design and operation of the Group’s share

incentive schemes.

The full terms of reference of the Committee have

been agreed by the Board.

Members of the Remuneration Committee during 2011

• CH Wiese (Chairman)

• DI Samuels

• A Goldstone – Attendance ex Officio

All members of the Committee are non-executive

directors.

The Committee met five times during 2011. The chief

executive officer attends the Committee meetings by

invitation and assists the Committee in its

deliberations, except when issues relating to his own

compensation are discussed. No director is involved in

deciding his or her own remuneration. In 2010 the

Committee was advised by the Group’s finance and

human resources divisions on the implementation of

the executive incentive schemes.

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

provided advice to the Committee. However, in their

capacity as Group auditors, they perform normal audit

procedures on the remuneration of directors.

The Remuneration Committee meets at least annually

and the attendance at meetings held was as follows:

25 May 11 Jun 24 Aug 22 Oct 3 Mar

2009 2010 2010 2010 2011

CH Wiese √ √ √ √ √DI Samuels √ √ √ √ √A Goldstone √ √ √ √ √



Remuneration policy and executive remuneration

Principles of executive remuneration

The Group’s remuneration policy aims to attract and

retain high-calibre executives and to motivate them to

develop and implement the Group’s business strategy

in order to optimise long-term shareholder value

creation. The policy conforms with King III and is based

on the following principles:

• Total rewards are set at levels that are competitive

within the relevant market.

• Incentive-based rewards are earned through

the achievement of demanding performance

conditions consistent with shareholder interests

over the short-, medium- and long-term.

• Incentive plans, performance measures and targets

are structured to operate effectively throughout

the business cycle.

• The design of long-term incentives is prudent and

does not expose shareholders to unreasonable

financial risk.

Elements of executive remuneration

The four elements of executive remuneration consist

of a base salary, benefits, an annual incentive and

long-term incentives. The Committee seeks to ensure

an appropriate balance between the fixed and

performance-related elements of executive

remuneration, and between those aspects of the

package linked to short-term financial performance

and those aspects linked to longer-term shareholder

value creation. A further consideration has been the

need to retain critical skills in the Group. The

Committee considers each element of remuneration

relative to the market and takes into account the

performance of the Group and the individual

executive in determining both quantum and design.

The policy relating to each component of

remuneration is summarised below:

Base salary

The base salary of the executives is subject to annual

review. It is set to be competitive at the median level,

with reference to market practice in companies

comparable in terms of size, market sector and

business complexity. Group and Company

performance, individual performance and changes in

responsibilities are also taken into consideration when

determining annual base salaries.

Benefits

Benefits for executives include membership of a

retirement fund and a medical aid, to which

contributions are made by the executives and the

Group.

Short-term incentive

All executives are eligible to participate in a short-term

incentive with payment levels based on either

corporate or individual performance or both. Key

performance indicators are set on an individual basis

each year. The incentive plan is contractual but not

pensionable. The Committee retains the discretion to

make positive adjustments to bonuses earned at the

end of the year on an exceptional basis, taking into

account both Group performance and the overall and

specific contribution of individual executives to

meeting the Group’s objectives.

The Committee reviews measures annually, to ensure

that the targets set are appropriate, given the

economic context and the performance expectations

for the Group.

Long-term incentive

Invicta Holdings long-term bonus and share incentive

scheme

In order to attract and retain key staff, the Group

requires appropriate long-term incentive schemes.

Many of the Group’s operations require key technical

skills which are often difficult to replace. In trying to

address the critical factor, the Committee, in

consultation with industry professionals, has designed

a long-term bonus incentive scheme for key

executives. In terms of the scheme, executives will be

rewarded on their performance, with reference to the

growth in the Invicta share price over a period of three

to five years. The bonus, as determined by the

formula, will be settled with equity in Invicta by the

relevant operational entity or on terms of the existing

Invicta Holdings Limited Share Trust. The bonus

scheme will constantly be reviewed by the Committee

for its effectiveness and will be amended from time to

time, if necessary. Divisional senior executives and

management are on a cash-based bonus system, which

ensures they are rewarded for performance in those

areas over which they have direct influence. Details of

the Invicta Holdings Long-Term Bonus and Share

Incentive Scheme are detailed on page 32.


Equity-settled bonus share incentive right scheme

The Group employed a long-term bonus equity-settled share incentive right scheme (“LBSIR scheme”) for key executives in 2006. In terms of the LBSIR scheme executives are granted a bonus share incentive right (“the bonusright”) calculated with reference to a specified number of shares at a price equal to the weighted average five-day closing market price on the date of grant. The bonus right vests after a period of one year, (subject to theachievement of the performance conditions set for the executive), and the bonus right becomes exercisable aftera further two-year period, after which the executive has a further two-year period in which to take up the bonusright before it lapses.

The bonus right is determined based on the difference between the grant price and the weighted average five-day closing share price on the exercise date. The bonus, as determined by the formula, will be settled withInvicta shares.

The bonus right expense has been calculated using a Black Scholes valuation model and is expensed over a three-year period from the grant date and is recorded in the Share Appreciation Reserve.

2011 2010

Weighted Weightedaverage average

Number incentive Number incentiveof rights cost of rights cost

incentives Rand incentives Rand

Outstanding at the beginning of the year 15 610 458 11 506 458Awarded during the year 1 000 000 5,87 4 360 000 4,44Exercised during the year (5 505 958) (256 000)

Outstanding at the end of the year 11 104 500 15 610 458

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

Number of grants 3 514 000 250 000 3 814 000 4 104 000 75 000 4 360 000 1 000 000Grant date 13 Mar 06 1 Sep 06 26 Mar 07 14 Mar 07 30 Sep 08 13 Mar 09 2 Mar 10Grant price R17,20 R20,00 R27,97 R24,84 R26,87 R18,48 R24,37

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

Expected volatility (daily) 2,1 2,0 2,1 2,2 2,2 2,1 2,1Dividend yield 5,6 5,3 6,4 3,5 3,8 4,2 4,9Risk-free rate 7,2 8,17 8,17 9,4 8,7 6,43 8,68

Executive directors’ interests in the LBSIR scheme are set out in note 36 on page 80 of the 2011 Annual Report.

A long-term loan scheme for executives on the board of directors of Invicta Holdings Limited (“Invicta”)

The purpose of the loan is to incentivise Invicta executives over the long term by providing them with a mechanism to acquire a meaningful stake in Invicta, thereby aligning them with the interests of Invicta shareholders.

A subsidiary of Invicta, Humulani Marketing (Pty) Limited (“Humulani”) will make a seven-year loan to the executives to acquire shares in Invicta within 90 days of the loan being granted.

Interest on the loan will be charged at the Income Tax Official Rate for low interest loans to employees as published by SARS from time to time (currently 6,5% per annum), calculated daily and capitalised annually.

Capital shall be repayable at the end of the loan period.



Servicing of the loan will be by interest being paidannually using dividends received on the Invicta shareswhich have been acquired with the loan. If the dividends received are less than the interest payable,the shortfall shall be capitalised. The executive may, athis election, pay off all or part of the accumulated interest at any time, but shall not be obliged to do so.

The loan will be secured by a cession and pledge of theInvicta shares acquired with the loan, plus a cessionand pledge of additional Invicta shares which may be provided by the executive, plus any additional securitythat the Invicta Remuneration Committee may requirefrom time to time, such that the value of thesecurity:loan ratio will be at least 1,5:1.

The loan will be limited to a multiple of each executive’s cost to company. The multiple will varydepending on the executive’s position and responsibility, as well as the security he is able to provide for the loan. The limit will be determined bythe Remuneration Committee.

The total capital value of the loans to the Invicta executives shall not exceed R85 million and the maximum loan to any one individual shall not exceedR40 million.

Humulani will grant the executive a put of the shares(acquired with the loan) at 75% of the price paid byhim for the shares, which shall be used to offset anyloan balance at the time. The put shall only be exercisable when the loan falls due for repayment atthe end of the loan period or if his employment withthe Group is terminated due to no fault of his, egdeath or disability.

By the time this report reaches shareholders, details ofthe proposed loans will have been announced. Werefer shareholders to this announcement.

In line with the principles stated above, theRemuneration Committee has authorised the implementation of a bonus bank scheme at senior andmiddle management level which entails managementearning a performance-based bonus, which is effectively paid out over the subsequent three years.

External appointments

Executive directors are not permitted to hold externaldirectorships or offices without the approval of theBoard. If such approval is granted, directors may retainthe fees payable from such appointments.

Directors’ fees

Directors’ payments for services as directors and otheremoluments are set out in note 36 on pages 79 and 80

of the 2011 Annual Report. Members will be requested to consider an ordinary resolution approving these emoluments at the annual generalmeeting.

Non-executive directors’ fees

The annual fees payable to non-executive directors of

the Company are based on a fee for attendance per

meeting of the Board and, where applicable, per

meeting of sub-committees. An additional fee is paid

to the Chairman of both the Board and the Audit

Committee.

Non-executive directors do not participate in the

Company’s annual bonus plan, or in any of its share

incentive schemes.

Directors’ and executive management’s service

contracts

None of the directors are bound by service contracts.

All executive directors, who are also directors of

subsidiary companies, have an engagement letter

which provides for a notice period of between one

and three months to be given by either party.

The Group chief executive officer has no service

contract.

None of the non-executive directors have a contract of

employment with the Group.

In terms of the Articles of Association, not less than

one-third of the directors are required to retire by

rotation at each annual general meeting of the

Company and may offer themselves for re-election.

The appointment of new directors during the year is

required to be confirmed at the next annual general

meeting and such new directors are required to retire

at such annual general meeting, but may offer them-

selves for re-election.

Approval

This remuneration report has been approved by the

Board of Directors of Invicta.

Signed on behalf of the Remuneration Committee

Dr CH Wiese

Chairman of the Remuneration Committee



The Board of Directors acknowledges its responsibility

to ensure the integrity of the Integrated Report.

The Board has accordingly applied its mind to the

Integrated Report and, in the opinion of the Board,

the Integrated Report addresses all material issues,

and presents fairly the integrated performance of the

organisation and its impacts. The Integrated Report

has been prepared in line with appropriate best

practices pursuant to the recommendations of the

King III Code.

REPORT SCOPE AND BOUNDARY

The Integrated Report (“the Report”) covers in its

scope both the legal entities and physically located

branches making up the distribution, sales and

administrative infrastructure of the Invicta Group.

The Report covers the financial year ended on

31 March 2011, but due to the contiguous nature of

business and reporting, the Report implicitly takes into

cognisance the end of the previous and the first

quarter of the subsequent financial year.

The Group has always been run on an operationally

decentralised basis due to the complimentary, but

often different nature of the main operational pillars

making up the Group. Based on this principle of

decentralised operations, the Group’s role is that of

providing a strategic, financial and strong directional

role for operations, with CEO’s of the main

operational pillars having direct reporting and

executive responsibility on the Board.

ORGANISATIONAL OVERVIEW, BUSINESSMODEL AND GOVERNANCE STRUCTURES

The Group has always seen its distribution sales and

support network as a key strategic asset, enabling it to

create value on a sustainable basis, while also

constituting barriers of entry to competitors on a

national basis. The extent and number of the Group

operational outlets are highlighted on pages 2 and 3

of the Annual Report.

Further to the above, the Group sees its management

and staff as a key factor in a business which is

effectively selling, supporting and advising on a wide

range of industrial consumable products.

The Group, besides having a Remuneration Committee

and a Audit and Risk Committee at the Group level,

has maintained these same management and

governance disciplines in place at main operational

pillars to ensure policies and direction are effectively

cascaded down, at the same time allowing for

effective reporting up. Details of Group management

and governance committee, are provided in more

detail in the Report of the Directors (page 39),

Corporate Governance Report (page 25), the

Remuneration Report (page 30) and Audit and Risk

Committee Report (page 42).

OPERATIONAL CONTEXT

The Group continues to act as a value-added proxy for

the South African economy, with a clear delayed

correlation between commodity and resources

performance and the Group.

The Group imports almost all of the products it

supplies and thus the effects of exchange rate

fluctuations need to be effectively managed through

operational buying departments, under the Group’s

policy of hedging through the use of Forward

Exchange Contracts.

Employment and logistic costs are the main domestic

cost elements that make up a significant element of

the overhead base of the Group.

STAKEHOLDER RELATIONSHIPS

The Group continues to view its employees as a key

stakeholder group, and endeavours to, on an

on-going basis, develop not only training, but

improved communication processes within the

operations.

The Group has made a conscious effort to address its

community and social responsibility spending by

developing a more clearly focused programme of

initiatives, which it supports. With the Group holding

key agency and distribution agreements for world

class brands with international principals, ongoing

relationship building with these suppliers is seen as a

key element of the current and future success of the

Group, as the network and range of suppliers

increases.

Customers and shareholders, through their actions,

continue to give the Board and management a

mandate to run the Group, whose ongoing support

and beneficiation is seen as the litmus test of superior

performance by the Group.

STRATEGIC DIRECTION

The Group continues to look for acquisitions which fit

the distribution and sales model that it has

INTEGRATED REPORT


INTEGRATED REPORTCONTINUED

successfully developed over the last decade. Further consideration will also be given to opportunities that are

based outside South Africa, which not only fit with the Group’s expertise, but which also provide a natural hedge

against some of the currency exposures the Group faces.

PERFORMANCE

The Group continues to outperform its own return benchmarks and has, at a trading level, grown by more than20% per annum cumulatively for more than seven years.

Key and carefully selected acquisitions as well as excellent management are the primary drivers of the Group’s success.

The Group continues to benchmark return on working capital as a key factor.

SUMMARY FINANCIAL INFORMATION

2011 2010 2009 2008 2007 2006 2005 2004 2003

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Revenue 4 533 801 3 968 872 4 523 535 3 335 496 2 663 398 1 907 754 1 937 593 2 069 163 1 907 317

Operating profit

before finance costs,

interest and dividends

received 505 493 453 293 497 356 360 379 281 229 197 843 231 957 229 451 230 123

Profit for the year 426 222 365 389 362 812 300 856 217 724 125 165 108 507 99 631 96 502

Ordinary shareholders’

interest 1 611 265 1 442 966 1 206 055 1 025 591 886 161 716 296 365 075 312 339 343 665

Dividends per share (cents) 183 151 138 138 104 68 77 66 45

Earnings per share (cents) 504 453 437 356 292 170 190 164 133

Diluted earnings per

share (cents) 480 441 437 354 288 169 190 160 130

Share price at the

year-end (cents) 4 350 2 879 2 000 2 550 2 750 1 850 1 550 935 550

REMUNERATION POLICY

Principles of executive remuneration

The Group’s remuneration policy aims to attract and retain high-calibre executives and to motivate them to develop and implement the Group’s business strategy in order to optimise long-term shareholder value creation.The policy conforms with King III and is based on the following principles:

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

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

• Incentive plans, performance measures and targets are structured to operate effectively throughout the business cycle.

• The design of long-term incentives is prudent and does not expose shareholders to unreasonable financial risk.

In line with the principles stated above, the Remuneration Committee has authorised the implementation of abonus bank scheme at senior and middle management level which entails management earning a performancebased bonus which is effectively paid out over the subsequent three years.

Shareholders will further be asked to vote on a resolution in terms of which Invicta’s long-term bonus and shareincentive scheme of 2006 is made an approved scheme under Schedule 14 of the JSE Listing Requirements.

Finally a long-term scheme for executives on the board of directors of Invicta Holdings Ltd (“Invicta”) has beendeveloped. The purpose of the loan is to incentivise Invicta executives over the long term by providing them witha mechanism to acquire a meaningful stake in Invicta, thereby aligning them with the interests of Invicta shareholders. Shareholders are referred to the separate announcement in this regard.


VALUE ADDED STATEMENTfor the year ended 31 March 2011

2011 2010

Employees Providers of capital Government Retained for reinvestment

31%

38%

5%

26%

34%

40%

2%

24%

GROUP

2011 2010R’000 % R’000 %

Income from goods and services 4 533 801 3 968 872

Less: Cost of goods and services (3 404 499) (3 001 527)

Value added from trading operations 1 129 302 967 345

Add: Dividends received on investments 312 727 210 056

Add: Interest received from investments 177 405 198 442

Total value added 1 619 434 100,00 1 375 843 100,0

Utilised as follows:

Employees

Salaries and benefits 550 503 34,0 430 712 31,3

Providers of capital 657 015 40,6 527 724 38,3

Interest on borrowings 545 242 432 886

Dividends for shareholders 111 773 94 858

Government – company tax 25 032 1,5 64 155 4,7

Current 23 220 19 480

Foreign 8 683 53 460

Deferred (7 817) (9 593)

Secondary tax on companies 946 808

1 232 550 76,1 1 022 591 74,3

Retained for reinvestment

Depreciation and amortisation 32 729 2,0 32 356 2,4

Income retained in the business 354 155 21,9 320 896 23,3

386 884 23,9 353 252 25,7

Total utilisation of value added 1 619 434 100,0 1 375 843 100,0


APPROVAL OF THE ANNUAL FINANCIAL STATEMENTS

TO THE MEMBERS OF INVICTA HOLDINGS LIMITED

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

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

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

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

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

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

by reasonable and prudent judgements and estimates.


