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Integrated Annual Report

2013

Integrated annual report

The Board realises the importance of an Integrated Report that is meaningful and contains accurate measurable data; fully promoting transparency and accountability as well as its responsibility and need to have controls to enable it to verify and safeguard the integrity of the report, also having the report independently assured. The Group strives to fully comply to related standards in the future. Independent assurance for the 2013 Integrated Report was not obtained. Due to the current size of the Group and the extensive processes involved with publishing a full Integrated Report, we have disclosed as much as is currently possible by extending our corporate governance and sustainability reports (pages 16 to 29) to report on as many of the elements as possible regarding financial, corporate governance, social and economic performance.

We are positioning ourselves to present a fully Integrated Report in the future. The Board has authorised the report for release on 13 September 2013.

Signed as duly authorised by the Board

BT NgcukaChairman of the Board

Erhard van der MerweChief Executive Officer

THE BOARD OF DIRECTORS ACKNOWLEDGES ITS RESPONSIBILITY TO ENSURE THE INTEGRITY OF THE INTEGRATED REPORT.

Rolfes Holdings Limited | Integrated Annual Report 2013 1

ifc Board authorisation for release of the Integrated Annual Report

2 Group profile

3 Group structure

4 Group financial highlights

6 Letter from the Chairman

7 Chief Executive Officer’s report

11 Group Financial Director’s report

14 Remuneration and Nomination Committee report

16 Corporate Governance

25 Sustainability report

30 Directorate

32 Annual financial statements

115 Analysis of shareholding

116 Shareholders’ diary

117 Notice of annual general meeting

Attached Form of proxy

Enclosed Notice of electronic communications form

ibc Corporate information

Contents


Rolfes positioned itself strategically in various markets, locally and internationally, as a provider of industrial, agricultural, water and mining chemicals. The Group manufactures and distributes a wide range of market-leading, high-quality chemical products to diverse industries including the coatings, plastics, vinyl, leather tanning, ink, metallurgical, cleaning, formulators, automotive, general manufacturing, agricultural, food, construction, home care, personal care, water filtration, water treatment and water purification industries.

The Group structure was simplified during the year under review into three pillars consisting of the Industrial Chemicals, Agricultural Chemicals, and Mining and Water Chemicals divisions. Rolfes Colour Pigments International, Rolfes Chemicals, Acacia Specialty Chemicals and Rolfes Africa all reside within the Industrial Chemicals division. The many synergies existing between Rolfes Silica and the newly acquired PWM group of companies necessitated the combination of these companies under the Water and Mining Chemicals division. The Agricultural Chemicals division remains unchanged and includes Agchem Africa, Galltec, Absolute Science and Introlab Chemicals.

The Industrial Chemicals division manufactures and distributes alkyd resins, various organic and inorganic pigments, additives, in-plant and point-of-sale dispersions, leather chemicals and solutions, food

Group profile

fragrances, food flavourings, solvents, lacquer thinners, surfactants, cleaning solvents, creosotes, waxes and other industrial chemicals.

The Agricultural Chemicals division manufactures and distributes products that include herbicides, insecticides, fungicides, adjuvants, foliar feeds, enriched compost pellets, and soluble fertilisers promoting general plant, root, foliage and soil health.

The Mining and Water Chemicals division distributes pure beneficiated silica to the mining, metallurgical, fertiliser, water-filtration and construction industries. In addition, since 1 April 2013 through the newly acquired PWM group of companies, the division now also provides specialised water purification solutions and products to the industrial, agricultural, mining, home and personal care markets.

The Group’s international footprint now extends to North America, Asia, Africa and Eastern and Western Europe.

GLOBAL GROUP

EXPORTSWESTERN EUROPE

EASTERN EUROPE

NORTH AMERICA

SOUTH EAST ASIA

AFRICA


Group structure

InDuSTRIAl cheMIcAlS

AGRIculTuRAl cheMIcAlS

MInInG AnD WATeR

cheMIcAlS

lusakalagos

Jet parkAlberton

cape TownDurban

Germistoncape Town

Durban

pretoriapaarl

phoenixlusaka

Brits

MidrandDurban

cape Town

Gaborone

Midrand

cape Town

Durbanpretoria

Brackenfell

paarlWorcesterGermiston

pretoria


Cents

Performance per shareHeadline earnings 10,4 23,2 31,2 36,1 39,2Earnings 10,4 23,2 31,4 36,2 50,3Dividends declared – 5,0 10,0 10,0 10,0Net asset value 117,4 135,4 156,6 181,5 231,4Net tangible asset value 81,0 104,0 125,4 109,1 115,3

Percentage

Returns and productivityGross profit margin 18,0 21,0 18,9 20,0 20,9Operating profit margin 6,5 10,4 10,8 10,8 12,3Net profit margin (headline earnings) 2,9 6,5 7,0 5,9 5,1Interest cover (times) 2,3 7,9 13,1 7,6 8,6

Solvency and liquidityCurrent ratio 1,8 1,9 2,0 1,9 1,6Acid-test ratio 0,8 0,9 0,9 0,8 0,7Interest-bearing debt: equity ratio 0,3 0,2 0,1 0,4 0,4

Group financial highlights

FOR THE YEAR ENDED 30 JUNE

Rand 000’s 2009 2010 2011 2012 2013

Financial resultsRevenue 375 512 369 029 460 699 636 172 801 716EBITA 28 756 42 885 54 244 75 889 106 987Operating profit 24 454 38 275 49 568 68 521 98 922Headline earnings 10 739 23 861 32 160 37 213 40 822Cash and cash equivalents 352 6 127 4 833 (1 833) (31 916)Total assets 238 760 243 210 277 108 440 965 607 611Total debt (interest-bearing liabilities and bank overdraft)

35 042 24 140 15 901 80 311 105 385

Rolfes Chemical All share

Relative share price performance

Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13

80

120

140

180

220

Relative share price performance



GROWTH

IN TURNOVER INCREASED BY

26,0%

HEADLINE EARNINGS

INCREASED BY

9,7%

OPERATING

PROFIT INCREASED BY

44,4%

INTEREST

COVER

8.6TIMES

Revenue (Rand millions)

07 08 09 10 11 12 130

200

400

600

800

Headline earnings (Rand millions)

07 08 09 10 11 12 130

10

20

30

40

50

Operating pro�t (Rand millions)

07 08 09 10 11 12 130

20

40

60

80

100

Headline earnings (cents)

07 08 09 10 11 12 130

10

20

30

40

Total assets (Rand millions)

07 08 09 10 11 12 130

100

200

300

400

500

600

Total interest-bearing debt (Rand millions)

07 08 09 10 11 12 130

25

50

75

100


A few years ago the visionary leadership of this Group crafted a dynamic business strategy whose aim was to rise above the adverse market conditions that engulfed South Africa and the world.

Driven by the belief that whatever the challenges that the unfavourable market conditions threw at us as a company, planning for the many years that lie ahead was indispensable. It is this focused effort and the collective commitment to excellence that wouldn’t allow us to live in the comfort of the present but compelled us to think ahead.

The Group, as a result, has yet again concluded this financial year with quite a few heartening accomplishments that have set us apart from our peers. In line with our long-term vision, the Group Revenue registered a steady growth from last year, with gross profit margins also showing marked improvement.

Furthermore, the strong growth in the continent as well as greater market penetration in the USA and Europe, which resulted in remarkable signs of improvement in our export revenue, were a solid demonstration that our strategy was on the right track.

Our management team, as operational custodians of our strategy, managed to position the Company strategically in various markets, locally and internationally, as a provider of industrial, agricultural and mining and water chemicals.

In turn, the Group structure, in keeping with this strategic positioning, was simplified into three pillars – Industrial Chemicals, Agricultural Chemicals, and Mining and Water Chemicals divisions.

It is indeed pleasing to see the collective efforts of a committed and hard-working management team and workforce achieve extraordinary results in the formative years of a strategy. Our team continues to do incredibly well and constantly puts a smile on the face of our

Letter from the Chairman

shareholders. We look forward to the future with great anticipation and assure our management of our solid backing as it forges ahead.

On behalf of the Board and the shareholders, congratulations to each and every member of our team on a sterling performance.

Kind regards

Bulelani T NgcukaChairman

GROWTH IN TURNOVER

INCREASED BY

26,0%

HEADLINE EARNINGS

INCREASED BY

9,7%

BULELANI NGCUKA – CHAIRMAN


The Industrial Chemicals division manufactures and distributes alkyd resins, various organic and inorganic pigments, additives, in-plant and point-of-sale dispersions, leather chemicals and solutions, food fragrances, food flavourings, solvents, lacquer thinners, surfactants, cleaning solvents, creosotes, waxes and other industrial chemicals.

The Agricultural Chemicals division manufactures and distributes products that include herbicides, insecticides, fungicides, adjuvants, foliar feeds, enriched compost pellets, and soluble fertilisers promoting general plant, root, foliage and soil health.

The Mining and Water Chemicals division distributes pure beneficiated silica to the mining, metallurgical, fertiliser, water-filtration and construction industries. In addition, since 1 April 2013 through the newly acquired PWM group of companies, the division now also provides specialised water purification solutions and products to the industrial, agricultural, mining, home and personal care markets.

The Group’s international footprint now extends to North America, Asia, Africa and Eastern and Western Europe.

Group performance overview The Group concluded the June 2013 financial year with several positive achievements. Steady growth on Group revenue of 26% to R801,7 million (June 2012: R636,2 million) and gross profit margins improving to 21% (June 2012: 20%) supports our long-term vision for the Company.

Export revenue at R128,6 million (June 2012: R70 million) accounts for 16% (June 2012: 11%) of total revenue as a result of greater market penetration in the USA and Europe, as well as strong growth achieved in Africa. EBITDA increased by 41% to R107,0 million from R75,9 million in June 2012. EBITDA includes a capital profit of R15,7 million on the sale of an unused portion of the Jet Park property. EPS increased by 38,9% to 50,3 cents (June 2012: 36,2 cents), mainly due to the after-tax capital profit of R11,9 million on the sale of the Jet Park property. HEPS increased moderately by 8,6% to 39,2 cents (June 2012: 36,1 cents). The strong growth achieved by the Agricultural Chemicals, Mining and Water Chemicals divisions, were offset by a below par performance of the Industrial Chemicals division.

Divisional structureRolfes positioned itself strategically in various markets, locally and internationally, as a provider of industrial, agricultural, water and mining chemicals. The Group manufactures and distributes a wide range of market-leading, high-quality chemical products to diverse industries including the coatings, plastics, vinyl, leather tanning, ink, metallurgical, cleaning, formulators, automotive, general manufacturing, agricultural, food, construction, home care, personal care, water filtration, water treatment and water purification industries.

The Group structure was simplified during the year under review into three pillars consisting of the Industrial Chemicals, Agricultural Chemicals, and Mining and Water Chemicals divisions. Rolfes Colour Pigments International, Rolfes Chemicals, Acacia Specialty Chemicals and Rolfes Africa all reside within the Industrial Chemicals division. The many synergies existing between Rolfes Silica and the newly acquired PWM group of companies necessitated the combination of these companies under the Water and Mining Chemicals division. The Agricultural Chemicals division remains unchanged and includes Agchem Africa, Galltec, Absolute Science and Introlab Chemicals.

Chief Executive Officer’s report

ERHARD VAN DER MERWE – CEO


Divisional performanceIndustrial Chemicals

Revenue increased by 7,4% to R502,9 million (June 2012: R468,3 million). Limited growth in this division is mainly due to a strong increase in export activities into Africa and Europe, being offset by disappointing local results due to a weak manufacturing environment. Gross profit margins decreased to 15,1% (June 2012: 16,7%) as a result of weaker local trading conditions, extensive competition in certain markets and investing in African export market share.

Increased market share in KwaZulu-Natal and the Western Cape proved positive for the division. Export sales into Africa and Europe displayed strong growth. These achievements were notwithstanding the transport strike late September to early October 2012. Extended refinery shutdowns hampered the delivery of certain key products for prolonged periods to the market. Local competition pricing trends remained challenging for the resins manufacturing plant and certain traded pigments.

Operating costs increased by 20,1% mainly due the investment in skills and infrastructure for the new leather chemicals division within Rolfes Chemicals. Added investment into Rolfes Africa to enable further expansion of the African footprint contributed to the growth in operating costs. Operating costs ratio to turnover for 2013 is 8,0% (June 2012: 7,1%).

The slow growth in turnover, lower foreign exchange profits and increased costs resulted in operating profit being a disappointing 24,4% lower than the prior year. Appropriate measures on a management and plant level have been implemented at the Jet Park site to ensure improved performance.

Capital expenditure of R14,3 million included the building of a new manufacturing facility on the Jet Park site at a total cost of R10,1 million to allow for the combination of the Cape Town Dispersion and the Amazon factory previously located in Benrose. Both these facilities operated from rented sites and the combination thereof in Jet Park resulted in the extension of production capacity, significant cost savings, improved manufacturing facilities and staff amenities. A further R4,2 million was spent on building a leather tanning chemicals manufacturing facility, transport vehicles to extend logistics capabilities and expenditure to improve the Rolfes Chemicals site in Germiston.

With greater focus on exports to the rest of Africa and Europe, we plan to expand the current organic pigment manufacturing capacity, from 50 tonnes to 200 tonnes per month. Ongoing expansion of the product basket includes a wider range of specialty and commodity chemicals especially within the leather tanning market and targeted focus on the food sector. The division holds much promise for future growth and restoration of its margins to improved levels.

Agricultural Chemicals

Revenue amounted to R234,8 million for the year to 30 June 2013. Growth is mainly due to a solid performance in the local market and increased export sales into North America and Africa. These achievements were notwithstanding the farm labourers strike in the Western Cape and a three-month delay in completing the upgrade of the production facilities in Waltloo.

Operating costs amounted to R35,9 million. The Group recognises the need for technical expertise within this industry and realises that the investment in specialists is an absolute necessity. The cost base of 15,3% to turnover is in line with the previous year at 14,8%. This cost base is supported by a solid performance on gross and operating margins level.

Capital expenditure of R17,0 million included the upgrade of the existing production facility completed in September 2012 at a cost of R8,2 million. The investment into research and product development costs amounted to R7,7 million. We unfortunately had one fatality at the Agchem facility during February 2013. All regulatory procedures were followed and further plant improvements are being implemented.

Focus for the coming year will be on new product development and increasing exports to North America, Africa and Eastern Europe, which will allow for local low season performance to be counteracted by northern hemisphere demand. Agchem is in the process of registering a company in Romania with a local partner to distribute its products in that region.

The expansion of the Agchem product range includes some new, very exciting organic and biological products. Although the investment into the development of these products is ongoing, a number of new strategic product registrations have been completed or are in the process of being completed. Included in the prospects are two very exciting and leading-edge projects:

Chief Executive Officer’s report (continued)


• AgChemisprogressingwiththeconstructionofapilotplant for the production of Plant Growth Promoting Rhizobacteria (PGPR), ie biological products. The project, in conjunction with the University of Pretoria, is an initiative to be in line with world sustainable agricultural trends to supply greener agricultural products. Registrations on these products have been submitted for approval. The benefits of these bacteria/products are plant disease reduction and increased plant nutrient availability. It is expected that these products could yield attractive future returns.

• AgChemhasenteredintoajointventuretoproducequality protein hydrolysate obtained from fish offal into agriculture and related industries. Registrations on these products have been submitted for approval. Protein hydrolysate is an organic fertiliser high in essential amino acids and nitrogen. Experimental results yielded above average results. It is expected that these products could yield attractive future returns.

Mining and Water Chemicals

Revenue increased by 37,7% to R62,2 million (June 2012: R45,2 million). Growth in this division is mainly due to the inclusion of the South African and Botswana PWM companies’ results from 1 April 2013 and 1 June 2013, respectively. Gross profit margins increased to 31,2% (June 2012: 26,0%) resulting from higher margins in the PWM companies and the maintenance of gross margins in the Rolfes Silica business.

Operating costs amounted to R8,1 million (June 2012: R4,0 million). The increase is as a result of the inclusion of the PWM acquisition from the above dates. Costs to obtain the mining licence has contributed to an increase in Rolfes Silica operating costs but was counteracted by cost savings on other cost lines.

Capital expenditure incurred by Rolfes Silica amounted to R4,6 million and comprised investments into regulatory requirement upgrades and the capitalisation of plant and equipment obtained in lieu of payment from a previous delinquent debtor. The Rolfes Silica new order mining licence renewal was obtained during October 2012.

New products for the water chemicals business to allow for market expansion are currently being pursued with some new agency contracts with international suppliers already in place. Exports into Africa together with larger

penetration of the agricultural, industrial and mining sectors are a key focus of this business for the new year. Synergies with the new water chemicals acquisition will continue to produce favourable results for Rolfes Silica.

AchievementsDuring 2013, the Group focused on organic growth in all our divisions with increased revenue through actively pursuing and entering new markets, especially in Africa. Focus on agricultural chemical business growth and completing important product developments leading to successful strategic product registrations, contributed to entrenching the agricultural chemicals business as a major player in the specialised and niche sector of the agricultural industry.

The successful sale of an unused portion of the Jet Park property was concluded resulting in cash generated of R25,5 million assisting the Group to fund a portion of the PWM acquisition in cash. The merger of the two dispersion factories into one in Jet Park resulted not only in cost savings but improved facilities, product quality and capacity.

The successful acquisition of the PWM group of companies allowed entry into the highly specialised water industry. Synergies with Rolfes Silica produced results during the very early days since acquisition. Certain costs and logistics synergies remain to be fully explored but management is satisfied that the initial integration to date is on track.

Strategic objectives and risksSafety, Health and Environment

The chemicals industry environment involves potentially hazardous substances and emissions. We recognise that the long-term sustainability of the Group, as well as our ability to generate above average economic returns, depend on the integration of broader environmental, social and governance considerations into our business. We are continuously evaluating ways in which we can use more efficient and environmentally friendly processes in our businesses. The Group has recently subscribed to the Responsible Care initiative run by the Chemical and Allied Industries Association.

Price volatility of raw materials

Disruptions to the supply of key raw materials and exchange rate fluctuations directly affect our ability to deliver to our customers. Ongoing efforts to secure


additional raw material sources and enhancing supplier contract management, and conservative foreign exchange management, are some of the mitigation measures that we pursue.

Product quality

Plant failures or quality issues may affect our ability to service our customers’ needs. In the event of manufacturing technology not keeping pace with our customers or competitors, there is the risk that our products could become uncompetitive or inappropriate for customers’ needs. We address these challenges through new technology development and product innovation, inventory management, forecasting and planning, appropriate plant maintenance and operating standards and quality management processes.

Compliance to applicable laws and regulations

Non-compliance in a highly regulated industry can lead to reputational damage, fines and loss of some operating licences. We have a well-engrained compliance culture balanced with an understanding of our rights under the relevant laws where we operate.

Human ResourcesHuman capital is integral to growth and skills development plans – human resources and remuneration policies support the Group’s commitment to retaining and attracting talent. The Group also recognises that transformation is crucial to future growth and steps are underway to improve our transformation performance.

Corporate GovernanceThe Group recognises the recommendations of King III and remains committed to sound corporate governance and sustainability practices.

Forward-looking/OutlookThe Group will pursue new strategic acquisition opportunities in the chemicals sphere. However, in 2014 management will focus more on an operational level to optimise and improve our working capital investment, consolidate/reduce overheads, and increase our manufacturing, storage, mixing, blending and filling facilities as well as improving on the Group’s safety, health and environmental programmes and initiatives. Management will constantly review operations to identify restructuring opportunities ensuring the rightsizing of our cost base.

New and extended product development in all the divisions presents exciting growth prospects and we look forward to extending our market share in the USA, Africa and Western and Eastern Europe with current or new long-term partners.

Statements contained throughout this report regarding the prospects of the Group have not been reviewed or reported on by the Group’s external auditors.

AcknowledgementWe would like to thank all our investors and stakeholders for your keen support of the Group. Thank you to management and staff for your support, dedication and commitment to the Group. To the Board, I thank you for your strategic vision and contribution to Group performance.

E van der Merwe

Group Chief Executive Officer

Chief Executive Officer’s report (continued)


Financial performance highlightsThe Group views this performance, against the back- drop of difficult trading conditions where primary markets remained under pricing and volume pressures, as an achievement. Labour strikes and higher raw material input costs due to the weak rand have affected the Group’s performance while delivering on many levels. The exceptional profit growth of the Agricultural Chemicals division and the PWM acquisition positively affected earnings offsetting the reduced performance in the Industrial Chemicals division.

Gross profit increased to R167,3 million (June 2012: R127,2 million) with gross profit margins increasing to 21% (June 2012: 20%). Operating profit increased to R98,9 million (June 2012: R68,5 million). Included in operating profit is a profit of R15,7 million on the disposal of the Jet Park property. The proceeds in turn contributed R25 million towards the funding of the PWM acquisition. Earnings per share increased by 38,9% to 50,3 cents (June 2012: 36,2 cents) as a result of the disposal and headline earnings per share increased by 8,6% to 39,2 cents (June 2012: 36,1 cents).

The total net asset value (excluding minorities) increased to R251,3 million (June 2012: R188,1 million). The net asset value per share improved by 27,5% to 231,4 cents (June 2012: 181,5 cents) while net tangible asset value per share increased by 5,7% to 115,3 cents (June 2012: 109,1 cents), based on 108 609 467 (June 2012: 103 609 467) shares in issue.

Increased finance costs of R11,5 million (June 2012: R9,1 million) comprise mainly interest paid on the AgChem acquisition funding included for the full financial year and amounting to R3,1 million. Interest paid on overdraft amounted to R5,4 million. Earnings continued to be sustained well above interest requirements at 8,6 times (June 2012: 7,6 times) with the total debt (interest-bearing) equity ratio reducing slightly to 0,35 for June 2013 (June 2012: 0,38).

Acquisitions during 2013The strategic acquisition of the PWM group of companies included the acquisition of a 70,4% controlling stake, effective 1 April 2013, in the business of PWM group (“PWM”), operating in the water purification and water treatment industries and manufacturing chemicals used in water treatment products and services. The simultaneous acquisition of a 70% controlling stake in Tetralon Chemical Consultancy (Pty) Ltd (“Tetralon”), an

importer of chemicals and equipment for supply into the water treatment, home care and personal care markets. A further simultaneous acquisition of a 70,4% controlling stake, effective 1 June 2013, in the business of PWM Anticor (“Anticor”), operating in the water treatment and purification industry in Botswana. These acquisitions will allow Rolfes a solid footprint into the specialised water treatment and purification industry. Shareholders are referred to the SENS announcement released on 25 March 2013, detailing the terms and conditions pertaining to the acquisition of the PWM group.

Financial challengesRecessionary trends

The low growth recovery rates experienced locally and internationally, the moderately positive economic view adopted by the Group and the broader South Africa during the year under review fuelled the Group’s shift to more diversified business and trade strategies into bordering countries and into the rest of Africa. The Group persisted with vigilance to improve working capital management, implement cost-saving strategies and synergies to ensure safeguarding of available cash resources. The just-in-time purchase programmes for raw materials and trading products wherever possible was extended and efforts to contain investment in stock without hampering sales order fulfilment to a minimum continued. Accounts receivable management relied on

Group Financial Director’s report

LIZETTE LYNCH – FINANCIAL DIRECTOR


solid credit management policies to ensure proper credit risk mitigation. Conservatism in spending remained the order of the day with cost-saving strategies constantly reviewed and applied.

ZAR/USD exchange rates

The rand weakened significantly to the USD during the last six months of the financial year. This affected the Group positively in exports but negatively where raw material input pricing is concerned. The Group’s imports and exports are reasonably matched and provided a natural hedging against the fluctuations in the exchange rate. The Group constantly considers net foreign exchange exposure into account and follows a consistent approach to hedging of short-term foreign exchange exposures to defend margins and cash flow. The net effect was a foreign currency gain of R1,7 million (June 2012: R2,0 million) included under other income.

Commodity prices

Commodity prices remain a challenge although relatively stable during the financial year under review. The Group does not invest in large volume commodities although many of its products’ selling prices are directly influenced by international commodity price fluctuations, especially the industrial division. Storage of large volume commodities would also not be practical due to the high stock turnover thereof and consequential limitation of storage facilities. The benefit on rand profit is prevalent during high commodity pricing periods and increases or decreases are passed on to customers on a daily deviation basis mostly constitute traded products. International commodity pricing affecting manufacturing businesses are passed on to customers, mostly on a month-to-month basis.

Operating cost driversIndustrial Chemicals

Operating costs to turnover of 8,0% (June 2012: 7,1%) increased due to the investment in staff for the establishment of the new leather division within Rolfes Chemicals with further investment in salaries to extend the divisions’ footprint into Africa.


The increase in operating costs reflected is due to the agricultural divisions now included for the full financial year in the financial results. The cost base of 15,3% to turnover is in line with the previous year at 14,8%

to turnover. Salaries paid to properly qualified individuals are integral to the success of the business and contribute to the cost base.

Mining and Water Chemicals

The cost increases in this division is due to the inclusion of the South Africa PWM acquisition since 1 April 2013 and the PWM Botswana acquisition since 1 June 2013. Rolfes Silica has contained costs effectively in line with its flat year-on-year turnover growth.

Cash flow and financing activitiesCash flow

The Group paid cash dividends of R10,4 million during the financial year (including withholding tax on dividends) (June 2012: R10,4 million) to shareholders from current cash resources. The increase in net working capital investment since 30 June 2012 of R40,9 million (June 2012: R15, 5 million) represents an increase in inventory of R33,2 million (June 2012: R25,7 million) and an increase in accounts receivable of R30,2 million (June 2012: decrease R25,9 million), respectively. Accounts payable and value-added tax represent an increase of R22,5 million (June 2012: decrease of R15,7 million).

Working capital days were calculated on a proportionate basis due to acquisitions. Debtors’ days increased to 61,9 days (June 2012: 51,3 days) mainly due to longer customer payment terms on exports as an investment to allow market penetration and assist with market share gain. The debtors’ days have since recovered to lower levels. Stock days decreased slightly to 98,0 days (excluding stock in transit) (June 2012: 106,6 days (excluding stock in transit)). Investment in stock to enable product to market in the upcoming high season contributed to increased stock levels. Creditor days increased to 69,3 days (excluding stock in transit suppliers) (June 2012: 64,2 days) (excluding stock in transit suppliers).

The cash flow generated from financing activities of R16,0 million constitutes loan repayments of R23,5 million and financing raised on capital projects and other capital expenditure of R17, 5 million and the issuing of shares.

Emphasis is placed on cash generation and the managing net debt, which is the sum of current and non-current interest-bearing borrowings and bank overdrafts, net of cash and cash equivalents. A focus area for the Group is to obtain appropriate funding for increased export activities and future projects.

Group Financial Director’s report (continued)


Capital expenditure

The Group incurred capital expenditure, excluding acquisitions, of R36,6 million (June 2012: R14,7 million) to invest in product development, the effective combination, upgrade and improvement of manufacturing facilities to increase production and logistics capacity.

Related party transactions

The Group companies entered into various related party transactions. These transactions are no less favourable than those entered into with third parties and occur on an arm’s length and commercial bases.

Contingent consideration

The R6,7 million (June 2012: R6,2 million) constitutes the present value of a top-up for the existing tax of Agchem Holdings (Pty) Ltd shareholding for a maximum value of R8,25 million pending profit warranties being met by 30 June 2015.

Trade and other receivables

Certain trade and other receivables are ceded to Nedbank Limited as security for overdraft facilities with Agchem Africa receivables under a debtor financing agreement with Nedbank Limited.

Short-term loans

The loan represents the Nedbank Limited loan to Agchem Africa and is secured by debtors.

Dividend

The Group paid an interim dividend to shareholders on 25 March 2013 and will pay a final dividend to shareholders of 5 cents per share payable on 21 October 2013.

The salient dates of the dividend payment are as follows:

2013

Last date to tradeFriday, 11 October“cum” the dividend

Shares to commence trading “ex” the dividend Monday, 14 October

Record date Friday, 18 October

Payment date Monday, 21 October

Share certificates may not be dematerialised or rematerialised between Monday, 14 October 2013 and Friday, 18 October 2013, both days inclusive.

• Thelocaldividendwitholdingtaxrateis15%;

• NoSTCcreditswillbeutilised for the finalordinarydividend;

• 108609467ordinarysharesareinissue;

• Thenetordinarydividendis4,25000centspersharefor ordinary shareholders who are not exempt from dividend witholding tax; and

• Rolfes Holdings Limited’s tax reference number is 9492/089/140.

Accounting policies

The accounting policies used during the year under review are consistent with those applied in the prior year.

Lizette Lynch

Group Financial Director


Remuneration and Nomination Committeereport

The Group’s strategy is to ensure that remuneration matches individual contribution to Group performance, within the framework of market forces, while protecting shareholders’ interests and the Group’s financial health over the short and long term.

