Rolfes Holdings Limited | Integrated Report 2012 The Rolfes Group manufactures and distributes a...

Integrated Report

ROLFES HOLDINGS LIMITED

2012

Rolfes Holdings Limited | Integrated Report 2012

The Rolfes Group manufactures and distributes a wide range of market-leading, high-quality chemical products

to diverse industries including the coatings, plastics, vinyl, leather, ink, metallurgical, water filtration, cleaning,

formulators, automotive, general manufacturing, agricultural, food and construction industries.

In line with strategic objectives, Group companies are structured into specific divisions namely Colour

Chemicals, Industrial Chemicals, Mining and Water Chemicals and Agricultural Chemicals.

The Colour Chemicals division includes the results of Rolfes Colour Pigments International, a portion of Rolfes

Africa and Amazon Colours, who are responsible for the manufacture and distribution of alkyd resins, various

organic and inorganic pigments, additives and in-plant and point-of-sale dispersions.

The Industrial Chemicals division comprises the results of Rolfes Chemicals, a portion of Rolfes Africa and Acacia

Specialty Chemicals. Rolfes Chemicals and Rolfes Africa distribute solvents, lacquer thinners, surfactants,

cleaning solvents, creosotes, waxes and other industrial chemicals, while Acacia Specialty Chemicals procures

and distributes specialty chemicals for the agricultural, food and certain other niche sectors.

The Agricultural Chemicals division contains the newly acquired Agchem group of companies, including

Agchem Africa, Absolute Science, Introlab and Galltec. The division manufactures and distributes products

including herbicides, insecticides, fungicides, adjuvants, foliar feeds and enriched compost pellets, promoting

general plant, root, foliage and soil health. Introlab procures certain raw materials and soluble fertilisers for

Agchem and also sells these products to other local and export customers.

The Mining and Water Chemicals division comprises the results of Rolfes Silica that distributes pure beneficiated

silica to the mining, metallurgical, fertiliser, water filtration and construction industries.

The Group currently exports products into the East and Western Europe, South East Asia, North America, and

the rest of Africa which now includes exports to Zambia, Kenya, Uganda, Mauritius, Madagascar, Malawi,

Nigeria, Tanzania, Ethiopia, Zimbabwe, Botswana, Swaziland and Namibia.

Profile

Contents 1 Board authorisation for release of the Integrated Report

2 Group financial highlights

3 Graphical representation of Group financial highlights

4 Directorate

6 Letter from the Chairman

7 Group structure

8 Chief Executive Officer’s report

13 Financial Director’s report

16 Remuneration and Nomination Committee report

18 Corporate citizenship

39 Annual financial statements

111 Shareholders’ diary

112 Notice of annual general meeting

120 Salient features of the new Memorandum of Incorporation

Attached Form of proxy

ibc Corporate information

Rolfes Holdings Limited | Integrated Report 2012 1

The Board of Directors acknowledges its responsibility to ensure the integrity of the Integrated Report. We have accordingly

applied our mind to the Integrated Report and the recommendations of King III (principal 9.1). 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. Independent assurance was not obtained on this report. However, due to

the size of the Group and the extensive processes involved with publishing a full Integrated Report during the 2012 financial

year, we have disclosed as much as is currently possible by extending our corporate governance and sustainability reports

(pages 18 to 38), to report on as many of the elements as possible regarding financial, social and economic performance as

well as corporate governance and sustainability currently possible. We are positioning ourselves to present a fully Integrated

Report in the future. The Board has authorised the report for release on 14 September 2012.

Signed as duly authorised by the Board

BN Ngcuka Erhard van der MerweChairman of the Board Chief Executive Officer

Integratedreport

2005 2006 2007 2008 2009 2010 2011 2012R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

FINANCIAL RESULTSRevenue 100 423 164 003 224 727 314 898 375 512 369 029 460 699 636 172EBITDA 12 581 22 557 31 113 48 952 28 756 42 885 54 244 75 889Operating profit 12 260 21 482 28 846 45 107 24 454 38 275 49 568 68 521Headline earnings 7 507 11 750 19 040 29 954 10 739 23 861 32 160 37 213Cash and cash equivalents – (21 740) (8 116) (4 380) 352 6 127 4 833 (1 833)Total assets 55 336 94 797 140 987 230 605 238 760 243 210 277 108 440 965Total debt (interest-bearing

liabilities and bank overdraft) 9 695 34 202 17 754 33 634 35 042 24 140 15 901 80 311

2005 2006 2007 2008 2009 2010 2011 2012% % % % % % % %

RETURNS AND PRODUCTIVITYGross profit margin 24,1 21,5 23,5 22,5 18,0 21,0 18,9 20,0Operating profit margin 12,2 13,1 12,8 14,3 6,5 10,4 10,8 10,8Net profit margin (headline

earnings) 7,5 7,2 8,5 9,5 2,9 6,5 7,0 5,9Interest cover (times) 8,9 5,1 6,4 11,1 2,3 7,9 13,1 7,6

SOLVENCY AND LIQUIDITYCurrent ratio 2,1 1,2 1,7 1,7 1,8 1,9 2,0 1,9Acid-test ratio 1,1 0,6 1,0 0,8 0,8 0,9 0,9 0,8Interest-bearing debt: equity ratio 1,2 1,0 0,2 0,3 0,3 0,2 0,1 0,4

2005 2006 2007 2008 2009 2010 2011 2012cents cents cents cents cents cents cents cents

PERFORMANCE PER SHAREFully diluted headline earnings 8,8 13,8 20,9 29,1 10,4 23,2 31,2 36,1Earnings 8,8 17,1 19,0 28,6 10,4 23,2 31,4 36,2Dividends declared and paid 2,5 2,8 2,2 – – 5,0 10,0 10,0Net asset value 29,2 44,2 75,5 107,3 117,4 135,4 156,6 181,5Net tangible asset value 29,2 35,5 66,8 93,6 81,0 104,0 125,4 114,8

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Rolfes Chemical All share

Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12

for the year ended 30 June

2 Rolfes Holdings Limited | Integrated Report 20122

Group

financial highlights

Rolfes moved to the main board of the JSE on 21 November 2011.