Chairman Chief executive officer

31 May 2011

CERTIFICATION BY THE COMPANY SECRETARY

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

Companies Intellectual Property and Registration Office all such returns as are required by a public company in

terms of the Act and that all such returns are true, correct and up to date.

C Barnard

Secretary

Cape Town

31 May 2011


REPORT OF THE INDEPENDENT AUDITORS

TO THE MEMBERS OF INVICTA HOLDINGS LIMITED

Report on the annual financial statements

We have audited the group annual financial

statements and annual financial statements of Invicta

Holdings Limited, which comprise the Audit Committee

report on pages 42 and 43, the consolidated and

company statements of financial position as at

31 March 2011, and the consolidated and company

statements of comprehensive income, changes in

equity and cash flows for the year then ended, and a

summary of significant accounting policies and other

explanatory notes, and the directors’ report, as set out

on pages 39 to 41.

Directors’ Responsibility for the Financial Statements

The directors are responsible for the preparation and

fair presentation of these financial statements in

accordance with International Financial Reporting

Standards and in the manner required by the

Companies Act of South Africa, 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.

Auditors’ responsibility

Our responsibility is to express an opinion on these

financial statements based on our audit. We

conducted our audit in accordance with International

Standards on Auditing. Those standards require that

we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance

whether the financial statements are free from

material misstatement.

An audit involves performing procedures to obtain

audit evidence about the amounts and disclosures in

the financial statements. The procedures selected

depend on the auditor’s judgement, including the

assessment of the risks of material misstatement of the

financial statements, whether due to fraud or error. In

making those risk assessments, the auditor considers

internal control relevant to the entity’s preparation

and fair presentation of the financial statements in

order to design audit procedures that are appropriate

in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the

entity’s internal control. An audit also includes

evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates

made by management, as well as evaluating the

overall presentation of the financial statements.

We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our

audit opinion.

Opinion

In our opinion, the financial statements present fairly,

in all material respects, the consolidated and company

financial position of Invicta Holdings Limited as at

31 March 2011, and its consolidated and company

financial performance and consolidated and company

cash flows for the year then ended in accordance with

International Financial Reporting Standards and in the

manner required by the Companies Act of South

Africa.

Deloitte & Touche

Registered Auditors

Per SBF Carter

Partner

31 May 2011

Buildings 1 and 2, Deloitte Place, The Woodlands,

Woodlands Drive, Woodmead, Sandton

National executive: GG Gelink (Chief Executive),

AE Swiegers (Chief Operating Officer), GM Pinnock

(Audit), DL Kennedy (Risk Advisory), NB Kader (Tax &

Legal Services), L Geeringh (Consulting), L Bam

(Corporate Finance), JK Mazzocco (Human Resources),

CR Beukman (Finance), TJ Brown (Clients), NT Mtoba

(Chairman of the Board) and MJ Comber (Deputy

Chairman of the Board)

A full list of partners and directors is available on

request.

B-BBEE rating: Level 2 contributor/AAA (certified by

Empowerdex)


REPORT OF THE DIRECTORSfor the year ended 31 March 2011

INVICTA HOLDINGS LIMITED

The directors have pleasure in presenting their annual

report, which forms part of the annual financial

statements and the 2011 Annual Report of the Group

and of the Company for the year ended 31 March

2011.

In the context of the financial statements, the term

“Group” refers to the Company, its subsidiaries,

associates and joint ventures.

Nature of business

The Company is an investment holding and

management company. The various operations of the

Group are summarised below with an expanded

explanation of the various businesses detailed in the

review of operations.

Humulani Investments (Humulani)

Operational holding company of all the Invicta Group

operations.

Humulani has 25% of its ordinary shares under the

control of BEE parties.

20% of Humulani’s ordinary shares are held by

aloeCap Private Equity Investments 1 (Pty) Limited, a

wholly-owned subsidiary of aloeCap (Pty) Limited.

aloeCap is a 100% black-owned and managed

company.

5% of Humulani’s ordinary shares are held by

the Humulani Employee Investment Trust. The

beneficiaries of the trust are the black employees of

the Group.

In terms of SIC 12, the 5% of the ordinary issued share

capital of Humulani Investments (Pty) Limited owned

by the Humulani Employee Investment Trust (“the

trust”) has been consolidated. Deconsolidation

thereof and the recognition of the profit attributable

to the issue of the shares to the trust will commence

once the residual risks attributable to the loan finance

provided by Invicta to the trust to acquire the shares

dissipate through repayment or the investment value

increases.

BMG (Bearing Man Group)

Southern Africa's leading distributor of bearings, seals,

power transmission components, drives, belting,

fasteners, filtration and hydraulics.

CEG (Capital Equipment Group)

Northmec

Distributor of a full range of leading agricultural

machinery, implements and related spares.

CSE

Wholesale and retail distributor of light earthmoving

machinery, turf-grooming machinery, golf cars, utility

vehicles and related spares.

New Holland

Wholesale distributor of leading brand agricultural

machinery, implements and related spares.

Doosan SA

Doosan SA supplies predominately heavy earthmoving

machinery for construction and mining applications.

Criterion

Importer and distributor of leading materials handling

equipment and related spares.

Tiletoria

A leading importer and distributor of tiles and related

sanitary ware in the Western Cape, Gauteng and

KwaZulu- Natal.

Compliance with accounting standards

The Group’s and the Company’s annual financial

statements comply with International Financial

Reporting Standards, the South African Companies Act

and the JSE Limited’s Listings Requirements (“JSE”).

Group results

2011 2010

R'000 R'000

Revenue 4 533 801 3 968 872

Profit for the year 426 222 365 389

Management philosophy

Invicta adopts a hands-on approach to managing its

subsidiaries. Each subsidiary is self contained and has

its own managing director and a complete

complement of financial and administration

infrastructure. The Invicta Group chief executive

officer is, however, actively involved in the executive

committees of all operations, with executive directors

of the Group actively controlling and participating on


REPORT OF THE DIRECTORS continued


the boards of subsidiaries. Cash flow is always a major

focus of the Group. The Board aims to add value by

providing expertise and guidance to subsidiary

management teams, where feasible, and by pooling

best practices within the Group.

Share capital and share premium

The authorised share capital of the Company

remained unchanged at 134 000 000 ordinary shares

of 5 cents each.

During the year, the Company’s issued ordinary share

capital and share premium remained unchanged.

Dematerialising of shares (Strate)

Shareholders are again requested to note that, as a

result of clearing and settlement of trades through the

Strate system, the Company’s share certificates are

no longer good for delivery for trading.

Dematerialisation of the Company’s share certificates

is now a prerequisite when dealing in its shares.

Auditors

Deloitte & Touche continued in office as auditors of

the Company and its subsidiaries for 2011.

At the annual general meeting, shareholders will be

requested to reappoint Deloitte & Touche as auditors

of Invicta Holdings Limited and to confirm that SBF

Carter will be the designated auditor partner for the

2012 financial year.

Sponsor

Deloitte & Touche Sponsor Services (Pty) Limited acts

as sponsor to the Company in terms of the

requirement of the JSE Limited.

Transfer secretaries

Computershare Investor Services (Pty) Limited serves as

the registrar and transfer secretaries of the Company.

Invicta Holdings long-term bonus and share incentive

scheme and Bonus Bank Scheme

In order to attract and retain key staff the Group has

implemented a long-term bonus and share incentive

scheme as well as a Bonus Bank Scheme. The

Remuneration Report contains details of the scheme.

Subsidiaries and associate

Details of the Company’s interests in its material

subsidiaries and associate are set out in the attached

annual financial statements in notes 16 and 17 on

pages 68 to 71 of the 2011 Annual Report.

Dividends

Details of the ordinary dividends paid are reflected in

note 24 on page 73 of the 2011 Annual Report.

The Company’s current dividend policy is to consider

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

with a final dividend being considered to bring the

annual dividend cover ratio to no less than 2,75 times.

Historically the dividend cover ratio has been 3,5 times

at interim stage and 3,0 times annual dividend cover

ratio at the final dividend stage.

Directors

Details of the directors and company secretary during

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

pages 4 and 5 and on the inside back cover of the 2011

Annual Report.

Directors’ contracts

No material contracts have been entered into between

the Company and the Group and the directors during

the year under review.

Directors’ fees

Directors’ payments for services as directors and other

emoluments for the past year are set out in note 36 on

pages 79 and 80 of the 2011 Annual Report. Members

will be requested to consider an ordinary resolution

approving these emoluments at the annual general

meeting.

Members will further be requested to approve the fees

for services as director for the forthcoming year as

required by the Companies Act.

Directors‘ interest in shares in the Company

The total direct and indirect interest declared by the

directors in the issued share capital of the Company at

31 March 2011 was 59% (2010: 60%).

The details of the directors’ shareholding are reflected

in note 40 on page 85 of the 2011 Annual Report.

Unissued share capital

The unissued ordinary shares are the subject of a

general authority granted to the directors in terms of

the Companies Act and the JSE Listings Requirements.

As this general authority remains valid only until the

next annual general meeting, which is to be held

on 29 July 2011, members will be requested at the

meeting to consider an ordinary resolution placing the

said ordinary shares under the control of the

directors until the 2012 annual general meeting.


REPORT OF THE DIRECTORS continued


Repurchase of shares

It makes sound business sense for a Company to

acquire its own shares under certain circumstances.

Thus, the directors consider it appropriate to secure a

general authority for the Company to repurchase

shares on the open market of the JSE in order to

provide the Company with maximum flexibility

regarding the repurchase of its own shares.

The Group has over the years repurchased shares

which are held at subsidiary level. The treasury shares

are eliminated on consolidation and are thus treated

as cancelled from a financial reporting perspective.

The directors consider it appropriate to secure a

general authority for the Company to repurchase its

shares held by its subsidiary.

The Company’s Articles of Association allow the

Company to purchase its own shares if shareholders

have, by way of special resolution, given the Company

a general authority to affect such purchase or a

specific authority to affect a specific purchase of its

own shares, subject to the requirements of the

Companies Act and the JSE Listings Requirements.

Shareholders will be required to consider special

resolutions at the annual general meeting giving the

directors general authority to permit the Company or

a subsidiary of the Company to acquire the Company’s

shares and to permit the Company to acquire its shares

held by subsidiary companies.

Notice of annual general meeting

Notice to shareholders detailing all necessary

resolutions relating to the Company affairs is set out

on pages 89 to 96 of the 2011 Annual Report.

Signed on behalf of the Audit Committee


Chairman Chief Executive Officer

Cape Town

31 May 2011


AUDIT COMMITTEE REPORTfor the year ended 31 March 2011

Background

The Audit Committee is guided by a charter that isinformed by the Companies Act and is approved bythe Board as and when it is amended. The revisedcharter includes the specific requirements as set out inthe Companies Act, pertaining to audit committees.

Purpose

The purpose of the Committee is:

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

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

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

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

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

• To review the management of financial risk. Prior

to the establishment of a separate Risk Committee,

the Audit Committee will perform the function of

the Risk Committee, whereby identified risks will

be monitored and discussed at the Audit

Committee meetings.

• To monitor the compliance of the Group with legal

requirements and the Group’s code of ethics.

• To ensure a high standard of Corporate

Governance is adhered to at all times within the

Group.

• To review and monitor the internal audit function.

Membership

The Committee was appointed at the annual general

meeting on 29 July 2010. The Committee comprises

solely of non-executive directors. The members are:

DI Samuels (Chairman)

JS Mthimunye

LR Sherrell

JD Wiese (alternate to LR Sherrell and JS Mthimunye)

The Audit Committee members are considered to be

independent of executive management.

Shareholders will be requested to approve the

appointment of the members of the Audit Committee

at the annual general meeting scheduled for 29 July

2011.

Attendance at meetings during the year was as

follows:

24 May 21 July 4 Nov 10 Feb

2010 2010 2010 2011

C Barnard• √ √ √ √SBF Carter# √ √ x √A Goldstone• √ √ √ √JS Mthimunye* √ x √ xDI Samuels* √ √ √ √LR Sherrell* x x x √AM Sinclair• √ √ x xB Smith# √ x x xJD Wiese+ x x √ √* Members • Group Directors # External Audit

^ Internal Audit + Alternate

In addition to members, the chairman may request

personal or written representation from Group and

Company directors as well as internal and external

audit.

External audit

In terms of section 269A of the Companies Act, the

Committee nominated Deloitte & Touche as the

independent auditor and SBF Carter as the designated

partner, who is a registered independent auditor, for

appointment for the 2011 audit. This appointment

was approved by shareholders at the annual general

meeting on 29 July 2010. The Committee has satisfied

itself through enquiry that the auditor of Invicta is

independent as defined by the Companies Act, as

amended or replaced, and as per the standards

stipulated by the auditing profession.

Requisite assurance was sought and provided by the

auditor that internal governance processes within

the audit firm support and demonstrate their

independence.

The Committee, in consultation with executive

management, agreed to the engagement letter, terms,

nature and scope of the audit function and audit plan

for the 2011 financial year. The budgeted fee is

considered appropriate for the work that could

reasonably have been foreseen at that time. The final

adjusted fee will be agreed on completion of the

audit. Audit fees are disclosed in note 4 on page 59 of

the 2011 Annual Report.


AUDIT COMMITTEE REPORT continued


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

The Committee has again nominated, for approval atthe annual general meeting, Deloitte & Touche as theexternal auditor and SBF Carter as the designatedauditor for the 2012 financial year. The Committeeconfirms that the auditor and designated auditor areaccredited by the JSE.

Risk Committee

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

Risk management specifically includes the consideration of:

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

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

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

Risk management

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

Strategic risk review

The Group has, with the guidance of external consultants, performed a strategic risk review in theprevious years at both Group and divisional level. Theresults of this exercise have allowed management andthe Board to focus on risk mitigation strategies andprocesses. The Committee monitors the progress ofthe implementation of the above processes, with written submissions and presentations being done bymanagement at least annually.

Exchange rate fluctuations

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

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

Product supply

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

Distribution network and infrastructure

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

Trade and funding facilities

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

Annual financial statements

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

Group financial director

As required by the JSE Listings Requirements, the committee confirms that the Group and Company’sfinance director, Mr C Barnard, has the necessaryexpertise and experience to carry out his duties.