The Group’s remuneration policy in respect of directors will be tabled at the Annual General Meeting to be held on 1 November 2013 for approval by shareholders. Details of the directors’ aggregate emoluments on an individual basis are set out on page 90 of the Integrated Report.

The proceedings of the Remuneration and Nomination Committee are governed by a charter as approved by the Board.

Terms of referenceThe Remuneration and Nomination Committee ensures that employees are rewarded for their contribution to the Group’s operating and financial performance at levels which take account of industry, market and country benchmarks, as well as the requirements of collective bargaining.

The Remuneration and Nomination Committee is responsible for the administration, assessment and approval of the Board’s remuneration strategy for the Group, the determination of short- and long-term incentive pay structures for Group executives, general staff policy, remuneration, service contracts, the positioning of senior executive pay levels relative to local and international industry benchmarks and the assessment and authorisation of specific reward proposals for the Group’s executive directors and independent non-executive directors, as well as reviewing Group retirement funds. The Remuneration and Nomination Committee also provides input and assists with new directors and senior executive appointments.

MembershipThe Remuneration and Nomination Committee comprises KT Nondumo (Chairperson and independent non-executive director), L Dyosi and AJ Fourie, both non-executive directors.

The committee met once during the period 14 September 2012 to 12 September 2013. The Chief

Executive Officer and the Financial Director attend the committee meetings by invitation and assist the committee in its deliberation, except when issues relating to their own compensation are discussed.

The Group’s auditors, SizweNtsalubaGobodo, have not provided advice to the committee. However, in their capacity as Group auditors, they performed normal audit procedures on directors’ remuneration.

Attendance at the meeting during the year was as follows:

Number ofmeetings

KT Nondumo 1

L Dyosi 1

AJ Fourie 1

E van der Merwe* 1

L Lynch* 1

* By invitation.

Executive remunerationRemuneration of executive directors is determined through a process of benchmarking, utilising current market information, as well as remuneration and reward practices of the Group.

The Company adopts the principle of total ‘Cost to Company’ in determining executive directors’ remuneration packages. This includes basic remuneration, short-term incentives determined by fulfilment of performance targets, medical and other benefits.

The Board annually appraises the executive directors and the results of these appraisals are considered by the Remuneration and Nomination Committee to guide it in determining performance and remuneration.

The extent of managerial responsibility, together with actual workplace location, determines basic remuneration of executive directors. Details of directors’ remuneration are set out on page 90.

Terms of serviceThe Company complies with relevant legislation in determining minimum terms and conditions of employment for executive directors. Executive directors


have employment contracts incorporating the same information and restrictions. The contract includes a restraint of trade paragraph to ensure the Group does not incur losses or loss of business due to the resignation of a director. The contracts do not indicate any term of employment and employment will cease with the resignation or dismissal of the director. The contract does not specify any age or time period to regulate retirement of directors.

External appointmentDirectors only hold external directorships or offices with the approval of the Board. If such approval is granted, directors may retain the fees paid from such appointments.

Short-term incentivesPerformance bonus schemes are available for executive directors based on Group performance. Job level, business unit and individual performance determine individual awards. The aim of the bonus scheme is to reward performance in line with organisational objectives and achievements.

Non-executive directors and independent non-executive directorsTerms of service

Shareholders appoint the independent non-executive and non-independent non-executive directors at annual general meetings, however, in terms of Group policy, interim Board appointments may be made between annual general meetings. Such interim appointees may not serve beyond the date of the following annual general meeting, though they may make themselves available for re-election by shareholders.

Fees

Non-executive directors were remunerated for their contribution to the Board and Board committees during the year. Fees to non-executive directors were, for the financial year to 30 June 2013, payable per month as was approved by shareholders at the 2012 Annual General Meeting.

Shareholders will be requested to consider a special resolution approving the remuneration policy of the non-executive directors at the 2013 Annual General Meeting.

There are no short- or long-term incentive schemes or pension benefits for non-independent non-executive or independent non-executive directors.

Executive directors review independent and non- independent non-executive directors’ remuneration and recommendations are made to the Board which in turn proposes fees for approval by shareholders at the Annual General Meeting. Non-independent non-executive directors’ fees and independent non-executive directors’ fees for the June 2014 financial year as proposed are listed on page 122.

ApprovalThis Remuneration and Nomination Committee report was approved by the Board of directors.

KT Nondumo

Signed on behalf of the Remuneration and Nomination Committee

Chairman of the Remuneration and Nomination Committee


Corporate Governance

THE FOLLOWING TABLE PROVIDES ASSURANCE ON KING III COMPLIANCE: AREAS OF NON-COMPLIANCE – HIGHLIGHTED IN BOLD AND WITH AN ASTERIX

PRINCIPLE DESCRIPTION COMPLIANCE

Chapter 1 Ethical leadership and corporate citizenship The Rolfes Board is the guardian of the values and ethics of the Group and is assisted in this regard by the Group Social and Ethics Committee (SEC).

1.1 The board should provide effective leadership based on an ethical foundation.

1.2 The board should ensure that the Group is and is seen to be a responsible corporate citizen.

The SEC oversees Rolfes’ commitment to responsible corporate citizenship.

1.3 The board should ensure that the Group’s ethics are managed effectively.

Rolfes Group has a Code of Ethics, to which all members of the board, management and employees of the Group are required to adhere. The code promotes and enforces ethical business practices.

Integrated Report strategy The Group firmly believes that through endorsement and active participation the enhancement of sustainable development and business performance will be optimised. We fully support and embrace King III and its recommendations regarding integrated sustainability reporting.

Rolfes is confident that it acts in a socially responsible manner, embraces opportunities and manages risks appropriately. We advocate sound principles of responsible business practices to stakeholders. We are working towards producing a holistic and reliable report to stakeholders, containing required data, integrated across all areas of performance, both financially and non-financially in the triple bottom line context; encompassing economic, social and environmental issues; in accordance with Chapter 9 of King III.

The current boundary and scope of the report do not fully address the entire range of material economic, environmental and social impacts on the organisation and we are driving the required processes to ensure our Integrated Report completely addresses all relevant issues in the future.

Assurance The Board recognises its responsibility to ensure the integrity of our Integrated Report. The authority to evaluate sustainability disclosures and the oversight of assurance providers are delegated to the Audit and Risk Committee. The sustainability reporting and disclosure are currently not independently assured but the Board is satisfied that the information contained in this report is reliable and does not contradict the financial aspects of the report.

Corporate governance Rolfes Holdings Limited and its directors acknowledge their obligation and responsibility to fully support and endorse the King Report of Corporate Governance for South Africa – 2009 (King III) and the Board of Directors is committed to the principles of transparency, integrity and accountability. The Board is satisfied that the Group has, during the year under review, complied on an “apply or explain” basis with King III as well as the JSE Listings Requirements.



Chapter 2 Boards and directors Good corporate governance practice is an important ingredient in creating and sustaining shareholder value and ensuring that behaviour is ethical, legal, transparent and for the benefit of all Rolfes’ stakeholders. The Board Charter is an important component of the framework that defines our corporate governance practice within the Rolfes Group, which consists of Rolfes Holdings Limited (Rolfes, Rolfes Group or the Group) and all of its subsidiary and associated entities (“the Group”), and is designed to provide guidance to directors and external audiences as to how we approach this critical issue within the Group.

2.1 The board should act as the focal point for and custodian of corporate governance.

2.2 The board should appreciate that strategy, risk, performance and sustainability are inseparable.

The board is responsible to shareholders for creating and delivering sustainable shareholder value through the management of the Group’s businesses, in particular in relation to the triple bottom line of social, economic and environmental performance. It should therefore determine the strategic objectives and policies of the Group so as to deliver such long-term value, providing overall strategic direction within a framework of rewards, incentives and controls. The board must ensure that management strikes an appropriate balance between promoting long-term sustainable growth and delivering short-term performance.

2.3 The board should provide effective leadership based on an ethical foundation.

Refer to 1.1

2.4 The board should ensure that the Group is and is seen to be a responsible corporate citizen.

Refer to 1.2

2.5 The board should ensure that the Group’s ethics are managed effectively.

Refer to 1.3

2.6 The board should ensure that the Group has an effective and independent audit committee.

Refer to Principle 3

2.7 The board should be responsible for the governance of risk.


2.9 The board should ensure that the Group complies with applicable laws and considers adherence to non-binding rules, codes and standards.



Corporate Governance (continued)


2.10 * The board should ensure that there is an effective risk-based internal audit.


2.11 The board should appreciate that stakeholders’ perceptions affect the Group’s reputation.


2.12 * The board should ensure the integrity of the Group’s integrated report.


2.13 The board should report on the effectiveness of the Group’s system of internal controls.

Refer to Principle 7 and Principle 9

2.14 The board and its directors should act in the best interests of the Group.

The duties of directors include:

a. only exercising powers within the authority given and acting in accordance with the best interest of the Group;

b. at all times acting not only in good faith and honesty, but also in the Group’s best interests and to promote the success of the Group for all its members, whilst having regard to the likely consequences of any decision in the long term, the interests of employees, the need to further relationships with suppliers and customers, the impact on the community and the environment, and the need to act fairly as between members of the Group;

c. exercising independent judgement in carrying out their duties;

d. exercising reasonable care, skill and diligence in carrying out their duties commensurate with their knowledge and experience; and

e. avoiding a conflict of interest between their personal interests and their duties to the Group.

2.15 The board should consider business rescue proceedings or other turnaround mechanisms as soon as the Group is financially distressed as defined in the Act.

Not applicable.

2.16 The board should elect a chairman of the board who is an independent non-executive director. The chief executive officer of the Group should not also fulfil the role of chairman of the board.

Bulelani Ngcuka is the Chairman although not independent. The board has elected a lead independent non-executive director to take the chair where the Chairman believes that there may be a conflict of interest.

2.17 The board should appoint the chief executive officer and establish a framework for the delegation of authority.

Erhard van der Merwe, appointed as Group Chief Executive by the Rolfes Board in 2007, operates under a delegation of authority, as approved by the board.



2.18 The board should comprise a balance of power, with a majority of non-executive directors. The majority of non-executive directors should be independent.

The board has an appropriate mix of non-executive, executive and independent non-executive directors. As at 30 June 2013, the Group had 3 independent non-executive directors, 4 non-executive directors and 2 executive directors.

2.19 Directors should be appointed through a formal process.

The process for appointing new directors to the board is determined by the board through the Nomination and Remuneration Committee.

2.20 The induction of and ongoing training and development of directors should be conducted through formal processes.

The Group CEO and Chairman of the Board agree upon a board training programme based on the requirements of the board. Training and orientation meetings and visits are held, covering topics such as Rolfes’ business, corporate governance, fiduciary duties and responsibilities, new laws and regulations and risk management. All newly appointed directors go through the orientation programme with management.

2.21 The board should be assisted by a competent, suitably qualified and experienced Group secretary.

The Group Company Secretary, Johan Schlebusch (CA (SA)) is regarded by the board as competent, suitably qualified and experienced.

2.22 The evaluation of the board, its committees and the individual directors should be performed every year.

The Rolfes Board conducts an annual review of its own effectiveness and that of the board committees. In addition, the directors perform an annual self-evaluation that is reviewed and commented on by the Chairman.

2.23 The board should delegate certain functions to well-structured committees but without abdicating its own responsibilities.

The Rolfes Group Board takes full ownership of certain key decisions to ensure it retains proper direction and control of the Group and has appointed committees to help it meet these responsibilities. The board is responsible for the performance and affairs of the Group and holds itself ultimately accountable to its stakeholders. Delegating various functions and authorities to committees and management does not absolve the board and its directors of their duties and responsibilities. The following board committees exist in Rolfes Group:

The Audit and Risk Committee

Nomination and Remuneration Committee (REMCO)

Social and Ethics Committee




2.24 A governance framework should be agreed between the Group and its subsidiary boards.

The governance model for Rolfes’ subsidiaries is based on our risk management framework, ensuring that the governance requirements applicable to each entity are congruent with the risk exposure.

2.25 Companies should remunerate directors and executives fairly and responsibly.

Refer to the REMCO report.

2.26 Companies should disclose the remuneration of each individual director and certain senior executives.

Refer to the REMCO report.

2.27 Shareholders should approve the Group’s remuneration policy.

Ordinary shareholders of Rolfes Group approve, by means of a non-binding advisory note, the Group’s remuneration policy annually at the AGM.

Chapter 3 Audit committee Refer to the Audit and Risk Committee report

3.1 The board should ensure that the Group has an effective and independent audit committee.

The membership of the committee comprises three independent non-executive directors.

3.2 Audit committee members should be suitably skilled and experienced independent non-executive directors.

The members of the committee are all suitably skilled and experienced independent non-executive directors.

3.3 The audit committee should be chaired by an independent non-executive director.

Takalani Tshivhase, the chairman, is an independent non-executive director.

3.4 * The audit committee should oversee integrated reporting.

The committee oversees integrated reporting in the Rolfes Group however not implemented fully to date.

3.5 * The audit committee should ensure that a combined assurance model is applied to provide a co-ordinated approach to all assurance activities.

The combined assurance model is not applied as yet. The Group is working towards applying in the future.

3.6 The audit committee should satisfy itself of the expertise, resources and experience of the Group’s finance function.

The committee performs this assessment on an annual basis.

3.7 * The audit committee should be responsible for overseeing of internal audit.

Refer to 7.1.

3.8 The audit committee should be an integral component of the risk management process.

The committee overseas risk management in the Group.

3.9 The audit committee is responsible for recommending the appointment of the external auditor and overseeing the external audit process.

The committee performs this function on an ongoing basis.

3.10 The audit committee should report to the board and shareholders on how it has discharged its duties.

Refer the Audit and Risk Committee report.



Chapter 4 The governance of risk

4.1 The board should be responsible for the governance of risk.

The Audit and Risk Committee assists the board with the governance of risk.

4.2 The board should determine the levels of risk tolerance.

The Audit and Risk Committee assesses the levels of risk tolerance and limits of risk appetite in the Rolfes Group and recommends it to the board for approval.

4.3 The risk committee or audit committee should assist the board in carrying out its risk responsibilities.

Refer to 4.1.

4.4 The board should delegate to management the responsibility to design, implement and monitor the risk management plan.

The board has delegated the day-to-day responsibility for risk management to management.

4.5 The board should ensure that risk assessments are performed on a continual basis.

The Audit and Risk Committee actively monitors the Group’s key risks as part of its standard agenda.

4.6 The board should ensure that the frameworks and methodologies are implemented to increase the probability of anticipating unpredictable risks.

All risks are identified and steps to mitigate these are outlined, including reasonably unpredictable risks.

4.7 The board should ensure that management considers and implements appropriate risk responses.

The Audit and Risk Committee ensures that the executive directors have in place appropriate responses to perceived risks.

4.8 The board should ensure continual risk monitoring by the management.

Responsibility for identified risks is assigned to the Chief Executive Officer and the Group FD, who are required to report on the steps being taken to manage or mitigate such risks.

4.9 The board should receive assurance regarding the effectiveness of the risk management process.

The Audit and Risk Committee receives this assurance from executive directors various providers and the external auditors.

4.10 The board should ensure that there are processes in place enabling complete, timely, relevant, accurate and accessible risk disclosure to stakeholders.

The Integrated Annual Report provides an outline of the risk management process to its stakeholders. Refer the Audit and Risk Committee report.



Chapter 5 The governance of information technology

5.1 The board should be responsible for information technology (IT) governance.

The board is comfortable that an effective governance structure is in place through executive management and the Audit and Risk Committee, whose mandate is to improve the overall status of IT governance in the Group, while ensuring that future platforms will meet strategic needs and remain competitive. The Audit and Risk Committee have oversight of selected components of IT governance. IT risk management is aligned to the principal risk framework under operational risk.

5.2 IT should be aligned with the performance and sustainability objectives of the Group.

Refer to 5.1.

5.3 The board should delegate to management the responsibility for the implementation of an IT governance framework.

Refer to 5.1.

5.4 The board should monitor and evaluate significant IT investments and expenditure.

Refer to 5.1.

5.5 IT should form an integral part of the Group’s risk management.

Refer to 5.1.

5.6 The board should ensure that information assets are managed effectively.

Refer to 5.1.

5.7 A risk committee and audit committee should assist the board in carrying out its IT responsibilities.

Refer to 5.1.

Chapter 6 Compliance with laws, codes, rules and standards

6.1 The board should ensure that the Group complies with applicable laws and considers adherence to non-binding rules, codes and standards.

In the context of the overall obligations of the board, the duties of the directors are to ensure that the Group complies with all legislation, regulation, codes and standards.

6.2 The board and each individual director should have a working understanding of the effect of the applicable laws, rules, codes and standards on the Group and its business.

The directors and the board understand and stay abreast of the appropriate laws, rules, and codes of standards applicable to Rolfes Group.

6.3 Compliance risk should form an integral part of the Group’s risk management process.

Compliance is an identified significant risk and addressed as part of the risk management process.

6.4 The board should delegate to management the implementation of an effective compliance framework and processes.

The board delegates this to the Group CEO and Group FD functions.




Chapter 7 Internal audit risk

7.1 * The board should ensure that there is an effective risk-based internal audit.

The Group is committed to comply with Chapter 7, however the Internal Auditor is no longer employed by the Group and a suitable replacement will be found in the future. The Group still believes that the size of the Group currently does not warrant a high-level internal audit function.

7.2 * Internal audit should follow a risk-based approach to its plan.

Refer to 7.1.

7.3 * Internal audit should provide a written assessment of the effectiveness of the Group’s system of internal control and risk management.

Refer to 7.1.

7.4 * The audit committee should be responsible for overseeing internal audit.

Refer to 7.1.

7.5 * Internal audit should be strategically positioned to achieve its objectives.

Refer to 7.1.

Chapter 8 Governing stakeholder relations

8.1 The board should appreciate that stakeholders’ perceptions affect the Group’s reputation.

Rolfes has a formal, decentralised stakeholder engagement model with a practical framework designed around our main stakeholder groups. We use various policies and methodologies to govern communication and conduct with stakeholders to cater for their diverse and sometimes conflicting interests and concerns. This is a continuous process and our policies and methodologies are widely informed by best practice, corporate governance and legislative requirements, as well as risk and reputation management principles.

8.2 The board should delegate to management to proactively deal with stakeholder relationships.

Management is responsible for maintaining stakeholder relationships.

8.3 The board should strive to achieve the appropriate balance between its various stakeholder groupings, in the best interests of the Group.

The appropriate balance is assessed on a continuous basis.

8.4 Companies should ensure the equitable treatment of shareholders.

In terms of the Board Charter, Rolfes directors must act in a way they consider, in good faith, would promote the success of the Group for the benefit of the shareholders as a whole and, in doing so, have regard (amongst other matters) to the need to act fairly between shareholders of Rolfes.

8.5 Transparent and effective communication with stakeholders is essential for building and maintaining their trust and confidence.

Refer to 8.1.

8.6 The board should ensure that disputes are resolved as effectively, efficiently and expeditiously as possible.

The board ensures that disputes are resolved effectively as possible.



Chapter 9 Integrated reporting and disclosure

9.1 The board should ensure the integrity of the Group’s integrated report.

The Board is responsible for the integrity of the integrated Report and is assisted in this regard by the Audit and Risk Committee.

9.2 * Sustainability reporting and disclosure should be integrated with the Group’s financial reporting.

Rolfes’ integrated reporting provides evidence that sustainable reporting is in process and that current disclosure is as far as possible at the moment integrated with the Group’s financial reporting.

9.3 * Sustainability reporting and disclosure should be independently assured.

Rolfes has not progressed to the point of having an independently assured sustainability report and will be working toward this in the future.



The Group fully supports and embraces King III’s integrated sustainability reporting approach and corporate citizenship principles and will endeavour to apply the requirements and principles fully in line with business growth. The Board acknowledges that in addition to being responsible for corporate performance its responsibility for triple bottom line reporting consisting of responsible economic, social and environmental practices.

The Group requires that directors prescribe to the five moral duties of conscience, care, competence, commitment and courage. The ethical corporate culture contains that all directors follow ethical standards; that the interests of all stakeholders should be taken into account in making decisions; that the conduct of individuals needs to improve moral values; that business activities should be conducted with integrity, fairness and vision; that fair competition practices are followed in all aspects of the business activity; and that poor performance is never blamed on the exercise of good ethical standards.

Sustainability priorities and practices include:

• continuousdevelopmentandmarketingofinnovativeenvironmentally friendly products, such as its lead-free organic pigments product range manufactured and distributed globally;

• constantlystrivingtoimproveemployees’healthandwelfare opportunities;

• responsible reputation management to assist withincreasing market share and building the Rolfes brand;

• contributing authentically to the process of broad-based Black Economic Empowerment;

• advocating socially responsible environmentalpractices;

• understandingstakeholderrequirementsbyprovidingplatforms for regular, mutual, honest and transparent stakeholder communication; and

• pro-activereputationmanagementassistingwiththestrengthening of the Rolfes brand.

Our MissionWe endeavour to:

• add value to our customers by providing qualityproducts and services on time at fair value.

• recogniseoursuppliersasstakeholders.

• provideanenvironmentwherestaffcanexcelthroughequal opportunities and training.

• exerciseresponsibleenvironmentalpractices.

• rewardshareholderswithexceptionalreturns.

Sustainability report

Value-added statement

Group

2013 2013 2012 2012 R’000 % R’000 %

Revenue 801 716 636 172Cost of material and services (594 748) (482 026)

Value-added by operations 206 968 99.80 154 146 99.64Interest income 412 0.20 555 0.36

Total 207 380 100.00 154 701 100.00

Applied as follows:Employees salaries, wages and benefits 89 621 43.22 67 573 43.68Government taxation 23 660 11.41 17 116 11.06Providers of capital and interest 11 450 5.52 9 068 5.86Dividends 10 360 5.00 10 684 6.91

Retained in the GroupRetained earnings 52 379 25.26 37 268 24.09Minority shareholders 11 845 5.71 5 624 3.64Depreciation and amortisation 8 065 3.88 7 368 4.76

Total 207 380 100.00 154 701 100.00


Our Corporate valuesThe Rolfes Group subscribes to a comprehensive value system supporting the following:

• transparencyandaccountability

• entrepreneurship,equalopportunityanddevelopment

• fairness,integrityandhonesty

• respectandresponsibility

• environmentalprotection

EnvironmentalThe Group recognises its obligations to all stakeholders with interests in our activities. We commit to responsible care and to protect our environmental resources. Our aim is to act as good corporate citizens and we undertake to operate within environmental laws and regulations.

Products and servicesThe Group is continuously developing processes to add organic products to our product range.

Packaging materialsPackaging material for the majority of our exported products cannot be reclaimed locally. Local Group companies have various initiatives in place to ensure, as far as it is under our control, that packaging is disposed of in an environmentally responsible manner.

ComplianceThe Group is not aware of any fines or non-monetary sanctions for non-compliance to environmental laws and regulations issued to the Group during the year under review.

Strategies to be undertaken to facilitate future reporting on environmental aspects include:

Biodiversity

Rolfes is unable to report on the biodiversity value and the impact of its activities in this report. The reporting of biodiversity is a future focus area.

Emission, effluent and waste

Continuous monitoring of effluent treatment plants with assistance of external institutions ensure that particular care is taken to water quality and discharges. Preventive measures are in place and upgrades are underway to ensure that storm water pollution does not take place. Safe disposal of waste is done through registered and accredited institutions, certifying that waste is properly and legally disposed of.

Harmful discharges from factory emissions are limited through preventative measures. The Jet Park plants have seen significant reductions in emissions on a year-to-year analysis since the conversion from coal to gas. This conversion led to a reduction in CO2 and sulphur emissions and improvement of our carbon footprint. Pro-active logistic planning ensures less travel and a reduction in greenhouse gas emitted from motor vehicles. No chemical spills were reported for the year under review and the Group has been pro-active in meeting Hazchem transportation requirements.

Water

Water is one of the precious and scarce resources identified as a key component of future sustainability of operations. Management has endeavoured to apply their focus on water recycling initiatives. Amazon Colours has a water recycling plant on a small but effective scale to ensure efficient and responsible water usage. Rolfes Silica uses filtering and recycling of rainwater in their washing processes and achieves significant reductions in water usage.

Social: Labour practices and decent work Labour/Management relationsPercentage of employees covered by collective bargaining agreements:

Company

Totalnumber of

employees

Percentage covered

by collectivebargaining

agreements

Rolfes Asset Holding 15 73Rolfes Chemicals 62 63Rolfes Colour Pigments International 116 65Rolfes Silica 78 100Agchem Africa 51 0Amazon Colours 25 0Rolfes Holdings Limited 6 17Absolute Science 9 0Acacia Specialty Chemicals 5 0Galltec 2 0Introlab Chemicals 2 0Rolfes Africa 1 0PWM Cape 2 0Rolfes PWM 38 0Tetralon 10 0

Total 422 48

Sustainability report (continued)


EnergyThe Group has applied its focus on efficiency of energy consumption. The Group is committed to long-term energy-saving practices through awareness training of the workforce. On the Jet Park site the plant was re-engineered from coal to gas operations. The conversions lead to a significant reduction in electricity consumption and emissions which in turn reduced the plants carbon footprint.

Freedom of association and collective bargaining

The Group acknowledges the workforce’s right to freedom of association and participation in collective bargaining without limitation. Employee relations are managed by way of trade union negotiations.

The minimum notice period regarding operational changes is as per the Labour Relations Act and a clause relating thereto is not included in collective bargaining agreements.

Equity and practicesRolfes acknowledges that effective human resources management is strategic to Group performance. The Group recognises workplace needs to reflect a transformed society with equity barriers carefully considered in policy and decision-making. Employment equity practices focus on attracting competent employees, skills retention and staff performance development. The Group’s employment equity approach provides for equal opportunity and fair treatment in employment. While this enables compliance with South African employment equity legislation, the Group emphasises diversity by continuing to maximise its talent pool, strengthen capacity and increasing innovation by introducing different ways of thinking.

Employment Equity reports are submitted timeously to the Department of Labour on an annual or every second year basis, depending on the regulatory submission requirements for each legal entity.

Male FemaleForeignnational

Occupational levels Afr

ican

Co

lour

ed

Ind

ian

Whi

te

Afr

ican

Co

lour

ed

Ind

ian

Whi

te

Mal

e

Fem

ale

Tota

l

Top management 0 0 1 9 0 0 0 2 1 0 13

Senior management 0 0 5 6 1 0 0 3 0 0 15

Professionally qualified and experienced specialists in micro-management

8 1 6 18 2 0 2 10 0 0 47

Skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents

31 0 5 29 1 2 3 25 0 0 96

Semi-skilled and discretionary decision-making

142 11 1 14 8 7 3 15 0 0 201

Unskilled and defined decision-making

23 0 0 0 27 0 0 0 0 0 50

Total permanent employees 204 12 18 76 39 9 8 55 1 0 422

Temporary employees 60 0 0 2 18 0 0 0 0 0 80

Grand total 264 12 18 78 57 9 8 55 1 0 502

Employment

Consolidated total workforce by employment type, gender, nationality and race as per the latest Employment Equity Report submission:


Health and Safety

Health and safety reporting is compiled monthly and reported to executive directors on a quarterly basis during Group Safety, Health, Risk and Environment meetings. Meetings are recorded in formal minutes and kept with the Company Secretary in a formal minute book. There was a single fatality and no other serious injury due to workplace accidents reported for the year under review. Measures to prevent workplace accidents and fatalities are in place and enforced through policies, strategies, procedures and infrastructure to mitigate environmental, occupational health and safety risks. Regular risk assessments and monitoring assist with ongoing compliance with all relevant occupational health and safety regulations. In-house training on various safety precautions, industrial hygiene, codes of practice and safe operating procedures are conducted on a regular basis.

Surveillance programmes are in place at all sites with workers monitored for the potential health effects of products to which they are exposed. Personnel are issued with required protective clothing and equipment and trained on prevention strategies to mitigate potentially harmful exposure risks as well as emergency treatment of accidental exposure.

Proper storage facilities are in place for raw materials and finished goods to ensure safety of employees and the environment. Appropriate precautions are taken to avoid potential explosions associated with dust clouds or flammable materials. Underground storage tanks are monitored for leaks and compliance to applicable legislation.

HIV/Aids

Healthcare promotion in the Group concentrates on implementing preventative and corrective mitigation measures to reduce and eliminate underlying causes of HIV/Aids, other serious diseases and identifiable health hazards. The Group promotes voluntary testing, non- discrimination and awareness about preventing the spread of the disease and mitigating its effects.

Training and EducationHuman resource development

Workforce skills and competency levels are improved through human resource development programmes. These are implemented to unlock each employee’s personal potential and to make these production skills

available to operations. Training courses include health and safety training, Hazchem requirements training, plant and equipment operation training, specialised sales force development programmes and product-related training courses.