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Graphical representation of

Group financial highlights

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

Appointed: 5 April 2007

Bulelani is the founder member and Executive Chairman of Vuwa Investments and a former national director ofPublic Prosecutions. He was admitted as an attorney in 1980 and practised in his own practice under the name Ngcuka and Associates. He played a critical role in the political transformation of SouthAfrica and served in various institutions including the Constitutional Assembly, the Judicial Services Commissionand was also the Deputy Chair of the National Council of Provinces.

He served as Chairman on the boards of a number of listed companies and as a director on others including BasilRead Holdings, Transnet Limited, Growthpoint Properties Limited and Mutual & Federal Insurance CompanyLimited. He currently serves as a director at Menzies Aviation, Tradelink, Primagas, Coega Autospray, AmadleloAgri, BetterGroup, Leapfrog and is the Chairman of City Lodge Group, Top Fix Holdings Limited and RolfesHoldings.

Bulelani T Ngcuka (57)Non-Executive Chairman

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

Appointed: 1 February 2007

Erhard qualified during 1989 as a chartered accountant with PricewaterhouseCoopers Inc. He worked as a senioraudit manager on large national and international clients until 1991, following which he was seconded to theLondon office before returning to Johannesburg during 1993. He spent a further 13 years in the corporate financeindustry completing a number of local and international due diligence, corporate advisory, mergers andacquisitions, JSE and SRP transactions and assignments.

He joined the Rolfes Group during 2006, responsible for, inter alia, positioning the Group for a listing andcompleting strategic acquisitions. He brings a wealth of business and corporate finance experience in the listedenvironment.

With effect from 31 August 2012, Erhard has been appointed independent non-executive director of PinnacleTechnology Holdings Limited and as a member of its Audit and Risk Committee.

Erhard van der Merwe (50)Chief Executive Officer

BCompt (UNISA)

Appointed: 25 June 2008

After completing her studies at Unisa and auditing articles, Lizette started her career at SA Oil Mills. In 1997 shewas appointed Financial Manager at iafrica.com. She joined Distribution and Warehousing Network Limited(DAWN) in 2001 as financial director in a subsidiary and, rising through the ranks, was appointed head of GroupInternal Audit, with a seat on the SSD board of DAWN, and fulfilled the role of financial director in subsidiarybusinesses as the need arose. Lizette joined Rolfes in January 2008 as a consultant, appointed permanently in April2008 and subsequently appointed as Financial Director on 25 June 2008.

Lizette Lynch (46) +Financial Director

BA Law; LLB (University of Cape Town); SEP (University of Witwatersrand and Harvard Business Schools); Advocateof High Court of South Africa

Appointed: 5 April 2007

Lungisa is the Chief Executive Officer of Vuwa Investments, a Black Economic Empowerment company. He hasextensive knowledge of the public sector, having acted for six years for the National Prosecuting Authority as aStrategy and Legal Advisor to the National Director of Public Prosecutions. His current directorships are DCM Chrome, Tradelink Textiles, Afriglass, Indwe Aviation and Amadlelo Agri. He also servedas a director on the board of Basil Read Holdings Limited.

Lungisa Dyosi (41) #

Non-Executive Director

^ Audit and Risk Committee# Remuneration and Nomination Committee+ Social and Ethics Committee

Directorate


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


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 demonstrablycontributed 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 ofDataNet Infrastructure Group (Pty) Ltd; Infrasol; Pinnacle Micro (Pty) Ltd; RentNet Rentals (Pty) Ltd;AxizWorkgroup; and ex-non-executive director of Intersite Management Services. Takalani chairs the Rolfes Auditand Risk Committee.

Takalani AM Tshivhase (57) ^Lead Independent Non-Executive Director

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


Karabo is executive head corporate finance at Vodacom Group Limited. Previously, the chief executive officer ofAWCA Investment Holdings Limited and prior to this Rand Refinery Limited, a precious metals managementcompany, where she was the Head of Global Markets Operations. She is a former associate and executiveassistant to the executive chairman at Shanduka Group. She was seconded to Shanduka Coal, where she was ashareholder representative, and also served on various boards representing Shanduka's interests. She is aqualified Chartered Accountant, having completed her articles with PricewaterhouseCoopers Inc. She is a memberof the South African Institute of Chartered Accountants (SAICA) and African Women Chartered Accountants(AWCA). She is an independent non-executive director of Merafe Resources Ltd and member of its Audit and Riskas well as Remuneration and Nomination Committees.

Karabo T Nondumo (34) ^#

Independent Non-Executive Director

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

Appointed: 22 November 2000

Arnold is the Chief Executive Officer of the listed ICT group, Pinnacle Technology Holdings Limited. He foundedPinnacle in 1993. Arnold acquired Rolfes in 1999 and was Chief Executive Officer of Rolfes Holdings Limitedfrom 2000 until 2007. He continues to play a leading role in the strategic direction and future growth of theGroup.

Arnold J Fourie (50) #

Non-Executive Director

Directoratecontinued

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

Johan was appointed as audit manager at Du Toit Greeff and Du Plooy Inc, subsequent to the completion of hisarticles with them. He joined the Rolfes Group during February 2007 as Group financial manager after qualifyingas a chartered accountant. Johan was appointed as Company Secretary on 23 June 2010. He is a member ofthe South African Institute of Chartered Accountants (SAICA).

TO B

E UPDATED

MBA (WITS Business School), BSc (University of Natal)Appointed: 26 August 2012

Seapei joined Discovery Health Limited and worked in the Vitality team eventually becoming the quality managerand then functional head of Vitality. She then joined Standard Bank of South Africa as head of customer andstrategy, business banking credit, personal and business banking South Africa and subsequently moved to SouthAfrican Breweries Limited as business performance and capability leader. Recently she has accepted the positionof Chief Operating Officer at Shanduka Black Umbrella’s, a non-profit company involved in the support ofemerging black businesses through enterprise development.