DI SamuelsChairman of the Audit Committee

31 May 2011


STATEMENTS OF COMPREHENSIVE INCOMEfor the year ended 31 March 2011

GROUP COMPANY

2011 2010 2011 2010Notes R’000 R’000 R’000 R’000

Revenue 4 533 801 3 968 872 – –

Cost of sales (3 169 438) (2 886 154) – –

Gross profit 1 364 363 1 082 718 – –

Selling, administration and distribution costs (858 870) (629 425) 5 958

Operating profit before finance costs, interest

and dividends received 4 505 493 453 293 5 958

Finance costs 5 (545 242) (432 886) (13) (2)

Dividends received from subsidiaries – – 132 170 96 990

Dividends received from investments 312 727 210 056 48 548 49 044

Share of profits of associate 17 871 639 – –

Interest received 6 177 405 198 442 175 23

Profit before taxation 451 254 429 544 180 885 147 013

Taxation 7 (25 032) (64 155) (668) (368)

Profit for the year 426 222 365 389 180 217 146 645

Other comprehensive income

Exchange differences on translating

foreign operations (833) (7 649) – –

Total comprehensive income for the year 425 389 357 740 180 217 146 645

Profit attributable to:

Owners of the Company 354 155 320 896 180 217 146 645

Non-controlling interest 72 067 44 493 – –

426 222 365 389 180 217 146 645

Total comprehensive income attributable to:

Owners of the Company 353 630 315 196 180 217 146 645

Non-controlling interest 71 759 42 544 – –

425 389 357 740 180 217 146 645

Dividends per share (cents) 24 183 151

Earnings per share (cents) 8 504 453

Diluted earnings per share (cents) 8 480 441


STATEMENTS OF FINANCIAL POSITIONas at 31 March 2011

GROUP COMPANY

2011 2010 2011 2010Notes R’000 R’000 R’000 R’000

ASSETSNon-current assetsProperty, plant and equipment 9 353 953 312 860 – –Investment in subsidiaries 16 – – 502 264 502 264Investment in associate 17 2 190 2 119 – –Financial investments 10 2 963 484 2 880 087 422 683 443 000Goodwill 11 304 746 245 403 – –Other intangible assets 12 57 707 9 923 – –Financial asset 13 249 230 179 549 – –Finance lease receivable 14 433 – – –Long-term receivables 15 260 992 6 721 – –Deferred taxation 7.1 69 940 69 852 – –

4 262 675 3 706 514 924 947 945 264

Current assetsLoans to subsidiaries 18 – – 237 750 401 136Inventories 19 1 381 615 1 298 795 – –Trade and other receivables 20 698 526 670 979 7 293 7 146Current portion of finance lease receivable 14 299 – – –Current portion of financial investments 10 97 998 – 36 326 –Current portion of long-term receivable 15 1 201 – – –Taxation prepaid 14 150 273 – –Bank balances and cash 34 432 403 260 553 9 717 12 681

2 626 192 2 230 600 291 086 420 963

TOTAL ASSETS 6 888 867 5 937 114 1 216 033 1 366 227

EQUITY AND LIABILITIESCapital and reservesOrdinary share capital 21 3 724 3 724 3 724 3 724Share premium 22 282 715 282 715 282 715 282 715Treasury shares 23 (119 809) (96 570) – –Share appreciation reserve 54 979 55 339 – –Available for sale reserve – – 4 814 –Revaluation reserve 5 025 5 025 – –Foreign currency translation reserve (6 674) (6 149) – –Retained earnings 1 391 305 1 198 882 918 814 857 021

Equity attributable to the equity holders 1 611 265 1 442 966 1 210 067 1 143 460Non-controlling interest 243 584 170 297 – –

SHAREHOLDERS’ EQUITY 1 854 849 1 613 263 1 210 067 1 143 460

Non-current liabilitiesLong-term borrowings 26 3 391 948 3 026 890 688 688Guaranteed repurchase liability 25 9 347 – – –Financial liabilities 27 251 819 182 168 – –Deferred taxation 7.1 6 248 14 289 784 –

3 659 362 3 223 347 1 472 688

Current liabilitiesTrade and other payables 28 1 111 487 947 777 2 647 2 431Provisions 29 93 237 72 571 – –Tax liabilities 13 052 13 287 690 665Loan from subsidiary 30 – – 420 218 344Shareholders for dividends 7 062 2 967 737 639Current portion of long-term borrowings 26 122 290 18 056 – –Current portion of guaranteed repurchase liability 25 3 781 – – –Bank overdrafts and bankers’ acceptances 34 23 747 45 846 – –

1 374 656 1 100 504 4 494 222 079

TOTAL LIABILITIES 5 034 018 4 323 851 5 966 222 767

TOTAL EQUITY AND LIABILITIES 6 888 867 5 937 114 1 216 033 1 366 227


STATEMENTS OF CHANGES IN EQUITYfor the year ended 31 March 2011

Foreign Attribu-Share Available currency table to Non-

appre- for Re- trans- equity control-Share Share Treasury ciation sale valuation lation Retained share- ling

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

GROUP

Balance at

1 April 2009 3 724 282 715 (94 247) 33 294 – 8 194 (449) 972 824 1 206 055 130 196 1 336 251

Total comprehensive

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

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

Share appreciation

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

Non-controlling

interest arising on

acquisition of

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

Revaluation reserve

written off on

liquidation of

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

Treasury shares

acquired – – (2 323) – – – – – (2 323) – (2 323)

Balance at

31 March 2010 3 724 282 715 (96 570) 55 339 – 5 025 (6 149) 1 198 882 1 442 966 170 297 1 613 263

Total comprehensive

income for the year – – – – – – (525) 354 155 353 630 71 759 425 389

Dividends paid – – – – – – – (111 773) (111 773) (6 907) (118 680)

Share appreciation

rights issued – – – 19 226 – – – – 19 226 – 19 226

Share appreciation

rights exercised – – – (19 586) – – – (50 920) (70 506) – (70 506)

Acquisition of

additional non-

controlling interest – – – – – – – 961 961 (2 608) (1 647)

Non-controlling interest

arising on acquisition

of subsidiary – – – – – – – – – 11 043 11 043

Treasury shares

acquired – – (23 239) – – – – – (23 239) – (23 239)

Balance at

31 March 2011 3 724 282 715 (119 809) 54 979 – 5 025 (6 674) 1 391 305 1 611 265 243 584 1 854 849

COMPANY

Balance at

1 April 2009 3 724 282 715 – – – – – 810 180 1 096 619 – 1 096 619

Total comprehensive

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

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

Balance at

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

Mark to market on

treasury shares – – – – 4 814 – – – 4 814 – 4 814

Total comprehensive

income for the year – – – – – – – 180 217 180 217 – 180 217

Dividends paid – – – – – – – (118 424) (118 424) – (118 424)

Balance at

31 March 2011 3 724 282 715 – – 4 814 – – 918 814 1 210 067 – 1 210 067


STATEMENTS OF CASH FLOWSfor the year ended 31 March 2011

GROUP COMPANY

2011 2010 2011 2010Notes R’000 R’000 R’000 R’000

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 31 626 547 590 226 74 811

Finance costs (545 242) (432 886) (13) (2)

Dividends paid to Group shareholders 32 (107 679) (92 436) (118 327) (99 730)

Dividends paid to non-controlling interest (6 907) (3 953) – –

Taxation (paid) refunded 33 (48 377) (25 329) (643) 263

Interest and dividends received 490 132 408 498 180 893 146 057

Net cash inflow from operating activities 408 474 444 120 61 984 47 399

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds on sale of property, plant and equipment 21 303 9 872 – –

Expansion to property, plant and equipment and

intangible assets (61 919) (46 914) – –

Replacement of property, plant and equipment (52 455) (37 416) – –

Additions to intangible assets (1 967) – – –

Acquisition of subsidiaries 42 (134 646) (32 964) – –

Acquisition of associate – (1 480) – –

Dividends received from associate 800 – – –

Investment in treasury shares (23 239) (2 323) (10 410) –

Disposal of investment in partnership – 1 527 875 – –

(Increase) decrease in long-term receivable (254 553) (6 721) 36 326 –

Increase in financial investments (83 397) (1 684 987) – –

Increase in current portion of financial investments

and long-term and finance lease receivables (99 498) – (36 326) –

Decrease (increase) in loans to subsidiaries – – 163 386 (146 655)

Net cash (outflow) inflow from investing activities (689 571) (275 058) 152 976 (146 655)

CASH FLOWS FROM FINANCING ACTIVITIES

Increase in long-term borrowings 358 184 164 594 – –

Increase in guaranteed repurchase liability 9 347 – – –

(Decrease) increase in loan from subsidiary – – (217 924) 100 803

Increase in current portion of long-term borrowings

and guaranteed repurchase liabilities 107 515 12 510 – –

Net cash inflow (outflow) from financing activities 475 046 177 104 (217 924) 100 803

Net increase (decrease) in cash and cash equivalents 193 949 346 166 (2 964) 1 547

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

Cash and cash equivalents at the end of the year 34 408 656 214 707 9 717 12 681


NOTES TO THE ANNUAL FINANCIAL STATEMENTSfor the year ended 31 March 2011

1. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

During the year, the Group adopted all of the new and revised Standards and Interpretations issued by the

International Accounting Standards Board (the IASB) and the International Financial Reporting

Interpretations Committee (IFRIC) of the IASB that are relevant to its operations and effective for the Group’s

reporting period. The adoption of IFRS 2 Share-based Payments (amendments), IFRS 5 Non-current Assets

Held for Sale and Discontinued Operations (amendments), IFRS 8 Operating Segments (amendments), and

related amendments to IAS 1 Presentation of Financial Statements, IAS 7 Statement of Cash Flows, IAS 17

Leases, IAS 28 Investments in Associates, IAS31 Interest in Joint Ventures, IAS 32 Financial Instruments:

Presentation, IAS 36 Impairment of Assets, IAS 38 Intangible Assets, IAS 39 Financial Instruments: Recognition

and Measurement has not resulted in any significant changes to the Group and Company’s accounting

policies and the effects on the amounts reported for the current or prior years have been disclosed.

At the date of authorisation of these financial statements, the following Standards applicable to the Group

and Company were in issue but not yet effective:

Standards: Effective date:

• IFRS 3 – Business Combinations

(Amendments) Annual periods beginning on or after 1 July 2010

• IFRS 7 – Financial Instruments: Disclosures

(Amendments) Annual periods beginning on or after 1 July 2010

• IFRS 9 – Financial Instruments –

Classification and Measurement Annual periods beginning on or after 1 January 2013

• IAS 1 – Presentation of Financial

Statements (Amendments) Annual periods beginning on or after 1 January 2011

• IAS 12 – Income Taxes – Limited scope

amendment Annual periods beginning on or after 1 January 2012

• IAS 24 – Related Party Disclosures (Revised) Annual periods beginning on or after 1 January 2011

• IAS 27 – Consolidated and Separate

Financial Statements (Amendments) Annual periods beginning on or after 1 July 2010

• IAS 34 – Interim Financial Reporting

(Amendments) Annual periods beginning on or after 1 January 2011

The directors anticipate that the adoption of these Standards in future periods will have no material impact

on the financial statements of the Group and Company.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with International Financial Reporting Standards

and in the manner required by the Companies Act of South Africa. The financial statements have been

prepared on the historical cost basis, except for the revaluation of financial instruments. The principal

accounting policies adopted are set out below.

2.1 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and

entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the


NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued


power to govern the financial and operating policies of an entity so as to obtain benefits from its

activities. The results of subsidiaries acquired or disposed of during the year are included in the

consolidated statements of comprehensive income from the effective date of acquisition or up to the

effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their

accounting policies into line with those used by the Group.

All intra-Group transactions, balances, income and expenses are eliminated on consolidation. The

non-controlling interests in the net assets of consolidated subsidiaries are identified separately from

the Group’s equity therein. The non-controlling interests consist of the amount of those interests at

the date of the original business combination and the non-controlling shareholders’ share of changes

in equity since the date of the combination. Losses applicable to the non-controlling shareholder in

excess of the non-controlling interests’ share in the subsidiary’s equity are allocated against the

interests of the Group except to the extent that the non-controlling shareholder has a binding

obligation and is able to make an additional investment to cover the losses.

2.2 Business combinations

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition

is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities

incurred or assumed, and equity instruments issued by the Group in exchange for control of the

acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable

assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are

recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups)

that are classified as held for sale in accordance with IFRS 5 Non-Current Assets Held for Sale and

Discontinued Operations, which are recognised and measured at fair value less costs to sell. Goodwill

arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the

cost of the business combination over the Group’s interest in the net fair value of the

identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s

interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities

exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

The interest of non-controlling shareholders in the acquiree is initially measured at the non-

controlling shareholders’ proportion of the net fair value of the assets, liabilities and contingent

liabilities recognised.

2.3 Goodwill

Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the excess

of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets,

liabilities and contingent liabilities of the subsidiary or jointly controlled entity recognised at the date

of acquisition.

Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any

accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each

of the Group’s cash-generating units expected to benefit from the synergies of the combination.

Cash-generating units to which goodwill has been allocated are tested for impairment annually, or

more frequently when there is an indication that the unit may be impaired. If the recoverable amount

of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is

allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the

other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. An

impairment loss recognised for goodwill is not reversed in a subsequent period.




On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is

included in the determination of the profit or loss on disposal.

2.4 Investments in associates

The results of associates are incorporated in the consolidated financial statements using the equity

method of accounting. Under the equity method, investments in associates are carried in the

consolidated statement of financial position at cost as adjusted for post-acquisition changes in the

Group’s share of the net assets of the associate, less any impairment in the value of individual

investments. Losses of an associate in excess of the Group’s interest in that associate (which includes

any long-term interests that, in substance, form part of the Group’s net investment in the associate)

are recognised only to the extent that the Group has incurred legal or constructive obligations or

made payments on behalf of the associate.

2.5 Non-current assets held for sale

Non-current assets and disposal groups are classified as held-for-sale if their carrying amount will be

recovered through a sale transaction rather than through continuing use. This condition is regarded

as met only when the sale is highly probable and the asset (or disposal group) is available for

immediate sale in its present condition. Management must be committed to the sale, which should be

expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held-for-sale are measured at the lower of the

assets’ previous carrying amount and fair value less costs of disposal.

2.6 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents

amounts receivable for goods and services provided in the normal course of business, net of discounts

and sales-related taxes. Sales of goods are recognised when goods are delivered and title has passed.

Interest income is accrued on the time basis, by reference to the principal outstanding and at the

effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts

through the expected life of the financial asset to that asset’s net carrying amount.

Dividend income from investments is recognised when the shareholders’ rights to receive payment

have been established.

2.7 Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks

and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessor

When assets are leased out under finance leases, the present value of the lease payments is recognised

as a receivable. Finance income is recognised over the term of the lease using the net investment

method, which reflects a constant periodic rate of return.

Rental income from operating leases is recognised on the straight-line basis over the term of the

relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added

to the carrying amount of the leased asset and recognised on the straight-line basis over the lease

term. Payments received in advance is recognised as deferred income and recognised in revenue over

the term of the agreement.




The Group as lessee

Assets held under finance leases are recognised as assets of the Group at their fair value at the

inception of the lease or, if lower, at the present value of the minimum lease payments. The

corresponding liability to the lessor is included in the statements of financial position as a finance lease

obligation. Lease payments are apportioned between finance charges and a reduction of the lease

obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance

charges are charged to profit or loss.

Rentals payable under operating leases are charged to profit or loss on the straight-line basis over the

term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating

lease are also spread on the straight-line basis over the lease term.

2.8 Foreign currencies

The individual financial statements of each Group entity are presented in the currency of the primary

economic environment in which the entity operates (its functional currency). For the purpose of the

consolidated financial statements, the results and financial position of each entity are expressed in

currency units, which are the functional currency of the Company, and the presentation currency for

the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than

the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing

on the dates of the transactions. At each statements of financial position date, monetary items

denominated in foreign currencies are retranslated at the rates prevailing on the statements of

financial position date. Non-monetary items carried at fair value that are denominated in foreign

currencies are retranslated at the rates prevailing on the date when the fair value was determined.

Non-monetary items that are measured in terms of historical cost in a foreign currency are not

retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of

monetary items, are included in profit or loss for the period. Exchange differences arising on the

retranslation of non-monetary items carried at fair value are included in profit or loss for the period

except for differences arising on the retranslation of non-monetary items in respect of which gains and

losses are recognised directly in equity. For such non-monetary items, any exchange component of that

gain or loss is also recognised directly in equity.

In order to hedge its exposure to certain foreign exchange risks, the Group enters into forward

contracts and options. For the purpose of presenting consolidated financial statements, the assets and

liabilities of the Group’s foreign operations are expressed in currency units using exchange rates

prevailing on the statements of financial position date. Income and expense items are translated at

the average exchange rates for the period, unless exchange rates fluctuated significantly during that

period, in which case the exchange rates at the dates of the transactions are used. Exchange

differences arising, if any, are classified as equity and transferred to the Group’s translation reserve.

Such translation differences are recognised in profit or loss in the period in which the foreign

operation is disposed of.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as

assets and liabilities of the foreign operation and translated at the closing rate.


2.9 Borrowing costs

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

Borrowing costs directly attributable to the acquisition or construction of assets that necessarily take

a substantial period of time to get ready for their intended use are added to the cost of those assets,

until such time as the assets are substantially ready for their intended use.

2.10 Government grants

Government grants towards staff re-training costs are recognised in profit or loss over the periods

necessary to match them with the related costs and are deducted in reporting the related expense.

2.11 Retirement benefit costs

Defined contribution pension and provident funds

Current contributions to the defined contribution pension and defined contribution provident funds

registered in terms of the Pension Fund Act, 1956 are based on current service and current salaries and

are charged against income for the year. Payments to defined contribution retirement benefit plans

are charged as an expense as they are incurred.

Other post-retirement obligations

The Group provides a post-retirement medical aid subsidy to some of its retirees. The entitlement to

these benefits is conditional on the employee having pensionable service from a particular date and

continuous medical aid membership of a qualifying scheme from the same date. The expected costs of

these benefits are accrued over the period of employment.

2.12 Taxation

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as

reported in the statements of comprehensive income because it excludes items of income or expense

that are taxable or deductible in other years and it further excludes items that are never taxable or

deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or

substantively enacted at the statements of financial position date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the

financial statements and the corresponding tax bases used in the computation of taxable profit, and

are accounted for using the balance sheet liability method. Deferred tax liabilities are generally

recognised for all taxable temporary differences and deferred tax assets are recognised to the extent

that it is probable that taxable profits will be available against which deductible temporary differences

can be utilised.

Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from

the initial recognition (other than in a business combination) of other assets and liabilities in a

transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in

subsidiaries and associates, and interests in joint ventures, except where the Group is able to control

the reversal of the temporary difference and it is probable that the temporary difference will not

reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each

statements of financial position date and reduced to the extent that it is no longer probable that

sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred

tax is calculated at the tax rates that are expected to apply in the period when the liability is settled

or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to

items charged or credited directly to equity, in which case the deferred tax is also dealt with in

equity.