Skills development

Emphasis is placed on human capital as an integral part of the Group’s sustainability. The Skills Development and Employment Equity Committee is appointed from members of management and staff who, in compliance to skills development legislation, evaluate, monitor and conduct training, learning and career development opportunities for employees. CHIETA receives workplace skills and training reports timeously and ensures compliance to regulations.

Human rights and non-discriminationEmployees work in an environment which is free from all forms of discrimination. Human resource management respects employee rights and labour regulations and underlines the importance by taking appropriate disciplinary action against offenders. No incidents of discrimination were reported for the period under review.

Child and forced or compulsory labour

The Group rejects child and forced labour practices. It respects national cultures, local laws and traditions. As a responsible employer, the Rolfes Group undertakes to comply with regulatory requirements and rules of the various Acts and governing bodies, including the Constitution, the Labour Relations Act, the Employment Equity Act, the Skills Development Act and the Basic Conditions of Employment Act. The Group will immediately terminate agreements and relationships with contractors or suppliers who contravene the Constitution or the Universal Declaration of Human Rights standards. None of the operations practice child and forced or compulsory labour.

Strategies to be undertaken to facilitate future reporting on human rights aspects include:

Investment and procurement practices

Rolfes will endeavour to include human rights clauses in future investment contracts as well as ensuring that the particular investment has undergone human rights screening, where appropriate, as well as reporting on the percentage of significant suppliers and customers that have undergone human rights screening.

Sustainability report (continued)


Corporate Social Investment (CSI)The Social and Ethics Committee have taken large strides during the year to ensure the implementation of the CSI plan and have together with management taken up the responsibility to promote social awareness and participation in projects run within each legal entity in the Group.

Current projects undertaken during the year included:

• DonationsoffoodanddrinkforthechildrenatBeyersBytjies Pre-school, where AgChem staff assisted in the painting and upgrading of the classrooms.

• Sponsoring of the AgChem Fast11 soccer teamconsisting of AgChem and CMC employees.

• Two regional golf days from which all proceedsare donated to Charities in aid of the previously disadvantaged.

• RCPI donation together with staff participation atthe Mandela Day festivities at Ubambiswana. Staff assisted as well as provided fun activities for the children involved.

• Donation of 100 cases of Coca-Cola to the AlexCrisis Youth Centre in support of their choir festival held for their youth in aid of entertaining the disabled and senior citizens in the community.

• Sponsorshipofpaintaspartofaninitiativeundertakenby WITS as part of Mandela Day celebrations. The paint was utilised to paint rooms for mothers and their children at the Usindiso Shelter.

Bribery and corruptionThe Group is committed to the highest standards of ethical conduct in dealings with all stakeholders. Bribery and corruption are not tolerated at any level and employees are encouraged to conduct their activities objectively and in a manner that comply with all the requirements of the Anti-Fraud and Corruption Act and the Protected Disclosures Act. The core of the commitment is to apply the highest standard of ethical conduct in dealings with all stakeholders.

ComplianceNo fines or non-monetary sanctions for non-compliance with laws and regulations have been issued to the Group during the year under review.

Strategies to be undertaken to improve reporting on corporate social responsibility aspects include:

The Group CSI Plan is in the process of being implemented and will be extended until fully operational.

Social: Product responsibility

Customer health and safety

The Group publishes all material safety and technical data sheets of products sold on our website. These are updated continuously to ensure it meets customers’ health, safety and designed use needs.

QualityThe following legal entities within the Group are accredited with ISO 9001:2008 Quality Management Assurance Standards:

• RolfesColourPigmentsInternational’sJetParkandAlberton manufacturing facilities, Amazon Colours Jet Park manufacturing facilities.

• RolfesChemicalsGermistonmanufacturingfacilities(in process).

• Agchem Africa Pretoria manufacturing facilities (in process).

ComplianceNo fines or non-monetary sanctions for non-compliance with laws and regulations have been issued to the Group during the year under review.

Strategies to be undertaken to improve reporting on product responsibility aspects include:

• Customerhealthandsafety

Development of alternatives for potentially harmful products is being assessed continuously to ensure products are improved in terms of health and safety.

• Productsservicesandlabelling

Product labelling practices are constantly reviewed and revised to ensure proper responsible labelling in accordance with relevant legislation.

Broad-Based Black Economic Empowerment

The Group has aligned its efforts to the Department of Trade and Industry’s B-BBEE Codes of Good Practice, through Vuwa Investments Proprietary Limited (“Vuwa”), a 15,8% shareholder and the Group’s black empowerment partner, to ensure a sustainable contribution to the empowering of employees and historically disadvantaged individuals within local communities. Vuwa is owned and controlled by black people. Further individual black shareholders comprise 11,1%.


Directorate

1

5

1

4 5

2 3

32

4

For full CV’s please visit:www.rolfesza.net

Bulelani T Ngcuka (58)

Non-Executive Chairman

BProc (University of Fort Hare); LLB (UNISA); MA (Webster University, Geneva, Switzerland)

Appointed: 5 April 2007Chairman of the Board

Lungisa Dyosi (42) #

Non-Executive Director

BA Law; LLB (University of Cape Town); SEP (University of the Witwatersrand and Harvard Business School); Advocate of High Court of South Africa

Appointed: 5 April 2007

Erhard van der Merwe (51)

Chief Executive Officer

BCom (Hons) (Accounting) and CTA (University of Johannesburg); MCom (Business Management) (University of Johannesburg); CA (SA)

Appointed: 1 February 2007

Lizette Lynch (47) +

Financial Director

BCompt (UNISA)

Appointed: 25 June 2008

Arnold J Fourie (51) #


BSc Chem Eng (University of Potchefstroom); MSc Chem Eng (University of the Witwatersrand)

Appointed: 22 November 2000

^ Audit and Risk Committee

# Remuneration and Nomination Committee

+ Social and Ethics Committee


^ Audit and Risk Committee

# Remuneration and Nomination Committee

+ Social and Ethics Committee

6

9 10

7 8

9

8

10

6 7

For full CV’s please visit:www.rolfesza.net

Mike Teke (48)


MBA (UNISA), B. Ed (University of the North) and a BA (Hons) (University of Johannesburg)

Appointed 8 April 2013

Takalani AM Tshivhase (58) ^

Lead Independent Non-Executive

Director

BAdmin (UNIN); HonsB (Admin) (Econ) (SA); MBL (SA); MAdmin (Econ) (University of Pretoria); FIBSA (SA); CPMM (University of the Witwatersrand); CM (SA), M.Inst.

Appointed: 25 February 2009Chair: Remuneration and Nomination Committee

Karabo T Nondumo (35) ^#

Independent Non-Executive Director

BAcc (University of Natal); HdipAcc (University of the Witwatersrand); CA (SA)

Appointed: 25 February 2009Chair: Audit and Risk Committee

Johan C Schlebusch (31)

Company Secretary

BAcc (Central University of Technology, Free State); CA (SA)

Seapei S Mafoyane (36) ^ +

Independent Non-Executive Director

MBA (WITS Business School), BSc (University of Natal)

Appointed: 26 August 2012Chair: Social and Ethics Committee


33 Directors’ approval and responsibility statement

33 Declaration by Company Secretary

34 Report of the Independent Auditors

35 Directors’ report

39 Report by the Audit and Risk Committee

42 Statement of financial position

43 Statement of comprehensive income

44 Statement of changes in equity

45 Statement of cash flows

46 Accounting policies

63 Notes to the consolidated financial statements

Annual financial statements


Directors’ approval and responsibility statement

The directors of Rolfes Holdings Limited have pleasure in presenting the annual financial statements for the year ended 30 June 2013.

In terms of the South African Companies Act, the directors are required to prepare annual financial statements that fairly present the state of affairs and business of the Company and of the Group at the end of the financial year and of the profit or loss for that year. To achieve the highest standards of financial reporting, these annual financial statements have been drawn up to comply with International Financial Reporting Standards and have been prepared using appropriate accounting policies, supported by reasonable and prudent judgements and estimates.

The annual financial statements comprise:

• thedirectors’report• thestatementoffinancialposition• thestatementofcomprehensiveincome• thestatementofchangesinequity• thestatementofcashflow• thenotestothefinancialstatements• theinterestsinsubsidiaries• theanalysisofshareholding

The reviews by the Chairman and the Chief Executive Officer are on the results of operations for the year and those matters which are material for an appreciation of the state of affairs and business of the Company and of the Rolfes Group.

Supported by the Audit Committee, the directors are satisfied that the internal controls, systems and procedures in operation provide reasonable assurance that all assets are safeguarded, that transactions are properly executed and recorded, and that the possibility of material loss or misstatement is minimised. The directors have reviewed the appropriateness of the accounting policies, and concluded that estimates and judgements are prudent. They are of the opinion that the annual financial statements fairly present the state of affairs and business of the Company and Group at 30 June 2013 and of the profit for the year to that date. The external auditors are responsible for reporting on whether the financial statements are fairly presented. In addition, the directors have also reviewed the cash flow forecast for the year to 30 June 2014 and believe that the Rolfes Group has adequate resources to continue in operation for the foreseeable future. Accordingly, the annual financial statements have been prepared on a going concern basis and the external auditors concur.

The annual financial statements were approved by the board of directors and signed on their behalf by:

B NGCUKA E VAN DER MERWE L LYNCHChairman Chief Executive Officer Financial Director

Declaration by Company Secretary

In terms of Section 88(2)(e) of the South African Companies Act, as amended (the Act), I certify that Rolfes Holdings Limited has lodged with the Companies and Intellectual Properties Commission all such returns as are required of a public company in terms of the Act. Further, that such returns are true, correct and up to date.

J SchlebuschCompany Secretary

Midrand13 September 2013


Report of the Independent Auditors

TO THE SHAREHOLDERS OF ROLFES HOLDINGS LIMITED

We have audited the consolidated and separate financial statements of Rolfes Holdings Limited set out on pages 42 to 114 which comprise the statement of financial position as at 30 June 2013, the statement of comprehensive income, statement of changes in equity and statement of cash flow for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Directors’ responsibility for the consolidated financial statementsThe Company’s directors are responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act, 71 of 2008, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these consolidated and separate financial statements based on our audit. We conducted the audit in accordance with International Financial Reporting Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated and separate 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 auditors’ judgement, including the assessment of the risks of material misstatement of the financial statement, 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 of our audit opinion.

OpinionIn our opinion, the consolidated and separate financial statements present fairly, in all material aspects, the consolidated and separate financial position of Rolfes Holdings Limited as at 30 June 2013, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards, and the requirements of the Companies Act, 71 of 2008.

Other reports required by the Companies ActAs part of our audit of the consolidated and separate financial statements for the year ended 30 June 2013, we have read the Directors’ Report, the Audit and Risk Committee’s Report and the Company Secretary’s Certificate for the purpose of identifying whether there are material inconsistencies between the reports and the audited consolidated and separate financial statements. These reports are the responsibility of the respective preparers. Based on the reading of these reports we have not identified material inconsistencies between these reports and the audited consolidated and separate financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

SizweNtsalubaGobodo Inc.Director: A PhilippouRegistered Auditor Pretoria

13 September 2013


The directors have pleasure in presenting their report on the activities of the Company and the Group for the year ended 30 June 2013.

Nature of business of the GroupRolfes Holdings Limited (Rolfes or the Rolfes Group) is a holding company incorporated in the Republic of South Africa that, through its divisions and subsidiaries, provides a wide range of market-leading products to customers through dedicated teams of industry specialists in the agri-chemicals, water and mining chemicals and industrial chemical industries. Rolfes listed on the Main Board of the JSE Limited on 21 November 2011; its primary listing was previously on AltX. The Group has acquired the PWM Group business on 1 April 2013. Details of the acquisitions are set out on pages 103 to 107.

Results of operationsThe results of the year’s operations are set out in the financial statements from pages 42 to 114 and incorporate the consolidated results of the Company and its subsidiaries.

Year under reviewThe year under review is fully covered in the Chairman’s, the Chief Executive Officer’s and the Financial Director’s reports.

Events after the reporting periodThe directors are not aware of any significant events that have occurred between the end of the financial year and the date of this report that may materially affect the results of the Company for the period under review or their financial position as at 30 June 2013.

Share capitalDetails of the authorised and issued share capital appear in note 9 on page 74 of the annual financial statements.

The Company’s authorised share capital remained unchanged during the year, while there was an issue of 5 000 000 shares effective 28 March 2013.

DividendsThe Group paid an interim dividend to shareholders of 5 cents per share on 25 March 2013 and will pay a final dividend of 5 cents per share on 21 October 2013 of R5,4 million.

The salient dates applicable to the final dividend are as follows:

2013

Last day to trade “cum” dividend Friday, 11 OctoberFirst day to trade “ex” dividend Monday, 14 OctoberRecord date Friday, 18 OctoberPayment date Monday, 21 October

No share certificates may be dematerialised or rematerialised between Monday, 14 October 2013 and Friday, 18 October 2013, both days inclusive.

• Thelocaldividendwithholdingtaxrateis15%;

• NoSTCcreditswillbeutilisedforthefinalordinarydividend;


• Thenetordinarydividendis4,25000centspershareforordinaryshareholderswhoarenotexemptfromdividend

withholding tax; and

• RolfesHoldingsLimited’staxationreferencenumberis9492/089/140.

Directors’ report

FOR THE YEAR ENDED 30 JUNE 2013


DirectorsBiographical notes of the current directors are set out on pages 30 and 31.

Details of directors’ remuneration appear on page 90.

Changes in directorateMsSSMafoyanewasappointedon26August2012.

Mr MS Teke appointed on 8 April 2013.

In terms of the Company’s Memorandum of Incorporation, directors retire by rotation every three years. Mr AJ Fourie retires as a director at the forthcoming Annual General Meeting and, being eligible, offers himself for re-election.

Directors’ interests in contractsNo material contracts involving directors’ interests were entered into in the year under review.

Company secretary and registered officeThe Company’s registered, physical and postal addresses are:

12 Jet Park RoadJet ParkBoksburg1459

Mr JC Schlebusch is the Company Secretary, his address and the registered address of the Company are as above and below:

PO Box 8112Elandsfontein1406

The Board confirms it believes that the Company Secretary is suitably qualified and experienced to provide the Board with the required support for sufficient functioning and discharge of its duties as prescribed by the Companies Act, King III and the JSE Listings Requirements.

The Board believes an arm’s length relationship exists between itself and the Company Secretary.

Property, plant and equipmentDetails of additions to property, plant and equipment during the year are disclosed in notes 2 and 3 to the annual financial statements. There was no change in the nature of the property, plant and equipment of the Company or in the policy regarding their use during the year under review.

Material eventsBusiness combinations

Results were strengthened by the acquisitions and addition of the PWM group results for three months from 1 April 2013. Overall market share in the water chemicals and treatment industries increased with these acquisitions, while other divisions yielded mixed results, depending on the sector in which they operate.

International Financial Reporting Standards (IFRS)Rolfes’ financial statements have been prepared in accordance with IFRS.

Major shareholdersShareholdersholdingbeneficially,directlyorindirectly,inexcessof5%oftheissuedsharecapitaloftheCompanyaredetailed on page 115.

Directors’ report (continued)



Directors’ shareholdingsThe direct and indirect beneficial shareholdings of the directors in office at the date of this report are as follows:

2013 2012

Direct Indirect Direct Indirect

Executive directorsL Lynch 3 000 – 3 000 –E van der Merwe 2 196 605 – 3696605 –Non-executive directors –MS Teke 7 000 000 – – –L Dyosi 1 130 247 – 1 272 754 –AJ Fourie 10 611 943 – 19 111 943 –BT Ngcuka 3 390 739 – 3818261 –KT Nondumo – – – –SS Mafoyane – – – –TAM Tshivhase 5 101 500 – 101 500 –

29 434 034 – 28004063 –

Attendance at meetingsThe number of meetings attended by each of the directors of the Company during the period 14 September 2012 to 12 September 2013 is as follows, with the number in brackets reflecting the number of meetings held, whilst the director was in office:

Remunerationand

Audit and Risk NominationBoard Committee Committee

meetings meetings meetings

BT Ngcuka 3 (4) 1 (2)** –E van der Merwe 4 (4) 2 (2)** 1 (1)**L Dyosi 3 (4) 2 (2)** 1 (1)AJ Fourie 3 (4) 1 (2)** 1 (1)L Lynch 4 (4) 2 (2)** 1 (1)**KT Nondumo 3 (4) 2 (2) 1 (1)TAM Tshivhase 4 (4) 2 (2) –SS Mafoyane*** 4 (4) 2 (2) –J Schoeman** (representing BDO South Africa) – 2 (2)** –JC Schlebusch* 3 (4) 1 (2)** –MS Teke**** 1 (4) – –

* Company Secretary** Attended by invitation*** Appointed26August2012**** Appointed 8 April 2013


Special resolutionsRepurchase of securities

A general authority to repurchase ordinary shares in the Company was granted in terms of a special resolution passed by the Company’s shareholders on 2 November 2012 and registered by the Registrar of Companies (“general authority”). During the financial year under review the Company did not acquire ordinary shares on the open market (2012: nil).

The directors will seek approval at the Annual General Meeting for authority to repurchase further shares. On approval, at the Annual General Meeting, of the special resolution required to effect any repurchase of securities, the maximum numberofsharesthattheCompanymayrepurchaseis limitedto20%,orbyasubsidiary is limitedto10%,oftheissuedsharecapitaloftheCompany.Themaximumpremiumpayableonanyrepurchasewillbelimitedto10%abovethe weighted average market price of such shares over the five days immediately preceding the date of repurchase. Such approval is valid until the next Annual General Meeting or 15 months from the date of approval of the resolution.

In considering any repurchase scheme the directors will take cognisance that after such repurchase, the Company and the Group, will in the ordinary course of business, after the notice of the Annual General Meeting for the succeeding 12-month period, be able to pay its debts, the working capital requirements and the ordinary capital and reserves of the Company and the Group will be adequate and the consolidated assets of the Group will be in excess of its consolidated liabilities, fairly valued for cash.

Special resolutions by subsidiariesApproval of financial assistance.

AuditorsThe auditors, SizweNtsalubaGobodo Incorporated (appointed during March 2013), have indicated their willingness to continue in office for the ensuing year. The Audit and Risk Committee has satisfied itself of the independence of the auditors and of the designated auditor, Mr A Philippou. A resolution to ratify and re-appoint SizweNtsalubaGobodo Incorporated as auditors will be proposed at the next Annual General Meeting scheduled to take place on Friday, 1 November 2013.

Directors’ report (continued)



The Audit and Risk Committee has clearly defined terms of reference outlined in the Audit and Risk Committee Charter which was approved by the Board of Directors. The Audit Charter is available for inspection at the registered office of the Company.

PurposeThe Audit and Risk Committee meets with the Chief Executive Officer, Financial Director and other members of executive management (when and if required), as well as the external auditors, to discuss issues of accounting, risk, auditing, internal controls, financial reporting and corporate governance.

The duties of the Audit and Risk Committee include:

• establishingtheindependenceandobjectivityoftheregisteredexternalauditors,thedesignatedauditorandtheirappointment;

• assessingtherelevance,impactandresolutionofaccountingorauditingissuesidentifiedbyexternalauditors;

• assessingthescopeandresultsoftheexternalauditanddeterminethefeestobepaidtotheexternalauditor;

• appraisingthenatureandextentofnon-auditservices,seekingtobalancethemaintenanceofobjectivityandvaluefor money;

• pre-approvinganyproposedcontractwiththeauditorfortheprovisionofnon-auditservicestotheGrouptoensurethat the fees for such services do not become so significant to call to question the auditors’ independence;

• ensuringthattheappointmentoftheauditorcomplieswiththeSouthAfricanCompaniesActandanyotherlegislationrelating to the appointment of auditors;

• addressingappropriatelyanycomplaints (internalorexternal) relatingeither toaccountingpracticesand internalaudit of the Group or to the content or auditing of its financial statements, or to any related matter;

• reviewingandreportingonthefunctioningoftheinternalcontrolsystem;

• analysingriskareasoftheGroup’soperations,takingcognisanceoflegal,operationalandfinancialfactors;

• assessingInformationTechnology(“IT”)risksandcontrols,businesscontinuityanddatarecoveryrelatingtoITandinformation security and privacy;

• examining the reliability and accuracy of the financial information provided tomanagement and other users offinancial information;

• assessingtheappropriatenessoftheexpertiseandexperienceofthefinancialdirectoroftheGroup;

• assistingtheBoardinreviewingtheintegratedreportstoensurethattheinformationisreliableandthatnoconflictsor differences arise when compared with the financial results or advise the Board of the need to engage an external assurance provider;

• reviewinginterimandprovisionalfinancialresultsandpricesensitiveinformation;and

• assuringtheGroup’scompliancewithlegalandregulatoryprovisions,itsMemorandumofIncorporation,codeofconduct, by-laws and rules established by the Board.

The Audit and Risk Committee considers whether or not the interim report should be subject to an independent review by the auditors. It also reviews the annual financial statements and the appropriateness of the accounting policies adopted by the Group.

The Board confirmed that it is satisfied that the Audit and Risk Committee has during the review year performed the duties mandated to it by the Board.

MembershipEstablished with terms of reference from the Board, the Audit and Risk Committee comprises TAM Tshivhase (Chairman),KTNondumoandSSMafoyane (appointed26August2012); independentnon-executivedirectorson the Board with the required skills and expertise. Shareholder approval for the appointment of the existing members of the Audit and Risk Committee will be sought at the Annual General Meeting to be held on 1 November 2013.

The term of the committee is one year and its composition and membership are reviewed annually by the Board.

Report by the Audit and Risk Committee



Attendance at meetings during the year was as follows:

14 Sept2012

22 Feb2013

TAM Tshivhase √ √KT Nondumo √ √SS Mafoyane* √ √

*Appointed26August2012

The external auditors and appropriate members of the Board attend the meetings by invitation.

External auditIn terms of Section 90(1) of the Companies Act, the committee nominated SizweNtsalubaGobodo Incorporated as the independent, external auditor and A Philippou, a registered auditor, as the designated partner, for appointment for the 2014 audit. The appointment of BDO South Africa Incorporated as the independent auditor was approved by the shareholders at the Annual General Meeting on 2 November 2012. The committee has made the recommendation to the Board for the appointment of SizweNtsalubaGobodo Incorporated effective 7 March 2013 which appointment will be ratified by the shareholders at the Annual General Meeting to be held on 1 November 2013. The committee satisfied itself through enquiry of the independence of the auditor as required by the Companies Act, as amended or replaced, and as per the standards stipulated by the auditing profession. Required assurance as to the support and demonstration of the independence claims within the internal governance processes of the audit firm was obtained.

The Audit and Risk Committee agreed to the engagement letter, terms, nature and scope of the audit function and the audit plan for the 2013 financial year. The budgeted fee is considered appropriate for the work that could reasonably have been foreseen at that time. Audit fees are disclosed in note 21 on page 84.

Non-audit services rendered by the auditor are governed by a formal procedure and each engagement letter for such services, where material, is reviewed and approved by the Committee.

The external auditors have unrestricted access to the chairman of the Audit and Risk Committee and no matters of concern were raised during the review year. The committee meets at least once a year with the auditors without the presence of executive directors or management to ensure that the audit was performed according to plan and to obtain feedback as necessary about the conduct of the audit from key members of the Company’s management, including the financial director.

The committee has nominated, for approval at the Annual General Meeting, SizweNtsalubaGobodo Incorporated, as the external auditor and Mr A Philippou as the designated auditor for the 2014 financial year. The committee confirms that the registered auditors and designated auditor are accredited by the JSE Limited

Internal auditAn internal audit function was established in the beginning of the 2012 financial year to assist the Board and Audit and Risk Committee in concluding that an effective system of internal controls exists. This position has become vacant during February 2013 and has not yet been filled. The Internal Audit function, the external auditors, along with the executive directors, provide assurance of strategic, operational and financial risk mitigation and reliability of internal controls in the Group.

Risk managementThe Audit and Risk Committee is an integral component of the risk management process in the Group with the Audit and Risk Committee Charter detailing responsibilities of the committee regarding risk management. The committee supervises financial reporting risks, including fraud and IT risks. The Board has partly delegated responsibility for overseeing the design, implementation and maintenance of a sound system of internal control to the Audit and Risk Committee. The Audit and Risk Committee ensures balance between the Group’s approach to risk management and the nature of the Company’s legal, operational and financial environment. Through understanding of the internal and external environment and the related challenges, the committee assures itself that the risk programme is appropriate

Report by the Audit and Risk Committee (continued)



to the Company.

Internal financial control evaluations are presented annually in a formal document for review by the Audit and Risk Committee to enable it to adequately perform its responsibilities to oversee the integrity of the Group’s financial information. Material financial control inadequacies are considered individually or in combination, if in existence. This includesactualmaterialfinancialloss,fraudand/ormaterialerrorsaswellascorrectiveactiontaken.Anyinadequaciesare reported to the Board for disclosure in the Board report.

To mitigate and limit fraud risk, the Audit and Risk Committee considers matters that may result in material misstatements in the financial statements.

Information Technology (IT) risksThe Audit and Risk Committee considers the identification of IT risk as a vital element in the effective review of risk management. As reported above, the Board has accepted responsibility of the Group’s IT governance, with assistance from the Audit and Risk Committee, who plays a supervisory role relating to IT risks and controls.

The Audit and Risk Committee is appropriately assured that adequate controls are in place to mitigate risks.

Annual financial statements and accounting practices

The Audit and Risk Committee has reviewed the accounting policies and the financial statements of the Company and is satisfied that they are appropriate and comply with International Financial Reporting Standards.

A process has been established to receive and deal appropriately with any concerns and complaints relating to the reporting practices of the Company. No matters of significance have been raised in the past financial year.

The Audit and Risk Committee fulfilled its mandate and recommended the financial statements for the year ended 30 June 2013 for approval to the Board. The Board approved the financial statements on pages 42 to 114 on 13 September 2013 and the financial statements will be open for discussion at the Annual General Meeting.

Group Financial DirectorThe Audit and Risk Committee confirms that it has satisfied itself of the appropriateness of the expertise and experience of the Financial Director of the Group, Ms Lizette Lynch.

ApprovalThe Audit and Risk Committee Report has been approved by the Board of Directors of Rolfes.