Johan C Schlebusch (30)Company Secretary

Seapei S Mafoyane (35) ^ # +Independent Non-Executive Director

5Rolfes Holdings Limited | Integrated Report 2012

Letter from

the Chairman

We entered the current financial year faced with a month-long industry wide labour strike, not a good start. The fluid market

conditions, especially in Europe, presented us with further challenges. However, we persevered and, backed by a seasoned

Board and experienced management team, the Group continued on its growth path.

The excellent 38,1% growth in turnover and a commendable growth in headline earnings keep the Group on track to achieve

its strategic five-year plan to be a substantial and diversified chemicals player in Africa by June 2016. The completed Agchem

and Amazon transactions added not only further industry diversification to the Group, but also reduced our overall exposure

to the coatings industry, an industry currently under pressure. Future acquisitions, in especially other specialty chemicals areas,

will continue to diversify the Group further to ultimately being able to offer a balanced portfolio of chemical products across

the continent.

Without committed and outstanding management and staff who sometimes have to face trying business conditions, our strategic

suppliers and service providers and loyal customers, we would not have realised the growth we have, as a Group, achieved.

Our team has once again illustrated the resilience, willingness and entrepreneurship to grow the business under variable

conditions. Thank you!

The Board, the shareholders and all other stakeholders in the business congratulate the team for the continued performance.

Being a member of the Rolfes Group is not only a privilege, but one we will treasure and nurture to the benefit of all.

Bulelani T Ngcuka Chairman

Bulelani T NgcukaChairman


Group

Structure

COLOUR CHEMICALS

INDUSTRIALCHEMICALS

AGRICULTURALCHEMICALS

MINING AND WATERCHEMICALS

BenroseCape Town

Jet ParkAlberton

Cape TownDurban

ZambiaKenya

AFRICA

Germiston

GermistonCape Town

Durban

ZambiaKenya

AFRICA

Pretoria

PretoriaPaarl

agchem

Brits

Pretoria

PaarlWorcester


Chief Executive Officer’sreport

GROUP PERFORMANCE OVERVIEW

We are pleased to have delivered on our commitment for

continued growth in a particularly interesting but challenging

year. Revenue increased by 38,1% to R636,2 million (June

2011: 460,7 million). Overall gross margins and volumes

improved, and EBITDA increased to R75,9 million (R54,2

million – June 2011). The 15,7% increase in headline

earnings per share to 36,1 cents was lower than initially

budgeted.

The Agchem Group and Amazon Colours acquisitions

contributed positively to the results for the eight months since

1 November 2011. Overall market share in the agriculture

and coatings industries increased with these

acquisitions, while other divisions yielded mixed results.

Continued reduced European product demand prompted a

decline in exports (excluding Africa). Certain high

volume product demand (acquisitions’ products excluded)

reduced locally due to weaker trading conditions and

unfavourable import pricing, and increased competition.

Performance for the first month of the financial year was also

severely influenced by a month-long labour strike.

Erhard van der MerweChief Executive Officer

• Rolfes’ listing on the

JSE moved from the

Altx to the Main Board

of the exchange on

21 November 2011.

• 38% Turnover growth



continued

However, exports into the rest of Africa continued to grow

aggressively to R44,7 million (June 2011: R18,1 million) with

total exports now comprising R70 million or 11% of total

revenue for the financial year to June 2012 (R55,7 million –

June 2011 or 12% of total revenue).

DIVISIONAL REVIEW

Group product offering and divisional structure

The Rolfes Group manufactures and distributes a wide range

of market-leading, high-quality chemical products to diverse

industries including the coatings, plastics, vinyl, leather, ink,

metallurgical, water filtration, cleaning, formulators,

automotive, general manufacturing, agricultural, food and

construction industries.

In line with strategic objectives, the Group companies are

allocated to specific divisions being Colour Chemicals,

Industrial Chemicals, Mining and Water Chemicals and

Agricultural Chemicals. The Colour Chemicals division

includes the results of Rolfes Colour Pigments International, a

portion of Rolfes Africa and Amazon Colours, who are

responsible for the manufacture and distribution of alkyd

resins, various organic and inorganic pigments, additives,

and in-plant and point-of-sale dispersions.

The Industrial Chemicals division comprises the results of

Rolfes Chemicals, a portion of Rolfes Africa and Acacia

Specialty Chemicals. Rolfes Chemicals and Rolfes Africa

distribute solvents, lacquer thinners, surfactants, cleaning

solvents, creosotes, waxes and other industrial chemicals,

while Acacia Specialty Chemicals procures and distributes

specialty chemicals for the agricultural, food and certain

other niche sectors.

The Agricultural Chemicals division contains the newly

acquired Agchem group of companies, including Agchem

Africa, Absolute Science, Introlab and Galltec. The division

manufactures and distributes products including herbicides,

insecticides, fungicides, adjuvants, foliar feeds, and enriched

compost pellets, promoting general plant, root, foliage and

soil health. Introlab procures certain raw materials and

soluble fertilisers for Agchem and also sells these products to

other local and export customers.

The Mining and Water Chemicals division comprises the

results of Rolfes Silica that distributes pure beneficiated silica

to the mining, metallurgical, fertiliser, water filtration and

construction industries.

The Group currently exports products into the East andWestern Europe, South East Asia, North America and therest of Africa which now includes exports to Zambia, Kenya,Uganda, Mauritius, Madagascar, Malawi, Nigeria,Tanzania, Ethiopia, Zimbabwe, Botswana, Swaziland andNamibia.