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

2.13 Property, plant and equipment

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

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

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

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

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

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

Golf cars, forklifts and equipment rental fleets are accounted for as part of property, plant and equipment and are depreciated over their relevant contractual rental terms.

2.14 Other intangible assets

Other intangible assets consist of computer software which is amortised on the straight-line basis overa period of three to ten years. Re-acquired agency rights, which are determined with reference to theagency’s forecast trading results to the end of the contracted lease term. The rights are amortised overthe remaining contractual term of the agency agreement.

2.15 Impairment of tangible and intangible assets excluding goodwill

At each statements of financial position date, the Group reviews the carrying amounts of its tangibleand intangible assets to determine whether there is any indication that those assets have suffered animpairment loss.

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

Recoverable amount is the higher of fair value less costs to sell and value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value usinga pre-tax discount rate that reflects current market assessments of the time value of money and therisks specific to the asset. If the recoverable amount of an asset (or cash-generating unit) is estimatedto be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reducedto its recoverable amount.




An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a

revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an

impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is

increased to the revised estimate of its recoverable amount, but so that the increased carrying amount

does not exceed the carrying amount that would have been determined had no impairment loss been

recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is

recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in

which case the reversal of the impairment loss is treated as a revaluation increase.

2.16 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and,

where applicable, direct labour costs and those overheads that have been incurred in bringing the

inventories to their present location and condition. Cost is calculated using the first-in first-out

method.

Net realisable value represents the estimated selling price less all estimated costs of completion and

costs to be incurred in marketing, selling and distribution.

2.17 Financial instruments

Financial assets and financial liabilities are recognised on the Group’s statements of financial position

when the Group becomes a party to the contractual provisions of the instrument.

Trade receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at

amortised cost using the effective interest rate method as reduced by appropriate allowances for

estimated irrecoverable amounts. These allowances are recognised in profit or loss when there is

objective evidence that the asset is impaired. The allowance recognised is measured as the difference

between the asset’s carrying amount and the present value of estimated future cash flows discounted

at the effective interest rate computed at initial recognition.

Investments

Investments are recognised and derecognised on a trade date basis where the purchase or sale of an

investment is under a contract whose terms require delivery of the investment within the timeframe

established by the market concerned, and are initially measured at fair value, plus directly

attributable transaction costs.

At subsequent reporting dates, debt securities that the Group has the expressed intention and ability

to hold to maturity (held-to-maturity debt securities) are measured at amortised cost using the

effective interest rate method, less any impairment loss recognised to reflect irrecoverable amounts.

An impairment loss is recognised in profit or loss when there is objective evidence that the asset is

impaired, and is measured as the difference between the investment’s carrying amount and the

present value of estimated future cash flows discounted at the effective interest rate computed at

initial recognition.

Impairment losses are reversed in subsequent periods when an increase in the investment’s

recoverable amount can be related objectively to an event occurring after the impairment was

recognised, subject to the restriction that the carrying amount of the investment at the date the

impairment is reversed, shall not exceed what the amortised cost would have been had the

impairment not been recognised.

Investments other than held-to-maturity debt securities are classified as either investments held for

trading or as available-for-sale, and are measured at subsequent reporting dates at fair value. Where

securities are held for trading purposes, gains and losses arising from changes in fair value are

included in profit or loss for the period. For available-for-sale investments, gains and losses arising




from changes in fair value are recognised directly in equity, until the security is disposed of or is

determined to be impaired, at which time the cumulative gain or loss previously recognised in equity

is included in the profit or loss for the period. Impairment losses recognised in profit or loss for

equity investments classified as available-for-sale are not subsequently reversed through profit or loss.

Impairment losses recognised in profit or loss for debt instruments classified as available-for-sale are

subsequently reversed if an increase in the fair value of the instrument can be objectively related to

an event occurring after the recognition of the impairment loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly

liquid investments that are readily convertible to a known amount of cash and are subject to an

insignificant risk of changes in value.

Financial liabilities and equity

Financial liabilities and equity instruments issued by the Group are classified according to the

substance of the contractual arrangements entered into and the definitions of a financial liability and

an equity instrument. An equity instrument is any contract that evidences a residual interest in the

assets of the Group after deducting all of its liabilities. The accounting policies adopted for specific

financial liabilities and equity instruments are set out below.

Bank borrowings

Interest-bearing bank loans and overdrafts are initially measured at fair value, and are subsequently

measured at amortised cost, using the effective interest rate method. Any difference between the

proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over

the term of the borrowings in accordance with the Group’s accounting policy for borrowing costs.

Trade payables

Trade and other payables are initially measured at fair value, and are subsequently measured at

amortised cost, using the effective interest rate method.

Equity instruments

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

costs.

Guaranteed repurchase liability

Guaranteed repurchase liabilities are initially and subsequently measured at present value using the

effective interest rate method.

Derivative financial instruments and hedge accounting

The Group’s activities expose it primarily to the financial risks of changes in foreign exchange rates and

interest rates. The Group uses derivative financial instruments (primarily foreign currency forward

contracts and interest rate swaps) to hedge its risks associated with foreign currency fluctuations

relating to certain firm commitments, forecast transactions and interest rate fluctuations relating to

bank loans. The use of financial derivatives is governed by the Group’s policies approved by the board

of directors, which provide written principles on the use of financial derivatives consistent with the

Group’s risk management strategy.

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

Derivative financial instruments are initially measured at fair value on the contract date, and are

remeasured to fair value at subsequent reporting dates.

Derivatives embedded in other financial instruments or other non-financial host contracts are treated

as separate derivatives when their risks and characteristics are not closely related to those of the host

contract and the host contract is not carried at fair value with unrealised gains or losses reported in

profit or loss.




2.18 Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event, and it

is probable that the Group will be required to settle that obligation. Provisions are measured at the

directors’ best estimate of the expenditure required to settle the obligation at the statements of

financial position date, and are discounted to present value where the effect is material.

The warranty provision represents warranty income that has been deferred and which is recognised

on a systematic basis over the warranty term. It is expected that the majority of warranty claims will

be incurred within two years after the reporting period.

2.19 Share-based payments

The Group issues equity-settled share-based payments to certain employees. Equity-settled

share-based payments are measured at fair value (excluding the effect of non market-based vesting

conditions) at the date of the grant. The fair value determined at the grant date of the equity-settled

share-based payments is expensed on the straight-line basis over the vesting period, based on the

Group’s estimate of the shares that will eventually vest and is adjusted for the effect of non-

market-based vesting conditions. Fair value is measured using the Black-Scholes pricing model. The

expected life used in the model is adjusted, based on management’s best estimate, for the effects of

non-transferability, exercise restrictions and behavioural considerations.

2.20 Key judgements made by management

Preparing financial statements in conformity with IFRS requires judgements and assumptions that

affect reported amounts and related disclosures. Actual results could differ from these estimates.

Certain accounting policies have been identified as involving particularly complex or subjective

judgements or assessments as follows:

Asset lives and residual values

Property, plant and equipment is depreciated over its useful life taking into account residual values,

where appropriate. The actual lives of the assets and residual values are assessed annually and may

vary depending on a number of factors. In reassessing asset lives, factors such as technological

innovation, product life cycles and maintenance programmes are taken into account. Residual value

assessments consider issues such as future market conditions, the remaining life of the asset and

projected disposal values.

Intangible assets other than goodwill

Intangible assets other than goodwill are amortised over their useful lives. The actual lives of the

intangible assets are assessed annually and may vary depending on a number of factors. In reassessing

intangible asset lives, factors such as technological innovation are taken into account.

Provisions

Management bases their estimation for warranty provision on the number of products under

warranty at year-end, the age of these products and the remaining period under warranty. Actual

warranty costs may vary depending on a number of factors.

Valuation of derivatives

Derivatives valuations are determined by discounting the contractual stream of payments/receipts

using appropriate discount rates at the valuation date.

Valuation of investments

Investments are carried at cost or fair value. The directors determine the fair value on an annual basis

by assessing the future cash flows associated with the investment.






3. BUSINESS SEGMENTS

3.1 Segment revenues and results

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

Segment revenue Segment profit

2011 2010 2011 2010

R’000 R’000 R’000 R’000

Engineering consumables 2 387 363 2 018 304 319 665 292 673

Capital equipment 1 876 542 1 749 538 157 525 123 441

Group, financing and other operations 269 896 201 030 28 303 37 179

4 533 801 3 968 872 505 493 453 293

Share of profits of associate 871 639

Finance costs (545 242) (432 886)

Interest and dividends received 490 132 408 498

Profit before taxation 451 254 429 544

Taxation (25 032) (64 155)

Profit for the year 426 222 365 389

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

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

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

decision maker for the purposes of assessment of segment performance.

3.2 Segment assets and liabilities

2011 2010

R’000 R’000

Segment assets

Engineering consumables 1 450 792 1 233 928

Capital equipment 1 081 667 884 232

Group, financing and other operations 4 356 408 3 818 954

Total assets 6 888 867 5 937 114


3. BUSINESS SEGMENTS CONTINUED

3.2 Segment assets and liabilities continued

2011 2010

R’000 R’000

Segment liabilities

Engineering consumables 414 378 300 217

Capital equipment 778 091 631 884

Group, financing and other operations 3 841 549 3 391 750

Total liabilities 5 034 018 4 323 851

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

• all assets are allocated to reportable segments other than investments in associate and tax assets;

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

3.3 Other segment information

Additions to property,

Depreciation and plant and equipment

amortisation and intangible assets

2011 2010 2011 2010

R’000 R’000 R’000 R’000

Engineering consumables 19 425 16 006 70 670 10 523

Capital equipment 56 513 22 993 89 552 25 815

Group, financing and other operations 5 351 4 464 4166 47 992

Total 81 289 43 463 164 388 84 330

Geographical segments

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

substantially within southern Africa.

Customers

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

10% of the Group’s total revenue.




GROUP COMPANY

2011 2010 2011 2010R’000 R’000 R’000 R’000

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

Operating profit before finance costs, interest

and dividends received is arrived at after taking

into account the following items:

Income

Profit on disposal of property, plant and equipment 2 361 3 762 – –

Release of deferred profit on issue of shares

by subsidiary 3 870 3 870 – –

Negative goodwill recognised on acquisition

of subsidiary – 7 952 – –

Credit default swap derivative 69 681 (52 963) – –

Interest rate swap derivative 30 1 303 –

Goodwill impairment reversed – 3 442 – –

Net impairment of property, plant and equipment 4 271 (190) – –

Expenses

Auditors’ remuneration – audit fees 3 257 3 557 – –

– Current year 3 114 3 123 – –

– Prior year 49 150 – –

– Other services 94 284 – –

Depreciation* 30 499 30 215 – –

– Buildings 4 230 3 420 – –

– Plant and equipment 4 849 3 404 – –

– Leasehold improvements 1 887 1 449 – –

– Motor vehicles 6 316 4 144 – –

– Furniture and fittings 2 457 2 058 – –

– Office equipment 4 922 4 064 – –

– Computer equipment 5 838 6 630 – –

– Golf cars – 5 039 – –

– Forklifts – 7 –

Amortisation of intangible assets 2 230 2 141 – –

Put option/credit default swap derivative 69 681 (52 963) – –

Loss on disposal of property, plant and equipment 2 244 30 – –

Employment costs 550 503 430 712 – –

Operating lease expenses 65 149 14 390 – 92

– Premises 47 482 13 271 – 92

– Equipment 494 407 – –

– Motor vehicles 17 148 – – –

– Other 25 712 – –

Pension and provident fund contributions 19 267 20 491 – –

Share options expense 19 227 22 045 – –

* This excludes depreciation charge disclosed in cost of sales of R48 559 749 (2010: R11 106 792).




GROUP COMPANY

2011 2010 2011 2010

R’000 R’000 R’000 R’000

5. FINANCE COSTS

Bank overdrafts and loans 19 630 22 631 1 2

Foreign exchange premiums 1 794 9 496 – –

Finance leases 1 216 827 – –

Guaranteed repurchase liability 4 537 – – –

Debentures, promissory notes and other

long-term borrowings 518 065 399 932 12 –

Total 545 242 432 886 13 2

6. INTEREST RECEIVED

Bank balances and cash 12 955 2 419 6 23

Finance leases 72 – – –

Partnership income – 123 035 – –

Foreign exchange gains 2 268 5 240 – –

Long-term receivables 162 110 67 748 169 –

Total 177 405 198 442 175 23

7. TAXATION

South African normal taxation

Current tax

– current year 23 245 18 044 575 433

– prior year (25) 1 436 93 (65)

Deferred tax

– current year (5 683) (4 466) – –

– prior year (2 134) (5 127) – –

Secondary tax on companies 946 808 – –

Foreign tax 8 683 53 460 – –

Total 25 032 64 155 668 368

Reconciliation of tax rate % % % %

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

Permanent differences and exempt income (23,7) (25,3) (27,7) (27,7)

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

Utilisation of tax losses (0,5) (0,7) – –

Prior year under provision (0,4) 0,3 0,1 –

Foreign tax 1,9 12,4 – –

Effective tax rate 5,5 14,9 0,4 0,3

Estimated tax losses in the Group amount to R68 559 128 (2010: R59 403 245). A deferred tax asset of

R8 507 183 (2010: R2 970 595) was raised with respect to certain of these tax losses due to the uncertainty in

estimating the remaining tax losses.






GROUP COMPANY

2011 2010 2011 2010

R’000 R’000 R’000 R’000

7. TAXATION CONTINUED

7.1 Deferred taxNet balance at the beginning of the year 55 563 43 901 – –Arising on acquisition of subsidiaries 312 2 069 – –Statement of comprehensive income charge 7 817 9 593 – –

Net balance at the end of the year 63 692 55 563 – –

Comprising:Capital allowances (8 264) (10 422) – –Tax losses 8 507 2 971 – –Provisions 52 210 45 272 – –Other temporary differences 11 239 18 252 – –Prepayments – (510) – –

Total 63 692 55 563 – –

Disclosed as:Deferred taxation asset 69 940 69 852 – –Deferred taxation liability (6 248) (14 289) (784) –

Total 63 692 55 563 (784) –

8. EARNINGS PER SHARE

Basic earnings per share (cents) 504 453 – –Diluted earnings per share (cents) 480 441 – –

8.1 Basic earnings per share

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

Profit for the year attributable to owners of the Company 354 155 320 896 – –

Weighted average number of ordinary shares for the purposes of basic earnings per share 70 211 70 779 – –

8.2 Diluted earnings per share

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

Earnings used in the calculation of diluted earnings per share 354 155 320 896 – –

Weighted average number of ordinary shares used in the calculation of diluted earnings per share 73 720 72 767 – –




GROUP

Non- Attributablecontrolling to equity

Gross Taxation interest holdersR’000 R’000 R’000 R’000

8. EARNINGS PER SHARE CONTINUED

8.3 Headline earnings per share

This calculation is based on the weighted

average number of 70 211 362

(2010: 70 779 151) ordinary shares in issue

during the year. It is derived, after taxation

and non-controlling interest, as follows:

2011

Earnings attributable to ordinary shareholders 451 254 (25 032) (72 067) 354 155

Adjusted for:

Release of deferred profit on issue of

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

Net profit on disposal of property, plant

and equipment (117) 33 17 (67)

Net impairment of property, plant and

equipment (4 271) 1 196 615 (2 460)

Headline earnings for purposes of headline

earnings per share 442 996 (23 179) (71 435) 348 382

2010

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

Adjusted for:

Release of deferred profit on issue of

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

Net profit on disposal of property, plant

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

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

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

Impairment of goodwill 3 442 – (688) 2 754

Headline earnings for purposes of headline

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

GROUP

2011 2010R’000 R’000

Headline earnings for purposes of diluted headline

earnings per share 348 382 312 002

Headline earnings per share (cents) 496 441

Diluted headline earnings per share (cents) 473 429




GROUP

2011 2010R’000 R’000

9. PROPERTY, PLANT AND EQUIPMENT

Land and buildings 201 412 196 784

– Gross carrying amount 229 255 225 213– Accumulated depreciation and impairment 27 843 28 429

Plant and equipment 19 831 14 991


Leasehold improvements 5 263 4 448

– Gross carrying amount 9 502 6 809– Accumulated depreciation 4 239 2 361

Motor vehicles 19 666 10 430


Furniture and fittings 7 837 8 347


Office equipment 19 271 16 392

– Gross carrying amount 57 422 49 402 – Accumulated depreciation and impairment 38 151 33 010

Computer equipment 8 630 9 229


Rental assets – Golf cars 13 005 11 586


Rental assets – Forklifts 48 411 40 653


Rental assets – Equipment 10 627 –

– Gross carrying amount 11 864 –– Accumulated depreciation and impairment 1 237 –

Net carrying value 353 953 312 860

Total gross carrying amount 622 040 534 058Total accumulated depreciation and impairment 268 087 221 198

9.1 Details of land and buildingsA register containing details of land and buildings is available for inspection during business hours atthe registered office of the Company by members or their duly authorised agents.