Signed on behalf of the Audit and Risk Committee

TAM TshivhaseChairman of the Audit and Risk Committee


Statements of financial position

Group Company

2013 2012 2013 2012Notes R’000 R’000 R’000 R’000

ASSETSNon-current assets 221 908 150 775 450 076 254 140

Plant and equipment 2 68 347 46 545 199 78 Property 3 27 512 29 226 – –Investments 4 – – 449 877 254 062Intangible assets 5 126 049 75 004 – –

Current assets 385 703 290 190 53 801 24 741

Inventories 6 210 148 170 251 – –Trade and other receivables 7 166 841 112 596 2 187 150 Short-term loans 8 4 975 3 783 51 614 24 591 Value-added taxation receivable 6 3 739 3560 – –

Total assets 607 611 440 965 503 877 278 881

EQUITY and LIABILITIESCapital and reserves 301 174 213 982 347 535 178 173

Share capital 9 1 086 1 036 1 086 1 036Treasury shares 10 (868) (868) – –Share premium 49 802 28 603 49 802 28 603Retainedincome/(loss) 199 113 157 094 (30 396) (22 935) Revaluation reserve 11 2 193 2 193 327 043 171 469

Interest of shareholders 251 326 188 058 347 535 178 173Non-controlling interest 49 848 25 924 – –

Non-current liabilities 72 358 71 145 57 766 31 900

Interest-bearing liabilities 12 40 656 46 757 – –Vendor loan 13 6 731 6 191 6 731 6 191Deferred taxation liability 14 22 162 14 854 51 035 25 709 Provisions 16 2 398 3 343 – –Loss in associate 41 411 – – –

Current liabilities 234 079 155 838 98 576 68 808

Trade and other payables 17 152 149 114 328 (1 048) 354 Short-term liabilities 8 16 885 15 404 96 779 64 359Cash and cash equivalents 18 31 916 1 833 348 1 940 Current portion of interest-bearing liabilities 12 22 352 20 678 – –Derivative liability 19 – 231 – –Value-added taxation liability 17 – – 981 1 365Taxation liability 17 9 142 2 299 1 516 790 Provisions 16 1 635 1 065 – –

Total equity and liabilities 607 611 440 965 503 877 278 881

AS AT 30 JUNE


Group Company

2013 2012 2013 2012Notes R’000 R’000 R’000 R’000

Revenue 20 801 716 636 172 16 880 20 919 Cost of sales (634 406) (508 970) – –

Gross profit 167 310 127 202 16 880 20 919 Other operating income 28 463 10 112 2 600 –Operating expenses (35 638) (25 538) (3 986) (7 074)

Material operating itemsLoss in associate (411) – – –Insurance (2 499) (2 610) (1 267) (1 831)Rent of property and equipment (5 257) (2 738) – –Salaries and wages (including directors’ remuneration) (53 046) (37 907) (4 761) (6 130)

Operating profit before interest 21 98 922 68 521 9 466 5 884 Finance cost 24 (11 450) (9 068) (7 337) (3 587)Finance income 25 412 555 1 897 1 382

Profit before taxation 87 884 60 008 4 026 3 679Taxation expenses 26 (23 660) (17 116) (1 127) (2 066)

Profit for the year 64 224 42 892 2 899 1 613Other comprehensive income for the year, net of taxation – – – –

Total comprehensive income for the year 64 224 42 892 2 899 1 613

Profit for the year attributable to:Owners of the parent 52 379 37 268 2 899 1 613Non-controlling interest 11 845 5 624 – –

64 224 42 892 2 899 1 613

Total comprehensive income attributable to:Owners of the parent 52 379 37 268 2 899 1 613Non-controlling interest 11 845 5 624 – –

64 224 42 892 2 899 1 613

Profit for the year attributable to:Continued operations 64 224 42 892 2 899 1613Discontinued operations – – – –

64 224 42 892 2 899 1613

Total comprehensive income attributable to:Continued operations 64 224 42 892 2 899 1613Discontinued operations – – – –

64 224 42 892 2 899 1613

Earnings per share (cents) 28– Basic 50,3 36,2– Headline 39,2 36,1– Diluted 50,3 36,2– Diluted headline 39,2 36,1

Statements of comprehensive income



Share Share Treasury Retained Revaluation Non-

controlling Total capital premium shares income reserve interest equity

Group R’000 R’000 R’000 R’000 R’000 R’000 R’000

Balance at 30 June 2011 1 036 28 603 (868) 131 327 2 193 – 162 291Recognising of minority interest – – – – – 21 733 21 733Net profit for the year – – – 37268 – 5624 42 892Dividends declared – – – (10360) – (324) (10684)Acquisition of remaining portion in Amazon Colours (Pty) Limited – – – (1 141) – (1 109) (2 250)

Balance at 30 June 2012 1 036 28 603 (868) 157 094 2 193 25 924 213 982 Recognising of non-controlling interest – – – – – 12 079 12 079 Issue of new shares 50 21 199 – – – – 21 249 Net profit for the year – – – 52 379 – 11 845 64 224Dividends declared – – – (10 360) – – (10 360)

Balance at 30 June 2013 1 086 49 802 (868) 199 113 2 193 49 848 301 174

More information disclosed in notes: 9 10 11

Ordinary Share Retained Re-

valuation Total shares premium loss reserve equity

Company R’000 R’000 R’000 R’000 R’000

Balance at 30 June 2011 1 036 28 603 (14 188) 171 469 186 920Net profit for the year – – 1 613 – 1 613Dividends declared – – (10 360) – (10 360)

Balance at 30 June 2012 1 036 28 603 (22 935) 171 469 178 173 Issue of new shares 50 21 199 – – 21 249 Net profit for the year – – 2 899 – 2 899Dividends declared – – (10 360) – (10 360)Revaluation of investment – – – 155 574 155 574

Balance at 30 June 2013 1 086 49 802 (30 396) 327 043 347 535

More information disclosed in notes: 9 11

Statements of changes in equity



Statements of cash flows


Group Company

2013 2012 2013 2012Notes R’000 R’000 R’000 R’000

Cash generated from/(utilised in) operating activities 11 193 34 593 (9 952) (7 395)

Cash received from customers and subsidiaries 784 269 672 198 17 443 20 794 Cash paid to suppliers and employees 736 832 (608 445) (11 194) (14 157)

Cash generated from operations 37.1 47 437 63 753 6 249 6 637Finance income 412 555 1 897 1 382 Finance cost (11 450) (9 068) (7 337) (3 587)Taxation paid 37.2 (14 846) (9 963) (401) (1 467)Dividends declared and paid (10 360) (10 684) (10 360) (10 360)

Cash utilised in investing activities (57 317) (70 464) (9 705) (4 081)

Additions to plant and equipment 2 (28 891) (10846) (187) (15)Additions to intangible assets (7 703) (3 892) – –Proceeds from disposal 21 437 698 – –Loans(advanced)/received (3 789) (5 860) 5 397 44 318 Cost of acquisition of companies 37.3 (38 782) (50 564) – –Decrease/(Increase)ininvestments – – (14 915) (48 384)(Decrease)/Increaseinassociate 411 – – –

Cash generated from/(utilised in) financing activities 16 041 29 205 21 249 (94)

(Decrease)/Increaselong-termborrowings (6 300) 28 208 – – Increase in instalment sale agreements – short-term portion 1 674 13 465 – (94)Decrease in short-term interest-bearing liabilities (582) (10 218) – –Issue of shares 21 249 – 21 249 –Acquisition non-controlling interest – (2 250) – –

Cash (deficit)/surplus for the year (30 083) (6 666) 1 592 (11 570)Cash and cash equivalents – beginning of the year (1 833) 4 833 (1 940) 9 630

Cash and cash equivalents – end of the year 18 (31 916) (1 833) (348) (1 940)


Accounting policies


1. ACCOUNTING POLICIES1.1 Basis of preparation

The annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS and IFRIC – International Financial Reporting Interpretations Committee of the IASB – interpretations) issued by the International Accounting Standards Board (IASB), AC 500 standards as issued by the Accounting Practices Board and its successor and in accordance with the requirements of the Companies Act of South Africa.

The annual financial statements have been prepared on the historical cost basis, except for the measurement of financial assets and liabilities at fair value through profit or loss and at fair value through other comprehensive income and incorporate the principal accounting policies set out below.

The accounting policies applied conform with IFRS and are consistent with those followed in the preparation of the annual financial statements for the year ended 30 June 2012.

1.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

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

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between:

• the aggregate of the fair value of the consideration received and the fair value of any retained interest; and

• thepreviouscarryingamountoftheassets(includinggoodwill),andliabilitiesofthesubsidiaryandanynon-controlling interests.


1. ACCOUNTING POLICIES (continued)1.2 Basis of consolidation (continued)

When assets of the subsidiary are carried at revalued amounts of fair values and the related cumulative gain or loss has been recognised in other comprehensive income and accumulated in equity, the amounts previously recognised in other comprehensive income and accumulated in equity are accounted for as if the Company had directly disposed of the relevant assets (ie reclassified to profit or loss or transferred directly to retained earnings as specified by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 – Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity.

Initial recognition and measurement

All business combinations are accounted for by applying the acquisition method. The cost of the business combination are the fair values at the date of exchange of the assets given, liabilities incurred or assumed, and equity instruments issued by the Group, in exchange for control of the acquiree. Costs directly attributable to the business combination are expensed as incurred, except the costs to issue debt which are amortised as part of the effective interest and costs to issue equity which are included in equity. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest.

Contingent consideration is included in the cost of the business combination at fair value determined at the date of acquisition. Subsequent changes to the assets, liabilities or equity which arise as a result of the contingent consideration are not effected against goodwill, unless they are valid measurement period adjustments. The interest of non-controlling shareholders may be measured either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. When a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value on the date the Group attains control and the resulting gain or loss is recognised in profit or loss.

Where the previously held interest was classified as an available-for-sale financial asset, the cumulative fair value adjustments recognised to other comprehensive income and accumulated in equity are recognised in profit or loss as a reclassification adjustment. At the acquisition date, 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 is recognised as goodwill in accordance with the Group’s accounting policy for goodwill. The acquisition date is the date on which the Group effectively obtains control of the acquiree. The excess of the fair value of the net identifiable assets and contingent liabilities of the entity acquired over the cost of acquisition results in a bargain purchase which is recognised immediately in profit or loss.

Subsequent measurement

If the initial accounting for business combinations has been determined provisionally, then these provisional amounts are adjusted during the measurement period to reflect new information obtained about facts and circumstances that existed as of the date of acquisition that, if known, would have affected the amounts initially recognised. The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date, subject to a maximum of one year.


1. ACCOUNTING POLICIES (continued)1.3 Borrowings costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

1.4 Goodwill

For business combinations completed on or after 1 January 2010, cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree. Contingent consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration classified as a financial liability, re-measured subsequently through profit or loss. For business combinations completed on or after 1 January 2010, direct costs of acquisition are recognised immediately as an expense.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to profit or loss. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to profit or loss on the acquisition date.

Internally generated goodwill is not recognised as an asset.

Goodwill is tested annually at the financial year-end for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose identified according to operating segment.

1.5 Dividends

Dividend distribution to the Group’s shareholders is recognised in the statement of changes in equity when the liability arises.

1.6 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care) are recognised in the period in which the service is rendered and is not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

Accounting policies (continued)



1. ACCOUNTING POLICIES (continued)1.6 Employee benefits (continued)

The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

Defined contribution plans

Payments to defined contribution retirement benefit plans are charged as an expense when incurred.

1.7 Financial instrument

Initial recognition

A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument in another entity. The Group’s financial instruments consists primarily of the following instruments: loans and receivables, cash and cash equivalents, trade and other receivables and other current financial assets; and the following financial liabilities: borrowings, trade and other payables and other current financial liabilities.

The Group recognises a financial asset or a financial liability in its statement of financial position when the Group becomes party to the contractual provisions of the instrument.

Fair value

Where financial instruments are recognised at fair value, the instruments are measured at the price that should be received to sell on asset or paid to transfer a liability in an orderly transaction between market participants on measurement date. Fair values have been determined as follows:

• Wheremarketpricesareavailable,thesehavebeenused;

• Wheremarketpricesarenotavailable, fair valueshavebeendeterminedusingvaluation techniquesincorporating observable market inputs or discounting expected cash flows at market rates.

Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset.

Fair value measurement hierarchy

IFRS 7 requires certain disclosures which require the classification of financial assets and financial liabilities measured at fair value using fair value hierarchy that reflects the significance of the inputs used in making the fair value measurement. The fair value hierarchy has the following levels:

• Quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities(Level1);

• InputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectly (ie as a price) or indirectly (ie derived from prices) (Level 2); and

• Inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs) (Level 3).


1. ACCOUNTING POLICIES (continued)1.7 Financial instruments (continued)

The level in the fair value hierarchy within which the financial asset or financial liability is categorised is determined on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are classified in their entirety into only one of the three levels.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period.

The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction cost and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period. Income is recognised on an effective interest basis for debt instruments other than those financial assets designated as at fair value through profit or loss.

Financial assets

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Group has not classified any of its financial assets as held to maturity.

Financial assets and financial liabilities are offset and the net amount reported only when a legally enforceable right to set-off the amounts exists and the intention is to either settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group’s accounting policy for each category is as follows:

Fair value through profit or loss – Held-for-trading

Financial assets classified as held-for-trading comprise the foreign forward exchange contracts which are not designated as hedges in terms of IAS 39 – Financial Instruments: Recognition and Measurement.

Loans and receivables

These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (eg. trade receivables), but also incorporate other types of contractual monetary asset.

They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment allowances are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in





profit or loss. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Loans to Group companies

These include loans to holding companies, fellow subsidiaries, subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs. Subsequently these loans are measured at amortised cost using the effective interest rate method, less any impairment loss recognised to reflect irrecoverable amounts.

On loans receivable an impairment loss is recognised in profit or loss when there is objective evidence that it is impaired. The impairment 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 loan’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 loan at the date the impairment is reversed shall not exceed what the amortised cost would have been had the impairment not been recognised.

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each end of the reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the asset have been impacted.

For financial assets, measured at amortised cost using the effective interest rate method, the following objective evidence is considered in determining when an impairment loss has been incurred:

• significantfinancialdifficultyofthedebtor;

• abreachofcontract,suchasadefaultordelinquencyininterestorprincipalrepayments;and

• itisbecomingprobablethatthedebtorwillenterbankruptcyorotherfinancialre-organisation.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account.



Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss.

In respect of available-for-sale equity securities, impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other comprehensive income.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group, comprising ordinary shares, are recorded at the proceeds received, net of direct issue costs.

Where the Group or its subsidiaries purchase the Company’s equity share capital (treasury shares), the amount paid, including any directly attributable incremental external costs net of income taxes, is deducted from total shareholders’ equity as treasury shares. When treasury shares are subsequently reissued or sold, the amount received, net of any directly attributable incremental transaction costs and the related income tax effects is recognised as an increase in equity.

Financial liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired.

The Group’s accounting policy for each category is as follows:

Fair value through profit or loss – Held-for-trading

Financial liabilities classified as held-for-trading comprise the foreign forward exchange contracts which are not designated as hedges in terms of IAS 39 – Financial Instruments: Recognition and Measurement.





Other financial liabilities include the following items:

Bank overdrafts, borrowings and loans from Group companies

Bank overdrafts, borrowings and loans from Group companies 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.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.

1.8 Impairment of assets (other than goodwill)

The Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease.

An impairment loss is recognised for cash-generating units if the recoverable amount of a unit is less than the carrying amount of collective units. The impairment loss is allocated to reduce the carrying amount of the assets of the unit on the following basis:

• totheassetsoftheunitpro rata on the basis of the carrying amount of each asset in the unit.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit and loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase in other comprehensive income.


1. ACCOUNTING POLICIES (continued)1.9 Inventories

Inventories are stated at the lower of cost and net realisable value. Costs comprise 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 weighted average 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.

1.10 Investment in subsidiaries

In the Company’s separate financial statements investments in subsidiaries are accounted for as available-for-sale financial assets. Available-for-sale financial assets are initially and subsequently measured at fair value through other comprehensive income.

1.11 Intangible assets

In the Company’s separate financial statements, intangible assets are recognised if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably.

Intangible assets are recognised on business combinations if they are separable from the acquired entity or giverisetoothercontractual/legalrights.Theamountsascribedtosuchintangiblesarearrivedatbyusingappropriate valuation techniques.

Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.

An intangible asset arising from development (or from the development phase of an internal project) is recognised when:

• itistechnicallyfeasibletocompletetheassetsothatitwillbeavailableforuseorsale;

• thereisanintentiontocompleteanduseorsellit;

• thereisanabilitytouseorsellit;

• itwillgenerateprobablefutureeconomicbenefits;

• thereareavailabletechnical,financialandotherresourcestocompletethedevelopmentandtouseorsell the asset;

• theexpenditureattributabletotheassetduringitsdevelopmentcanbemeasuredreliably.

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

The residual value, amortisation period and the amortisation method for intangible assets are reviewed annually.

Intangible assets with finite useful lives are amortised on a straight-line basis over its estimated useful life.

The significant intangibles recognised by the Group, its useful economic life and the method used to determine the cost of the intangible is as follows:

Product licences 15 years Cost

Trademark 15 years Cost




1. ACCOUNTING POLICIES (continued)1.12 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

The land and buildings elements of property leases are considered separately for the purposes of lease classification.

Finance leases

Finance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease. The lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to achieve a constant rate on the remaining balance of the liability.

Lessors shall recognise assets held under finance lease in their statement of financial position and present them as a receivable at an amount equal to the net investment in the lease.

Operating leases

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability. Any contingent rent is expensed in the period it is incurred.

Lease income from operating leases shall be recognised in income on a straight-line basis over the lease term, unless another systematic basis is more representative of the time pattern in which the use benefit derived from the leased asset is diminished.

1.13 Property, plant and equipment

The cost of an item of property, plant and equipment is recognised as an asset when:

• it is probable that future economic benefits associated with the item will flow to the entity; and

• thecost of the item can be measured reliably.

Property, plant and equipment is initially recognised at cost. Costs include costs incurred initially to acquire an item of property, plant and equipment and costs incurred subsequently to add to or replace a part. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

Property, plant and equipment, excluding land, is carried at cost less accumulated depreciation and any impairment losses.


1. ACCOUNTING POLICIES (continued)1.13 Property, plant and equipment (continued)

Property, plant and equipment, excluding land, is depreciated on the straight-line basis at rates considered appropriate to reduce book values to estimated residual values over their estimated useful lives. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately. Depreciation ceases when residual value equals more than the carrying value of the specific item of property, plant and equipment.

The useful lives, depreciation method and residual values of the individual items of property, plant and equipment are reviewed on an annual basis and any revision to these are accounted for as a change in accounting estimate.

The estimated average useful lives of the classes of assets are as follows:

Furnitureandfittings 6yearsComputer equipment 3 yearsEarth-moving equipment 4 yearsVehicles 5 years Plant and equipment 5 to 15 years Rehabilitation asset 53 months Buildings 30 to 50 years Land Indefinite Development costs 15 years

Land is not depreciated and is carried at revalued amount, being the fair value at the date of revaluation, based on periodic valuations by a professional qualified valuer. These revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period (at least every five years). Changes in fair value are recognised in other comprehensive income and accumulated in the revaluation reserve, except to the extent that any decrease in value in excess of the credit balance on the revaluation reserve, or reversal of such a transaction, is recognised in profit or loss. The increase is recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss. Any decrease in an asset’s carrying amount, as a result of a recalculation, is recognised in profit or loss in the current period. The decrease is debited directly to equity in the revaluation reserve to the extent of any credit balance existing in the revaluation surplus in respect of that asset.

Rehabilitation cost

Restoration cost is recognised when a present legal obligation arises to restore the environment to its previous status or according to stipulated requirements in the mining license. A rehabilitation provision is recognised at the present value of the estimated obligation and is increased annually with finance charges calculated at market-related discount rates and is recognised through the profit or loss.

An asset is recognised at the present value of the estimated rehabilitation obligation and is depreciated in accordance with the policies applicable to equivalent items of property, plant and equipment.

The estimated obligation will be evaluated annually and any increases or decreases in the obligation will be recognised in profit or loss in the current year.




1. ACCOUNTING POLICIES (continued)1.14 Provisions

Provisions are recognised for liabilities of uncertain timing or amount that have arisen as a result of past transactions and are discounted at a pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability. The increase in the provisions, due to passage of time, is recognised as an interest expense.

1.15 Purchase of non-controlling interest in subsidiary

The cost of the purchase of shares is measured at the aggregate of the fair value of assets given at the date of exchange, liabilities incurred or assumed and the fair value of the equity instruments issued by the Group in exchange for shares purchased in a controlled entity with the excess of the cost of the purchase of shares recognised in equity. Any costs directly attributable to the transaction, are recognised immediately as an expense.

1.16 Revenue recognition

Sales

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 trade discounts, volume rebates and value-added taxation.

Revenue from the sale of goods is recognised when all the following conditions have been satisfied:

• theGrouphastransferredtothebuyerthesignificantrisksandrewardsofownershipofthegoods;

• the Group retains neither continuingmanagerial involvement to the degree usually associated withownership nor effective control over the goods sold;

• theamountofrevenuecanbemeasuredreliably;

• itisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtotheGroup;and

• thecostsincurredortobeincurredinrespectofthetransactioncanbemeasuredreliably.Otherrevenueearned by the Group is recognised on the following bases:

Services

Revenue from the rendering of services will be recognised when the outcome of the transaction involving the service can be estimated reliably.

Monthly services rendered will be recognised on a monthly basis after the service has been performed.

Rentals

Rentals are recognised on the accrual basis in accordance with the substance of the relevant agreement.

Interest income

Interest is recognised, in profit and loss, using the effective interest rate method.

Dividend income

Dividend income is recognised when the shareholder’s right to receive payment is established.


1. ACCOUNTING POLICIES (continued)1.17 Share capital

Ordinary shares are classified as equity. Incremental external costs directly attributable to the issue of new shares are shown in equity as a deduction, net of taxation, from the proceeds.

1.18 Segmental reporting

Segment information is determined on the same basis as the information used by the chief operating decision-maker for the purposes of allocating resources to segments and assessing segments’ performance. The chief operating decision-maker has been identified as the chief executive officer in conjunction with the board of directors that makes strategic decisions. All inter-segment transactions are eliminated.

1.19 Critical accounting estimates and assumptions

In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts represented in the financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates.

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

Provisions

Warranty provision

A warranty provision is raised based on prior experience for defective products sold, to be utilised by the returningofdefectiveproductsbycustomers.Refertonote16.

Bad debts provision

An estimate is made for doubtful receivables based on a review of all outstanding amounts at year-end, taking into account the difference between the carrying amount of assets and the present value of the estimated future cash flows discounted at the effective interest rate computed at initial recognition. Bad debts are recognised directly in profit and loss in the year in which they are identified. Refer to note 7.

Loans and receivables

The directors assess the loans and receivables for impairment at each end of the reporting period. In determining whether an impairment loss should be recorded in profit or loss, the directors make judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from the financial asset.

The impairment of loans and receivables is based on the amounts outstanding, which management feels, will not be collected or only partially collected. Where possible, the impairment is estimated per debtor. The estimate is based on a review of all outstanding amounts at year-end. Refer to note 7.

Useful lives of items of property, plant and equipment

The directors estimate the useful lives of the classes of property, plant and equipment, taking into account the individual items of the class and the present condition along with any major capital expenditure that is budgeted in the near future.




1. ACCOUNTING POLICIES (continued)1.19 Critical accounting estimates and assumptions (continued)

Depreciation of items of property, plant and equipment

The directors assess the methods used for property, plant and equipment on an annual basis.

Residual values of items of property, plant and equipment

The residual values of the individual items of property, plant and equipment are reviewed annually by the directors. The estimate is made after taking into account the condition of the item, age and judgement relating to useful lives.

Decommissioning and rehabilitation obligations

The directors estimate annually any decommissioning and rehabilitation obligations which might exist at year-end. The estimate is made after taking into account the extent of the obligation and any requirements relating to the obligation. This obligation arose out of the Mining and Water Chemical Segment and the requirementsinthemininglicense.Refertonote16.

Determination of fair values of intangibles acquired in business combination

The fair values of product licences acquired in a business combination are based on the discounted estimated royalty payments that would have been avoided as a result of the product licences being owned. The fair value of the other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the asset.

Taxation

Judgement is required in determining the provision for income taxes due to the complexity of legislation. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The Group recognises the net future tax benefit related to deferred tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred tax assets requires the Group to make significant estimates related to expectations of future taxable income.

Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.

Estimated tax loss

The Group bases the tax expenses and deferred tax calculation on the estimated tax loss of the individual subsidiaries. The estimated tax loss is calculated as per the South African Revenue Service stipulations, indicated in the Income Tax Act, No 71 of 2008. Once SARS has assessed the Company and agrees with the calculation of the estimated assessed loss, SARS grants the Company an assessed loss. Should the situation occur that SARS does not agree with the estimated assessed loss, it will be rectified in the first tax expense calculation being performed with clear indication of such an event.


1. ACCOUNTING POLICIES (continued)1.19 Critical accounting estimates and assumptions (continued)

Impairment testing

The recoverable amounts of individual assets have been determined based on the higher of value-in-use calculations and fair values. These calculations require the use of estimates and assumptions. It is reasonably possible that the assumption may change which may then impact on estimates and may then require a material adjustment to the carrying value of assets.

The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in 1.4 for goodwill. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates.

1.19.1 Critical judgements in applying the entity’s accounting policy

No critical judgements, apart from those involving estimations, have been made in the process of applying the Group’s accounting policies that will have a significant effect on the amounts recognised in the financial statement.

1.20 Treasury shares

Where the Company or its subsidiaries purchase the Company’s equity share capital, the shares are treated as treasury shares. The shares are treated as a deduction from the issued and weighted average number of shares and the cost price of the share is deducted from share capital in the statement of financial position on consolidation. Dividends received on treasury shares are eliminated on consolidation.

1.21 Translation of foreign currencies

The Group’s functional and presentation currency is represented by South African Rand.

Foreign currency transactions

Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they operate (their “functional currency”) are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the re-translation of unsettled monetary assets and liabilities are recognised immediately in profit or loss, except for foreign currency borrowings qualifying as a hedge of a net investment in a foreign operation, in which exchange differences are recognised in other comprehensive income and accumulated in the foreign currency translation reserve along with the exchange differences arising on the translation of foreign operations.

When a gain or loss on a non-monetary item is recognised in other comprehensive income, any exchange component of that gain or loss shall be recognised in other comprehensive income.

Conversely, when a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss shall be recognised in profit or loss.




1. ACCOUNTING POLICIES (continued)1.22 Taxation

Tax expenses

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

• atransactionoreventwhichisrecognised,inthesameoradifferentperiod,directlyinequity;or

• abusinesscombination.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly to equity.

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Currenttaxliabilities/(assets)forthecurrentandpriorperiodsaremeasuredattheamountexpectedtobepaidto/(recoveredfrom)thetaxauthorities,usingthetaxrates(andtaxlaws)thathavebeenenactedorsubstantively enacted by the end of the reporting period.

Deferred taxation asset and liabilities

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising on:

• theinitialrecognitionofgoodwill;

• theinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandatthe time of the transaction affects neither accounting or taxable profit; and

• investmentsinsubsidiariesandjointlycontrolledentitieswheretheGroupisabletocontrolthetimingofthe reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the differences can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to applywhen the deferred tax liabilities/(assets) aresettled/(recovered).

Deferred tax is charged or credited in profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is recognised in equity.


1. ACCOUNTING POLICIES (continued)1.23 Standards, interpretations and amendments for the year 2013

At the date of authorisation of these financial statements, the following new and amended Standards and Interpretations were in issue but not yet adopted. The Group intends to adopt these standards when they become effective.

Accounting Standards/Interpretations issued but not yet effective, comprise:Effective

date

IFRS 9 – Financial Instruments

New standard that forms the first part of a three-part project to replace IAS 39 – Financial Instruments: Recognition and Measurement.

1 January 2015

Amendments to existing standards issued, but not yet effective, compromise:Effective

date

IAS 32 – Financial Instruments: Presentation

Amendment require entities to disclose gross amount subject to right to set-off amounts in accordance with the Accounting Standards following and the related net credit exposure. This information will help investors understand the extent to which an entity has set-off in ITS statement of financial position and the effects of rights of set-off on the entity’s right and obligations.

1 January 2013

At this stage the impact of the standards/interpretations issued but not yet effective is not known orreasonably estimable at this stage.

1.24 Related parties

Related parties are considered to be related if one party has the ability to control or jointly control the other party or exercise significant influence over the party in making financial and operational decisions. Key management personnel are also regarded as related parties. Key management personnel are those persons having authority and responsibility for planning.

1.25 Earnings per share

The Company presents basic and diluted earnings per share for its ordinary shares. Basic and diluted earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.

1.26 Headline earnings per share

Headline earnings per ordinary share are calculated using the weighted average number of ordinary shares in issue during the period and are based on the earnings attributable to ordinary shareholders, after excludingthoseitemsasrequiredbyCircular3/2012issuedbyTheSouthAfricanInstituteofCharteredAccountants (“SAICA”).




Furniture and fittings

R’000

Computer equipment

R’000Vehicles

R’000

Earth-moving equipment

R’000

Plant and equipment

R’000Total

R’000

2. Plant and equipmentGroup

– Cost 1 087 2 097 11 200 6 265 47 084 67 733– Accumulated depreciation (934) (1 368) (6 480) (3 909) (17 691) (30 382)

Carrying value at 30 June 2011 153 729 4 720 2 356 29 393 37 351

Additions 315 433 1 951 – 6 737 9 436Disposals (29) (62) (1 391) – (637) (2 119)Depreciation (120) (685) (2 033) (760) (3 543) (7 141)Depreciation of disposals 62 58 1 153 – 225 1 498 Acquisition of subsidiary 333 338 2368 – 4 480 7 519

– Cost 1 706 2 806 14 128 6 265 57 664 82 569– Accumulated depreciation (992) (1 995) (7 360) (4 669) (21 009) (36 025)


Additions 516 575 1 738 – 24 944 27 773Disposals (33) (18) (216) – (1 106) (1 373)Depreciation (209) (684) (1 781) (675) (4 079) (7 428)Depreciation of disposals 33 11 216 – 859 1 119 Acquisition of subsidiary 425 263 834 – 189 1 711

– Cost 2 614 3 626 16 484 6 265 81 691 110 680– Accumulated depreciation (1 168) (2 668) (8 925) (5 344) (24 229) (42 334)


Estimated residual values 80 15 3 064 921 34 823 –

Notes to the consolidated financial statements


Notes to the consolidated financial statements (continued)


Recon-struction

assetR’000

TotalR’000

2. Plant and equipment (continued)Group – Cost 266 67999 – Accumulated depreciation (265) (30647)

Carrying value at 30 June 2011 1 37 352

Additions – 9 436Disposals – (2 119)Depreciation – (7 141)Depreciation of disposals – 1 498 Acquisition of subsidiary – 7 519

– Cost 266 82 835 – Accumulated depreciation (265) (36 290)


Additions – 27 773Disposals – (1 373)Depreciation – (7 428)Depreciation of disposals – 1 119Acquisition of subsidiary – 1 711

– Cost 266 110 946– Accumulated depreciation (265) (42 599)


Estimated residual values 1 –


Furniture and Computer fittings R’000

equipment R’000

TotalR’000

2. Plant and equipment (continued)Company

– Cost 73 778 851 – Accumulated depreciation (26) (514) (540)


Additions 12 3 15 Disposals – (50) (50)Depreciation (13) (235) (248)Depreciation of disposals – 50 50

– Cost 85 731 816– Accumulated depreciation (39) (699) (738)


Additions 13 174 187 Depreciation of disposals (17) (49) (66)

– Cost 98 905 1 003 – Accumulated depreciation (56) (748) (804)


Estimated residual values 1 1

Total property, plant and equipment held by the Group at 30 June 2013 amounted to R68,4 million and R46,5millionfortheprioryear,comprisingtheamountsanalysedabove.