OPERATIONAL REVIEW

Colour Chemicals

Turnover increased by 1,5% to R289,9 million (June 2011: R285,7 million) mainly due to the acquisition of AmazonColours and increased sales in Africa being offset by areduction in local business. Sales in resin products increased albeit at low to breakeven margins dueto severely adverse competitive market pricing tactics.Pigments and dispersion turnover performance displayedmixed results with marginal growth in some and a decline incertain other product groups for the period under reviewwith trading primarily hampered by weaker local tradingconditions in the coatings industry, the labour dispute in July2011 and lower product demand for certain product volumes due to the weak construction industry and increasedcompetition.

Furthermore, the European financial crises directly impactedthe export of organic pigment into Europe resulting in significantly lower than expected export volumes. The inclusion of Amazon results from 1 November 2011 contributed marginally to turnover growth.

The division’s gross profit margin decreased slightly to 17,5%(June 2011: 18,3%) due to competitors’ pricing strategies inthe resin market, placing margins under severe pressure, aswell as slightly higher raw material input costs in the pigments business.

With a new management team and the division constantlyexploring opportunities to optimise and increase its productbasket, along with expectations of local market improvementand export activities, especially into the rest of Africa, as wellas volume growth from Europe (organic pigments) and othergeographies, prospects are favourable.



continued

Industrial Chemicals

The wider product offering, growth in African sales and

expanded national presence resulted in the significant

increase in turnover of 35,8% to R178,4 million (June 2011:

R131,4 million). Gross profit margins decreased slightly to

15,4% (June 2011: 16,1%).

The inclusion of Acacia Specialty Chemicals for the period

from 1 November 2011 contributed marginally to the

division’s results. The division’s achievement was

notwithstanding the month-long labour strike in July 2011

and untimely refinery shutdowns for routine maintenance

and safety reasons, resulting in key product shortages for a

prolonged period, hampering delivery to market. Increased

market share, assisted by strategic pricing in both

KwaZulu-Natal and the Western Cape somewhat

compensated for key product shortages. Rolfes remains a

key player in the solvents market, supplying from small to

large customers.

With its ongoing expanding product basket which include a

wider range of specialty and commodity chemicals, Acacia’s

special focus on the food sector, increasing exports into

Africa and its national footprint being continually extended,

the division looks forward to stimulating further growth.

Agricultural Chemicals

The newly acquired Agchem group companies have

contributed R120 million to Group turnover and R38,7

million to gross profit (gross profit margin 32,3%) for the

eight months ended 30 June 2012. The business was

acquired on 1 November 2011 during its high season. Late

rainfalls have resulted in a better than expected performance

since acquisition.

New product development initiatives and efforts to increase

export opportunities to North America, Eastern Europe and

African countries are already underway to compensate and

assist with counteracting lesser performance during the local

low season (February to July).

Mining and Water Chemicals

Turnover increased by 9,2% to R45,2 million (June 2011: R41,4 million). Volume demands for silica fines increased by26% while the demand for aggregates reduced by 7%.Market share was maintained with the lower demand bylarger aggregate construction customers continuing to influence the results. Gross profit margins at 26% (June2011: 28%) declined as a result of changes in productionand sales mix adjusted to match market demands.

Government infrastructure spending remained on hold during the period under review, influencing aggregatedemand. Opportunities for increased supply into the metallurgical and fertiliser industries continue to presentthemselves, promising improved prospects for businessgrowth. Various other growth opportunities are currentlybeing explored to drive growth in this division.

ACHIEVEMENTS

2012 was characterised by the successful integration of thetwo acquisitions, restructuring of acquisition funding and theeffective identification of cost synergies and savings strategies setting a positive platform for growth. Operationswere structured in product specific divisions and with therightsizing of our cost base we will be able to accommodategrowth in an ever changing business environment.

Executive resources are dedicated to identifying andimplementing opportunities for organic growth and acquisitions. Against this backdrop of strategic progress theimprovements in risk management, corporate socialinvestment, safety, health and environmental initiatives areall achievements to be proud of.

Rolfes’ growth strategy has moved into a new phase: withexpansion in chosen geographies, most notably Africa, Northand South America, South East Asia and Europe. Capitalinvestment to expand production facilities has been undertakenin the Agricultural Chemicals business, divisions have hadsteady growth outside of South Africa and the Group hasinstalled a robust risk and governance framework.



continued

OPERATING ENVIRONMENT

Efforts to grow the African market have paid off with the fullyoperational Rolfes Africa’s Zambian branch, formal distributors appointed in East Africa and the West Africanmarkets now being investigated. The physical presence inAfrica has already stimulated much interest in the Group’sproduct offering. Furthermore, the Group is in the process ofentering into various agency and distribution type agreementsto sell more products into more African countries and distributeproducts in North and South America and Eastern Europe.

STRATEGIC OBJECTIVES AND RISKS

Safety, Health and Environment – The chemicalsindustry environment involves potentially hazardous substances and emissions. We recognise that the long-termsustainability of the Group, as well as our ability to generateabove average economic returns, depend on the integrationof broader environmental, social and governance considerations into our business. We are continuously evaluating ways in which we can use more efficient andenvironmentally friendly processes in our businesses.

Price volatility of raw materials – Disruptions to thesupply of key raw materials and exchange rate fluctuationsdirectly affect our ability to deliver to our customers. Ongoing efforts to secure additional raw material sourcesand enhancing supplier contract management, and conservative foreign exchange management, are some ofthe mitigation measures that we pursue.

Product quality – Plant failures or quality issues mayaffect our ability to service our customers’ needs. In the eventof manufacturing technology not keeping pace with our customers or competitors, there is the risk that our productscould become uncompetitive or inappropriate for customers’needs. We address these challenges through new technology development and product innovation, inventorymanagement, forecasting and planning, appropriate plantmaintenance and operating standards and quality management processes.