9.2 EncumbrancesThe Group has encumbered land and buildings, motor vehicles and golf cars having a carrying valueof R202 million (2010: R155 million) to secure banking financing facilities as detailed in note 26.




GROUP

2011 2010R’000 R’000

9. PROPERTY, PLANT AND EQUIPMENT CONTINUED

9.3 Reconciliation of movement in carrying value

Land and buildings

Balance at the beginning of the year 196 784 151 040

Additions 1 597 47 227

Acquisitions of subsidiaries 10 210 –

Impairment reversed 5 771 4 000

Depreciation for the year (4 230) (3 420)

Disposals (8 720) (2 063)

Balance at the end of the year 201 412 196 784

Plant and equipment



Acquisitions of subsidiaries 3 108 983

Impairment (181) (97)


Disposals (285) (5)


Leasehold improvements



Acquisitions of subsidiaries 205 –



Motor vehicles



Acquisitions of subsidiaries 7 925 4

Impairment – (12)


Disposals (1 562) (258)


Furniture and fittings



Acquisitions of subsidiaries 362 110


Disposals (42) (20)





GROUP

2011 2010R’000 R’000

9. PROPERTY, PLANT AND EQUIPMENT CONTINUED

9.3 Reconciliation of movement in carrying value continued

Office equipmentBalance at the beginning of the year 16 392 16 567Additions 7 441 4 037Acquisitions of subsidiaries 514 51Impairment – (189)Depreciation for the year (4 922) (4 064)Disposals (154) (10)


Computer equipmentBalance at the beginning of the year 9 229 11 953Additions 4 766 3 508Acquisitions of subsidiaries 369 614Impairment reversed (raised) 181 (158)Depreciation for the year (5 838) (6 630)Disposals (77) (58)


Rental assets – Golf carsBalance at the beginning of the year 11 586 13 086Additions 6 873 4 798 Depreciation for the year (4 559) (5 039)Disposals (895) (1 259)


Rental assets – ForkliftsBalance at the beginning of the year 40 653 –Additions 61 473 11 639Acquisitions of subsidiaries – 46 329Impairment (1 500) (3 734)Depreciation for the year (42 764) (11 114)Disposals (9 451) (2 467)


Rental assets – EquipmentBalance at the beginning of the year – –Additions 11 864 –Depreciation for the year (1 237) –

Balance at the end of the year 10 627 –

TotalBalance at the beginning of the year 312 860 228 997Additions 114 374 83 424Acquisitions of subsidiaries 22 693 48 091Net impairment reversed (raised) 4 271 (190)Depreciation for the year* (79 059) (41 322)Disposals (21 186) (6 140)


* Depreciation relating to the forklifts, equipment and golf car hire fleets is included in cost of sales.


GROUP COMPANY

2011 2010 2011 2010R’000 R’000 R’000 R’000

10. FINANCIAL INVESTMENTS

Unlisted securities

Business Venture Investments No 1048 (Pty)

Limited – 50 000 redeemable non-cumulative

preference shares 752 100 752 100 – –

The shares are redeemable from 8 August 2011

to 8 February 2016 in semi-annual instalments.

Dividends are received at a rate of 10,9% per

annum compounded semi-annually. The

preference shares are pledged as security

to the debenture holders under a credit default

swap (refer note 26).

Business Venture Investments No 1057 (Pty)

Limited – 50 000 redeemable non-cumulative

preference shares 443 000 443 000 443 000 443 000

The shares are redeemable from 8 August 2011

to 8 February 2016 in semi-annual instalments.


annum compounded semi-annually. The

preference shares are pledged as security to

the debenture holders under a credit default

swap (refer note 26).

Gryphon Financial Engineering (Pty) Limited

preference shares – fully paid Class “A” par

value redeemable preference shares of R1,00 1 866 382 1 684 987 – –


annum compounded quarterly. Government bonds

have been pledged as security via a put option

with Gryphon Support Services (Pty) Limited

(refer note 27).

Treasury shares – – 16 009 –

Total 3 061 482 2 880 087 459 009 443 000

Current portion of financial investments

disclosed in current assets (97 998) – (36 326) –

Long-term portion of financial investments 2 963 484 2 880 087 422 683 443 000

Directors’ valuation 2 963 484 2 880 087 422 683 443 000






GROUP

2011 2010R’000 R’000

11. GOODWILL

Goodwill arising on acquisition of subsidiaries


Acquisition of subsidiaries 58 788 6 354

Acquisition of non-controlling interest in

subsidiaries 555 –

Goodwill impaired during the year – (3 442)


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

Bearing Man Group 271 422 213 615

Goldquest International

Hydraulics SA (Pty) Limited 1 683 1 683

Disa Equipment (Pty) Limited 11 793 11 793

Tiletoria Cape Group 13 847 13 292

Humulani Marketing (Pty) Limited 6 001 5 020

Total 304 746 245 403

The directors assess the carrying value of goodwill with reference to the

future cash flows of the cash-generating unit.

12. OTHER INTANGIBLE ASSETS

Computer software

– Gross carrying value 20 496 18 529

– Accumulated amortisation (10 836) (8 606)

Re-acquired agency rights 48 047 –

Net carrying value 57 707 9 923

Reconciliation of movement in carrying value


Acquisition of subsidiaries 48 047 –

Additions 1 967 906

Amortisation for the year (2 230) (2 141)


13. FINANCIAL ASSET

Credit default swap derivative 249 230 179 549

The fair value of the credit default swap derivative was determined by discounting the contractual stream

of receipts on the long-term receivable using the zero swap curve at the valuation date.




GROUP

2011 2010R’000 R’000

14. FINANCE LEASE RECEIVABLE

Later than one year and not later than five years 356 –

Due in the second and fifth years inclusive 473 –

829 –

Unearned interest on finance lease (97) –

Net investment in finance lease 732 –

Net investment in finance leases can be analysed as follows:

Not later than one year 299 –

Later than one year and not later than five years 433 –

Net investment in finance lease 732 –

The Group entered into finance lease agreements over certain of its equipment

and forklifts. The average term of finance leases entered into is five years.

The interest rate inherent in the leases is fixed at the contract date for the

entire lease term. The average effective interest rate is prime-linked.

15. LONG-TERM RECEIVABLE

Serec Capital (Pty) Limited 259 604 –

The long-term receivable earns interest ranging from 8% to 12% and no

fixed repayment terms have been set. The loans are long-term in nature.

Other 2 589 6 721

262 193 6 721

Current portion of long-term receivables disclosed in current assets (1 201) –

Total 260 992 6 721

16. INVESTMENT IN SUBSIDIARIES

Details of the Company’s subsidiaries at 31 March 2011 are as follows:

Shares at cost 502 264 502 264

Total 502 264 502 264




16. INVESTMENT IN SUBSIDIARIES CONTINUEDGROUP

Proportion ofownership interest

and votingpower held

Place of 2011 2010

Name of subsidiary Principal activity operation % %

Direct holdings

Bearing Man 1955 Limited Investment holding company South Africa 100 100

Humulani Investments

(Pty) Limited* Investment holding company South Africa 80 80

Indirect holdings

Bearing Man (Botswana)

(Pty) Limited Trading company Botswana 80 80

Bearing Man (Namibia)

(Pty) Limited Trading company Namibia 80 80

Bearing Man (Swaziland)

(Pty) Limited Trading company Swaziland 80 80

Bearing Man (Mozambique) Lda Trading company Mozambique 80 80

Bearing Man (Zambia)

(Pty) Limited Trading company Zambia 80 80

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

Oscillating Systems Technology

Africa (Pty) Limited Trading company South Africa 80 80

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

Criterion Equipment (Pty) Limited Trading company South Africa 80 80

Goldquest International

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

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

Farmmac (Pty) Limited Trading company South Africa 80 80

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

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

Wegezi Power Holdings

(Pty) Limited Trading company South Africa 56 –

Trendy Property Investments


SET agency Trading company South Africa 41 –

Alpha Bearings (Pty) Limited Trading company South Africa 21 –

Turnkey Hydraulics KZN


Hi-Quip Hydraulics (Pty) Limited Trading company South Africa 80 –

Humulani Marketing

Mozambique Lda Trading company Mozambique 80 –

Edmik Engineering (Pty) Limited Trading company South Africa 56 –

Smart Taps (Pty) Limited Trading company South Africa 38 –

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

Share Incentive Trust has been consolidated in terms of SIC12. Refer the Report of the directors on pages 39 to 41 of the

2011 Annual Report for further details.




GROUP

2011 2010R’000 R’000

16. INVESTMENT IN SUBSIDIARIES CONTINUED

The Group acquired 70% of the share capital of Wegezi Power Holdings

(Pty) Limited, effective 1 April 2010.

The Group acquired 70% of the share capital of Turnkey Hydraulics KZN


The Group acquired 100% of the share capital of Hi-Quip Hydraulics (Pty)

Limited, effective 1 September 2010.

The Group acquired 70% of the share capital of Edmik Engineering (Pty)

Limited, effective 1 November 2010.

The Group acquired 80% of the share capital of Smart Taps (Pty) Limited,

effective 1 June 2010.

The Group acquired 51% of the share capital of Trendy Property Investments


The Group, through Trendy Property Investments (Pty) Limited, acquired

100% of the share capital of the SET Agency, effective 1 April 2010.

The Group, through SET Agency, acquired 51% of the share capital of Alpha

Bearings (Pty) Limited, effective 1 October 2010.

A register containing details of the other direct and indirect subsidiaries is

available for inspection during business hours at the registered office of the

Company by members or their duly authorised agents.

The Company’s attributable interest in the aggregate profits and losses

(after taxation and non-controlling interest) of its subsidiaries is as follows:

Profits 289 068 272 077

Losses 4 261 41

17. INVESTMENT IN ASSOCIATE

Proportion of

ownership interest

and voting

power held

Place of

Principal incorporation 2011 2010

Name of associate activity and operation % %

Compact Computers Solutions

(Pty) Ltd Trading company South Africa 40 40




GROUP

2011 2010R’000 R’000

17. INVESTMENT IN ASSOCIATE CONTINUED

Summarised financial information in respect of the Group’s associate

is set out below.

Total assets 3 569 2 018

Total liabilities (2 892) (1 406)

Net assets 677 612

Revenue for the year 20 450 17 890Profit for the year 2 177 1 599

Group’s share of profits of associate 871 639

Reconciliation of carrying amount:Acquisition of associate 2 080 2 080Equity accounted earnings, net of taxation 1 510 639Dividends received (1 400) (600)

Carrying value at the end of the year 2 190 2 119

GROUP COMPANY

2011 2010 2011 2010R’000 R’000 R’000 R’000

18. LOANS TO SUBSIDIARIES

Bearing Man 1955 Limited – – 228 228 223 872

Humulani Investments (Pty) Limited – – 9 522 177 264

– – 237 750 401 136

The loans are unsecured, bear no interest and no

fixed terms of repayment have been negotiated.

19. INVENTORIES

Merchandise 1 554 083 1 441 226 – –Work-in-progress 20 841 38 932 – –Obsolescence provision (193 309) (181 363) – –

Total 1 381 615 1 298 795 – –

Inventory carried at net realisable value 193 891 261 403 – –

Inventory write-down expensed 2 828 3 062 – –

Inventory recognised in the statement ofcomprehensive income 3 169 438 2 886 154 – –


GROUP COMPANY

2011 2010 2011 2010R’000 R’000 R’000 R’000

20. TRADE AND OTHER RECEIVABLES

Trade receivables 685 354 598 856 – –

Provision for doubtful debts (37 495) (39 925) – –

Prepayments 6 758 3 367 – 121

Other receivables 43 909 108 681 7 293 7 025

Total 698 526 670 979 7 293 7 146

The directors consider that the

carrying value of trade and other

receivables approximates fair

value at year-end.

Movement in provision for

doubtful debts

Balance at the beginning of the year 39 925 35 827 – –

Acquisition of subsidiaries 358 11 583 – –

Amounts written off during the year, net

of recoveries (3 556) (1 487) – –

Net provision raised (released) during the year 768 (5 998) – –

Balance at the end of the year 37 495 39 925 – –

Trade receivables past due and not impaired

All past due receivable balances have been

assessed for recoverability and it is believed

that their credit quality remains intact. The

ageing of these past due trade receivables

that have not been impaired, is as follows:

60 days 12 731 4 754 – –

90 days 8 687 2 343 – –

More than 120 days 11 866 – – –

Total 33 284 7 097 – –

Trade receivables past due and impaired

60 days 5 408 1 280 – –

90 days 4 958 12 349 – –

More than 120 days 27 129 26 296 – –

Total 37 495 39 925 – –

21. ORDINARY SHARE CAPITAL

Authorised

134 000 000 (2010: 134 000 000)

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

Issued

74 480 555 (2010: 74 480 555)

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






Number of shares Number of shares

2011 2010 2011 2010

‘000 ‘000 ‘000 ‘000

21. ORDINARY SHARE CAPITAL CONTINUED

Unissued shares The unissued ordinary shares are under the control

of the directors in terms of a resolution of the shareholders passed at the last annual general meeting. This authority remains in force until the next annual general meeting. 64 045 63 288 64 045 63 288

At the Company’s annual general meeting held on 29 July 2010, a special resolution was passed giving the directors general authority to repurchase its own shares not exceeding 20% of the issued share capital on the open market. This authority remains in force until the next annual general meeting.

GROUP COMPANY

2011 2010 2011 2010R’000 R’000 R’000 R’000

22. SHARE PREMIUM

The ordinary share premium is made up as follows:

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

23. TREASURY SHARES

4 525 913 (2010: 3 768 261) ordinary shares of 5 cents each (226) (188) – –

Share premium (119 583) (96 382) – –

Balance at the end of the year (119 809) (96 570) – –

24. ORDINARY DIVIDENDS*

Final102 cents paid on 12 July 2010 (2010: 85 cents)

to shareholders registered in the books of theCompany on 9 July 2010 75 971 63 308 75 971 63 308

Interim57 cents paid on 6 December 2010 (2010: 49 cents)

to shareholders registered in the books of theCompany on 3 December 2010 42 454 36 496 42 454 36 496

Dividends received on treasury shares (6 651) (4 966) – –

Total 111 774 94 838 118 425 99 804

* In accordance with IAS10 the final dividend of 126 cents per share (2010: 102 cents) proposed by the directors has not been

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


GROUP COMPANY

2011 2010 2011 2010R’000 R’000 R’000 R’000

25. GUARANTEED REPURCHASE LIABILITY

Present value at the beginning of the year – – – – Acquisition of subsidiary 16 902 – – – Liability raised during the year 1 060 – – – Interest accrued during the year 1 615 – – – Liabilities settled during the year (6 449) – – –

Present value at the end of the year 13 128 – – –

Guaranteed repurchase liability can be analysed as follows:

Not later than one year 3 781 – – – Later than one year and not later than five years 9 347 – – –

13 128 – – –

The Group has entered into repurchase undertakings with financial institutions over certain forklifts sold to customers. The company will repurchase these forklifts from the financial institution at a predetermined value at the end of the customers' rental term with the respective financial institution.

The directors consider that the carrying value of the guaranteed repurchase liability approximates fair value.

26. LONG-TERM BORROWINGS

26.1 Secured borrowingsFinance lease agreements 32 090 27 368 – –The lease agreements are repayable between 36 and 60 months and bear interest at fixed rates between 11% and 13,8% per annum. The leases are repaid in equal monthly instalments. No arrangements have been entered into for contingent rental payments. The borrowings are secured by certain motor vehicles and golf cars as detailed in note 9.2.

Mortgage bonds 143 879 125 620 – –The mortgage bonds are repayable over 120 months. The mortgage bonds attract interest at JIBAR plus 2,05% per annum. The capital on the JIBAR linked bonds are repayable from the third year onwards. The JIBAR linked variable rates bonds have been swapped for fixed rate loans for a period of two years. These bonds are secured by certain land and buildings as referred to in note 9.2.

Balance carried forward 175 969 152 988 – –




GROUP COMPANY

2011 2010 2011 2010R’000 R’000 R’000 R’000

26. LONG-TERM BORROWINGS CONTINUED

26.1 Secured borrowings continued

Balance brought forward 175 969 152 988 – –

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

Serec Capital (Pty) Limited loan 1 867 506 1 686 001 – –The loan bears interest at a compounded quarterly fixed rate of 11,73% per annum. The fixed date of repayment is 15 August 2018. The Group may however elect to repay the loan at an earlier date without premium or penalty. The loan is secured by a credit default swap as referred to in note 13.

26.2 Unsecured borrowings

Other borrowings 16 059 10 857 – –The amounts payable are unsecured, interest-free and no fixed repayment terms have been negotiated. The loans are long-term in nature.