PlantandequipmentwithacarryvalueofR6,5million(2012:R6,6million),havebeenpledgedbywayofanotarialbond to the value of R1,4 million in favour of Engen Petroleum as security for trade creditors.

AdditionsincludeR16,6million(2012:R2,9million)assetsunderinstalmentsaleagreementsanddisposalswithacost of R0 (2012: R0) were settled under instalment sale agreements. The assets acquired under instalment sale agreements are encumbered as security for repayment of the instalment sale liabilities. (Refer note 12.)

Depreciationexpensechargedtothecostofgoodssold: R4,6million (2012:R4,6million) Depreciation expense charged to overheads: R3,5 million (2012: R2,8 million) (Refer note 21)

During the year under review, the directors performed an impairment test on the assets of the Group and found that no asset of the Company was impaired and no impairment loss was recognised.


Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

3. PropertyCost 21 689 20 279 – –Revaluation 7 537 7 537 – –

At beginning of year 29 226 27 816 – –Additions – other 1 118 1 410 – –Addition – acquisitions 2 674 – – –Disposals – cost (5 506) – – –

At end of year 27 512 29 226 – –

Total property held by the Group at 30 June 2013 amounted to R27,5 million (2012: R29,2 million), comprising the amounts analysed above.

A mortgage bond of R10 million over property held in the name of New Heights 390 (Pty) Ltd was registered as security in favour of Sasol Chemical Industries as security for Group borrowings.

The directors are of the opinion that the property is stated at fair market value and not impaired.

During the year, Anton Smit & Associated Valuers, an independent third party, performed a revaluation on the Grouppropertybasedondiscountedfuturecashflows,market-relatedrentalsandacapitalisationrateof12%.

The directors are of the opinion that the fair market value equals the estimated residual value and thus no depreciation is recognised.

At Group level the majority of investment property is owner-occupied. The portion of the property that generates rental income, as per note 20, is regarded as insignificant resulting in all investment property being classified as property and not split between property and investment property.

Had the property not been revalued, the carrying amounts would equal the cost, as disclosed above.

The value of the property has been considered at the year-end and no change was deemed necessary.

There are no restrictions on the distribution of the revaluation surplus and the Company may declare a dividend out of profits or reserves, realised or unrealised, whether revenue or capital in nature

Land, which is included in the above property, has an indefinite estimated average useful life and is not depreciated.




Group Company

Number of 2013 2012 2013 2012shares R’000 R’000 R’000 R’000

4. InvestmentsUnlistedAt cost:Rolfes Colour Pigments International (Pty) Ltd 1 000 – – 1 1 Rolfes Asset Holdings (Pty) Ltd 100 – – – –Rolfes Chemicals (Pty) Ltd 100 – – – –Rolfes Silica (Pty) Ltd 200 000 – – 2 308 2 308 Rolfes Europe Trading (Pty) Ltd 100 – – – –Rolfes Logistics (Pty) Ltd 100 – – – –AgChem Holdings (Pty) Ltd 70 – – – –Tetralon Chemical Consultancy (Pty) Ltd 2 800 – – 3 –Rolfes PWM (Pty) Ltd 100 – – – –Rolfes Water Chemicals (Pty) Ltd 100 – – – –

– – 2 312 2 309

At fair value:Rolfes Colour Pigments International (Pty) Ltd – – 190 955 67 955Rolfes Asset Holdings (Pty) Ltd – – 54 710 47 710 Rolfes Chemicals (Pty) Ltd – – 68 083 67 183Rolfes Silica (Pty) Ltd – – 32 639 16 639AgChem Holdings (Pty) Ltd – – 88 575 54 575 Tetralon Chemical Consultancy (Pty) Ltd – – 14 915 –

– – 449 877 254 062

Fair value is determined annually at the end of the reporting period, using the discounted future cash flow method.

The fair value of investments in subsidiaries is based on a Level 3 for fair value hierarchy. Level 3 is inputs for the asset or liability that are not based on observable market data (unobservable inputs). Refer to note 5 for the assumptions used in the fair value of investments.

Refer to pages 113 and 114 for details of shareholding.


Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

5. Intangible assets5.1 Goodwill

Gross 61 758 37 691 – –Impairment (5 333) (5 333) – –

Opening balance 56 425 32 358 – –Recognition of goodwill:– acquisition of Amazon Colours (Pty) Ltd by

Rolfes Colour Pigments International (Pty) Ltd 514 1 074 – –– acquisition of AgChem Holdings (Pty) Ltd – 22 993 – –– acquisition of Tetralon Chemical Consultancy (Pty) Ltd 11 331 – – –– acquisition of PWM Anticor (Pty) Ltd business 5 592 – – –– acquisition of PWM group business 7 834 – – –

Closing balance 81 696 56 425 – –

Impairment of goodwill The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill may be

impaired. The Group’s goodwill was tested for impairment at year-end based on management’s assessment.

Goodwill acquired through business combinations has been allocated to the following significant individual cash-generating operations (after impairment testing), as follows:

• Rolfes Resins (arose on the acquisition of Chempoint Chemical Technologies (Pty) Ltd) R7,5 million (2012: R7,5 million), effective 1 July 2005;

• RolfesSilica(Pty)LtdR1,6million(2012:R1,6million),effective1August2005;

• RolfesDispersion(aroseontheacquisitionofLeather-Chem(Pty)Ltd)R5,1million(2012:R5,1million),effective1 December 2007;

• RolfesChemicals(aroseontheacquisitionofNewHeights390(Pty)Ltd)R18,2million(2012:R18,2million),effective 1 December 2008;

• Amazon(aroseontheacquisitionof70%ofAmazonColours(Pty)Ltd)R1,6million(2012:R1,1million),effective1 November 2011;

• AgChem(aroseontheacquisitionof70%ofAgChemHoldings(Pty)Ltd)R23,0million(2012:R23,0million),effective 1 November 2011, and the cash-generating unit to which goodwill can be attributed consists mainly of AgChem Africa (Pty) Ltd;

• Tetralon(aroseontheacquisitionof70%ofTetralonChemicalConsultancy(Pty)Ltd)R11,3million,effective1 April 2013;

• Anticor (aroseontheacquisitionof70,4%ofPWMAnticor (Pty)Ltdnetassetvalue)R5,6million,effective1 June 2013; and

• PWM(aroseontheacquisitionof70,4%ofPWMgroupofcompaniesnetassetvalue)R7,8million,effective1April 2013.




5. Intangible assets (continued) The recoverable amount of a cash-generating unit is determined based on value-in-use calculations. These

calculations use discounted cash flow projections based on financial forecasts, approved by management, over a five-year period. Key assumptions applied in value-in-use calculations of the cash-generating unit’s revenue, gross margin and cost forecasts are based on historical performance or, where not appropriate, management’s views and estimates.

Thediscountrateusedinthecashflowmodelsis20%.Thisratereflectsthecurrentmarketassessmentsofthetime-value of money and specific risks of the cash-generating unit. The discount rate is arrived at after taking into account the following factors:

• the level of risk of the cash-generating unit; and

• the opportunity cost of capital.

The growth rates used by management in forecasting future cash flows, are based on the historic experience of management and the economic environment in which the cash-generating unit operates, and are as follows:

• RolfesResins–acompoundgrowthrateof15%perannum;

• RolfesSilica–acompoundgrowthrateof15%perannum;

• RolfesDispersion–acompoundgrowthrateof10%perannum;

• RolfesChemicals–acompoundgrowthrateof15%perannum;

• Amazon–acompoundgrowthrateof20%perannum;

• AgChem–acompoundgrowthrateof10%perannum;

• Tetralon–acompoundgrowthrateof15%perannum;

• Anticor–acompoundgrowthrateof15%perannum;and

• PWM–acompoundgrowthrateof15%perannum.

Management believes that any reasonable possible change in the key assumptions on which Rolfes Dispersion, Rolfes Resins, Rolfes Silica, Rolfes Chemicals, Amazon, AgChem, Tetralon, Anticor and PWM recoverable amounts are based would not cause any of the individual carrying amounts to exceed its recoverable amount.

5.2 Product licences and intellectual property

Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

Opening balance 12 726 – – –– acquisition of AgChem Holdings (Pty) Ltd – 12 726 – –– acquisition of PWM Anticor (Pty) Ltd business 4 967 – – –– acquisition of PWM group business 13 741 – – –


The product licences were acquired with the acquisition of AgChem – R12,7 million, Anticor – R5,0 million and PWM R13,7 million. Product licences are amortised over a period of 15 years. The remaining amortisation period is 180 months.

An intangible asset and related deferred tax were recognised on the product licences and Intellectual Property.

The valuation was performed by an independent consultant, using the discounted estimated royalty payments methodwithadiscountrateof11,54%overafour-yearperiod.


5. Intangible assets (continued)5.3 Research, development and product registration

Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

Opening balance 5 853 – – –– acquisition of AgChem Holdings (Pty) Ltd – 2 188 – –Additions 7 690 3 892 – –Amortisation (637) (227) – –


5.4 TrademarksGroup Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

Opening balance – – – –Additions 13 – – –Amortisation – – – –

Closing balance 13 – – –

Total intangible asset 126 049 75 004 – –

The directors review the intangible assets annually to identify any impairment losses to be recognised. No impairment loss on intangible assets were identified.

Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

6. InventoriesFinished goods 152 467 117 436 – –Raw materials 42 445 42 102 – –Work in progress 15 446 12 287 – –Marketing – 382 – –Packing 1 987 1 658 – –Consumable stores 1 092 1 066 – –Stock provisions (3 498) (4 839) – –Other 209 159 – –

210 148 170 251 – –

Stock written off during the year 567 2 596 – –

The cost of inventories recognised as an expense during the period and included in cost of sales amounted to 593 906 481 690 – –




6. Inventories (continued) No inventories are currently carried at fair value less cost to sell.

No inventories are expected to be recovered after more than 12 months.

Inventories of Rolfes Colour Pigments International (Pty) Ltd have been encumbered with a notarial bond to the value of R10 million as security in favour of Sasol Solvents.

AgChem Africa (Pty) Ltd inventories are encumbered under a notarial bond to the value of R24 million as security for overdraft facilities in favour of Nedbank.

Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

7. Trade and other receivablesTrade receivables 122 327 89 847 1 786 –Foreign trade receivables– US Dollar 2013 $2 085 744 $1 630 159 2012 20 779 13 351 – –– Euro 2013 €991 760 €508 855 2012 12 866 5 287 – –– Pound 2013 – £22 380 2012 – 288 – –– Kwacha 2013 ZMW3 684 584 ZMW2 102 353 2012 6 628 3 335 – –Pre-paid debtor 1 206 98 – –Provision for bad debts (2 423) (1 909) – –Deposits 479 500 – –Sundry debtors 4 979 1 797 401 148 Staff loans – 2 – 2

166 841 112 596 2 187 150

Value-added taxation asset 3 739 3 560 – –

170 580 116 156 2 187 150

Trade receivables have been ceded to the bank as security for bank overdrafts. (Refer note 18.)


Group

2013 2012R’000 R’000

7. Trade and other receivables (continued)7.1 Trade receivables

Trade receivables (net of allowances) held by the Group amounted to comprising the amounts as presented above.

166 841 112 596

The average age of these receivables in days are 66,6 56,7

No interest is charged on trade receivables.

Recalculated on a proportionate basis due to acquisitions from 1 November 2011, the average for 2012 is 51,3 days.

Recalculated on a proportionate basis due to acquisitions from 1 April 2013, theaveragedaysfor2013is61,9days.

Before accepting any new customers, the Group uses credit references, credit history, bank codes and credit rating information to assess the potential customer’s credit quality and credit limits are defined by customers. 70%ofthetradereceivablesthatareneitherpastduenorimpairedhavegoodratings.The remaining30%ofthesetradereceivablesaremonitored closely.

Included in the Group’s trade receivables with carrying amount of 13 291 5 510 are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable. The historic default rate for debtors that are notpastdueandnotimpairedislessthan2%.TheGroupholdspersonalor other surety over some of these balances. The Group has registered a notarial bond of R1,1 million over equipment of a certain debtor as security over the outstanding balances in the prior year. This notarial bond was effected during the current year.

Not past due nor impaired 141 026 98 375

Ageing of past due but not impaired:90 days 5 860 6 314120 days 15 714 7 419

21 574 13 733

Movement in the allowance of doubtful debt:Balance at beginning of the year 1 909 913 Increase due to acquisitions 600 1 950Movement in provision (188) 31 Amounts written off as uncollectable 102 (985)

Balance at end of the year 2 423 1 909

Impairment losses recognised on receivables 866 426

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to a large and unrelated customer base. Accordingly, the directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.




Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

8. Short-term loansCurrent assetsRolfes Silica (Pty) Ltd – – 20 301 18 005 New Heights 390 (Pty) Ltd – – 1 950 1 269AgChem Africa (Pty) Ltd – – 5 195 3 493 Amazon Colours (Pty) Ltd – – – 1 824 Rolfes PWM (Pty) Ltd (previously AgChem Services) – – 16 070 –Maxipil (Pty) Ltd 4 763 3 783 – –Rolfes Water Chemicals (Pty) Ltd – – 8 098 –PWM Anticor (Pty) Ltd 212 – – –

4 975 3 783 51 614 24 591

Current liabilitiesRolfes Colour Pigments International (Pty) Ltd – – 40 894 37 269Rolfes Asset Holdings (Pty) Ltd – – 44 524 16 622Rolfes Chemicals (Pty) Ltd – – 11 361 10 468Debtor financing 10 461 11 043 – –Nexus Finance (Pty) Ltd 3 030 1 979 – –Indicator Trust 2 382 2 382 – –PWM Group (Pty) Ltd 1 012 – – –

16 885 15 404 96 779 64 359

The Company loans are unsecured, carry interest at prime rates with no fixed terms of repayment.

The Group loans are unsecured, carry interest at prime rates above non-controlling interest percentages with no fixed terms of repayment.

The debtor financing represents short-term borrowings from Nedbank and carry interest at market rates with no fixed terms of repayment.

Interest paid and received on the above loans and further information about these loans are contained in notes 24 and 25.

The fair value of the above loans equals their carrying value.


Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

9. Share capitalAuthorised500 000 000 ordinary shares of R0.01 5 000 5 000 5 000 5 000

Issued108609467(2012:103609467)ordinaryshares of R0.01 1 086 1 036 1 086 1 036

Unissued ordinary shares of R0.01 3 914 3 964 3 914 3 964

9.1 Fully paid ordinary sharesNumber

of sharesShare

capitalShare

premium

Balance at 30 June 2011 103 609 1 036 28 603

Balance at 30 June 2012 103 609 1 036 28 603Issue of shares 5 000 50 21 199

Balance at 30 June 2013 108 609 1 086 49 802

Fully paid ordinary shares, which have a par value of R0.01, carry one vote per share and carry the right to dividends.

Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

10. Treasury shares ListedAt cost (prior year – at cost)Rolfes Holdings Limited (868) (868) – –

Rolfes Asset Holding (Pty) Ltd purchased shares in the Company.

The share purchase adheres to the requirements of the JSE Limited and the Memorandum of Incorporation of the Company.




Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

11. Revaluation reserve Investment in sharesRevaluation – – 378 078 197 178 Deferred tax – – (51 035) (25 709)

Carrying value at 30 June – – 327 043 171 469

PropertyRevaluation 3 089 3 089 – –Deferred tax (896) (896) – –

Carrying value at 30 June 2 193 2 193 – –

Total carrying value at 30 June 2 193 2 193 327 043 171 469

12. Interest-bearing liabilitiesSecured 63 008 67 435 – –

– Instalment sale agreements 22 066 9 044 – –– Medium-term bank loans 40 942 58 391 – –

Short-term portion (22 352) (20 678) – –

40 656 46 757 – –

Group

2013 2012R’000 R’000

Instalment sale agreements are secured over motor vehicles with a carrying amount of 1 578 1 300and plant and equipment with a carrying amount of 9 415 3 100and bear interest of 7,67% 7,70%

Instalment sale agreements relate to motors vehicles and equipment with lease terms of four years on average. The Group’s obligation under instalment sale agreements are secured by the lessor’s title to the leased assets. The Group has an option to purchase the motor vehicles and equipment for a nominal amount at conclusion of the agreement.

A medium-term loan was obtained for the purchase of Rolfes Logistics (Pty) Ltd (previously Leather-Chem (Pty) Ltd) with carrying amounts of

Theinstalmentbearsinterestat10,21%andisrepayableover60monthswiththe last payment being on 1 January 2013.

– 1 402


Group

2013 2012R’000 R’000

12. Interest-bearing liabilities (continued)A medium-term loan was obtained for the purchase of New Heights 390 (Pty) Ltd with carrying amounts of

Theinstalmentbearsinterestat8,91%andisrepayableover60months with the last payment being on 1 February 2014.

2 293 5 499

A medium-term loan was obtained for the purchase of AgChem Holdings (Pty) Ltd with carrying amounts of

The instalmentbearsinterestat8,7%andisrepayableover38 months with the last payment being on 1 May 2015.

13 440 19 653

A medium-term loan was obtained for the purchase of AgChem Holdings (Pty) Ltd with carrying amounts of

The instalmentbearsinterestat8,97%andisrepayableover60months withthelastpaymentbeingon1October2016.

19 714 24 707

A medium-term loan was obtained for the purchase of Amazon Colours (Pty) Ltd with carrying amounts of

The instalmentbearsinterestat8,93%andisrepayableover48months withthelastpaymentbeingon1February2016.

3 695 4 880

A medium-term loan was obtained for the purchase of Amazon Colours (Pty) Ltd with carrying amounts of

The instalmentbearsinterestat8,97%(2011:Nil)andisrepayableover 48monthswiththelastpaymentbeingon1July2016.

Refer to note 18 for security over these loans.

1 800 2 250

Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

Total minimum payments

Total payments – Repayments 71 629 78 076 – –– Finance cost (8 621) (10 641) – –

Present value 63 008 67 435 – –

Payments – up to 1 year – Minimum repayments 26 642 25 591 – –– Finance cost (4 290) (4 913) – –




Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

12. Interest-bearing liabilities (continued)Payments – 2 to 5 years – Minimum repayments 44 987 52 485 – –– Finance cost (4 331) (5 728) – –

Present value 40 656 46 757 – –

The fair value of the medium-term loans and instalment sale agreements are approximately equal to their carrying amount.

13. Contingent considerationPurchase of AgChem Holdings (Pty) Ltd

Non-current portion of vendor loan 6 731 6 191 6 731 6 191Current portion of vendor loan – – – –

6 731 6 191 6 731 6 191

Opening balance 6 191 – 6 191 – Arising on business combination – 5 938 – 5 938 Finance cost 540 253 540 253

Closing balance 6 731 6 191 6 731 6 191

Thisrepresentsthepresentvalueofatop-upfortheexisting70%oftheAgChemHoldings(Pty)LtdshareholdingforamaximumvalueofR8,25millionpendingprofitwarrantiesbeingmetby30June2015,computedata9%interest rate. The amount allocated to the purchase price was R5,94 million.


Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

14. Deferred tax liabilityDeferred tax is calculated in full on temporary differences under the balance sheet method usingataxrateof28%.

Movement on the deferred tax account is indicated below:

Opening balance 14 854 11 799 25 709 25 709 Provisions 320 (584) – –Originating temporary difference on tangible fixed assets 532 951 – –Revaluation on investment property – – – –Revaluation on investments – – 25 326 – (Increase)/Decreaseintaxlossesavailablefor set-off against future taxable income 1 218 (1 404) – – Unredeemable capital allowances – 529 – –Intangible asset 5 238 3 563 – –

Closing balance 22 162 14 854 51 035 25 709

Movement on deferred tax was charged as follows:– To profit and loss 2 070 3 334 – – – In statement of financial position 5 238 (279) 25 326 –

7 308 3 055 25 326 –

Reconciliation of deferred tax liability:Provisions (1 983) (2 303) – – Property, plant and equipment 13 782 13 250 – – Revaluation reserve 1 991 1 991 – – Investments – – 51 035 25 709Tax losses available for set-off against future taxable income (396) (1 614) – – Capital loss (33) (33) – – Intangible asset 8 801 3 563 – –

Closing balance 22 162 14 854 51 035 25 709

The closing balance broken down:– deferred tax liability 24 574 18 804 51 035 25 709 – deferred tax asset (2 412) (3 950) – –

There are no time limits on the utilisation of unused tax losses. Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.




Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

15. Estimated tax loss and capital redemption fundAgChem Group 1 414 5 764 – –

Estimated tax loss 1 414 5 764 – –

The estimated tax loss arose out of losses incurred by trading circumstances of the individual companies and will be utilised in future periods against taxable profit.

16. ProvisionsWarranty provision Opening balance 1 July 1 065 643 – –Increases 608 446 – –Utilised during the year (38) (24) – –

Closing balance 30 June 1 635 1 065 – –

Reconstruction provisionOpening balance 3 343 3 343 – –Estimate (1 000) – – –Finance charges 55 – – –


Due within one year or less 1 635 1 065 – –Due after more than a year 2 398 3 343 – –

Total provisions 4 033 4 408 – –

No finance charges were recognised in 2012 on the rehabilitation provision, since management was of the opinion that the provision is fairly stated at 30 June 2012.

On closure of the mining operations, when rehabilitation of the site needs to be actioned, there will be an expected outflow of economic benefits, although the expected timing and amount of the outflows are uncertain at this stage.

Details regarding the provisions are indicated in the accounting policies note 1.


Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

17. Trade and other payablesTrade payables 98 624 75 742 421 226Foreign creditors – US Dollar 2013: $4 897 122 (2012:$3 693 407) 48 786 30 249 – – Salary control 620 657 – –Accruals 3 782 2 447 – – Leave day accrual 635 3 248 (1 469) 128 Bonus accrual (679) 476 – – Commission accrual – 77 – –Credit cards 94 (171) – –Salary advances 152 84 – – Deposits 135 489 – – Minority shareholders for dividends – 1 030 – –

Total trade and other payables 152 149 114 328 (1 048) 354 Value-added taxation liability – – 981 1 365Income tax liability 9 142 2 299 1 516 790

161 291 116 627 1 449 2 509




18. Cash and cash equivalents For the purpose of the statement of cash flow, cash and cash equivalents include cash on hand and in banks,

net of outstanding bank overdrafts.

Cash and cash equivalents at the end of the financial year as shown in the statement of cash flow can be reconciled to the related items in the statement of financial position, as follows:

Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

Bank overdraft 34 511 2 938 350 1 943 Call account (85) (85) – – Dollar account (2013: $242 703)(2012:$127 655) (2 418) (1 045) – – Euro account (2013: €3 496) (2012: €7 527) (45) 78 – – Petty cash (43) (46) (2) (3) Trading account (4) (7) – –

31 916 1 833 348 1 940

The entity indicates cash on hand and bank overdraft accounting on a net basis due to a contractual right to settle on a net basis.

Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

Banking facilities are available as follows:– Multi-Optional facility 45 000 35 000 45 000 35 000 Availablebywayofoverdraftand/orLetterof

Credit/Guarantees. Shared with Rolfes Colour Pigments International

(Pty) Ltd, Rolfes Silica (Pty) Ltd, Rolfes Chemicals (Pty) Ltd, Rolfes Asset Holding (Pty) Ltd and Rolfes Logistics (Pty) Ltd

– FEC facility 3 000 2 000 – – Shared between Rolfes Colour Pigments

International (Pty) Ltd, Rolfes Chemicals (Pty) Ltd, Acacia Specialty Colours (Pty) Ltd and AgChem Africa (Pty) Ltd

– Asset-based facility (Revolving credit line) 14 000 14 000 – – Shared with Rolfes Colour Pigments International

(Pty) Ltd, Rolfes Chemicals (Pty) Ltd, Rolfes Silica (Pty) Ltd, Rolfes Asset Holding (Pty) Ltd, AgChem Holdings (Pty) Ltd, AgChem Africa (Pty) Ltd and Gallus Technologia Western Cape (Pty) Ltd


Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

18. Cash and cash equivalents (continued)– Overdraft facility 19 200 17 500 – – Available with fixed overdraft to AgChem Africa

(Pty) Ltd, Absolute Science (Pty) Ltd, Acacia Speciality Chemicals (Pty) Ltd, Introlab Chemicals (Pty) Ltd and Amazon Colours (Pty) Ltd

– Overdraft facility 10 000 – – – Available in Rolfes PWM (Pty) Ltd– Debtors’ financing 40 000 40 000 – – Available in AgChem Africa (Pty) Ltd– Medium-Term loan facility – 1 401 – –Running down with remaining term of 0 months– Medium-Term loan facility 2 293 5 499 – –Running down with remaining term of 8 months– Medium-Term loan facility 13 440 19 653 – –Running down with remaining term of 23 months– Medium-Term loan facility 19 714 24 707 – –Running down with remaining term of 40 months– Medium-Term loan facility 3 695 4 880 – –Running down with remaining term of 32 months– Medium-Term loan facility 1 800 2 250 – –Running down with remaining term of 37 months

Facilities are secured as follows:

• Unlimitedcross-suretyship (incorporating cession of loan funds) by Rolfes Asset Holding (Pty) Ltd, Rolfes Silica (Pty) Ltd, Rolfes Chemicals (Pty) Ltd, Rolfes Colour Pigments International (Pty) Ltd, Rolfes Logistics (Pty) Ltd, Rolfes Holdings Limited, AgChem Holdings (Pty) Ltd, Absolute Science (Pty) Ltd, Acacia Specialty Chemicals (Pty) Ltd, Rolfes PWM (Pty) Ltd, AgChem Africa (Pty) Ltd, Gallus Technologia (Pty) Ltd, Introlab Chemicals (Pty) Ltd and Gallus Technologia Ventersdorp (Pty) Ltd.

• Cessionofinsurancepolicyrequiredintermsofcoveringmortgagebond.

• Agreementofpledge,cessionandset-offbyRolfesHoldingsLimited,RolfesColourPigmentsInternational(Pty) Ltd, Rolfes Silica (Pty) Ltd, Rolfes Chemicals (Pty) Ltd, Rolfes Asset Holding (Pty) Ltd and Rolfes Logistics (Pty) Ltd, for the R35 million overdraft facility.

• CessionofallpresentandfuturedebtorsofRolfesColourPigmentsInternational(Pty)Ltd,RolfesChemicals(Pty) Ltd, Rolfes Silica (Pty) Ltd, Amazon Colours (Pty) Ltd, Introlab Chemicals (Pty) Ltd, Acacia Specialty Chemicals (Pty) Ltd, AgChem Africa (Pty) Ltd, Rolfes Logistics (Pty) Ltd, Rolfes Assets Holdings (Pty) Ltd, and Rolfes PWM (Pty) Ltd

• CessionofCGICpolicy.

• Thirdcontinuouscoveringmortgagebondover remainingportions147and174,Rietfontein63 I.R.and273Witkoppie64I.R.withRolfesAssetHoldings (Pty) Ltd as mortgagor and Nedbank as mortgagee in the amount of R10,35 million.




• Cessionofcustomerforeigncurrencyaccount.

• Limitedcross-suretyshipinthesumofR5,25millionbetweenRolfesColourPigmentsInternational(Pty)Ltdand Amazon Colours (Pty) Ltd.

• LimitedsuretyshipofR1,051millionbyAgChemHoldings(Pty)Ltd.

• Unlimitedcross-suretyshipinfavourofNedbankLimitedbyNewHeights390(Pty)LtdandRolfesChemicals(Pty) Ltd as well as Rolfes Holdings Limited and AgChem Holdings (Pty) Ltd, as well as Rolfes Holdings Limited and Amazon Colours (Pty) Ltd.

• GeneralnotarialbondinfavourofNedbankLimitedonstockintheamountofR24million.

• Cross-suretyship between Rolfes PWM (Pty) Ltd, Professional Water Management Cape (Pty) Ltd andTetralon Chemical Consultancy (Pty) Ltd.

Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

19. Derivative liabilitiesForeign exchange contracts – 231 – –

No forward exchange contracts are in place at year-end.