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

ACQUISITIONS DURING 2012

The strategic acquisition of a controlling stake, effective 1 November 2011, in Agchem Holdings (Pty) Ltd(“Agchem”), a distributor and manufacturer of agriculturalchemical products, will allow Rolfes to realise its strategy ofbeing able to offer a complete range of chemicals to diversemarkets and industries. Shareholders are referred to theSENS announcements released on 12 July 2011, 18 August2011 and 31 October 2011, respectively, detailing the termsand conditions pertaining to the acquisition of Agchem. The strategic acquisition of a 70% controlling stake, effective1 November 2011, in Amazon Colours (Pty) Ltd(“Amazon”), a manufacturer and distributor of in-plant andpoint-of-sale dispersions now enables the Group to offer acomplete basket of products in the colourants industry.Shareholders are referred to the SENS announcementreleased on 2 November 2011, detailing the terms and conditions pertaining to the acquisition of Amazon. Rolfesacquired the remaining 30% stake in Amazon on 30 June 2012. Shareholders are referred to the SENSannouncement released on 14 June 2012, detailing theterms and conditions pertaining to the further acquisition ofAmazon. Had these acquisitions been effective 1 July 2011,the total turnover would have been R718,3 million and profitafter tax would have been R50,1 million.

HUMAN RESOURCES

Human capital is integral to growth and skills developmentplans – human resources and remuneration policies supportthe Group’s commitment to retaining and attracting talent.The Group also recognises that transformation is crucial tofuture growth and steps are underway to improve our transformation performance.



continued

CORPORATE GOVERNANCE

The Group recognises the recommendations of King III and

remains committed to sound corporate governance and

sustainability practices.

FORWARD-LOOKING/OUTLOOK

The Group will continue to actively pursue new acquisition

opportunities in the chemicals sphere, especially in the

mining, water and specialty chemicals sectors. Focus on an

operational level in 2013 will be to optimise our current

manufacturing, merge our two dispersion factories into one,

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.

New product development in the Agricultural Chemicals

division presents exciting growth prospects while an

extended product offering in the Industrial Chemicals and

Colour Chemicals divisions will deliver lasting growth in

these divisions.

Investor relationship strategies continued to focus on

improving share liquidity. Regular investor and stockbroker

visits and creation of communication platforms will keep the

investment community informed on corporate activity and

developments within the Group.

Statements contained throughout this Integrated Report

regarding the prospects of the Group have not been

reviewed or reported on by the Group’s external auditors.

ACKNOWLEDGEMENT

Thank you to all stakeholders for your enthusiastic support,

dedication and commitment to the Group. To the Board,

I thank you for your strategic vision and contribution to

Group performance.

Erhard van der MerweGroup Chief Executive Officer


Financial Director’sreport

FINANCIAL PERFORMANCE HIGHLIGHTSAgainst a backdrop of continuing economic pressure anddifficult world economic circumstances, the Groupimplemented a conservative approach by consolidatingacquisitions, focusing on maintaining market share and oneffective working capital management to fund activity tosupport further growth.

Group revenue for the financial year to 30 June 2012increased by 38,1% to R636,2 million (June 2011: R460,7million). The Agchem acquisition, included from 1 November2011, contributed R120,0 million to Group turnover andR15,8 million to profit after tax. Amazon, included from thesame date, contributed R14,7 million to Group turnover andR1,4 million to profit after tax. Gross profit increased toR127,2 million (June 2011: R 87,0 million) with gross profitmargins increasing to 20% (June 2011: 19%). Operatingprofit increased to R68,5 million (June 2011: R49,6 million)constituting 11% of turnover for the 2012 and 12% for the2011 financial year. Headline earnings per share and fullydiluted headline earnings per share increased by 15,7% to36,1 cents (June 2011: 31,2 cents).

The total net asset value (excluding acquisitions) increased toR188,1 million (June 2011: R162,3 million). The net assetvalue per share improved to 181,5 cents (June 2011: 156,6cents) while net tangible asset value per share decreased to114,8 cents (June 2011: 125,4 cents), based on 103 609 469 shares in issue.

Increased finance costs of R9,1 million (June 2011: R3,8million) consist mainly of interest paid on acquisition fundingamounting to R3,2 million. Additional to this was interestpaid on the Agchem Group overdraft and short-term

Lizette LynchFinancial Director

EBITDA increased by 40,0%to R75,9 million

(June 2011: R54,2 million)

Headline earnings at 36,1 cents

per share and earnings per share

at 36,2 cents per share

increased by 15,7% and 15,3respectively

Agchem and Amazonacquisitions successfully

integrated


debtors’ funding facilities of R2,0 million. Interest coverreduced to 7,6 times (June 2011: 13,1 times) with the totaldebt (interest-bearing) equity ratio at 0,4 for June 2012(2011: 0,1). The significant increase in the debt:equity ratiois primarily due to the consideration for the acquisition ofAgchem and Amazon, totalling R56,3 million, financedthrough long-term debt. The reduction in interest cover isprimarily due to the increase in interest paid emanating fromthe debt incurred on the Agchem and Amazon acquisitions.

OTHER ACHIEVEMENTS

Achievements during the year included effective cost controlwith the cost base growing by 36,2% in relation to the 38,1%turnover growth. Synergies identified to optimise cost-savings between the various subsidiaries will produce furtherbenefit in the future.

Acquisition debt of R20 million was successfully restructuredfrom short-term debt to a long-term loan repayable at primeinterest rate over a period of 38 months from 1 May 2012.

FINANCIAL CHALLENGES

Recessionary trends

With both the local and world economic markets’uncertainties during the year under review, the Groupremained vigilant in its working capital management andcost-saving strategies and synergies to ensure preservationof its cash resources. Variations in customer demands ofGroup products had our companies adopt just-in-timepurchase programmes for raw materials and tradingproducts wherever it was possible, to keep investment instock to a minimum without hampering selling opportunities.Accounts receivable management relied on solid creditmanagement policies to ensure proper credit risk mitigation.The Group therefore continued with its lean approachtowards spending, ensuring that our manufacturing andoverhead cost base remains a competitive advantage.