Gryphon Financial Engineering (Pty) Limited 259 604 – – –The amounts payable are unsecured, interest ranges from 8% to 12% and no fixed repayment terms have been set. The loans are long-term in nature.

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

Total borrowings 3 514 238 3 044 946 688 688Less: Current portion of long-term

borrowings disclosed in current liabilities (122 290) (18 056) – –

Total long-term borrowings 3 391 948 3 026 890 688 688




GROUP COMPANY

2011 2010 2011 2010R’000 R’000 R’000 R’000

26. LONG-TERM BORROWINGS CONTINUED

Borrowings are repayable as follows:On demand or within one year 122 290 18 056 – –In second to fifth year inclusive 510 847 145 789 – –After five years 2 881 101 2 881 101 688 688

Total 3 514 238 3 044 946 688 688

There is no limit on the Group’s borrowings and guarantees in terms of the Company’s Articles of Association.

27. FINANCIAL LIABILITIES

Put option/credit default swap derivative 249 230 179 549 – – Interest rate swap derivative 2 589 2 619 – –

251 819 182 168 – –

The fair values of the put option/credit default swap derivative and the interest rate swap derivative were determined by discounting the contractual stream of payments using the zero swap curve at the valuation date.

28. TRADE AND OTHER PAYABLES

Trade payables 833 602 561 786 – –Other payables 247 036 373 007 2 647 2 431Deferred income 30 849 12 984 – –

Total 1 111 487 947 777 2 647 2 431

29. PROVISIONS

Employee benefit provisions 68 014 42 885 – – Warranties and service provisions 25 223 29 686 – –

Total 93 237 72 571 – –

Movements in provisionsEmployee benefit provisionsBalance at the beginning of the year 42 885 86 439 – –Charged (credited) to income 24 532 (46 024) – –Acquisition of subsidiaries 597 2 470 – –


Warranties and service provisionsBalance at the beginning of the year 29 686 16 971 – –(Credited) charged to income (4 463) 10 884 – –Acquisition of subsidiaries – 1 831 – –


The provision has been recognised for expected warranty claims on certain products sold during the last

three financial years.






GROUP COMPANY

2011 2010 2011 2010R’000 R’000 R’000 R’000

30. LOAN FROM SUBSIDIARY

Humulani Marketing (Pty) Limited – – 420 218 344

Total – – 420 218 344

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

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

Profit before taxation 451 254 429 544 180 885 147 013Adjusted for:Depreciation 79 059 30 215 – – Amortisation of intangible assets 2 230 2 141 – –Impairment of property, plant and equipment (4 271) 190 – –Interest rate swap gain (30) (1 303) – –Net profit on disposal of property, plant

and equipment (117) (3 732) – –Finance costs 545 242 432 886 13 2Dividends received (312 727) (210 056) (180 718) (146 034)Share of profits of associate (871) (639) – –Interest received (177 405) (198 442) (175) (23)Negative goodwill on acquisition of subsidiaries – (7 952) – –Goodwill impairment – 3 442 – –Currency translation of foreign operations (833) (7 649) – –Revaluation reserve reversed on liquidation of

Group company – (3 169) – –Share appreciation rights exercised (70 506) – – –Share appreciation rights charge 19 226 22 045 – –

Cash generated before movements in working capital 530 251 487 521 5 958

Working capital changes: 96 296 102 705 69 (147)

(Increase) decrease in inventories (67 256) 391 825 – –Decrease (increase) in trade and other receivables 23 529 60 925 (147) (138)Increase (decrease) in trade and other payables

and provisions 140 023 (350 045) 216 (9)

Cash generated from operations 626 547 590 226 74 811

32. DIVIDENDS PAID TO GROUP SHAREHOLDERS

Amounts unpaid at the beginning of the year 2 967 565 639 565Final dividend paid 2 July 2010 (2010: 13 July 2009) 75 971 63 308 75 971 63 308Interim dividend paid 6 December 2010

(2010: 7 December 2009) 42 454 36 496 42 454 36 496Dividends received on treasury shares (6 651) (4 966) – –

Amounts unpaid at the end of the year (7 062) (2 967) (737) (639)

Total 107 679 92 436 118 327 99 730




GROUP COMPANY

2011 2010 2011 2010R’000 R’000 R’000 R’000

33. TAXATION PAID (REFUNDED)

Amounts unpaid (prepaid) at the

beginning of the year 13 014 (35 405) 665 34

Acquisition of subsidiary 1 416 – – –

Charged to the statement of

comprehensive income 32 849 73 748 668 368

Amounts prepaid (unpaid) at the end of the year 1 098 (13 014) (690) (665)

Total 48 377 25 329 643 (263)

34. CASH AND CASH EQUIVALENTS

Bank and cash balances 432 403 260 553 9 717 12 681

Bank overdrafts and bankers’ acceptances (23 747) (45 846) – –

Total 408 656 214 707 9 717 12 681

GROUP

Bank Trading

R’000 R’000

Banking and trading facilities

Gross facility balances 289 964 2 117 367

Facilities utilised (14 125) (963 873)

Facilities available 275 839 1 153 494

These facilities are callable on notice being given by the facility provider.

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

months.

35. CONTINGENT LIABILITIES

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

finance facilities guaranteed were R252 443 (2010: R313 233).




36. DIRECTORS’ EMOLUMENTS

Share

Share appre-

appreciation

ciation rights

Audit rights exercised –

and exercised – amount

Remu- amount recog-

neration Salary Retire- included nised in Total

Directors’ Committee and ment in retained emolu-

fees fees benefits benefits reserve earnings Bonus ments

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

2011

Executive directors

C Barnard – – 1 471 222 1 843 4 196 1 400 9 132

A Goldstone – – 2 044 255 9 660 7 345 2 000 21 304

AM Sinclair – – 2 239 160 1 818 3 737 1 500 9 454

CE Walters – – 2 523 227 948 2 613 1 500 7 811

– – 8 277 864 14 269 17 891 6 400 47 701

Non-executive directors

CH Wiese 665 22 – – – – – 687

JS Mthimunye 125 88 – – – – – 213

DI Samuels 348 286 – – – – – 634

JD Wiese 69 – – – – – – 69

LR Sherrell 69 22 – – – – – 91

AK Masuku 10 – – – – – – 10

1 286 418 – – – – – 1 704

Total 1 286 418 8 277 864 14 269 17 891 6 400 49 405

Audit and

Remuneration Salary Retire- Total

Directors’ Committee and ment emolu-

fees fees benefits benefits Bonus ments

R’000 R’000 R’000 R’000 R’000 R’000

2010

Executive directors

C Barnard – – 1 099 170 1 200 2 469

A Goldstone – – 1 400 201 5 000 6 601

AM Sinclair – – 1 656 103 470 2 229

CE Walters – – 1 871 166 498 2 535

– – 6 026 640 7 168 13 834

Non-executive directors

CH Wiese 635 22 – – – 657

J Mthimunye 84 80 – – – 164

DI Samuels 332 262 – – – 594

LR Sherrell 63 – – – – 63

1 114 364 – – – 1 478

Total 1 114 364 6 026 640 7 168 15 312




36. DIRECTORS’ EMOLUMENTS CONTINUED

With effect from 31 March 2010, a portion of the cumulative total of the bonuses paid to the directors have

been deducted from the benefit accrued to the directors under the long-term bonus share incentive right

scheme. The cumulative portion of the bonuses that was deducted in the previous year from the benefits

accrued, are reflected below:

Cumulativetotal of

bonus paidto date

R

C Barnard 480 000A Goldstone 14 984 900AM Sinclair 1 200 000CE Walters 1 297 200

Weightedaverage

Number of Number of cost ofTotal number grants grants grants

of grants exercised awarded awardedShare appreciation awarded in the in the in the Grantrights awarded to date current year current year current year date

2011A Goldstone 2 150 000 2 000 000 150 000 5,87 2 March 2010AM Sinclair 1 110 000 419 375 130 000 5,87 2 March 2010C Barnard 975 000 404 000 125 000 5,87 2 March 2010CE Walters 1 380 000 200 000 130 000 5,87 2 March 2010

2010A Goldstone 4 000 000 – 1 000 000 4,44 13 March 2009AM Sinclair 1 399 375 – 300 000 4,44 13 March 2009C Barnard 1 254 000 – 400 000 4,44 13 March 2009CE Walters 1 450 000 – 300 000 4,44 13 March 2009




GROUP COMPANY

2011 2010 2011 2010R’000 R’000 R’000 R’000

37. RETIREMENT BENEFITS

The Group contributes to a defined contribution

pension plan and a defined contribution provident

plan which are governed by the Pension Funds Act,

1956. No actuarial valuation of the plans is required.

All staff are members of a fund and the costs of

providing retirement benefits are charged to the

statement of comprehensive income as they are

incurred. Refer to note 4 for contributions made

to retirement funds during the year.

38. COMMITMENTS

Commitments in respect of unexpired

rental agreements for premises:

– Payable within twelve months 50 300 30 861 – 54

– Payable thereafter 54 989 43 618 – –

Total 105 289 74 479 – 54

Commitments in respect of unexpired rental

agreements for motor vehicles:

– Payable within twelve months 11 847 12 624 – –

– Payable thereafter 18 809 14 904 – –

Total 30 656 27 528 – –

Commitments in respect of unexpired rental

agreements for office equipment:

– Payable within twelve months 76 231 – –

– Payable thereafter 145 113 – –

Total 221 344 – –

Commitments in respect of contracted

capital expenditure 7 121 988 – –

Expenditure will be financed from existing cash facilities.




39. FINANCIAL RISK MANAGEMENT

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

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

Redemption Interest 2011 2010Description Currency period rate % p.a. R’000 R’000

Bank overdrafts ZAR N/A 8,25 – 10,50 23 747 45 846Fixed rate borrowings ZAR 2006 – 2018 11,00 – 13,80 3 242 308 2 893 217Variable rate borrowings ZAR 2009 – 2020 8,50 – 14,10 149 640 133 673

The Group is exposed to interest rate risk on its variable rate borrowings. The exposure to interest rate risk is managed using derivatives, where it is considered appropriate, and through a closely monitored cash management system. The impact of a change in the interest rate of 2% will have an effect of approximately R3 million (2010: R3 million) on the statement of comprehensive income.

Credit risk managementPotential areas of credit risk consist of trade accounts receivable and short-term cash investments. Tradeaccounts receivable consist of a widespread customer base. Group companies monitor the financial positionof their customers on an ongoing basis. Where considered appropriate, use is made of credit guaranteeinsurance. The granting of credit is controlled by application and account limits. Provision is made for specific bad debts and at the year-end management did not consider there to be any material credit riskexposure that was not already covered by credit guarantee or a bad debt provision (refer to note 20 for further detail in this regard). It is Group policy to deposit short-term cash investments with only the majorbanks and financial institutions.

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

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

Less than 2 to 5 More than

1 year years 5 years Total

R’000 R’000 R’000 R’000

2011

Mortgage bonds 10 298 65 103 68 478 143 879

Serec Capital loan – – 1 867 506 1 867 506

Debentures 97 998 1 097 102 – 1 195 100

Finance lease liabilities and unsecured borrowings 13 994 18 096 – 32 090

Guaranteed repurchase liability 3 781 9 347 – 13 128

Trade and other payables 1 111 487 – – 1 111 487

1 237 558 1 189 648 1 935 984 4 363 190

2010

Mortgage bonds 2 804 65 815 57 001 125 620

Serec Capital loan – – 1 686 001 1 686 001

Debentures – 566 477 628 623 1 195 100

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

Trade and other payables 947 777 – – 947 777

965 833 641 028 2 375 005 3 981 866




39. FINANCIAL RISK MANAGEMENT CONTINUED

Foreign currency risk management

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

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

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

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

forward exchange contracts in various currencies which will be utilised for settlement of orders placed on

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

foreign exchange contracts.

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

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

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

methodologies.

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

The forward exchange contracts in place at the year-end to cover current and future inventory purchases,

are as follows:

Foreign Average

currency exchange Rand

’000 rate ’000

2011

US Dollar 63 637 6,8600 436 550

Euro 224 389 0,9697 217 590

Yen 1 091 990 12,0662 90 500

Australian Dollar 19 6,9474 132

Singapore Dollar 13 5,4615 71

British Pound 289 10,9446 3 163

Swiss Franc 125 7,4240 928

Swedish Krona 452 1,0619 480

2010

US Dollar 40 490 7,6181 308 457

Euro 20 188 10,8838 219 722

Yen 786 602 11,6117 67 742

Australian Dollar 19 5,6842 108

Singapore Dollar 327 1,0734 351

British Pound 112 11,8036 1 322

Swiss Franc 17 7,5882 129

The forward exchange contracts mature within twelve months.

Capital risk management

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

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

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

credit default swap and equity. Capital risk was reviewed in detail by the Board in the corporate restructure

process and assessment of new acquisitions.





Financial instrumentsFinancial instruments as disclosed in the statement of financial position include trade receivables andpayables, other receivables and payables, long-term debtors, overdrafts and short-term borrowings, long-term borrowings and shareholders for dividend.

GROUP

2011 2010R’000 R’000

Categories of financial instrumentsFinancial assetsInvestments at cost or fair valueFinancial investments 3 061 482 2 880 087

Financial assets at fair valueFinancial asset 249 230 179 549

Loans and receivables at amortised costFinance lease receivable 732 –Long-term loans 262 193 6 721Trade and other receivables 691 768 667 612Bank balances and cash 432 403 260 553

4 697 808 3 994 522

Financial liabilitiesFinancial liabilities at fair valueFinancial liabilities 251 819 182 168

Financial liabilities at amortised costBorrowings 3 514 238 3 044 946Guaranteed repurchase liability 13 128 –Trade and other payables 1 080 638 947 777Bank overdrafts and bankers’ acceptances 23 747 45 846

4 883 570 4 220 737

Fair value disclosureThe following is an analysis of the financial instruments that are measured subsequent to initial recognitionat fair value. They are grouped into levels 1 to 3 based on the extent to which the fair value is observable.

The levels are classified as follows:Level 1 – fair value is based on quoted prices in active markets for identical financial assets or liabilitiesLevel 2 – fair value is determined using directly observable inputs other than Level 1 inputsLevel 3 – fair value is determined on inputs not based on observable market data

31 March

2011 Level 1 Level 2 Level 3

Financial assets at fair value

Financial asset 249 230 – 249 230 –

Financial liabilities at fair value

Financial liabilities 251 819 – 251 819 –

Trade and other payables 544 019 – 544 019 –





31 March

2010 Level 1 Level 2 Level 3

Financial assets at fair value

Financial asset 179 549 – 179 549 –

Financial liabilities at fair value

Financial liabilities 182 168 – 182 168 –

Trade and other payables 382 378 – 382 378 –

40. DIRECTORS’ INTERESTS IN THE SHARES OF THE COMPANY

Number of shares held

2011 2010

Direct Indirect Direct Indirect

interest interest interest interest

C Barnard 147 439 72 438 100 000 25 000

A Goldstone 138 966 3 619 401 588 966 3 749 008

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

LR Sherrell – 9 427 788 – –

RE Sherrell – – 3 760 018 6 253 400

AM Sinclair 137 000 – 137 000 –

CE Walters 297 500 – 300 000 –

CH Wiese – 25 480 590 – 25 113 992

41. RELATED PARTY TRANSACTIONS

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

received from subsidiaries of R132 million (2010: R97 million).

Remuneration of key management personnel

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

is set out below:

GROUP

2011 2010R’000 R’000

Short-term employee benefits 53 798 33 521

Retirement benefits 1 290 1 279

55 088 34 800

Services provided by Bravura Equity Services (“Bravura”)

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

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

investments and borrowings (refer notes 10 and 26 respectively). During the current and prior year, Bravura

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

derivative instruments (refer notes 10 and 13) and borrowings (refer notes 26 and 27).




42. ACQUISITION OF SUBSIDIARIES

The significant acquisitions included the following:

• 70% of the share capital of Wegezi Power Holdings (Pty) Limited, effective 1 April 2010.• 51% of the share capital of Trendy Property Investments (Pty) Limited, effective 1 April 2010.• 70% of the share capital of Turnkey Hydraulics KZN (Pty) Limited, effective 1 April 2010.• 100% of the share capital of Hi-Quip Hydraulics (Pty) Limited, effective 1 September 2010.• 70% of the share capital of Edmik Engineering (Pty) Limited, effective 1 November 2010.• 80% of the share capital of Smart Taps (Pty) Limited, effective 1 June 2010.