The notional principal amounts of the outstanding forward foreign exchange contracts amounted to:– US Dollar – $394 065 – –

20. RevenueRevenue arises from the following activities:Sale of goods 799 938 633 549 – – Rentals 1 778 2 623 – – Management fee – – 16 880 20 919

801 716 636 172 16 880 20 919


Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

21. Profit for the yearOperating profit before interest is arrived at after taking the following items into account:

– Realised (2 164) (1 772) – – – Unrealised 355 (254) – – – Foreign currency translation 130 61 – –

Gains on foreign currency transactions/translation (1 679) (1 965) – –

– Cost of goods sold 4 555 4 591 – – – Operating expenses 3 510 2 777 66 248

Depreciation and amortisation 8 065 7 368 66 248

Audit fees– for audit 555 541 568 525 – for other services – – – –

555 541 568 525

Legal fees 406 515 71 –

Research and development costs expensed immediately 2 394 1 598 – –

Direct expenses relating to rental income 241 686 – –

Finance costs related to rental income 63 6 – –

Gain on disposal of property, plant and equipment (7 291) (77) – –

Gain on disposal of rental contracts (8 385) – – –

Change in financial liability/(asset) at fair value through profit and loss 231 (47) – –

Directors’ emoluments for services as director– Basic salaries 13 645 13 824 2 802 2 590 – Allowances 1 564 1 224 524 553

15 209 15 048 3 326 3 143 – Bonus 1 365 1 621 548 447

16 574 16 669 3 874 3 590

Non-executive directors’ emoluments for services as director 457 127 457 127

Other staff costs – Refreshments and entertainment 774 327 12 16– Salaries and wages 38 074 22 859 1 434 2 987 – Salaries and wages (included in cost of sales) 31 068 24 697 – –

69 916 47 883 1 446 3 003




Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

21. Profit for the year (continued)Contributions to provident fund 1 739 1 555 – –

Contributions to pension fund 1 392 1 466 154 127

Operating lease arrangementsMinimum lease payments under operating leases recognised in profit and loss for the year 630 562 – –

At the end of the reporting period, the Group had outstanding commitments for future minimum lease payments under fixed-term operating leases, which fall due as follows:

Within one year 520 514 – –In the second to fifth years 4 899 4 081 – –

The material leasing arrangements of the Group consist of leasing arrangements for property and plant. These arrangements include terms of renewal that vary between one and five years, no option to purchase and escalation clauses that refer to market rates.

Inter-company transactionsManagement fees – – 14 480 17269Telephone and security – – (13) (16)

– – 14 467 17 253

Lease costs, renewable annually, for the year are represented by rentals payable by the subsidiaries for certain plant and equipment eliminated on consolidation:Premises 120 120 – –Equipment 4 000 4 000 – –

4 120 4 120 – –

Insurance refund 12 000 – – –

Insurance claim (12 000) – – –

During the year the Group dealt with an insurance claim from one of its customers. The claim was settled in full by the Group’s insurers. Apart from an insurance excess of R0,35 million paid by the Company.


22. The Group as a lessor Leasing arrangements Rental agreements relate to property owned by the Group with lease terms of one year, with an option to extend

for a further one year. All contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not have an option to purchase the property at the expiry period.

Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

Rental income earned by the Group from property, which is leased out under operating leases, amounted to 1 778 2 623 – –

Direct operating expenses arising from the leased property amounted to 241 686 – –

Total future minimum lease income under non-cancellable operating leases for the following period:– Not later than one year 593 2 654 – –

23. Contingent liabilitiesCourt proceedings – legal costs incurred up to date – 250 – –

Rolfes Colour Pigments International is currently in litigation relating to the retrenchment of a former agent in France.

The amount or timing of any possible outflow is uncertain.

24. Finance costInterest paid includes:Creditors, outstanding balances and shareholders’ loans 39 26 – –Finance charges 5 185 3 418 – 2 Subsidiary loan accounts – – 6 347 3 332 Current account 5 423 5 036 450 –Rehabilitation provision 55 – – –Acquisition vendor interest 540 253 540 253 Related party loans 208 335 – –

11 450 9 068 7 337 3 587




Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

25. Finance incomeCurrent account 412 305 – 117 Subsidiaries’ loan accounts – – 1 897 1265Loans to related parties – 250 – –

412 555 1 897 1 382

Investment revenue earned on financial assets, categorised as loans and receivables (including cash and bank balances) 412 555 1 897 1 382

26. TaxationSouth African normal taxation 19 544 12 746 1 127 1 030 Deferred taxation 2 070 3 334 – –South African Secondary Tax on Companies (STC) 9 1 036 – 1 036Prior year 2 037 – – –

23 660 17 116 1 127 2 066

% % % %

Tax rate reconciliation:Effective rate 26,93 28,53 28,00 56,16

Statutory rate 28,00 28,00 28,00 28,00

– Non-allowableexpenditure/exemptincome (3,38) (1,13) 0,00 0,00– Tax allowances (0,02) (0,07) 0,00 0,00– STC on dividends 0,01 1,73 0,00 28,16– Prior year correction 2,32 0,00 0,00 0,00


Group

2013 2012R’000 R’000

27. Other gains and lossesGain on disposal of property, plant and equipment 7 291 77 Gain on disposal of rental contracts 8 385 –Net foreign exchange gain 1 679 1 965

28. Earnings per shareNumeratorProfit for the year 52 379 37 268

Earnings used in basic earnings per share 52 379 37 268

Earnings used in diluted earnings per share 52 379 37 268

Deduct: Gains from sale of asset (11 968) (55)Gain/(loss)fromassociates 411 –

Earnings used in headline earnings per share 40 822 37 213

Denominator:Opening balance 20 20 Issueofshareson1July2006 1 1 Share capitalisation 89 979 89 979 Share issue on 23 May 2007 12 500 12 500 Share issue on 23 May 2007 1 109 1 109 Shares issued on 28 March 2013 1 250 –Treasury shares (641) (641)

Weighted average number of shares used in basic earnings per share, diluted earnings per share, headline earnings per share and diluted headline earnings per share (’000) 104 218 102 968

Earnings per share (cents)– Basic 50,3 36,2– Headline 39,2 36,1– Diluted 50,3 36,2– Diluted headline 39,2 36,1




Group

2013 2012R’000 R’000

29. Dividends per shareFinal dividend declared on 24 October 2011 – 5 180 Interim dividend declared on 19 March 2012 – 5 180 Final dividends declared on 15 October 2012 5 180 –Interim dividends declared on 25 March 2013 5 180 –

Total dividend declared during the year 10 360 10 360

Issued number of shares (‘000) 108 609 103 609

Cents per ordinary share 0,10 0,10

A final dividend of R0,05 per share will be paid during October 2013, being R5,4 million.

In terms of the dividend withholding tax effective 1 April 2012, the following additional information is disclosed:

• Thelocaldividendwithholdingtaxrateis15%;

• No STC credits will be utilised for the final ordinary dividend;


• The net ordinary dividend is 4,25 cents per share for ordinary shareholders who are not exempt from dividend withholding tax; and

• RolfesHoldingsLimitedtaxreferencenumberis9492/089/140.


L Lynch E van der

Merwe Total R’000 R’000 R’000

30. Directors’ remuneration Executive directorsServices as directors:Remuneration– Basic 767 1 823 2 590 – Allowances 246 307 553

1 013 2 130 3 143 – Bonus 50 397 447

For the year ended 30 June 2012 1 063 2 527 3 590

Remuneration– Basic 844 1 958 2 802 – Allowances 224 300 524

1 069 2 258 3 326 – Bonus 151 397 548

For the year ended 30 June 2013 1 220 2 655 3 875

AJ Fourie

#S Mafoyane

BT Ngcuka and L Doysi

TAM Tshivhase

*N Mthombeni

KT Nondumo Total

R’000 R’000 R’000 R’000 R’000 R’000

Non-executive directorsRemuneration– Basic – – – 53 11 63 127

For the year ended 30 June 2012 – – – 53 11 63 127

Remuneration– Basic 90 75 90 101 – 101 457

For the year ended 30 June 2013 90 75 90 101 – 101 457

* Appointed 4 October 2011; resigned 29 June 2012.

# Appointed 27 August 2012.

§ MS Teke appointed 8 April 2013 – no remuneration earned during the year.

The directors did not receive remuneration from subsidiaries.

Employment contracts of the individual executive directors all incorporate the same information and restrictions. The contracts include a restraint of trade paragraph to ensure the Group does not incur losses or loss of business due to the resignation of its directors. The contracts do not indicate any term of employment and employment will cease with the resignation or dismissal of the director. The contracts do not specify any age or time period to indicate retirement of directors.




31. Group risk The Group is exposed, through its operations, to one or more of the following financial risks: – Interest rate risk – Foreign currency risk – Liquidity risk – Credit risk

There have been no change to the objectives, policies and procedures for managing risk since the comparative period.

Policy for managing these risks is set by the Board following recommendations from the Chief Executive Officer and the Finance Director. Certain risks are managed centrally, while others are managed locally following guidelines communicated from the Board. The policy for each of the above risks is described in more detail below:

Capital management The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns

while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged from the prior year.

The capital structure of the Group consists of debt, which includes the borrowings disclosed in notes 8 and 12, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in notes 9, 10, 11 and 18, respectively.

Gearing ratio The Group’s directors review the capital structure on a semi-annual basis. As part of this review, the directors

consider the cost of capital and the risks associated with each class of capital.

Group

2013 2012R’000 R’000

The gearing ratio at the year-end was as follows:Interest-bearing debt 105 385 80 311 Positive cash and cash equivalents – –

Net debt 105 385 80 311

Equity 301 174 213 983

Net debt to equity ratio 0,4 0,4

Debt is defined as long- and short-term interest-bearing borrowings and bank overdraft, as detailed in notes 8, 12 and 18. Equity includes all capital and reserves of the Group.

The bank requires the Group to adhere to certain covenants and failure to comply will result in the reduction of the multi-optional facility. The Group’s directors review the covenant requirements on an ongoing basis to ensure compliance, and complied for the year ended 30 June 2013.


31. Group risk (continued)Gearing ratio (continued)

Significant accounting policiesDetails of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument as disclosed in note 1 to the financial statements.

Group Company

2013 2012 2013 2012Categories of financial instruments R’000 R’000 R’000 R’000

Financial assetsAvailable for sale Trade and other receivables – – – – Short-term loans – – – – Cash and cash equivalents – – – – Investment in subsidiaries – – 449 877 254 062Loans and receivables Trade and other receivables 162 600 112 108 2 187 150 Short-term loans 4 975 3 783 51 614 24 591 Cash and cash equivalents – – – – Investment in subsidiaries – – – –Other financial liabilities Trade and other receivables – – – – Short-term loans – – – – Cash and cash equivalents – – – – Investment in subsidiaries – – – –Fair value through profit and loss (held for trading) Trade and other receivables – – – – Short-term loans – – – – Cash and cash equivalents – – – – Investment in subsidiaries – – – –

Fair value Trade and other receivables 162 600 112 108 2 187 150 Short-term loans 4 975 3 783 51 614 24 591 Cash and cash equivalents – – – – Investment in subsidiaries – – 449 877 254 062




Group Company

2013 2012 2013 2012Categories of financial instruments R’000 R’000 R’000 R’000

31. Group risk (continued)Financial liabilitiesAvailable for sale Interest-bearing liabilities – – – – Short-term loans – – – – Vendor loan – – – – Trade and other payables – – – – Financial liabilities – FEC* – – – – Cash and cash equivalents – – – –Loans and receivables Interest-bearing liabilities – – – – Short-term loans – – – – Vendor loan – – – – Trade and other payables – – – – Financial liabilities – FEC* – – – – Cash and cash equivalents – – – –Other financial liabilities Interest-bearing liabilities 63 008 67 435 – – Short-term loans 16 885 15 404 96 779 64 359 Vendor loan Trade and other payables 152 149 114 328 (1 048) 354 Financial liabilities – FEC* – – – – Cash and cash equivalents 31 916 1 833 348 1 940 Fair value through profit and loss (held for trading) Interest-bearing liabilities – – – – Short-term loans – – – – Vendor loan – – – – Trade and other payables – – – – Financial liabilities – FEC* – 231 – – Cash and cash equivalents – – – –

Fair value Interest-bearing liabilities 63 008 67 435 – – Short-term loans 16 885 15 404 96 779 64 359 Vendor loan – – – – Trade and other payables 152 149 114 328 (1 048) 354 Financial liabilities – FEC – 231 – – Cash and cash equivalents 31 916 1 833 348 1 940

* The fair value of financial assets and liabilities relating to forward exchange contracts is based on a level 1 fair vale measurement hierarchy. Level 1 uses quoted prices (unadjusted) in active markets for identical assets or liabilities


31. Group risk (continued)The fair values of financial assets and financial liabilities approximate their carrying values.

Fair value of financial instrumentsThe fair values of financial assets and financial liabilities are determined as follows:

• the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets is determined with reference to quoted market prices;

• the fair value of other financial assets and financial liabilities (excluding derivative instruments) is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments; and

• the fair value of short-term receivables and short-term payables approximates their carrying amount.

At the reporting date, there were no significant concentrations of credit risk for loans and receivables. The carrying amount of financial assets as reflected above represents the Group’s maximum exposure to credit risk.

Financial risk management objectivesThe Group’s financial department provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group. These risks include market risk (including currency risk, and cash flow interest rate risk), credit risk, liquidity risk and cash flow interest rate risk.

The Group seeks to minimise the effects of these risks by using derivative financial instruments to economically hedge these risk exposures.

Compliance with policies and exposure limits is reviewed on a continuous basis. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk.

Market riskThe Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group enters into foreign exchange contracts to manage its exposure to foreign currency risk, including:

• forward foreign exchange contracts to hedge the exchange rate risk arising on the import of goods from international suppliers.

Foreign currency risk managementThe Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.




31. Group risk (continued) The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at

the reporting date are as follows:

2013’000

2012

’000

AssetCurrency of Dollar 2 328 1 758 Currency of Euro 995 509 Currency of Pound – 22 Currency of Kwacha 3 685 2 102

LiabilityCurrency of Dollar 4 897 3693Currency of Euro – 8 Currency of Pound – –Currency of Kwacha – –

The Group trades in Europe, Asia and Africa in Pound, Euros, US Dollars and Kwacha in Zambia. It is Group policy that these transactions are hedged locally by entering into foreign exchange contracts as set out below.

The Group reduced its currency risk by negotiating favourable payment terms with foreign suppliers and by actively managing its banking facilities for foreign debt repayments.

It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency paymentsand receiptswithin50% to60%of theexposuregenerated.TheGroupalsoenters into forwardcontractsuptotwomonthswithin40%to50%oftheexposuregenerated.Basisadjustmentsaremadetothecarrying amounts of non-financial hedged items when the anticipated sale or purchase transaction takes place.

The Group places orders to purchase raw materials from international suppliers with relevant forward foreign exchange contracts (evaluated as above for terms not exceeding three months) to hedge the exchange rate risk arising from these anticipated future purchases.

Foreign currency sensitivity analysis The Group is mainly exposed to currency in Euro and US Dollars.

ThefollowingtabledetailstheGroup’ssensitivitytoa10%increaseanddecreaseagainsttherelevantforeigncurrencies. The sensitivity analysis includes only outstanding foreign currency-denominated monetary items and adjuststheirtranslationattheperiod-endfora10%changeinforeigncurrencyrates.Thesensitivityanalysisincludes external loans as well as loans to foreign operations within the Group where the denomination of the loan is in a currency other than the currency of the lender or the borrower.

Apositivenumberbelowindicatesanincreaseinprofitandotherequitywherethecurrencystrengthens10%againsttherelevantcurrency.Fora10%weakeningofthecurrencyagainsttherelevantcurrency,therewouldbe an equal and opposite impact on the profit and other equity, and the balances below would be negative.

The foreign currency sensitivity analysis is consistent with those methods and assumptions used in the prior year.

2013R’000

2012

R’000

Dollar (2 559) (1 585)Euro 1 291 521 Pound – 29 Kwacha 663 334

Profit/(Loss) (605) (701)


31. Group risk (continued)Interest rate riskThe Group limits its long-term interest-bearing liabilities as far as possible to limit the exposure to interest rate risk. The Group has made arrangements with its bankers to limit the exposure to interest rate risk, but this does not eliminate the risk, since the Group’s interest rate is linked to prime.

The Company limits its interest rate risk by carefully monitoring its cash requirements to limit unnecessary overdraft facilities resulting in unnecessary interest expenses.

The Group is exposed to cash flow interest rate risk as entities in the Group borrow funds at floating interest rates.

Interest rate sensitivity analysisThe sensitivity analysis below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the end of the reporting period was outstanding for the whole year.

A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher and all other variables were held constant, the Group’s profit for the year ended 30 June 2013 would decrease by R0,057 million (2012: R0,045 million).

This is mainly attributable to the Group’s exposure to interest rates on its variable rate borrowings.

For a 50 basis point strengthening in the interest rate, there would be an equal and opposite impact on the profit and other equity.

Credit riskFinancial assets potentially subject to Group concentrations of credit risk consist principally of trade receivables, iecreditsales,whichwasR166,8million(2012:R112,1million).

It is Group policy to assess the credit risk of new customers before entering into contracts. Such credit ratings take into account local business practices, are factored into a credit risk profile. The Group uses credit references, credit history, bank codes and credit rating information, to determine the credit rating of its new applicants. The credit risk, with respect to trade receivables, is limited due to the fact that the customer base is spread over a wide variety of small and large receivables. The Group does not enter into complex derivatives to manage credit risk. The Group insures trading internationally through Credit Guarantee Insurance Company (CGIC).

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. This information is supplied by independent rating agencies where available and, if not available, the Group uses other publicly available financial information and its own trading records to rate its major customers. Collateral held by the Group consist of sureties signed by certain customers.

Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.




31. Group risk (continued) Liquidity risk The Group has minimised its liquidity risk by ensuring it has adequate banking facilities and reserve borrowing

capacity with high-quality financial institutions or related companies.

The liquidity risk of the Group is managed centrally by the Chief Executive Officer and Group Financial Director. The budgets are set and agreed by the Board annually in advance, enabling the Group’s cash requirements to be suitably anticipated. Where facilities for Group need to be increased, approval is sought in accordance with authority limits set by the Board.

The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Included in note 18 is a listing of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk.

TheGrouphasaccesstofinancingfacilities,thetotalunusedamountwhichisR69,6million(2012:R79,2 million)at the end of the reporting period. The Group expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.

Group

2013 2012R’000 R’000

The following table set out contractual maturities analysis:Up to 3 months Forward exchange contracts – 231 Trade and other payables 127 756 99 528 Loans and borrowings 6 544 4 995 Vendor loan – –

3 to 12 months Forward exchange contracts – – Trade and other payables 24 393 14 800 Loans and borrowings 15 808 15 683 Vendor loan – –

1 to 2 years Forward exchange contracts – – Trade and other payables – – Loans and borrowings 19 414 18 607 Vendor loan – –

2 to 5 years Forward exchange contracts – – Trade and other payables – – Loans and borrowings 21 242 28 150 Vendor loan 6 731 6191

Derivatives Foreign currency forward exchange contracts are measured using quoted forward exchange rates and yield

curves derived from quoted interest rates matching maturities of the contracts.


32. Related parties Transactions between the Company and its subsidiaries, as listed on page 85, which are related parties of the

Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are now disclosed. All related party transaction occur at arm’s length.

Group Company

2013 2012 2013 2012Relationship R’000 R’000 R’000 R’000

Trading transactionsManagement feesRolfes Colour Pigments International (Pty) Limited Subsidiary – – 4 343 4 344 Rolfes Chemicals (Pty) Limited Subsidiary – – 2 173 2 173 Rolfes Silica (Pty) Limited Subsidiary – – 5 000 6 000Rolfes Asset Holding (Pty) Limited Subsidiary – – 1 261 2 701 New Heights 390 (Pty) Limited Subsidiary – – 503 451 Amazon Colours (Pty) Limited Subsidiary – – – 1 600AgChem Africa (Pty) Limited Subsidiary – – 1 200 –Rolfes Holdings Limited performed certain administrative services for the Company, for which a management fee is charged, as disclosed above.

Management fees were based on an appropriate allocation of costs incurred by relevant administrative departments.Interest received/(paid)Rolfes Colour Pigments International (Pty) Limited Subsidiary – – (3 470) (1 845)Rolfes Asset Holdings (Pty) Limited Subsidiary – – (1 985) (1 427)Rolfes Chemicals (Pty) Limited Subsidiary – – (892) (60)Rolfes Silica (Pty) Limited Subsidiary – – 1 296 1 008 New Heights 390 (Pty) Limited Subsidiary – – 108 62AgChem Africa (Pty) Limited Subsidiary – – 493 195 Indicator Trust Non-controlling interest – (202) – –Nexus Finance (Pty) Limited Non-controlling interest (208) (133) – –Maxipil (Pty) Limited Associate – 250 – –Profit or (loss) in associatesMaxipil (Pty) Limited Associate (411) – – –

TelephonesRolfes Asset Holdings (Pty) Limited Subsidiary – – 13 16OtherLoansRolfes Colour Pigments International (Pty) Limited Subsidiary – – (40 894) (37 269)Rolfes Asset Holdings (Pty) Limited Subsidiary – – (44 524) (16 622)Rolfes Chemicals (Pty) Limited Subsidiary – – (11 361) (10 468)Rolfes Silica (Pty) Limited Subsidiary – – 20 301 18 005 New Heights 390 (Pty) Limited – – 1 950 1 269AgChem Africa (Pty) Limited – – 5 195 3 493 Amazon Colours (Pty) Limited – – – 1 824 Rolfes PWM (Pty) Limited Subsidiary – – 16 070 –Rolfes Water Chemicals (Pty) Limited Subsidiary – – 8 098 –Maxipil (Pty) Limited Common director 4 763 3 783 – –Nexus Finance (Pty) Limited Minority Shareholder (3 030) (1 979) – –




Group Company

2013 2012 2013 2012Relationship R’000 R’000 R’000 R’000

Indicator Trust Minority shareholder (2 382) (2 382) – –PWM Group (Pty) Limited Common director (1 012) – – –

CompensationThe remuneration of directors and other members of key management during the year was as follows:•Short-termbenefits 16 126 16 669 3 426 3 590

The remuneration of directors and key executives is determined by the Remuneration Committee having regard to the performance of individuals and market trends.

Additions to computer equipmentPinnacle MicroMr AJ Fourie Director 300 224 13 3

33. Retirement benefit schemes The companies are members of a defined contribution plan that is defined as post-employment benefit plans

under which an enterprise pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.

Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

Contributions made– Pension fund 1 392 1 466 154 127 – Provident fund 1 739 1 555 – –

3 131 3 021 154 127

Certain Group companies are members of the Crystal Pension Fund and the contributions to the fund are calculated as follows:

•TheGroup 9,0% (including1,52%administrationfee) •Theemployees 7,5%

Certain Group companies are also members of the Chemical Industry National Provident Fund and the contributions to the fund are calculated as follows:

•TheGroup 6,0% •Theemployee 6,0%

Certain Group companies are also members of the Liberty Life Provident Fund and the contributions to the fund are calculated as follows:

•TheGroup 7,5%and5,0% •Theemployees 7,5%and5,0%

In the above funds the companies have various brokers and are represented by trustees and have management boards that ensure the companies’ interests in the above funds are not dismissed. The funds’ trustees invest the assets of the funds to obtain the best results.

The total expense recognised in the statement of comprehensive income of R3,1 million (2012: R3,0 million)represents contributions payable to these plans by the companies at rates specified in the rules of the plans. As at 30 June 2013, all contributions to the retirement benefit schemes were paid in full.

32. Related parties (continued)


34. Subsidiaries acquiredSubsidiaries acquired

Principal activity Date of acquisition

Proportion of shares acquired

2012Amazon Colours (Pty) Limited Water-base pigments

dispersion manufacturer1 November 2011

70%

Analysis of assets and liabilities acquiredOn acquisition the book value of the assets and liabilities acquired were considered to equal the fair value.

Current assetsCash and cash equivalentsTrade and other receivables 3 757

– Gross trade receivables 3 957 – Provision for bad debts (200)

Inventories 4 442

Non-current assetsPlant and equipment 1 002

Current liabilitiesTrade and other payables (1 982) Cash and cash equivalents (786)Provisions (33) Value-added taxation liability (140) Taxation liability (283) Non-controlling interest (1 259)

Non-current liabilitiesLong-term liabilities (1 801) Goodwill on acquisition 1 074

The calculation has been finalised:– Fair value of net assets purchased 4 176– 30%non-controllinginterest (1 259) – Less: Consideration settled in cash (3 991)

Net outflow on acquisition Total purchase consideration 3 991

– Paid in cash 5 250 – Purchase of loan account (1 259)

Plus: Cash and cash equivalent balances acquired 786

4 777




34. Subsidiaries acquired (continued) Cost of acquisition Thecostofacquisitionforthe70%acquiredeffective1November2011wasR5,25millionpaidincash.The cost

ofacquisitionforthe30%acquiredeffective30June2012wasR2,25millionpaidincash,refertonote35.

Primary reason for business combination The desire to, inter alia, gain a presence in the point-of-sale dispersions market which Rolfes had as yet

not entered.



2012AgChem Holdings (Pty) Limited Development,

manufacturing, import and distribution of high-quality agricultural-chemicals and speciality nutrition fertiliser for soil and plants

1 November 2011 70%


R’000

Current assetsCash and cash equivalents 2 527 Trade and other receivables 61 295

– Gross trade receivables 63 045– Provision for bad debts (1 750)

Inventories 45 161

Vaue-added taxation asset 809 Taxation asset 1 167

Non-current assetsPlant and equipment 8 705Deferred taxation asset 279 Intangible asset recognised on acquisition 12 726

Current liabilitiesTrade and other payables (44 883) Short-term liabilities (27 699)Provisions (294) Non-current liabilitiesLong-term liabilities (8 060)Contingent consideration (5 938) Non-controlling interest (20 474) Goodwill on acquisition 22 993

The calculation has been finalised:– Fair value of net assets purchased 42 570 – Fair value adjustment (intangible) 12 726– Deferred taxation on fair value adjustment (3 563)– Non-controlling interest (20 474) – Contingent consideration (5 938) – Less: Consideration settled in cash (48 314)

Net outflow on acquisition Total purchase consideration 48 314 Less: Cash and cash equivalent balances

acquired (2 527)

45 787


34. Subsidiaries acquired (continued)Primary reason for business combination (continued)To gain entry into the highly attractive Agricultural Chemicals sector and to add a total new range of chemical products to the existing large product basket of the Rolfes Group.

Goodwill arising on acquisitionGoodwill, in the business combinations, arose because the cost of combination included a control premium paid toacquire70%ofAmazonColours(Pty)Ltd(“Amazon”)andAgChemHoldings(Pty)Ltd(“AgChem”).Inaddition,the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of both companies. These benefits are not recognised separately from goodwill as the future economic benefit arising from them cannot be measured reliably. No amount of goodwill is expected to be deducted for taxation purposes.

The Group also acquired the customer lists and customer relationships as part of the acquisitions. These assets could not be reliably measured and separately recognised from goodwill because they are not capable of being separated from the Group and sold, transferred, rented or exchanged, either individually or together with any related contracts.

Impact of acquisition on the results of the Group Included in the net profit for the year is R1,4 million attributable to the additional business generated by Amazon

and R15,8 million by the AgChem business.




34. Subsidiaries acquired (continued)



2013Tetralon Chemical Consultancy (Pty) Limited Import chemicals and

equipment for supply into the water treatment, home care and personal care markets

1 April 2013 70%


R’000

Current assetsTrade and other receivables 11 262

– Gross trade receivables 11 262 – Provision for bad debts –

Inventories 4 671

Short-term loans 407 Value-added taxation asset 281

Non-current assetsPlant and equipment 94 Deferred taxation asset 185

Current liabilitiesTrade and other payables (4 877)Cash and cash equivalents (542)Short-term liabilities (6 180)Provisions (83)Taxation liability (99)

Non-current liabilitiesNon-controlling interest (1 536)Goodwill on acquisition 11 331

The calculation has been finalised:– Fair value of net assets purchased 5 119 – Non-controlling interest (1 536)– Less: Consideration settled in cash (14 914)


acquired 542

15 456


34. Subsidiaries acquired (continued)Cost of acquisition

Thecostofacquisitionforthe70%acquiredeffective1April2013wasR14,9millionpaidincash.

Primary reason for business combinationTo gain entry into the Water Chemicals and Treatment sector and adds a new range of chemical products and associated services to the large existing product basket of the Rolfes Group.



2013PWM group The business of water

purification and treatment as well as manufacturing chemicals to be used in water treatment products and services

1 April 2013 70,4%


R’000

Current assets

Cash and cash equivalents 1 203 Trade and other receivables 10 730

– Gross trade receivables 11 330 – Provision for bad debts (600)

Inventories 1 246

Short-term loans 2 550

Non-current assets

Plant and equipment 1 105 Investment 354 Intangible asset recognised on acquisition 13 741

Current liabilities

Trade and other payables (8 313)Provisions (2 749)Value-added taxation liability 15






Non-current liabilitiesDeferred taxation liabilities (3 847)Long-term liabilities (199)Non-controlling interest (7 213)Goodwill on acquisition 7 834The calculation has been finalised:– Fair value of net assets purchased 19 683 – Deferred taxation on fair value adjustment (3 847)– Non-controlling interest (7 213)– Less: Consideration settled in cash (16 457)


acquired (1 203)

15 254

Cost of acquisition Thecostofacquisitionforthe70,4%acquiredeffective1April2013wasR16,5millionpaidincash.