ZAR/USD Exchange Rates

The instability of world currency markets during the yearunder review and the pressure on exports have posed quite achallenge during this financial year. The Group has followeda very specific approach to mitigate foreign currency risks byensuring maximum benefit from exports and focusing ontimeous hedging of imports and pricing strategies, includingallowances for exchange rate deviations. The net effect was aforeign currency gain of R2,0 million (June 2011: R2,7million) included under other income. Pricing strategiesincluded allowances for exchange rate deviations.

Commodity Prices

Commodity prices were unstable during the financial yearvarying substantially on some major product lines. Effective

pricing strategies in the various companies where commoditypricing has posed a challenge, ensured that deviations werepassed on timeously to customers to ensure effective marginmaintenance.

DRIVERS, PERFORMANCE AND ANALYSIS

Production, transport and operating costs

Colour Chemicals

Total operating costs amounted to R26,7 million (June2011:R23,3 million). Included is Amazon operating costsfrom 1 November 2011 amounting to R6,2 million.Therefore there was effectively an operating cost reduction ofR2,8 million. The saving comprises African export costs nowincluded under the Industrial Chemicals division of R0,4million and certain savings on bonuses not paid and legalfees incurred during the 2011 year not repeated in 2012.Further cost-saving initiatives on other operating cost linesaccounted for the balance of the savings.

Industrial Chemicals

Costs increased in total to R13,5 million (June 2011: R9,3million) with the main cost drivers being the inclusion of R0,4 million costs to support Industrial Chemicals’ growthinto Africa and the inclusion of Acacia from 1 November2011 as part of the Industrial Chemicals division, increasingthe division’s cost base from 2011 by a further R2,4 million.The production cost increase of 34% is in line with turnovergrowth.

Agricultural Chemicals

Production, transport and operating costs of R7,2 million,R2,5 million and R17,5 million, respectively, are includedfrom 1 November 2011. Transport costs include R0,4 millionincurred to expand warehousing facilities. Various successfulcost-saving and optimisation initiatives have beenimplemented since acquisition.

Mining and Water Chemicals

Effective cost management and focus on reducing stock levelsresulted in production cost-savings of 8,8%. Transport costswere almost fully recovered during the 2012 financial year.Optimisation of operating costs resulted in a saving of 6,1%.

Finance costs

The increase in finance costs to R9,1 million (June 2011: R3,8 million) consists mainly of interest paid on acquisitionfunding amounting to R3,2 million. In addition to this wasinterest paid on the Agchem Group overdraft and short-termdebtors’ funding facilities of R2,0 million.


continued


Cash flow

The Group paid cash dividends of R10,4 million during thefinancial year (excluding STC) (June 2011: R10,4 million) toshareholders from current cash resources. The increase innet working capital investment since 30 June 2011(acquisitions since 1 November 2011) of R15,5 million,represents an increase in inventory of R25,7 million and adecrease in accounts receivable of R25,9 million,respectively. Accounts payable and value added taxrepresent a decrease of R15,7 million. Working capital dayswere calculated on a proportionate basis, due to turnoverand cost of sales, debtors, stock and creditors of the twoacquisitions being included since 1 November 2011 only.Debtors’ days remained constant at 51,3 days (June 2011:51,7 days) mainly due to Agchem allowing longer customerpayment terms. Stock days increased to 109,5 days (June2011: 92,8 days) as a result of Agchem building stock forthe start of their high season and Rolfes Colour Pigmentsholding high key trading stocks as the financial year came toa close in anticipation of market demands early in the newfinancial year. Creditor days decreased to 66,7 days (June2011: 71,1 days). Cash flow initiatives to align newacquisitions with Group cash management policies weresuccessful and well accepted. Further alignment remains afocus area in the 2013 financial year.

Capital expenditure

The Group incurred capital expenditure, excludingacquisitions, of R14,7 million (June 2011: R4,1 million) toimprove, upgrade and increase capacity of production andlogistics facilities, and further investment in agriculturaldevelopment initiatives.

Liabilities

Related party transactions

The Group companies entered into various related partytransactions. These transactions are no less favourable thanthose entered into with third parties and occur on an arm’slength and commercial basis.

Long-term loans

The increase mainly constitutes acquisition financing of R54,2 million and asset financing less repayments to date.

Contingent consideration

The R6,2 million constitutes the present value of a top-up forthe existing tax of Agchem Holdings (Pty) Ltd shareholdingfor a maximum value of R8,25 million pending profitwarranties being met by 30 June 2015.

Trade and other receivables

Certain trade and other receivables are ceded to NedbankLimited as security for overdraft facilities with Agchemreceivables remaining under a debtor financing agreement.

Short-term loans

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

Dividend

The Group paid an interim dividend to shareholders on 19 March 2012 and will pay a final dividend toshareholders of 5 cents per share payable on 15 October2012.

The salient dates of the dividend payment are as follows: 2012

Last date to trade Friday, 5 October“cum” the dividend

Shares to commence trading Monday, 8 October“ex” the dividend

Record date Friday, 12 October

Payment date Monday, 15 October

Share certificates may not be dematerialised orrematerialised between Monday, 8 October 2012 andFriday, 12 October 2012, both days inclusive.

• The local dividend tax rate is 15%;

• No STC credits will be utilised for the final ordinarydividend;

• 103 609 469 ordinary shares are in issue;

• The net ordinary dividend is 4,25000 cents per share forordinary shareholders who are not exempt fromdividends tax; and

• Rolfes Holdings Limited’s tax reference number is9492/089/140.

Accounting policies

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

Appreciation and conclusion

A special word of thanks to our CEO, Erhard van derMerwe, for his leadership and support. I also wish to expressmy appreciation to the Board for their guidance andassistance. To the finance team, your hard work during theyear was well noted.

The financial position of the Group for the year under reviewis sound after a challenging year in which a very pleasingperformance was achieved.