GROUP

2011 2010R’000 R’000

Fair value of net assets acquired:

Property, plant and equipment 22 693 48 091Re-acquired rights 48 047 –Bank and cash (4 512) –Other assets 72 814 77 398Deferred taxation 312 2 069Long-term borrowings (6 874) (15 658)Other liabilities (52 293) (75 828)Non-controlling interest (11 043) (1 510)

Net asset value 69 144 34 562Non-controlling interest acquired in existing subsidiary 1 647 –

Fair value of net assets acquired 70 791 34 562Bank and cash 4 512 –

Net fair value of net assets acquired 75 303 34 562

Cash outflow on acquisitions 134 646 32 964Fair value of net assets acquired (75 303) (34 562)

Net goodwill 59 343 (1 598)

Positive goodwill 59 343 6 354Negative goodwill – (7 952)

Profit after tax since acquisition date included in the consolidated results for the year 26 706 10 350

Revenue since acquisition date included in the consolidated results for the year 297 420 202 506

Profit (loss) after tax should the business combinations have been included for the entire year 21 602 (33 270)

Revenue should the business combinations have been included for the entire year 328 876 189 865

43. EVENTS AFTER THE REPORTING PERIODTheramanzi Investments (Pty) Limited (“Trust Subsidiary”) (a 100% held subsidiary of the Humulani

Empowerment Trust (“Trust”), and aloeCap (Pty) Limited (“aloeCap”) entered into an agreement effective

1 June 2011, in terms of which the Trust Subsidiary, acquired aloeCap's 20% equity stake in Humulani

Investments (Pty) Limited.


SHARE INFORMATIONas at 31 March 2011

SHAREHOLDER SPREAD

Number of Number

shareholding % of shares %

1 – 1 000 shares 1 113 55,65 393 232 0,53

1 001 – 10 000 shares 640 32,00 2 320 087 3,11

10 001 – 100 000 shares 175 8,75 5 332 600 7,16

100 001 – 1 000 000 shares 59 2,95 17 316 481 23,25

1 000 001 shares and over 13 0,65 49 118 155 65,95

2 000 100,00 74 480 555 100,00

DISTRIBUTION OF SHAREHOLDERS

Banks 12 0,60 1 911 592 2,57

Close corporations 38 1,90 138 530 0,19

Endowment funds 8 0,40 411 591 0,55

Individuals 1 531 76,55 13 005 566 17,46

Insurance companies 9 0,45 864 359 1,16

Investment companies 11 0,55 3 907 321 5,24

Medical aid schemes 4 0,20 37 216 0,05

Mutual funds 69 3,45 9 958 389 13,37

Nominees and trusts 194 9,70 23 934 078 32,13

Other corporations 9 0,45 96 850 0,13

Own holdings 3 0,15 4 460 140 5,99

Private companies 48 2,40 12 517 764 16,81

Public companies 4 0,20 1 086 390 1,46

Retirement funds 60 3,00 2 150 769 2,89

2 000 100,00 74 480 555 100,00

PUBLIC AND NON-PUBLIC SHAREHOLDERS

Public shareholders 1 974 98,70 26 126 018 35,08

Non-public shareholders 26 1,30 48 354 537 64,92

Directors and associates of the Company holdings 23 1,15 43 894 397 58,93

Treasury stock 3 0,15 4 460 140 5,99

2 000 100,00 74 480 555 100,00

Beneficial shareholders holding 5% or more

Titan Shareholders 15 433 590 20,72

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

The Sherrell Family Trust 6 253 400 8,40

31 713 990 42,58

JSE LIMITED STATISTICS

2011 2010

Ordinary shares

Traded 12 798 911 10 127 369

High (cents) 4 525 2 900

Low (cents) 2 200 2 000

Market price at year-end (cents) 4 350 2 879


Financial year-end 31 March 2011

Declaration of final dividend 31 May 2011

Publication of financial results for the year 1 June 2011

Last day to trade “CUM” dividend 1 July 2011

Trading “EX” dividend commences 4 July 2011

Record date 8 July 2011

Dividends payable 11 July 2011

Annual report posted to shareholders 30 June 2011

Annual general meeting 29 July 2011

Publication of interim results November 2011

SHAREHOLDERS’ DIARY


CORPORATE INFORMATION

Company registration number

1966/002182/06

Nature of business

Investment holding and management company

Secretary

C Barnard

PO Box 851, Isando, 1600

Business address

3rd Floor, Pepkor House, 36 Stellenberg Road

Parow Industria, 7493

Postal address

PO Box 6077, Parow East, 7501

Auditors

Deloitte & Touche

Registered Auditors

Deloitte & Touche Place, The Woodlands

Woodlands Drive, Woodmead, Sandton, 2196

Private Bag X6, Gallo Manor, 2052

Share transfer secretaries

Computershare Investor Services (Pty) Limited

Ground Floor, 70 Marshall Street, Johannesburg, 2001

PO Box 61051, Johannesburg, 2107

Sponsors

Deloitte & Touche Sponsor Services (Pty) Limited

Deloitte & Touche Place, The Woodlands

Woodlands Drive, Woodmead, Sandton, 2196

Private Bag X6, Gallo Manor, 2052

Bankers

Standard Bank of South Africa Limited

Absa Bank Limited

First National Bank (A division of FirstRand

Bank Limited)

Nedbank Limited

Citibank

HSBC Africa

Attorneys

Bernadt, Vukic, Potash and Getz

10th Floor, BP Centre, Thibault Square,

Cape Town, 8001

PO Box 252, Cape Town, 8000

Website

www.invictaholdings.co.za

Audit Committee

DI Samuels – Chairman

JS Mthimunye

LR Sherrell


Risk Committee

DI Samuels – Chairman

JS Mthimunye

LR Sherrell


Remuneration Committee

Dr CH Wiese – Chairman

DI Samuels

A Goldstone (ex officio)


NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

Invicta Holdings Limited

(Registration number 1966/002182/06)

(Incorporated in the Republic of South Africa)

Share code: IVT • ISIN: ZAE000029773

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

NOTICE OF ANNUAL GENERAL MEETINGOF SHAREHOLDERS FOR THE YEAR ENDED 31 MARCH 2011

Notice is hereby given that the annual general

meeting of shareholders of Invicta Holdings Limited

will be held in the boardroom, Invicta Holdings

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

Parow Industria, Cape Town on Friday, 29 July 2011 at

12:00 for the following purposes:

The record date on which members must be recorded

as such in the register maintained by the transfer

secretaries of the Company for the purposes of being

entitled to attend and vote at the meeting is 20 July

2011.

All meeting participants will be required to provide

identification reasonably satisfactory to the chairman

of the meeting.

The purpose of the meeting is to transact the business

set out below and to consider and, if deemed fit, to

pass, with or without modification, the resolutions set

out below:

Special Resolution 1

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

amendment, the following resolution as a special

resolution:

“RESOLVED THAT, the Company and/or any subsidiary

of the Company be and is hereby authorised by way of

a general approval as contemplated in section 48 of

the Companies Act 71 of 2008, as amended (“Act”), to

acquire from time to time any of the issued ordinary

shares of the Company, upon such terms and

conditions and in such amounts as the directors of the

Company may from time to time determine, but

subject to the Memorandum of Incorporation of the

Company, the provisions of the Act and the Listings

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

applicable, and provided that:

• the repurchase of securities will be effected

through the order book operated by the JSE

trading system and done without any prior

understanding or arrangement between the

Company and the counterparty;

• this general authority shall only be valid until the

Company’s next annual general meeting, provided

that it shall not extend beyond 15 (fifteen) months

from the date of passing of this special resolution;

• in determining the price at which the Company’s

ordinary shares are acquired by the Company in

terms of this general authority, the maximum

premium at which such ordinary shares may be

acquired will be 10% (ten percent) of the

weighted average of the market price at which

such ordinary shares are traded on the JSE, as

determined over the 5 (five) trading days

immediately preceding the date of the repurchase

of such ordinary shares by the Company;

• the acquisitions of ordinary shares in the

aggregate in any one financial year do not exceed

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

ordinary share capital from the date of the grant

of this general authority;

• the Company and the Group are in a position to

repay their debt in the ordinary course of business

for the following year;

• the consolidated assets of the Company, being

fairly valued in accordance with International

Financial Reporting Standards, are in excess of the

consolidated liabilities of the Company for the

following year;

• the ordinary capital and reserves of the Company

and the Group are adequate for the next 12

(twelve) months;

• the available working capital is adequate to

continue the operations of the Company and the

Group in the following year;

• upon entering the market to proceed with the

repurchase, the Company’s sponsor has complied

with its responsibilities contained in section 2.12

and schedule 25 of the JSE Listings Requirements;

• after such repurchase the Company will still

comply with paragraphs 3.37 to 3.41 of the JSE

Listings Requirements concerning shareholder

spread requirements;

• the Company or its subsidiaries will not repurchase

securities during a prohibited period as defined in

paragraph 3.67 of the JSE Listings Requirements;

• when the Company has cumulatively repurchased

3% of the initial number of the relevant class of

securities, and for each 3% (three percent) in


aggregate of the initial number of that class

acquired thereafter, an announcement will be

made; and

• the Company only appoints one agent to effect

any repurchase(s) on its behalf.”

Other disclosure in terms of the JSE Listings

Requirements sections 11.26 and 11.23, required for

special resolutions 1 and 2.

Additional disclosure in terms of the JSE Listing

Requirements section 11.26

The JSE Listings Requirements require the following

disclosure, some of which are elsewhere in the annual

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

– Directors and management – pages 4 and 5 ;

– Major beneficial shareholders – page 87;

– Directors’ interests in ordinary shares – page 85; and

– Share capital of the Company – pages 72 and 73.

Litigation statement

In terms of section 11.26 of the JSE Listings

Requirements, the directors, whose names are given

on pages 4 and 5 of the annual report of which this

notice forms part, are not aware of any legal or

arbitration proceedings, including proceedings that

are pending or threatened, that may have or have had

in the recent past, being at least the previous 12

(twelve) months, a material effect on the Group’s

financial position.

Directors’ responsibility statement

The directors, whose names are given on pages 4 and

5 of the annual report, collectively and individually

accept full responsibility for the accuracy of the

information pertaining to this special resolution and

certify that to the best of their knowledge and belief

there are no facts that have been omitted which

would make any statement false or misleading, and

that all reasonable enquiries to ascertain such facts

have been made and that these special resolutions

contain all information required by law and the JSE

Listings Requirements.

Material changes

Other than the facts and developments reported on in

the annual report, there have been no material

changes in the affairs or financial position of the

Company and its subsidiaries since the date of

signature of the audit report and the date of this

notice.

Reason and effect

The reason for and the effect of the special resolution

is to grant to the Company a general approval in terms

of the Companies Act for the acquisition by the

Company of its own shares, which general approval

shall be valid until the earlier of the next annual

general meeting of the Company or the variation or

revocation of such general authority by special

resolution by a subsequent general meeting of the

Company, provided that the general authority shall

not extend beyond 15 (fifteen) months from the date

of this special resolution.

Statement of board's intention

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

definite intention of repurchasing shares in Invicta on

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

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

Invicta, that shareholders pass a special resolution

granting the Company a general authority to acquire

its own shares and permit subsidiary companies of

Invicta to acquire shares in the Company.

Pursuant to a general repurchase other than shares

repurchased by one or more of the subsidiary

companies to be held as treasury stock, application will

be made to the JSE for the cancellation and delisting

of the shares in question. The cancellation of the

shares will be effected by way of a reduction of the

ordinary share capital and a reduction of the ordinary

share premium.

Statement of directors

As at the date of this report, the Company's directors

undertake that they will not implement any such

repurchase (as contemplated in special resolution

number 1) unless for a period of 12 (twelve) months

following the date of the general repurchase:

a. the Company and the Group are in a position to

repay their debts in the ordinary course of

business;

b. the assets of the Company and the Group, being



liabilities of the Company and the Group;

c. the share capital and reserves of the Company and

the Group are adequate for ordinary business

purposes;

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERScontinued


d. the available working capital is adequate to

continue the ordinary business purposes of the

Company and the Group; and

e. upon entering the market to proceed with the

repurchase, the Company's sponsor has confirmed

the adequacy of the Company's and the Group's

working capital for the purposes of understanding

a repurchase of shares in writing to the JSE.




resolution:

“RESOLVED THAT, the Company be and is hereby

authorised by way of a specific approval as

contemplated in section 48 of the Act, to acquire from

time to time any or all of the issued ordinary shares of

the Company, held by Humulani Marketing (Pty)

Limited, upon such terms and conditions and in such

amounts as the directors of the Company may from

time to time determine, but subject to the

Memorandum of Incorporation of the Company and

the provisions of the Act, when applicable and

provided that:

• this specific authority shall only be valid until the

Company’s next annual general meeting, provided

that it shall not extend beyond 15 (fifteen) months

from the date of passing of this special resolution;

• the repurchase price not be lower than the cost to

the subsidiary of acquiring the shares and will not

be more than 20% (twenty percent) higher than

the weighted average price (R26,47) at which the

shares were acquired;

• the maximum number of shares that are to be

repurchased not to exceed 4 525 913;

• the Company and the Group are in a position to

repay their debt in the ordinary course of business

for the following year;

• the consolidated assets of the Company, being



consolidated liabilities of the Company for the

following year;

• the ordinary capital and reserves of the Company

and the Group are adequate for the next twelve

months; and

• the available working capital is adequate to

continue the operations of the Company and the

Group in the following year.

The shares which the Company wishes to obtain

specific authority to repurchase are treasury shares

held at subsidiary level, which are currently eliminated

on consolidation and are thus treated as cancelled

from a financial reporting perspective to shareholders

and any internal repurchase will therefore have no

financial effect.

Once shares have been repurchased in terms of this

authority, these shares will be cancelled.

Reason and effect

In terms of the Company’s specific authority to

repurchase shares granted at all the annual general

meetings held for each year ended since 31 March

2000 onwards, Invicta, through its wholly-owned

subsidiary Humulani Marketing (Pty) Limited has over

the years purchased 4 525 913 shares in the Company

which were held as “treasury shares”.

Source of funding for the repurchase will be from

within the Group.

The effect of the special resolution and the reason

therefore is to grant directors of the Company a

specific authority in terms of the Act, as amended, for

the acquisition by Invicta of 4 525 913 Invicta shares

held by the Company’s wholly-owned subsidiary,

Humulani Marketing (Pty) Limited.

Statement of directors

As at the date of this report, the Company's directors

undertake that they will not implement any such

repurchase (as contemplated in special resolution

number 2) unless for a period of 12 (twelve) months

following the date of any such repurchase:

a. the Company and the Group are in a position to

repay their debts in the ordinary course of

business;

b. the assets of the Company and the Group, being



liabilities of the Company and the Group;

c. the share capital and reserves of the Company and

the Group are adequate for ordinary business

purposes;




d. the available working capital is adequate to

continue the ordinary business purposes of the

Company and the Group;

e. upon entering the market to proceed with the

repurchase, the Company’s sponsor has confirmed

the adequacy of the Company’s and the Group’s

working capital for the purposes of understanding

a repurchase of shares in writing to the JSE; and

f. the Company and the Group has complied with

the applicable provisions of the Act and the JSE

Listings Requirements.

For the purpose of the JSE Listings Requirements in

respect of Special Resolution 2, the directors’ business

address and percentage shareholding of net shares in

issue are as follows:

3rd floor, Pepkor House, 36 Stellenberg Road, Parow

Industria, 7493

C Barnard 0,31%

A Goldstone 5,37%

DI Samuels 6,86%

LR Sherrell 13,48%

AM Sinclair 0,20%

CE Walters 0,43%

CH Wiese 36,42%




resolution:

"RESOLVED THAT the remuneration of each non-

executive director of the Company be approved, each

by way of a separate vote, as a special resolution in

terms of section 66 of the Act, for the 2012 financial

year as follows:

3.1 Chairman of the

Invicta Board R550 000 per annum

3.2 Chairman of the

BMG Board R200 000 per annum

3.3 Chairman of the

Audit Committee R55 000 per annum

3.4 Members of the

Invicta Board R23 000 per meeting

3.5 Members of the

BMG Board R11 000 per meeting

3.6 Members of the

Humulani Board R10 000 per meeting

3.7 Members of the

Audit Committee R22 000 per meeting

3.8 Members of

Remuneration Committee R22 000 per annum

Reason and effect

The reason for and effect of special resolution

numbers 3.1 to 3.8 is to grant the Company the

authority to pay fees to its non-executive directors for

their services as directors, in line with the

recommendations of the King Code of Governance for

South Africa 2009 (“King III”) and the Act.


“RESOLVED THAT the directors, in terms of and subject

to the provisions of section 45 of the Act, be

authorised to cause the Company to provide financial

assistance to any company or corporation which is

related or inter-related to the Company.”

Reason and effect

The reason for and effect of special resolution number

4 is to grant the directors of the Company the

authority to cause the Company to provide financial

assistance to any company or corporation which is a

consolidated entity of the Company. It does not

authorise the provision of financial assistance to a

director or prescribed officer of the Company.


“RESOLVED THAT the directors’ remuneration for the

year, which are set out in note 36 on pages 79 and 80

of the 2011 Annual Report be approved.”