Primary reason for business combination To gain entry into the Water Chemicals and Treatment sector and adds a new range of chemical products and

associated services to the large existing product basket of the Rolfes Group.



2013Rolfes Water Chemicals (Pty) Ltd The business of water

treatment and purification1 June 2013 70,4%


R’000

Current assets

Trade and other receivables 2 533

– Gross trade receivables 2 533 – Provision for bad debts –

Inventories 830





Non-current assetsPlant and equipment 3 187 Intangible asset recognised on acquisition 4 967

Current liabilitiesTrade and other payables (1 637)Short-term liabilities (1 437)Provisions (1 217)

Non-current liabilitiesDeferred taxation liabilities (1 391)Non-controlling interest (3 330)Goodwill on acquisition 5 592

The calculation has been finalised:– Fair value of net assets purchased 7 226 – Deferred taxation on fair value adjustment (1 391)– Non-controlling interest (3 330)– Less: Consideration settled in cash (8 097)


acquired –

8 097

Cost of acquisition Thecostofacquisitionforthe70,4%acquiredeffective1June2013wasR8,1millionpaidincash.

Primary reason for business combination To gain entry into the Water Chemicals and Treatment sector and adds a new range of chemical products and

associated services to the large existing product basket of the Rolfes Group.





34. Subsidiaries acquired (continued) Goodwill arising on acquisition Goodwill, in the business combinations, arose because the cost of combination included a control premium

paidtoacquire70%ofTetralonChemicalConsultancy(Pty)Ltd(“Tetralon”)and70,4%ofRolfesPWM(Pty) Ltd(“PWM”) and Rolfes Water Chemicals (Pty) Ltd (“Anticor”). In addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of both companies. These benefits are not recognised separately from goodwill as the future economic benefit arising from them cannot be measured reliably. No amount of goodwill is expected to be deducted for taxation purposes.

The Group also acquired the customer lists and customer relationships as part of the acquisitions. These assets could not be reliably measured and separately recognised from goodwill because they are not capable of being separated from the Group and sold, transferred, rented or exchanged, either individually or together with any related contracts.

Impact of acquisition on the results of the Group Included in the net profit for the year attributable to the additional business generated by are:

Group

2013 2012R’000 R’000

Tetralon 1 119 –PWM 3 107 –Anticor 513 –

35. Purchase of non-controlling interest in subsidiaryTheremaining30%portionofAmazonColours(Pty)Ltdwasacquiredon30 June 2012 for a consideration of R2,25 million by its parent company, Rolfes Colour Pigments International (Pty) Ltd, resulting in Amazon becoming a wholly-owned subsidiary.

The effect of the change in the Group’s ownership was as follows:Retained earnings 31 October 2011 – 4 176Loss from 1 November 2011 to 30 June 2012 – (479)

– 3 697

30%non-controllinginterestacquired – 1 109 Consideration settled in cash – (2 250)

Recognised in equity attributable to owners – (1 141)


36. Segment reporting The principal source of the Group’s risk and rates of return are as follows:

Business segments For management purposes the entity is organised on an international basis in four operating divisions,

ie Industrial Chemicals, Mining and Water Chemicals, Agricultural Chemicals and other. These divisions are the basis on which the entity report its primary information.

Only three of the four operating divisions qualify as reportable segments, namely:

• IndustrialChemicals TheIndustrialChemicalsdivisionmanufacturesanddistributesalkydresins,various organic and inorganic pigments, additives, in-plant and point-of-sale dispersions, leather chemicals products and solutions, food fragrances, food flavourings, solvents, lacquer thinners, surfactants, cleaning solvents, creosotes, waxes and other industrial chemicals.

• MiningandWaterChemicals involving the quarrying and processing of pure beneficiated silica for themetallurgical, filtration and construction industries and provides specialised water purefication solutions and products to the Industrial, Agricultural, Mining, Home and Personal Care markets.

• AgriculturalChemicals TheAgriculturalChemicalsdivisionmanufacturesanddistributesproductsthat include herbicides, insecticides, fungicides, adjuvants, foliar feeds, enriched compost pellets, and soluble fertilisers promoting general plant, root, foliage, and soil health.

Other non-reportable segments include the letting of property, plant and equipment.

Geographical segments The Group primarily operates in South Africa and the five geographical segments that could be identified would

have been Johannesburg, Pretoria, Durban, Cape Town and Brits districts, but these geographical segments will not be identified due to the proximity of most of the districts and the similarity of economic and political conditions.

Cape Town and Durban will not be identified geographical segments due to their insignificant contributions.

All inter-Group management fees were eliminated in the separate segments to ensure more accurate representation to the stakeholders regarding the various business segments in the current and prior year represented.

In the prior year there were four segments identified and during the current year management combined the Colour Chemicals and Industrial Chemicals divisions as they are of the opinion that the combination is a better presentation to the stakeholders.




36. Segment reporting (continued) The following table provides financial information on the aforementioned segments:

Industrial Chemicals


Mining and Water

Chemicals Other

Eliminations of inter-Group

items and other Total

2012 2012 2012 2012 2012 2012R’000 R’000 R’000 R’000 R’000 R’000

RevenueExternal 468 329 120 021 45 199 2 623 – 636 172Inter-company – – – – – –

Total revenue 468 329 120 021 45 199 2 623 – 636 172Total cost of sales (390 102) (81 311) (33 445) (4 112) (508 970)

Gross profit 78 227 38 710 11 754 (1 489) – 127 202 Gross profit 17% 32% 26% 20%

Other income 3 869 1 843 318 4 082 – 10 112Operating expenses (33 510) (17 741) (3 965) (13 577) – (68 793)

Profit before interest 48 586 22 812 8 107 (10 984) – 68 521Operating profit 10% 19% 18% 11%

Interest paid (3 889) (2 006) (344) (2 891) 62 (9 068)Interest received 48 314 – 255 (62) 555

Profit before taxation 44 745 21 120 7 763 (13 620) – 60 008Taxation expenses (12306) (5 455) (2 175) 2 820 – (17 116)

Profit after taxation 32 439 15 665 5 588 (10 800) – 42 892 Profit after taxation 7% 13% 12% 7%

Equity holders of the parent 31456 11 024 5 588 (10 800) – 37 268Non-controlling interest 983 4 641 – – – 5 624

Total assets 287 035 100 768 54 067 37 187 (38 092) 440 965

Total liabilities 168 299 42 387 23 984 7 882 (15 569) 226 983

Capital expenditure incurred 3 992 8 247 1 260 1 239 – 14 738

Depreciation (2 266) (2 064) (2 790) (248) – (7 368)

Bad debts provision 230 1 219 30 430 – 1 909

Information about geographical areas

Revenue from external customers can be allocated to identifiable countries as follows:

Africa 43 389 573 755 – – 44 717 Asia 1 923 882 – – – 2 805 Europe 16 988 5 549 – – – 22 537 South Africa 406 029 113 017 44 444 2 623 – 566 113

468 329 120 021 45 199 2 623 – 636 172


36. Segment reporting (continued)

Industrial Chemicals


Mining and Water Chemicals Other

Inter-Group items

and other Total2013 2013 2013 2013 2013 2013

R’000 R’000 R’000 R’000 R’000 R’000

RevenueExternal 502 946 234 765 62 227 1 778 – 801 716Inter-company – – – – – –

Total revenue 502 946 234 765 62 227 1 778 – 801 716Total cost of sales (427 201) (157 919) (42 806) (6 480) – (634 406)

Gross profit 75 745 76 846 19 421 (4 702) – 167 310Gross profit 15% 33% 31% – 21%

Other income 1 216 3 492 2 138 21 617 – 28 463Loss from associate – – – (411) – (411)Operating expenses (40 234) (35 899) (8 108) (12 199) – (96 440)

Profit before interest 36 727 44 439 13 451 4 305 – 98 922Operating profit 7% 19% 22% 12%

Interest paid (3 899) (3 454) (413) (3 684) – (11 450)Interest received 36 – 214 162 – 412

Profit before taxation 32 864 40 985 13 252 783 – 87 884Taxation expenses (9 187) (10 658) (4 150) 335 (23 660)

Profit after taxation 23 677 30 327 9 102 1 118 – 64 224Profit after taxation 5% 13% 15% 8%

Equity holders of the parent 22 461 21 128 7 672 1 118 – 52 379Non-controlling interest 1 216 9 199 1 430 – – 11 845

Total assets 280 994 181 400 126 750 42 497 (24 030) 607 611

Total liabilities 147 630 136 328 81 308 (13 024) (45 805) 306 437

Capital expenditure incurred 14 307 17 030 4 598 659 – 36 594

Depreciation (2 154) (3 033) (2 812) (66) – (8 065)

Bad debts provision 884 1 219 320 – – 2 423

Information about geographical areas

Revenue from external customers can be allocated to identifiable countries as follows:

Africa 58 556 22 434 1 080 – – 82 070Asia 4 547 2 474 – – – 7 021 Europe 30 294 5 196 – – – 35 490 USA – 4 030 – – – 4 030 South Africa 409 549 200 631 61 147 1 778 – 673 105

502 946 234 765 62 227 1 778 – 801 716




36. Segment reporting (continued) All non-current assets are domiciled in South Africa, except for holding in Botswana consisting of:

R12,14 million.

Information about major customers Revenuesfromtransactionswithsinglecustomersdoesnotexceed10%oftheabovereportingsegments

revenue and is thus not disclosed.

Information about basis if measurement for inter-segment transaction Inter-segment transactions are eliminated on presentation of the segment report to present a more feasible

segment. All related party transactions occur at arm’s length on the same terms and conditions that are available commercially.

The AgChem business acquisition of the prior year, excluding Acacia Specialty Chemicals (included in the Industrial Chemicals segment) forms the Agricultural Chemicals sector.

The PWM business acquisition forms part of the Mining and Water Chemicals sector, including of Rolfes Silica business.

37. Statement of cash flowGroup Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

37.1 Reconciliation of profit before interest to cash generated from operations:Operating profit before interest 98 922 68 521 9 466 5 884

Adjustments for non-cash items:– Depreciation 8 065 7 368 66 248 – Movement in bad debt provision 514 996 – –– Movement in warranty provision 570 95 – –– Movement in leave day accrual (2 613) 2 367 – –– Movement in bonus accrual (1 155) (110) – ––Loss/(Profit)withsaleofasset (15 676) (77) – –– Changes on reconstruction provision (945) – – –– Changes on acquisition vendor 540 253 540 –– Unrealised exchange rate fluctuations 355 (254) – –

Change in working capital: (41 140) (15 406) (3 823) 505

– Increase in inventories (33 150) (25 695) – ––(Increase)/Decreaseinreceivables (30 234) 25 914 (2 037) (125)–Increase/DecreaseinFECasset/liability (231) 47 – ––Increase/(Decrease)inpayablesandVAT 22 475 (15 672) (1 786) 630

47 437 63 753 6 249 6637

37.2 Taxation (paid)/receivedOpening balance: Receiver of Revenue (2 299) 636 (790) (191)Taxation(liability)/assetfromacquisition (99) 884 – –Taxation liability for the year (21 581) (12 746) (1 127) (1 030)STC liability for the year (9) (1 036) – (1 036)Closing balance: Receiver of Revenue 9 142 2 299 1 516 790

Taxation paid during the year (14 846) (9 963) (401) (1 467)


Group Company

2013 2012 2013 2012R’000 R’000 R’000 R’000

37.3 Cost with acquisition of companiesLand, property plant and equipment 4 386 9 707 – –Investments 354 – – –Trade receivables 24 525 65 052 – –Inventory 6 747 49 603 – –Accounts payable (14 827) (46 865) – –Long-term liabilities (199) (9 861) – –Short-term liabilities (4 660) (27 699) – –SARS – VAT 296 669 – –SARS – Income taxation (99) 884 – –Provisions (4 049) (327) – –Deferred taxation 185 3 842 – –Cash 661 1 741 – –

13 320 46 746 – –Goodwill 24 757 24 067 – –Intangible asset 18 708 12 726 – –Deferred taxation on intangible (5 238) (3 563) – –Non-controlling interest (12 079) (21 733) – –Contingent consideration – (5 938) – –Investments (354) – – –Deferred tax (185) – – –Goodwill – Amazon 514 – – –Cash of subsidiaries acquired (661) – – –

Cash cost 38 782 50 564 – –

Cash cost relates to the business acquisitions as follows: – –Tetralon Chemical Consultancy (Pty) Ltd 15 456 – – –Rolfes PWM (Pty) Ltd 15 254 – – –Rolfes Water Chemicals (Pty) Ltd 8 097 – – –Amazon Colours (Pty) Ltd – 4 777 – –AgChem Holdings (Pty) Ltd – 45 787 – –Refer note 34.

38. ReclassificationDuring the year the directors decided to reclassify research, development and product registration out of plant and equipment to intangible asset, since they are of the opinion it will result in a better presentation of the financials.

2013

R’000

2012

R’000

Effect of profit and loss – –Decease in plant and equipment – 5 853Increase in intangible asset – 5 853




39. Interest in subsidiaries

Name Details of operationsShare

capitalEffective

holdingEffective

holdingInvest-

mentInvest-

ment

Amount owing by/(to)

sub-sidiary


sub-sidiary

2013 2012 2013 2012 2013 2012

Rolfes Colour Pigments International (Pty) Ltd

The manufacturing and distribution of resins, dispersions, organic and inorganic pigments, pigments pastes, additives, dyes and water-based pigments dispersions

1 000 100 100 190 955 67 955 (40 894) (37 269)

Rolfes Chemicals (Pty) Ltd

The distribution of drummed solvents, lacquer thinners, creosotes, waxes and other speciality chemicals

100 100 100 68 083 67 183 (11 361) (10 468)

Rolfes Silica (Pty) Ltd The manufacture and distribution of pure beneficiated silica

200 000 100 100 32 639 16 639 20 301 18 005

Rolfes Asset Holdings (Pty) Ltd

The company invests in and lets out property, plant and equipment

100 100 100 54 710 47 710 (44 524) (16 622)

Rolfes Europe Trading (Pty) Ltd

Dormant 100 100 100 – – – –

Rolfes Logistics (Pty) Ltd

Distribution of pigments and industrial chemicals throughout African continent

100 100 100* – – – –

New Heights 390 (Pty) Ltd

The company is a property holding company

100 100* 100* – – 1 950 1 269

Amazon Colours (Pty) Ltd

Dormant 300 100* 100* – – – 1 824

AgChem Holdings (Pty) Ltd

Holding and investment company 100 70 70 88 575 54 575 – –

AgChem Africa (Pty) Ltd

Development and manufacturing of high-quality agro chemicals

1 000 70* 70* – – 5 195 3 493

Acacia Specialty Chemicals (Pty) Ltd

Distribution of industrial and speciality chemical raw material

100 35,7* 35,7* – – – –

Introlab Chemicals (Pty) Ltd

Importer and distribution of specialty nutrition fertilisers for foliar application

100 35* 35* – – – –

Absolute Science (Pty) Ltd

Accredited laboratory that provides high-quality analytical data

100 70* 70* – – – –

Gallus Technologia (Pty) Ltd

Dormant 100 70* 70* – – – –

Gallus Technologia Ventersdorp (Pty) Ltd

Dormant 100 70* 70* – – – –

Gallus Technologia Western Cape (Pty) Ltd

Manufacturing and distribution of ground and plant nutrition products

100 35,7* 35,7* – – – –

Rolfes PWM (Pty) Ltd (previously AgChem Services (Pty) Ltd)

The business of water purification and treatment as well as manufacturing chemicals to be used in water treatment products and services

142 (previously

100)

70,4 70 * – – 16 070 –


39. Interest in subsidiaries (continued)

Name Details of operationsShare

capitalEffective

holdingEffective

holdingInvest-

mentInvest-

ment


sub-sidiary


sub-sidiary

2013 2012 2013 2012 2013 2012

AgChem Herbicides (Pty) Ltd

Dormant 100 70* 70* – – – –

Bungor Trading (Pty) Ltd

Dormant 100 70* 70* – – – –

AgChem Recycling (Pty) Ltd

Dormant 100 70* 70* – – – –

Agrochem Namibia (Pty) Ltd # incorporated in

Namibia

Dormant 100 70* – – – – –

Tetralon Chemical Consultancy (Pty) Ltd

Import chemicals and equipment for supply into the water treatment, home care and personal care markets

100 70 – 14 915 – – –

Professional Water Management Cape (Pty) Ltd

The business of water purification and treatment as well as manufacturing chemicals to be used in water treatment products and services

100 42,2* – – – – –

Rolfes Water Chemicals (Pty) Ltd

The business of water treatment and purification

142 70,4 – – – 8 098 –

* incorporated in Botswana

(45 165) (39 768)

Amounts owing by subsidiaries 51 614 24 591

Amounts owing to subsidiaries (96 779) (64 359)

All companies are incorporated in South Africa, except where indicated with a # * = Indirect

40. Going concern The directors confirm that they are satisfied that the Group has adequate strategic, financial and operational

resources to continue in business for the foreseeable future. The basis on which that assessment is made is recorded at the time of approval of the annual financial statements. The Board continues adopting the going concern basis for preparing the financial statements.

41. Loss in associate RolfesHoldingsLimitedholds70%ofAgChemHoldings (Pty) Ltd,whichholds51%ofGallusTechnologia

WesternCape(Pty)Ltd,whichholds50%ofMaxipil(Pty)Ltd,resultinginaneffectiveholdingof17,9%.Theeffective holding is accounted for by applying the equity method and represents the Group’s portion of the loss for the year of Maxipil (Pty) Ltd.




Number of Number ofshareholders % shares %

Shareholder spread1 to 5 000 813 60,99 1 714 419 1,58 5 001 to 10 000 224 16,80 1 793 139 1,6510 001 to 50 000 203 15,23 4 533 541 4,17 50 001 to 100 000 26 1,95 1 855 181 1,71 100 001 to 1 000 000 47 3,53 16 118 178 14,84 1 000 001 shares and over 20 1,50 82 595 009 76,05

1 333 100,00 108 609 467 100,00

Distribution of shareholdersBank 3 0,22 516 337 0,48 Brokers 3 0,22 65 844 0,06Close Corporation 24 1,80 419 158 0,39 Individuals 1 131 84,85 23 043 700 21,21 Insurance Companies 1 0,08 626 639 0,58 Investment Companies 17 1,27 26 115 386 24,04 Mutual Funds 24 1,80 19 349 747 17,82 Nominees and Trusts 92 6,90 33 011 224 30,39 Other Corporations 8 0,60 271 520 0,25 Pension Funds 1 0,08 900 000 0,83 Private Company 29 2,18 4 289 912 3,95

1 333 100,00 108 609 467 100,00

Non-public/Public shareholdersNon-public shareholders 14 1,05 55 620 792 51,21

– Directors and associates of the Company holdings 12 0,90 30 875 789 28,43 –Strategicholdings(morethen10%) 2 0,15 24 745 003 22,78

Public shareholders 1 319 98,95 52 988 675 48,79

1 333 100,00 108 609 467 100,00

Beneficial shareholders holding 5% or moreVuwa Industrial (Pty) Ltd 12 863 750 11,84 Elandre Fourie Trust 11 881 253 10,94 Carmen Fourie Family Trust 10 611 943 9,77 36OneHedgeFund 7 224 235 6,65Mr Michael Solomon Teke 7 000 000 6,45

Analysis of shareholding


Shareholders’ diary


Interim results published Wednesday, 22 February 2013

Auditedresultspublished Monday,16September2013

Summarised annual financial statements mailed to shareholders and Integrated Report posted on website Monday, 30 September 2013

Dividend declaration date Monday, 30 September 2013

Last day to trade “cum” dividend Friday, 11 October 2013

Ordinary shares trade “ex” dividend Monday, 14 October 2013

Record date to be recorded in the register to participate in the dividend distribution Friday, 18 October 2013

Payment to shareholders in respect of the dividend distribution Monday, 21 October 2013

Posting of cheques or electronic bank transfers in respect of certificated shareholders. Accounts credited at CSDP or broker in respect of dematerialised shareholders.

No share certificates may be dematerialised or re-materialised between Monday, 14 October 2013, and Friday, 18 October 2013, both days inclusive.

Where applicable, payment in terms of certificated shareholders will be transferred electronically to the shareholder bank accounts on the payment date. In the absence of specific mandates, payment cheques will be posted to certificated shareholders at their risk on the payment date.

Shareholders who have dematerialised their shares will have their share accounts and their CSDP or broker credited on the payment date.

Annual General MeetingRecord date to receive notice of the Annual General Meeting Friday, 20 September 2013

Record date to participate and vote at the Annual General Meeting Friday, 25 October 2013

Forms of proxy for Annual General Meeting of shareholders to be received by 09:00 Wednesday, 30 October 2013

Annual General Meeting of the shareholders held at 09:00 Friday, 1 November 2013

Results of Annual General Meeting released on SENS Friday, 1 November 2013


Notice of Annual General Meeting

Rolfes Holdings LimitedRegistrationnumber:2000/002715/06Share code: RLFISIN:ZAE000159836(“the Company” or “the Rolfes Group” or “the Group”)

This document is important and requires your immediate attention. If you are in any doubt as to what action you should take in respect of the resolutions contained in this notice, please consult your Central Securities Depository Participant (“CSDP”), broker, banker, attorney, accountant or other professional adviser immediately.

If you have sold or otherwise transferred all your ordinary shares in the Company, please send this document together with the accompanying form of proxy at once to the relevant transferee or to the stockbroker, bank or other person through whom the sale or transfer was effected, for transmission to the relevant transferee.

Until the Companies Act, No 71 of 2008, as amended (“the Act”), came into effect on 1 May 2011, the Memorandum of Incorporation (“MOI”) of companies comprised the Memorandum of Association and Articles of Association. On the date that the Act came into effect, the Memorandum of Association and Articles of Association were deemed to be a company’s MOI. Accordingly, for consistency of reference in this notice of Annual General Meeting, the term “MOI” or “Memorandum of Incorporation” is used throughout to refer to the Company’s Memorandum of Incorporation (which previously comprised the Company’s Memorandum of Association and its Articles of Association, as aforesaid).

All references in this notice of Annual General Meeting (including all of the ordinary and special resolutions contained herein) to the Company’s MOI refer to provisions of that portion of the Company’s MOI that was previously called the Company’s Articles of Association.

Identification of meeting participantsSection63(1)oftheActrequiresthat,beforeanypersonmay attend or participate in a shareholders’ meeting, that person must present reasonably satisfactory identification and the person presiding at such meeting must be reasonably satisfied that the right of that person to participate and vote, either as a shareholder, or as a proxy to a shareholder, has been reasonably verified. Forms of identification that will be accepted include original and valid identity documents, drivers’ licences and passports.

Electronic participation by shareholdersPlease note that the Company intends to make provision for the shareholders of the Company, or their representatives or proxies, to participate in the Annual General Meeting by way of electronic participation. In this regard the Company intends making a conference call facility available. Should any shareholder wish to participate in the Annual General Meeting by way of electronic participation, that shareholder should apply to participate, in writing (including details as to how the shareholder or its representative or proxy can be contacted) to so participate, to the transfer secretaries at the address below, to be received by the transfer secretaries at least five business days prior to the Annual General Meeting. In order for the transfer secretaries to arrange for the shareholder (and its representative or proxy) access details of the electronic participation reasonably satisfactory identification must be provided to the transfer secretaries. The Company reserves the right to elect not to provide for electronic participation at the Annual General Meeting in the event that the Company determines it not practical to do so. The costs of accessing any means of electronic participation provided by the Company will be borne by the shareholder so accessing the electronic participation. Shareholders are advised that participation in the Annual General Meeting by way of electronic participation will not enable a shareholder to vote. Should a shareholder wish to vote at the Annual General Meeting, he/she/it may do so by attending and voting at the Annual General Meeting either in person or by proxy.

Notice of Annual General MeetingNotice is hereby given to the shareholders of Rolfes Holdings Limited as at Friday, 20 September 2013, being the record date to receive notice of the Annual General Meeting in terms of section 59(1)(a) of the Companies Act, that the Annual General Meeting of shareholders of the Company will be held in the boardroom at Corporate Business Park North, 404 Roan Crescent, Midrand, on Friday, 1 November 2013, at 09:00 for the purposes of the matters set out below, which meeting is to be participated in and voted at by shareholders registered as such on Friday, 25 October 2013, being the record date to participate in and vote at the Annual General Meeting in termsofsection62(3)(a), readwithsection59(1)(b) of the Companies Act, and to consider and, if deemed fit, to pass the following ordinary and special resolutions, with or without amendment:


Ordinary businessPresentation of annual financial statements and reportsThe consolidated audited annual financial statements for the Company and its subsidiaries, including the external auditors’, Audit and Risk Committee’s and Directors’ reports for the year ended 30 June 2013, have been distributed as required and will be presented to shareholders at the Annual General Meeting.

The complete set of consolidated audited annual financial statements, together with the abovementioned reports, are set out on pages 42 to 114 of the Integrated Report.

Social and ethics committeeIn accordance with Regulation 43(5)(c) of the Act, the chairperson of the social and ethics committee will report to shareholders at the Annual General Meeting.

Ordinary resolution 1Re-election of directors“RESOLVED THAT AJ Fourie, who retires in terms of the Company’s MOI, and who is eligible and available for re-election, is re-elected as a non-executive director of the Company.”

Reason for and effect of ordinary resolution 1In terms of the Company’s MOI, 1/3 (one-third) ofthe non-executive directors shall retire from office at each Annual General Meeting. Retiring non-executive directors shall be eligible for re-election. The Board has evaluated the past performance and contributions of the retiring directors and recommend that they are re-elected. In determining the number of non-executives directors to retire, no account shall be taken of any executive directors. Brief curricula vitae of the director appears below.

Arnold J Fourie (51)Non-Executive DirectorBSc Chem Eng (University of Potchefstroom); MSc Chem Eng (University of the Witwatersrand) Appointed: 22 November 2000

Arnold is the Chief Executive Officer of the listed ICT group, Pinnacle Technology Holdings Limited. He founded Pinnacle in 1993. Arnold acquired Rolfes in 1999 and was Chief Executive Officer of Rolfes Holdings Limited from 2000 until 2007. He continues to play a leading role in the strategic direction and future growth of the Group.

A majority of more than 50% (fifty percent) of votescast by those shareholders present or represented and voting at the Annual General Meeting is required for this resolution to be adopted.

Ordinary resolution 2Election of appointment as director“RESOLVED THAT MS Teke, who was appointed to the Board during the ensuing year and who retires in terms of the Company’s MOI, and who is eligible and available for election, is elected as a director of the Company.”

Reason for and effect of ordinary resolution 2In termsof theCompany’sMOI,1/3 (one-third)of thenon-executive directors shall retire from office at each Annual General Meeting. The non-executives so to retire at each Annual General Meeting shall firstly be vacancies filled or additional directors appointed since the last Annual General Meeting. A brief curriculum vitae of the director appears below.

Mike Teke (48)Non-Executive DirectorMBA (UNISA), B. Ed (University of the North) and a BA (Hons) (University of Johannesburg). Appointed 8 April 2013

Mike served in various HR roles in BHP Billiton and Impala Platinum after which he was appointed as CEO of Optimum Coal, which listed on the JSE in March 2010. He still serves as their non-executive chairman. He also joined the Chamber of Mines as VP and was appointed as Chairman of the Richards Bay Coal Terminal and is currently serving in these roles. He is also the founding and controlling shareholder of Dedicoal, a service-based mining and beneficiation vehicle active in the South African mining sector.


Ordinary resolution 3Re-appointment and ratification of auditors’ appointment“RESOLVED THAT upon recommendation of the audit and Risk Committee of the Company, SizweNtsalubaGobodo Incorporated be appointed as independent auditors of the Company, with A Philippou as the designated audit partner, until the conclusion of the next Annual General Meeting, and that their remuneration be determined by the audit and risk

Notice of Annual General Meeting (continued)


committee in terms of the audit and risk committee charter, which amount the directors shall be empowered to ratify.”

Reason for and effect of ordinary resolution 3In terms of Section 90(1) of the Act, each year at its Annual General Meeting, the Company must appoint an auditor for the year ending 30 June 2014 who complies with the requirements of Section 90(2) of the Act. SizweNtsalubaGobodo Incorporated was appointed in March 2013 and the audit and risk committee has recommended that they be appointed as the independent auditors of the Company. The audit and risk committee shall be empowered to ratify their remuneration, as determined by the audit and risk committee in terms of the audit and risk committee charter, which amount shall be approved and endorsed by the Board.