Lizette LynchFinancial Director


continued


Remuneration andNomination 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

2 November 2012 for approval by shareholders. Details of

the directors’ aggregate emoluments on an individual basis

are set out on page 91 of the Integrated Report.

The proceedings of the Remuneration and Nomination

Committee are governed by a charter as approved by the

Board.

Purpose

The 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.

Membership

The Remuneration and Nomination Committee comprises

KT Nondumo (Chairperson and independent non-executive

director), L Dyosi and AJ Fourie, both being non-executive

directors.

The Committee met once during the period 1 July 2011 to

13 September 2012. 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, BDO South Africa Incorporated, have

not provided advice to the Committee. However, in their

capacity as Group auditors, they performed normal audit

procedures on directors’ remuneration.

Attendance at meetings 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 remuneration

Remuneration of executive directors is determined through aprocess of benchmarking, utilising current market information, as well as remuneration and reward practicesof the Group. This is complemented by performance bonuses which may reach 27% of executives’ total packages.

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

The Board annually appraises the executive directors and theresults of these appraisals are considered by theRemuneration and Nomination Committee to guide it indetermining performance and remuneration.

The extent of managerial responsibility, together with actualworkplace location, determines basic remuneration of executive directors. Details of directors’ remuneration arelisted on page 91.


Remuneration andNomination Committeereport

continued

Terms of service

The Company complies with relevant legislation in determining minimum terms and conditions of employmentfor executive directors. Executive directors have employmentcontracts incorporating the same information and restrictions. The contract includes a restraint of trade paragraph to ensure the Group does not incur losses or lossof business due to the resignation of a director. The contractsdo not indicate any term of employment and employmentwill 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 appointment

Directors only hold external directorships or offices with theapproval of the Board. If such approval is granted, directorsmay retain the fees paid from such appointments.

Short-term incentives

Performance bonus schemes are available for executivedirectors based on Group performance. Job level, businessunit and individual performance determine individualawards. The aim of the bonus scheme is to reward performance in line with organisational objectives andachievements.

Non-executive directors and independent non-executive directors

Terms of service

Shareholders appoint the independent non-executive andnon-independent non-executive directors at annual generalmeetings, however, in terms of Group policy, interim Boardappointments may be made between annual generalmeetings. Such interim appointees may not serve beyond thedate of the following annual general meeting, though theymay make themselves available for re-election byshareholders.

Fees

Independent non-executive directors were remunerated fortheir contribution to the Board and Board Committees duringthe year. Fees to independent non-executive directors were,for the financial year to 30 June 2012, payable per meeting

attendance based on a fee for membership and assignmentto sub-committees. Non-independent non-executive directorswere not remunerated for their services during the June2012 financial year. Shareholders will be requested toconsider an ordinary resolution approving the remunerationpolicy of the non-executive directors at the 2012 annualgeneral meeting.

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

Executive directors review independent and non-independent non-executive directors’ remuneration andrecommendations are made to the Board which in turnproposes fees for approval by shareholders at the annualgeneral meeting. Non-independent non-executive directors’fees and independent non-executive directors’ fees for theJune 2013 financial year as proposed are listed on page 116.

Approval

This Remuneration and Nomination Committee report was

approved by the Board of directors.

Signed on behalf of the Remuneration and NominationCommittee

KT NondumoChairman of the Remuneration and Nomination Committee


INTEGRATED REPORT STRATEGY

Rolfes Holdings Limited believes that through endorsement and active participation the enhancement of sustainable

development and business performance will be optimised. The Group fully supports and embraces King III and its

recommendations regarding the integrated sustainability reporting approach in line with business growth.

Rolfes believes that it acts in a socially responsible manner and embraces opportunities and manages risks appropriately as

well as advocating sound principles of responsible business practices to stakeholders. The Group is therefore 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 full range of

material economic, environmental and social impacts on the organisation. The Group will drive the required processes to ensure

an Integrated Report completely addressing all relevant issues in the future.

Assurance

The Board recognises its responsibility to ensure the integrity of the Group’s 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. The Board is satisfied that current information

contained in the Integrated 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.

1. Roles and functions of the Board

Ethical leadership and corporate citizenship

Responsible leadership

The Board provides effective and responsible leadership based on an ethical foundation. It directs the strategy and

operations to build a sustainable business in consideration of the short- and long-term impacts of the strategy on the

economy, society and the environment. Business is conducted ethically, does not compromise the natural environment and

takes account of the Company’s impact on internal and external stakeholders. Stakeholders’ needs are considered and

are engaged with, where required and appropriate.

Board responsibilities

The Board provides strategic direction and sets high values to which the Company adheres. The Board ensures that its

conduct and that of management align to its values and is adhered to in all aspects of its business. A stakeholder-

inclusive approach of governance is promoted. The Board ensures that all deliberations, decisions and actions are based

on the five moral duties underpinning good governance – conscience, care, competence, commitment, courage – and

ensures that each director adheres to his/her fiduciary duties.

Corporate citizenship


Gap Identified 2011 Integrated Report – Code of Ethics – addressed during 2012 financial year

The gap identified in 2011 was addressed in the 2012 financial year with the Board’s formal approval and adoption of

a code of conduct. The manner in which Rolfes Holdings Limited conducts its activities ethically is set out and reflected in

the document as being of critical importance, reflecting its commitment to enhancing the standards and quality of life in

the society and communities in which the Group operates. The code of conduct sets out the values and provides

guidance to governing the Group’s business practices and corporate behaviour. Particular attention was placed on:

• Community – with emphasis on the importance of its contribution to society’s ability to manage, protect and sustain

environmental resources,

• Equality – pertaining to human rights, non-discrimination of any nature, nurturing of employee’s personal and

technical skills growth;

• Quality – in the supply of quality products and services;

• Integrity – focusing on honest business practices, compliance to applicable legislation, the acceptance of gifts,

reporting of corruption in the form of bribes offered and other practices that could compromise integrity.