Reason and effect

The reason for and effect of special resolution 5 is to

approve the remuneration to be paid to the

directors of the Company for their services as directors

as required by section 66(9) of the Companies Act.

Ordinary Resolution 1

To receive and consider the annual financial

statements and the Group annual financial statements

for the year ended 31 March 2011.

Ordinary Resolution 2.1 to 2.4

To re-elect, each by way of a separate vote, the

following directors who retire by rotation at the

Annual General Meeting, but being eligible, offer

themselves for re-election:



2.1 Dr CH Wiese

2.2 JS Mthimunye

2.3 DI Samuels

2.4 CE Walters

Abbreviated biographical details of the above

directors are set out on pages 4 and 5 of this annual

report.


“RESOLVED THAT shareholders endorse, through a

non-binding advisory vote required by King III to

ascertain the shareholder’s view on the Company’s

remuneration policy and its implementation. The

Company’s remuneration report is set out on pages 30

to 33 of this annual report.”


“RESOLVED THAT the authorised but unissued shares

in the capital of the Company be and are hereby

placed under the control and authority of the directors

of the Company and that the directors of the

Company be and are hereby authorised and

empowered to allot, issue and otherwise dispose of

such shares to such person or persons on such terms

and conditions and at such times as the directors of

the Company may from time to time and in their

discretion deem fit, subject to the provisions of the

Act, the Memorandum of Incorporation of the

Company and the JSE Listings Requirements, when

applicable, such authority to remain in force until the

next annual general meeting.”


“RESOLVED THAT the directors of the Company be and

they are hereby authorised by way of a general

authority, to issue all or any of the authorised but

unissued shares in the capital of the Company, for

cash, as and when they in their discretion deem fit,

subject to the Act, the Memorandum of Incorporation

of the Company, the Listings Requirements of the JSE,

when applicable, and the following limitations,

namely that:

• the equity securities which are the subject of the

issue for cash must be of a class already in issue, or

where this is not the case, must be limited to such

securities or rights that are convertible into a class

already in issue;

• any such issue will only be made to “public

shareholders” as defined in the JSE Listings

Requirements and not related parties, unless the

JSE otherwise agrees;

• the number of shares issued for cash shall not in

the aggregate in any one financial year exceed

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

share capital of ordinary shares. The number of

ordinary shares which may be issued shall be based

on the number of ordinary shares in issue, added

to those that may be issued in future (arising from

the conversion of options/convertibles) at the date

of such application, less any ordinary shares issued,

or to be issued in future arising from options/

convertible ordinary shares issued during the

current financial year, plus any ordinary shares to

be issued pursuant to a rights issue which has been

announced, is irrevocable and fully underwritten,

or an acquisition which has had final terms

announced;

• this authority be valid until the Company’s next

annual general meeting, provided that it shall not

extend beyond 15 (fifteen) months from the date

that this authority is given;

• a paid press announcement giving full details,

including the impact on the net asset value and

earnings per share, will be published at the time of

any issue representing, on a cumulative basis

within 1 (one) financial year, 5% (five percent) or

more of the number of shares in issue prior to the

issue; and

• in determining the price at which an issue of

shares may be made in terms of this authority, the

maximum discount permitted will be 10% (ten

percent) of the weighted average traded price on

the JSE of those shares over the 30 (thirty) business

days prior to the date that the price of the issue is

determined or agreed by the directors of the

Company.”

In terms of the JSE Listings Requirements, 75%

(seventy-five percent) of the votes cast by shareholders

present or represented by proxy at the annual general

meeting must be cast in favour of ordinary resolution

5 for it to be approved.


“RESOLVED THAT the reappointment of Deloitte &

Touche, Registered Auditors, as independent auditors

of the Company and to appoint SBF Carter as the

designated audit partner for the following year be

confirmed.”



Ordinary Resolution 7.1 to 7.4

“RESOLVED THAT, subject to the passing of ordinary

resolutions 2.2 and 2.3, the following independent

non-executive directors be elected, each by way of a

separate vote, as members of the Audit Committee of

the Company for the period from 1 April 2011 until

the conclusion of the next annual general meeting of

the Company in July 2012:

7.1 DI Samuels (Chairman)

7.2 JS Mthimunye

7.3 LR Sherrell

7.4 JD Wiese (alternate to LR Sherrell and JS

Mthimunye)

Abbreviated biographical details of the above

directors are set out on pages 4 and 5 of this annual

report.”


“RESOLVED THAT, as an ordinary resolution in terms of

the Listing Requirements of the JSE, the Invicta

Holdings Limited Long-Term Bonus and Share

Incentive Right Scheme 2006, as amended, and as

approved by the JSE, in order to ensure compliance

with schedule 14 of the Listing Requirements of the

JSE, be adopted by the Company.”

In terms of the JSE Listings Requirements, 75%

(seventy-five percent) of the votes cast by shareholders

present or represented by proxy at the annual general

meeting (excluding all votes attaching to all equity

securities owned or controlled by persons who are

participants in the Scheme and may be impacted by

the changes) must be cast in favour of ordinary

resolution 8 for it to be approved.

The Invicta Holdings Limited Long-Term Bonus and

Share Incentive Right Scheme 2006 will be available

for inspection by the shareholders during normal

business hours at the Company’s registered office and

the office of the Company’s transfer secretaries

commencing on 1 July 2011.

Reason

The reason for ordinary resolution 8 Invicta Holdings

Limited Long-Term Bonus and Share Incentive Right

Scheme 2006 is to ensure compliance with Schedule 14

of the JSE Listings Requirements.

Voting instructions

In terms of the Act, any member entitled to attend

and vote at the above meeting may appoint one or

more persons as proxy, to attend and speak and vote

in his stead. A proxy need not be a member of the

Company. Forms of proxy must be deposited at the

office of the transfer secretaries not later than 48

hours before the time fixed for the meeting (excluding

Saturdays, Sundays and public holidays).

If your Invicta shares have been dematerialised and

are held in a nominee account, then your Central

Securities Depository Participant (“CSDP”) or broker, as

the case may be, should contact you to ascertain how

you wish to cast your vote at the annual general

meeting and thereafter cast your vote in accordance

with your instructions.

If you have not been contacted it would be advisable

for you to contact your CSDP or broker, as the case

may be, and furnish them with your instructions. If

your CSDP or broker, as the case may be, does not

obtain instructions from you, they will be obliged to

act in terms of your mandate furnished to them, or if

the mandate is silent in this regard to abstain from

voting.

Dematerialised shareholders whose shares are held in

a nominee account must not complete the attached

form of proxy.

Unless you advise your CSDP or broker timeously in

terms of the agreement between yourself and your

CSDP or broker by the cut-off time advised by them

that you wish to attend the annual general meeting or

send a proxy to represent you at the annual general

meeting, your CSDP or broker will assume you do not

wish to attend the annual general meeting or send a

proxy. If you wish to attend the annual general

meeting, your CSDP or broker will issue the necessary

letter of representation to you to attend the annual

general meeting.

Shareholders who have dematerialised their shares

through a 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, or they must provide the CSDP or

broker with their voting instructions in terms of the

relevant custody agreement/mandate entered into

between them and the CSDP or broker.

Shareholder rights

In terms of the Act, any member entitled to attend

In terms of section 58 of the Companies Act, No. 71 of

2008 (as amended), shareholders have rights to be rep-

resented by proxy as herewith stated.

1. At any time, a shareholder of the Company may

appoint any individual, including an individual

who is not a shareholder of the Company, as a

proxy to:

a. participate in, and speak and vote at, a

shareholders meeting on behalf of the

shareholder; or

b. give or withhold written consent on behalf of

the shareholder to a decision contemplated in

section 60;

provided that the shareholder may appoint more

than one proxy to exercise voting rights attached

to different shares held by the shareholder.

2. A proxy appointment:

a. must be in writing, dated and signed by the

shareholder; and

b. remains valid for:

i. one year after the date on which it was

signed; or

ii. any longer or shorter period expressly set

out in the appointment, unless it is

revoked in a manner contemplated in

subsection (4)(c), or expires earlier as

contemplated in subsection (8)(d).218.164

3. Except to the extent that the Memorandum of

Incorporation of the Company provides otherwise:

a. a shareholder of the Company may appoint

two or more persons concurrently as proxies,

and may appoint more than one proxy to

exercise voting rights attached to different

securities held by the shareholder;

b. a proxy may delegate the proxy’s authority to

act on behalf of the shareholder to another

person, subject to any restriction set out in the

instrument appointing the proxy; and

c. a copy of the instrument appointing a proxy

must be delivered to the Company, or to any

other person on behalf of the Company,

before the proxy exercises any rights of the

shareholder at a shareholders meeting.

4. Irrespective of the form of instrument used to

appoint a proxy:

a. the appointment is suspended at any time and

to the extent that the shareholder chooses to

act directly and in person in the exercise of any

rights as a shareholder;

b. the appointment is revocable unless the proxy

appointment expressly states otherwise; and

c. if the appointment is revocable, a shareholder

may revoke the proxy appointment by:

i. cancelling it in writing, or making a later

inconsistent appointment of a proxy; and

ii. delivering a copy of the revocation

instrument to the proxy, and to the

company.

5. The revocation of a proxy appointment constitutes

a complete and final cancellation of the proxy’s

authority to act on behalf of the shareholder as of

the later of:

a. the date stated in the revocation instrument, if

any; or

b. the date on which the revocation instrument

was delivered as required in subsection

(4)(c)(ii).

6. If the instrument appointing a proxy or proxies has

been delivered to the Company, as long as that

appointment remains in effect, any notice that

is required by this Act or the Company’s

Memorandum of Incorporation to be delivered by

the Company to the shareholder must be delivered

by the Company to

a. the shareholder; or

b. the proxy or proxies, if the shareholder has

i. directed the company to do so, in writing;

and

ii. paid any reasonable fee charged by the

company for doing so.

7. A proxy is entitled to exercise, or abstain from

exercising, any voting right of the shareholder



without direction, except to the extent that the

Memorandum of Incorporation, or the instrument

appointing the proxy, provides otherwise.

8. If the company issues an invitation to shareholders

to appoint one or more persons named by the

Company as a proxy, or supplies a form of

instrument for appointing a proxy:

a. the invitation must be sent to every

shareholder which is entitled to notice of the

meeting at which the proxy is intended to be

exercised;

b. the invitation, or form of instrument supplied

by the company for the purpose of appointing

a proxy, must:

i. bear a reasonably prominent summary of

the rights established by this section;

ii. contain adequate blank space, immediately

preceding the name or names of any

person or persons named in it, to enable a

shareholder to write in the name and, if so

desired, an alternative name of a proxy

chosen by the shareholder; and

iii. provide adequate space for the shareholder

to indicate whether the appointed proxy is

to vote in favour of or against any

resolution or resolutions to be put at the

meeting, or is to abstain from voting;

c. the Company must not require that the proxy

appointment be made irrevocable; and

d. the proxy appointment remains valid only until

the end of the meeting at which it was

intended to be used, subject to subsection (5).

9. Subsection (8)(b) and (d) do not apply if the

Company merely supplies a generally available

standard form of proxy appointment on request

by a shareholder.

By order of the board

C Barnard

Company secretary

Johannesburg

31 May 2011



INVICTA HOLDINGS LIMITEDRegistration number 1966/002182/06 • Incorporated in the Republic of South Africa

Share code: IVT • ISIN: ZAE000029773 • (“Invicta” or “the Company”)

For use of shareholders who are:

1. Registered as such and who have not dematerialised their Invicta ordinary shares; or

2. Hold dematerialised Invicta ordinary shares in their own name

at the Invicta annual general meeting to be held in the boardroom, Invicta Holdings Limited, 3rd Floor, Pepkor House, 36 Stellenberg Road, Parow Industria, Cape Town on Friday, 29 July 2011 commencing at 12:00 (“the annual general meeting”).

Dematerialised shareholders holding shares other than with “own name” registration, must inform their CSDP or broker of theirintention to attend the annual general meeting and request their CSDP or broker to issue them with the necessary letter of representation to attend the annual general meeting in person and vote or provide their CSDP or broker with their voting instructions should they not wish to attend the annual general meeting in person. These shareholders must not use this form ofproxy.

I/We (please print name in full)

of (address)

being a shareholder(s) of Invicta and holding ordinary shares hereby appoint (name in block letters)

1. or failing him

2. or failing him

3. The chairman of the annual general meeting as my/our proxy to act for me/us at the annual general meeting which will be heldon Friday, 29 July 2011 at 12:00 in the boardroom of Invicta Holdings Limited at 3rd Floor, Pepkor House, 36 Stellenberg Road,Parow Industria, Cape Town for the purposes of considering and, if deemed fit, passing with or without modification, the resolutions to be proposed thereat and at each adjournment or postponement thereof, and to vote for and/or against the resolutions and/or abstain from voting in respect of the shares in the issued share capital of the Company registered in my/ourname(s) (see note 2).

Number of votes (one per share)

For Against Abstain

Special resolution 1General authority to repurchase shares

Special resolution 2Specific authority to acquire shares of the Company held byHumulani Marketing (Pty) Limited, a subsidiary company

Special resolution 3Approval of the non-executive directors’ remuneration for the 2012 financial year

Special resolution 4Approval of financial assistance to any company or corporation which is related or inter-related to the Company

Special resolution 5Approval of directors’ remuneration for the 2011 financial year

Ordinary resolution 1Adoption of the annual financial statements

Ordinary resolution 2.1To re-elect as director Dr CH Wiese

Ordinary resolution 2.2To re-elect as director Mr JS Mthimunye

Ordinary resolution 2.3To elect as director Mr DI Samuels

Ordinary resolution 2.4To elect as director Mr CE Walters

Ordinary resolution 3Approval of the remuneration policy and its implementation

Ordinary resolution 4To place the authorised but unissued shares under the control of the directors

Ordinary resolution 5To authorise the directors to issue shares for cash

Ordinary resolution 6To confirm the reappointment of Deloitte & Touche as independent auditors of the Company and SBF Carter as the designated audit partner for the following year

FORM OF PROXY


FORM OF PROXYcontinued

NOTES TO THE PROXY FORM

Number of votes (one per share)

For Against Abstain

Ordinary resolution 7.1To elect as audit committee member Mr DI Samuels

Ordinary resolution 7.2To elect as audit committee member Mr JS Mthimunye

Ordinary resolution 7.3To elect as audit committee member Mr LR Sherrell

Ordinary resolution 7.4To elect as alternate audit committee member Adv JD Wiese

Ordinary resolution 8Adoption of the Invicta Holdings Limited Long-Term Bonus and Share Incentive Right Scheme 2006

Please indicate with an “X” in the appropriate spaces above how you wish your votes to be cast.Unless otherwise instructed, my/our proxy may vote as he/she thinks fit.

Signed at on 2011

Signature

Assisted by (where applicable)

Number of sharesEach shareholder is entitled to appoint one or more proxies (who need not be a shareholder of the Company) to attend, speak andvote in place of that shareholder at the annual general meeting.Please read the notes below.

1. A shareholder may insert the name or names of two alternative proxies of the shareholder’s choice in the space provided, withor without deleting “the chairman of the annual general meeting” but any such deletion must be initialled by the shareholder.

2. A shareholder’s instruction to the proxy must be indicated by the insertion of the relevant number of votes exercisable by thatshareholder in the space provided. Failure to comply with the above will be deemed to authorise the proxy to vote or abstainfrom voting at the annual general meeting as he deems fit in respect of all the shareholder’s votes exercisable thereat. A shareholder or his proxy is not obliged to use all the votes exercisable by the shareholder or his proxy, or cast them in the sameway.

3. Any alteration or correction made to this form must be initialled by the signatory/ies.

4. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must beattached to this form unless previously recorded by the transfer secretaries or waived by the chairman of the annual generalmeeting.

5. The completion and lodging of this form will not preclude the relevant shareholder from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms thereof, should suchshareholder wish to do so.

6. The chairman of the annual general meeting may reject or accept any form of proxy which is completed and/or received otherthan in accordance with these instructions, provided that he is satisfied as to the manner in which a shareholder wishes to vote.

7. A minor must be assisted by his/her parent/guardian unless the relevant documents establishing his/her legal capacity are produced or have been registered by the Company.

8. Where there are joint holders of any shares:

• any one holder may sign this form of proxy;

• the vote(s) of the senior shareholders (for that purpose seniority will be determined by the order in which the names ofshareholders appear in the company's register of shareholders) who tenders a vote (whether in person or by proxy) willbe accepted to the exclusion of the vote(s) of the other joint shareholder(s).

9. Forms of proxy must be lodged with or posted to the Company’s transfer secretaries’ offices in Johannesburg (ComputershareInvestor Services (Pty) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001; PO Box 61051, Johannesburg, 2107) tobe received by 12:00 on Wednesday, 27 July 2011.


GRAPHICULTURE 2018

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