Ordinary resolution 4Election of a member of the audit and risk committee“RESOLVED THAT TAM Tshivhase is elected as member of the Company’s audit and risk committee, with effect from the end of this meeting, in terms of Section 94(2) of the Companies Act.”

A brief curriculum vitae of the member appears below.

Takalani AM Tshivhase (58) Lead Independent Non-Executive DirectorBAdmin (UNIN); HonsB (Admin) (Econ) (SA); MBL (SA); MAdmin (Econ) (University of Pretoria); FIBSA (SA); CPMM (University of the Witwatersrand); CM (SA), M.Inst.Appointed: 25 February 2009

Takalani is an executive director of Pinnacle Technology Holdings Limited, since May 2003, after a successful and varied career in government and commerce. During the past eight years he has demonstrably contributed to the growth and success of the Pinnacle Group through the successful penetration of key accounts, operational management and strategic direction. His other directorships are as follows: executive director of DataNet Infrastructure Group (Pty) Ltd; Infrasol; Pinnacle Micro (Pty) Ltd; RentNet Rentals (Pty) Ltd; AxizWorkgroup; and ex-non-executive director of Intersite Management Services.


Ordinary resolution 5Election of a member and Chair of the audit and risk committee“RESOLVED THAT KT Nondumo is elected as member and chairperson of the Company’s audit and risk committee, with effect from the end of this meeting, in terms of Section 94(2) of the Companies Act.”


Karabo T Nondumo (35) Independent Non-Executive DirectorBAcc (University of Natal); HdipAcc (University of the Witwatersrand); CA (SA) Appointed: 25 February 2009

Karabo is executive head: Vodacom Business and previously Executive Head: corporate finance at Vodacom Group Ltd. She was inaugural chief executive officer of AWCA Investment Holdings Limited (AIH) and former Head of Global Markets Operations at Rand Refinery Limited. She is a former associate and executive assistant to the executive chairman at Shanduka Group. She was seconded to Shanduka Coal, where she was a shareholder representative, and also served on various boards representing Shanduka’s interests. She is a qualified Chartered Accountant and a member of The South African Institute of Chartered Accountants (SAICA) and African Women Chartered Accountants (AWCA). She is an independent non-executive director of Merafe Resources Limited (member of Audit and Risk, Remuneration and Nomination Committees), Harmony Gold Company Limited (member of Audit and Risk, Remuneration committees), South African Express (SOC) Limited (Chair: Audit and Risk Committee). She is on the Advisory Board of Senatla Capital. Karabo chairs the Rolfes Audit and Risk Committee.



Ordinary resolution 6Election of a member of the audit and risk committee“RESOLVED THAT SS Mafoyane is elected as member of the Company’s audit and risk committee, with effect from the end of this meeting, in terms of section 94(2) of the Companies Act.”


SeapeiSMafoyane(36)Independent Non-Executive DirectorMBA (WITS Business School), BSc (University of Natal) Appointed:26August2012

Seapei joined Discovery Health Limited in 2000 and worked in the Vitality team, eventually becoming the quality manager and then functional head of Vitality. She then joined Standard Bank of South Africa in 2007 as head of customer and strategy, business banking credit, personal and business banking South Africa and subsequently moved to South African Breweries Limited as business performance and capability leader. In September 2012 she was appointed to the position of Chief Operating Officer at Shanduka Black Umbrellas, anNPOinvolvedinthesupportof100%black-ownedbusinesses through enterprise development via business incubators.


Reason for and effect of ordinary resolutions 4, 5 and 6The members of the audit and risk committee have been nominated by the Board for election as members of the audit and risk committee in terms of section 94(2) of the Companies Act. The Board has reviewed the proposed composition of the audit and risk committee in accordance with the requirements of the Companies Act and the Regulations under the Companies Act and confirm that if all the above persons are elected, the committee will comply with the relevant requirements and have the necessary knowledge, skills and experience to enable it to perform is statutory duties.

Ordinary resolution 7Approval for the issue of authorised but unissued ordinary shares“RESOLVED THAT as required by the Company’s MOI and subject to the provisions of section 41 of the Companies Act and the requirements of any recognised stock exchange on which the shares in the capital of the Company may from time to time be listed, the Board is authorised, as they in their discretion think fit, to allot and issue, or grant options over, shares representing not more than 15% (fifteen percent) of the numberof ordinary shares in the issued share capital of the Company as at 30 June 2013 (for which purposes any shares approved to be allotted and issued by the Company in terms of any share plan or incentive scheme for the benefit of employees shall be excluded), such authority to endure until the next Annual General Meeting of the Company (whereupon this authority shall lapse, unless it is renewed at the aforementioned Annual General Meeting).”

In terms of the Company’s MOI, read with the JSE Limited (“JSE”) Listings Requirements, the shareholders of the Company may authorise the Board to, inter alia, issueanyunissuedordinarysharesand/orgrantoptionsover them, as the Board in their discretion think fit.

The existing authority granted by the shareholders at the previous Annual General Meeting is proposed to be renewed at this Annual General Meeting. The authority will be subject to the provisions of the Companies Act and the JSE Listings Requirements. The aggregate number of ordinary shares capable of being allotted and issued in terms of this resolution, other than in terms of the Company’s share or other employee incentive schemes,shallbelimitedto15%(fifteenpercent)ofthenumber of ordinary shares in issue as at 30 June 2013.

The Board has decided to seek annual renewal of this authority in accordance with best practice. The Board has no current plans to make use of this authority, but wish to ensure, by having it in place, that the Company has some flexibility to take advantage of any business opportunity that may arise in the future.

Ordinary resolution 8Approval for the issuing equity securities for cash“RESOLVED THAT the Board is authorised until the next Annual General Meeting (whereupon this authority



shall lapse unless it is renewed at the aforementioned Annual General Meeting), provided that it shall not extend beyond 15 (fifteen) months of the date of this Annual General Meeting, to allot and issue equity securities for cash, subject to the JSE Listings Requirements and the Companies Act on the following bases:

(a) the allotment and issue of equity securities for cash shall be made only to persons qualifying as public shareholders as defined in the JSE Listings Requirements and not to related parties;

(b) equity securities which are the subject of issues for cash:

(i) in the aggregate in any one financial year may not exceed 15% (fifteen percent) of theCompany’s relevant number of equity securities in issue of that class;

(ii) of a particular class, will be aggregated with any securities that are compulsorily convertible into securities of that class and, in the case of the issue of compulsory convertible securities, aggregated with the securities of that class into which they are compulsorily convertible;

(iii) as regards the number of securities which may be issued (the 15% (fifteen percent)limit referred to in (i)), same shall be based on the number of securities of that class in issue added to those that may be issued in future(arisingfromtheconversionofoptions/convertible securities), at the date of such application, less any securities of the class issued, or to be issued in future arising from options/convertible securities issued, duringthe current financial year, plus any securities of that class to be issued pursuant to a rights issue which has been announced, is irrevocable and is fully underwritten, or an acquisition (which had final terms announced) which acquisition issue securities may be included as though they were securities in issue at the date of application;

(c) the maximum discount at which equity securities maybeissuedis10%(tenpercent)oftheweightedaverage traded price on the JSE of such equity securities 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;

(d) after the Company has issued equity securities for cash, which represent, on a cumulative basis within a financial year, 5% (five percent) ormore of the

number of equity securities of that class in issue prior to that issue, the Company shall publish an announcement containing full details of the issue, including the effect of the issue on the net asset value and earnings per share of the Company; and

(e) the equity securities which are the subject of the issue for cash are 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.”

In terms of the JSE Listings Requirements, a 75%(seventy-five percent) majority in favour of the above ordinary resolution by all equity securities holders present or represented by proxy at the Annual General Meeting, is required to approve this resolution.

In terms of ordinary resolution 8, the shareholders authorise the Board to allot and issue a portion of the authorised but unissued shares as the Board in their discretion think fit.

In terms of the JSE Listings Requirements, when shares are issued, or considered to be issued, for cash (including the extinction of a liability, obligation or commitment, restraint, or settlement of expenses), the shareholdershavetoauthorisesuchissuewitha75%(seventy-five percent) majority.

The existing general authority to issue shares for cash granted by the shareholders at the previous Annual General Meeting, held on Friday, 2 November 2012, will expire at the Annual General Meeting, unless renewed. The authority will be subject to the provisions of the Companies Act and the JSE Listings Requirements. The aggregate number of ordinary shares capable of being allotted and issued for cash are limited as set out in the resolution.

The Board considers it advantageous to renew this authority to enable the Company to take advantage of any business opportunity that may arise in future.

Special businessSpecial resolution 1Remuneration of independent non-executive directors

“RESOLVED THAT, in terms of section 66(9) of theCompanies Act, the remuneration payable to the non-executive directors for the year 1 July 2013 to 30 June 2014, as set out below, be approved:


Per annumR

L Dyosi 48 177AJ Fourie 96354SS Mafoyane 96354BT Ngcuka 48 177KT Nondumo 96354MS Teke 96354TAM Tshivhase 96354

Reason for and effect of special resolution 1The reason for special resolution 1 is to, in compliance with the provisions of the Companies Act, enable the Company to comply with the provisions of sections 65(11) (h),66(8)and66(9)oftheCompaniesAct,which stipulate that remuneration of directors for their services as directors may only be paid in accordance with a special resolution approved by the shareholders.

A75%(seventy-fivepercent)majorityofvotescastbythose shareholders present or represented and voting at the Annual General Meeting is required for this special resolution to be adopted.

Special resolution 2General authority to acquire issued shares“RESOLVED THAT the Company and/or any of itssubsidiaries, are authorised by way of a general authority to repurchase or purchase, as the case may be, shares issued by the Company from any person, on such terms and conditions and in such numbers as the directors of the Company or the subsidiary may from time to time determine, to the applicable provisions in the Company’s MOI, the provisions of the Companies Act and the JSE Listings Requirements when applicable, and subject to the following:

• 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 this special resolution;

• in determining the price at which the Company’s ordinarysharesareacquiredbytheCompanyand/or subsidiary of the Company, in terms of this general authority, the maximum premium at which such

ordinarysharesmaybeacquiredwillbe10%oftheweighted average of the market price at which such ordinary shares are traded on the JSE, as determined over the 5 (five) days immediately preceding the date of the repurchase of such ordinary shares;

• the acquisitions of ordinary shares in the aggregate inanyonefinancialyeardonotexceed20%(twentypercent) of the Company’s issued ordinary share capital from the beginning of the financial year;

• the Company only appoints one agent to effect any repurchase(s) on its behalf;

• when the Company has cumulatively repurchased 3%(threepercent)oftheinitialnumberoftherelevantclassofsecurities,andforeach3%(threepercent)inaggregate of the initial number of that class acquired thereafter, an announcement will be made;

• the Company or its subsidiaries will not repurchase securities during a prohibited period as defined in the JSE Listings Requirements unless they have in place a repurchase programme where the dates and quantities of the securities to be traded during the relevant period are fixed (not subject to any variation) and full details of the programme have been disclosed in an announcement over SENS prior to the commencement of the prohibited period;

• the Board of directors authorising the repurchase, and that after considering the effect of such maximum repurchasetheCompanyanditssubsidiary/ieshavepassed the solvency and liquidity test, ie:

(i) the Company and the Group will be able in the ordinary course of business to pay its debts for a period of 12 (twelve) months after the date of the notice of the Annual General Meeting;

(ii) the assets of the Company and the Group will be in excess of the liabilities of the Company and the Group for a period of 12 (twelve) months after the date of the notice of the Annual General Meeting;

(iii) the ordinary share capital and reserves of the Company and the Group will be adequate for business purposes for a period of 12 (twelve) months after the date of the notice of the Annual General Meeting;

(iv) the working capital of the Company and the Group will be adequate for ordinary business purposes for a period of 12 (twelve) months after the date of the notice of the Annual General Meeting; and



(v) that since the solvency and liquidity test has been applied there have been no material changes to the financial position of the Group.

The JSE Listings Requirements require, in terms of paragraph 11.26, the following disclosures, whichappear in the Integrated Annual Report;

• Directors and management – pages 30 and 31;

• MajorshareholdersoftheCompany–page115;

• Directors’interestsinsecurities–page37;

• SharecapitaloftheCompany–page74; and

• Directors’responsibilitystatement–page33.

Litigation statementThere are no legal or arbitration proceedings, either pending or threatened against the Company or its subsidiaries, of which the Company is aware, which may have, or have had in the last 12 months, a material effect on the financial position of the Company or its subsidiaries.

Material changeOther than the facts and developments reported on in the Integrated Report, there have been no material changes in the affairs or financial position of the Company and Group since the date of signature of the audit report and the date of this notice.

The Board of directors has no immediate intention to use this authority to repurchase company shares. However, the Board of directors is of the opinion that this authority should be in place should it become apparent to undertake a share repurchase in the future.

Directors’ responsibility statementThe directors, whose names are given on pages 30 and 31 of the Integrated Report, collectively and individually, accept full responsibility for the accuracy of the information given in this notice of Annual General Meeting 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 the notice contains all information required by law and the JSE Listings Requirements.

Statement by the Company’s Board of Directors in respect of repurchases of securitiesPursuant to and in terms of the JSE Listings Requirements, the directors of the Company hereby state that the intention of the directors is to utilise the authority at their discretion during the course of the period so authorised.

The directors are of the opinion that, after considering the effect of the maximum repurchase permitted and for a period of 12 months after the date of this Annual General Meeting:

1. the Company and the Group will be able in the ordinary course of business to pay its debts for a period of 12 months after the date of the notice of the Annual General Meeting;

2. the assets of the Company and the Group will be in excess of the liabilities of the Company and the Group for a period of 12 months after the date of the notice of the Annual General Meeting;

3. the share capital and reserves of the Company and the Group will be adequate for ordinary business purposes for a period of 12 months after the date of the notice of the Annual General Meeting;

4. the working capital of the Company and the Group will be adequate for ordinary business purposes for a period of 12 months after the date of the notice of the Annual General Meeting; and

5. the Company will provide its sponsor and the JSE with all documentation as required in Schedule 25 of the JSE Listings Requirements, and will not undertake any such repurchase until the sponsor has signed off on the adequacy of its working capital, advised the JSE accordingly and the JSE has approved this documentation.

Reason for and effect of special resolution 2The reason for and the effect of the special resolution is to authorise the Company and/or its subsidiary byway of a general authority to acquire its/their ownissued shares on such terms and conditions and in such numbers as determined from time to time by the directors, subject to the limitations above. A repurchase of shares is not contemplated at the date of this notice. However, the Board believes it to be in the best interest of the Company that shareholders grant a general


authority to provide the Board with optimum flexibility to repurchase shares as and when an opportunity that is in the best interest of the Company arises.


Special resolution 3Financial assistance“RESOLVED THAT to the extent required by sections 44 and/or45oftheCompaniesAct,theBoardofdirectorsof the Company may, subject to compliance with the requirements of the Companies Act, the Company’s MOI and the requirements of any recognised stock exchange on which the shares of the Company may be listed from time to time, authorise the Company to provide direct or indirect financial assistance by way of loan, guarantee, the provision of security or otherwise, to:

• anyof itspresentor future subsidiariesand/oranyother Company or corporation that is or becomes related or inter-related to the Company for any purpose or in connection with any matter, including, but not limited to, acquisition of or subscription for any option or any securities issued or to be issued by the Company or a related or inter-related company, or for the purchase of any securities of the Company or a related or inter-related company; and

• any of its present or future directors or prescribed officers (or any person related to any of them or to any company or corporation related or inter-related to any of them), or to any other person who is a participant, in any of the Company’s or group of companies share or other employee incentive schemes, for the purpose of, or in connection with, the acquisition of or subscription for any option or any securities issued or to be issued by the Company or a related or inter-related company, or for the purchase of any securities of the Company or a related or inter-related company, where such financial assistance is provided in terms of any such scheme that does not satisfy the requirements of section 97 of the Companies Act, at any time during a period commencing on the date of the passing of this resolution and ending at the next Annual General Meeting of the Company for the year ending 30 June 2014.”

Reason for and effect of special resolution 3Sections 44 and 45 of the Companies Act essentially require, subject to limited exceptions, approval by way of a special resolution for the provision of financial assistance. The regulated financial assistance, as contemplated in sections 44 and 45 may only be provided pursuant to a special resolution passed by shareholders within the previous two years.


General businessOrdinary resolution 9Advisory endorsement of the remuneration policy“To endorse through a non-binding advisory vote, the Company’s remuneration policy (excluding the remuneration of the non-executive directors for their services as directors and members of the Board or statutory committees), as set out in the remuneration report contained in the Integrated Report on pages 14 and 15.”

In terms of the King Code of Governance Principles for South Africa 2009, an advisory vote should be obtained from shareholders on the Company’s annual remuneration policy. The vote allows shareholders to express their views on the remuneration policies adopted and their implementation, but will not be binding on the Company.

Ordinary resolution 10Authority to action all ordinary and special resolutions“RESOLVED THAT any one director of the Company or the Company secretary be and is hereby authorised to do all such things as are necessary and to sign all such documents issued by the Company so as to give effect to such ordinary resolutions and special resolutions with or without amendment and where applicable, registered.”

To transact any other business capable of being transacted at an Annual General Meeting.

VotingOn a show of hands, every Rolfes Group shareholder who is present in person, by proxy or represented at the Annual General Meeting shall on show of hands have



one vote (irrespective of the number of ordinary shares held), and on a poll, every Rolfes Group shareholder present in person, by proxy or represented at the Annual General Meeting, shall have one vote for every ordinary share held.

ProxiesA shareholder entitled to attend, participate in and vote at the Annual General Meeting is entitled to appoint one or more proxies to attend, participate in and vote at the Annual General Meeting in his or her stead.

A proxy need not be a shareholder of the Company.

For the convenience of holders of certificated shares and holders of dematerialised shares with own name registration, a form of proxy is attached to this notice of Annual General Meeting. Duly completed forms of proxy must be lodged with and received by the transfer secretaries (at either the transfer secretaries’ physical or postal address set out below) at any time before the commencement of the Annual General Meeting (or any adjournment of the Annual General Meeting) or handed to the chairman of the Annual General Meeting before the appointed proxy exercises any of the relevant shareholder’s rights at the Annual General Meeting (or any adjournment of the Annual General Meeting), provided that should the transfer secretaries receive a shareholder’s form of proxy less than 48 hours

before the Annual General Meeting, such shareholder will also be required to furnish a copy of such form of proxy to the chairman of the Annual General Meeting before the appointed proxy exercises any of such shareholder’s rights at the Annual General Meeting (or any adjournment of the Annual General Meeting).

Holders of dematerialised shares without own name registration who wish to attend the Annual General Meeting in person should request their CSDP or broker to provide them with the necessary letter of representation in terms of their custody agreement with their CSDP or broker. Holders of dematerialised shares without own name registration who do not wish to attend the Annual General Meeting but who wish to be represented at the Annual General Meeting should advise their CSDP or broker of their voting instructions and should not complete the form of proxy attached to this notice of Annual General Meeting.

Holders of dematerialised shares without own name registration should contact their CSDP or broker with regard to the cut-off time for their voting instructions.

Shareholders who have any doubt as to the action they should take, should consult their stockbroker, accountant, attorney, banker or other professional adviser immediately.

By order of the Board

JC SchlebuschCompany secretary

13 September 2013

Registered addressRolfes Holdings Limited12JetParkRoad,JetPark,Boksburg,1406

Transfer secretariesComputershare Investor Services Proprietary LimitedGround Floor, 70 Marshall Street, Johannesburg, 2001 (POBox61051,Marshalltown,2107)


Rolfes Holdings Limited(Registrationnumber:2000/002715/06Sharecode:RLF ISIN:ZAE000159836(“the Company” or “the Rolfes Group” or “the Group”)

Only to be completed by certificated and dematerialised shareholders with “own name” registration.

If you are a dematerialised shareholder, other than with “own name” registration, do not use this form. Dematerialised shareholders, other than those with “own name” registration who wish to attend the Annual General Meeting, must inform their CSDP or broker of their intention to attend and request their CSDP or broker to issue them with the relevant letter of representation to attend the Annual General Meeting in person and vote, or, if they do not wish to attend the Annual General Meeting in person, but wish to be represented thereat, provide their CSDP or broker with their voting instructions in terms of the relevant custody agreement entered into between them and their CSDP or broker in the manner and cut-off time stipulated therein.

An ordinary shareholder entitled to attend and vote at the Annual General Meeting to be held in the Rolfes Holdings Limited boardroom at Corporate Business Park North, 404 Roan Crescent, Midrand, on Friday, 1 November 2013 at 09:00, is entitled toappointaproxytoattend,speakorvotethereatinhis/herstead.AproxyneednotbeashareholderoftheCompany.

All forms of proxy must be lodged at the Company’s transfer secretaries, Computershare Investor Services Proprietary Limited, GroundFloor, 70Marshall Street, Johannesburg, 2001 (POBox61051,Marshalltown, 2107), by no later than09:00onWednesday, 30 October 2013.

I/We

of (address)

being an ordinary shareholder(s) of the Company holding ordinary shares in the Company, do hereby appoint:

1. orfailinghim/her,

2. orfailinghim/her,

3. the chairman of the Annual General Meeting,asmy/ourproxytovoteonmy/ourbehalfattheabovementionedAnnualGeneralMeeting(andanyadjournmentthereof)tobe held at 09:00 in the Rolfes Holdings Limited boardroom at Corporate Business Park North, 404 Roan Crescent, Midrand, on Friday, 1 November 2013, for the purpose of considering and, if deemed fit, passing with or without modifications, the following ordinary and special resolutions to be considered at such meeting:

Number of votes (one per share)In favour of Against Abstain

Ordinary resolutions1. Re-election of directors

AJ Fourie2. Election of MS Teke3. Ratification and approval to appoint SizweNtsalubaGobodo

Incorporated as auditors and A Philippou as the designated audit partner

4. Confirm the election of TAM Tshivhase as audit and risk committee member

5. Confirm the election of KT Nondumo as chairperson audit and risk committee member

6. Confirm the election of SS Mafoyane as audit and risk committee member7. General authority for allotment of unissued shares8. General authority to issue shares for cash9. Advisory endorsement of remuneration policy

10. Authority to action all ordinary and special resolutionsSpecial resolutions

1. Remuneration of independent non-executive directors2. Authority to acquire issued shares of the Company3. Approval of financial assistance

Insertan“X”intheappropriateblock.Ifnoindicationsaregiven,theproxywillvoteashe/shedeemsfit.Eachmemberentitledto attend and vote at the meeting may appoint one or more proxies (who need not be a member of the Company) to attend, speakandvoteinhis/herstead.

Signed at on 2013

Signature

Assisted by (where applicable)

Please read the notes on the reverse side hereof.

Form of proxy


Notes to the form of proxy

1. A shareholder may insert the names of a proxy or the names of two alternative proxies of the member’s choice in the space provided, with or without deleting “the chairman of the Annual General Meeting”, but any such deletion must be initialled by the shareholder. The person whose name appears first on this form of proxy and which has not been deleted shall be entitled to act as proxy to the exclusion of those names following.

2. A shareholder is entitled to one vote on a show of hands and, on a poll, one vote in respect of each ordinary share held. A shareholder’s instructions to the proxy must be indicated by inserting the relevant number of votes exercisable by the shareholder in the appropriate box. Failure to comply with this will be deemed to authorise the proxy to vote or to abstain from voting at the Annual General Meeting as he/she deems fit in respect of all theshareholder’s votes.

3. A vote given in terms of an instrument of proxy shall be valid in relation to the Annual General Meeting, notwithstanding the death, insanity or other legal disability of the person granting it, or the revocation of the proxy, or the transfer of the ordinary shares in respect of which the proxy is given, unless an intimation as to any of the aforementioned matters shall have been received by the transfer secretaries or by the chairman of the Annual General Meeting before the commencement of the Annual General Meeting.

4. If a shareholder does not indicate on this form of proxy that his/herproxy is to vote in favour of oragainst any resolution or to abstain from voting, or gives contradictory instructions, or should any further resolution(s) or any amendment(s) which may properly be put before the Annual General Meeting, be proposed, the proxy shall be entitled tovoteashe/shethinksfit.

5. The authority of a person signing a proxy in a representative capacity must be attached to this form of proxy unless that authority has already been recorded with the Company’s transfer secretary or waived by the chairman of the annual general meeting.

6. Aminororanyotherpersonunderlegalincapacitymust be assisted by his/her parent or guardianas applicable, unless the relevant documents establishing capacity are produced or have been registered with the transfer secretaries.

7. Where there are joint holders of ordinary shares:

• any one holder may sign the form of proxy;

• the vote(s) of the senior shareholders (for that purpose seniority will be determined by the order in which the names of ordinary shareholders appear in the Company’s register) who tender a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint shareholder(s).

8. It is requested that proxies be lodged at or posted to the Company’s transfer secretaries, Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107), to be received notlater than 09:00 on Wednesday, 30 October 2013.

9. Any alteration or correction made to this form of proxy, other than the deletion of alternatives, must beinitialledbythesignatory/ies.

10. The completion and lodging of this form of proxy shall not preclude the relevant shareholder from attending the Annual General Meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof.

11. The chairman of the Annual General Meeting may reject or accept a form of proxy that is completed, other that in accordance with these instructions and notes, provided that the chairman is satisfied as to the manner in which a shareholder wishes to vote.

12. Subject to the restrictions set out in this form of proxy, a proxy may not delegate the proxy’s authority to act on behalf of a shareholder to another person.

Rolfes Holdings Limited | Integrated Annual Report 2013

Notice of electronic communications

Rolfes Holdings Limited(Registrationnumber:2000/002715/06Sharecode:RLF ISIN:ZAE000159836(“the Rolfes Group”)

Form of election to receive integrated/interim reports and other shareholder communications electronically

TheRolfesGroupisintheprocessofestablishingadatabasetodistributetheirintegrated/interimreports,circularsand other shareholder communications electronically to shareholders who prefer this type of communication instead of hard copies.

Ashareholdermayalsoelectnottoreceiveanycopiesoftheaforementionedcommunicationsifhe/sheisacertificatedshareholder. Dematerialised shareholders, who do not wish to receive copies of reports, should advise their CSDP or broker to amend their flags accordingly on the BDA System.

In order for Rolfes Group to furnish you with an electronic copy or record not to send any of these communications to you, please provide the transfer secretaries, Computershare Investor Services Proprietary Limited, with the following information:

Name

COYCode/Holdernumber

Postal address

Email address

Telephone numbers Home: ( ) Work: ( ) Cell:

Fax number

Copy of shareholder communications required (either electronic or a hard copy)

Yes No

Kindly complete the above details, where applicable, and return this shareholder communication form to Computershare InvestorServicesProprietaryLimited,POBox61051,Marshalltown,2107orfax/emailto:

Faxnumber (011)688-5248

Email [email protected]

Should any of the above details change, please advise Computershare Investor Services Proprietary Limited in order that they may amend their records accordingly.

The information supplied above will be treated with the utmost confidentiality and will only be used for the purpose for which it is provided.

Signed at on 2013

Signature

Assisted by (where applicable)

130

Corporate information

Rolfes Holdings LimitedIncorporated in the Republic of South Africa(“the Company” or “the Rolfes Group” or “the Group”)(Registrationnumber:2000/002715/06Share code: RLFISIN:ZAE000159836

Company secretaryJC Schlebusch (CA (SA))12Jet Park RoadJet ParkBoksburg 1459(POBox8112,Elandsfontein1406)Telephonenumber(011)8740634Facsimile number (011) 874 0784

Sponsor and corporate adviserGrindrod Bank Limited4th Floor, Building ThreeGrindrod Tower 8A Protea PlaceSandton2196(POBox78011,Sandton2146)Telephonenumber(011)4591860Facsimile number (011) 459 1872

Auditors and reporting accountantsSizweNtsalubaGobodo IncorporatedPracticenumber946016Ashley Gardens Office ParkBuilding 2, Ashley Gardens, 0081(PrivateBagX2008,Menlyn,0063)Telephonenumber0861176782Facsimilenumber(012)4601277

Transfer secretariesComputershare Investor Services Proprietary LimitedRegistrationnumber2004/003647/07Ground Floor70 Marshall StreetJohannesburg 2001(POBox61051,Marshalltown2107)Telephone number (011) 370 7700Facsimilenumber(011)6885248

AttorneysVan der Merwe du Toit Inc.Registrationnumber2000/031065/21Brooklyn PlaceCorner Bronkhorst and Dey StreetsBrooklyn 0181(PO Box 499, Pretoria 0001)Telephone number (012) 452 1300Facsimile number (012) 452 1301

Commercial bankerNedbank LimitedRegistrationnumber1951/000009/061st Floor, Emerald PlaceStoneridge Office Park8 Greenstone PlaceEdenvale1609(POBox282,Edenvale1610)Telephone number (011) 458 4000Facsimile number (011) 458 4010

integrated annual report - rolfesza.netrolfesza.net/userfiles/rolfes integrated annual report...

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