• Policy – relating to acceptable behaviour for the protection and enhancement of Rolfes Holdings Limited’s reputation.

The Board as a corporate citizen

The Board ensures that the Group is a responsible corporate citizen by considering both financial performance and the

impact of the Company’s operations on society and the environment. It endeavours to always protect, enhance and invest

in the well-being of the economy, society and the environment. The Board ensures that the Company’s performance and

interactions with stakeholders are guided by the Constitution and the Bill of Rights and ensures that collaborative efforts

with stakeholders are embarked upon to promote ethical conduct and good corporate citizenship.

Gap Identified 2011 Integrated Report – Corporate Citizenship – addressed during 2012 financial year

A measurable corporate citizenship policy and corporate social investment programmes have been implemented during

2012. The Social and Ethics Committee has been appointed with appropriate terms of reference in place, consisting of

the chairperson, Seapei Mafoyane, the Group Financial Director, Lizette Lynch, and a senior subsidiary director, Stephan

Naude. The Committee was established on 28 March 2012.

2. The Board of Directors

Roles and functions of the Board

The Board acts as the focal point for and custodian of corporate governance. A charter sets out its responsibilities and

the Board meets at least four times per year and monitors the relationship between management and stakeholders of the

Company. Strategy is aligned with the purpose of the Group to thrive and survive.

The Board appreciates that strategy, risk, performance and sustainability are inseparable. The strategy is approved by

the Board and is aligned with the purpose of the Group, the value drivers of its business and the legitimate interests and

expectations of its stakeholders. The Board is satisfied that the strategy and business plans are not encumbered by risks

that have not been thoroughly examined by management; and ensures that the strategy will result in sustainable

outcomes taking people, planet and profit into account.

Corporate citizenshipcontinued


The Board and its directors endeavour to always act in the best interest of the Company while adhering to the legal standards of conduct. A director of the Board, with Board approval, is permitted to take independent advice in connection with his/her duties. A policy regarding dealing in securities by directors, officers and selected employees isin place. Directors declare interests in contracts at every Board meeting and there was no interest in contracts by directors to declare during the year under review.

The Chairman and the CEO

The Chairman of the Board, Bulelani Ngcuka, is a non-executive director. Although the chairman is not independent, theBoard believes that he adds tremendous value, displays the objectiveness required from a Chairman and provides effective leadership and direction to facilitate an effective Board. The roles of the Chairman and Chief Executive Officerare separate. The role of the Chairman is formalised in the Board Charter and the Chairman is assessed and elected onan annual basis by the members of the Board. Mr Ngcuka holds chairmanships, fully considered by the Board, as disclosed on page 4. The appointed lead independent director is Takalani Tshivhase.

The Board appoints the CEO and Board input is requested for senior management appointments. The Board defines itsown level of materiality and has approved a delegation of authority framework. The role and function of the CEO areformalised and his performance is evaluated against specified criteria.

Gap Identified 2011 Integrated Report – Dispute Resolution and Business Rescue Policy – addressed 2012 financial year

The Board has documented, approved and adopted a dispute resolution policy for any real or perceived conflicts reported to the Board. The Board has documented a business rescue process plan as suggested by King III.

Composition of the Board

The Board comprises a balance of power, with a majority of non-executive directors of whom three are independent non-executive directors, three non-executive directors and two executive directors. The two executive directors are Mr Erhard van der Merwe, the Chief Executive Officer, and Ms Lizette Lynch, the Group Financial Director.

The Board believes that its size, diversity and demographics contribute to its effectiveness. The Board structure allows thenon-executive directors to provide their independent judgement on all relevant issues. The Board members complementeach other with a solid base of knowledge, skills and resources required for conducting the business of the Board andthe Group.

The Remuneration and Nomination Committee recommends the eligibility of prospective directors. The Board is responsible for the appointment of qualifying Board members for ratification at the annual general meeting by the shareholders of the Company. The Board is permitted to remove any director without shareholder approval.

King III Principle: Gap Identified Commitment


The Board consists of three non-executive directors andthree independent non-executive directors.

2.18.2 The majority of the non-executivedirectors should be independent.

All non-executive directors are subject to election byshareholders, retire by staggered rotation and stand for re-election in accordance with the Company’sMemorandum of Incorporation every three years.

2.18.6 At least one third of the non-executivedirectors should rotate every year.


Board appointment process

Directors are appointed through a formal process with appropriate background and reference checks conducted prior

to the nomination by the Remuneration and Nomination Committee and appointment by the Board.

The Board makes full disclosure regarding individual directors to enable shareholders to make their own assessment of

directors.

Gap Identified 2011 Integrated Report – Letter of Appointment – Non-Executive Directors – addressed 2012 financial year

A letter of appointment has been drawn up and signed by all non-executive directors, independent and non-independent.

Gap Identified 2011 Integrated Report – Director Development – addressed 2012 financial year

Director development

A formal induction process has been documented and approved by the Board. All newly appointed directors will be

expected to participate in the programme. New directors are given manuals with Board approved policies and charters,

annual reports and invited to do site visits, to name some of the programme points. The newly appointed director is also

advised and expected to attend a JSE recommended directors’ induction course. Professional development programmes

are held on, especially, legislation changes. Directors receive regular briefings by executive directors, at least during

every meeting, on changes in risks, laws and the environment. Directors are also expected to ensure that they keep up

to date with any changes and relevant applicable laws, rules, codes and standards.

Company Secretary

The Board is assisted by Mr Johan Schlebusch as Company Secretary who is a qualified CA(SA). The Board appoints

and is able to remove the Company Secretary. He is fully empowered to fulfil his duties and he has an arm’s length

relationship with the Board. He ensures that Board and committee charters are kept up to date; prepares and circulates

Board papers; elicits responses, input and feedback for Board and Board committee meetings; assists in drafting

yearly plans; ensures the preparation and circulation of minutes of Board and committee meetings and performs all other

duties expected from a Company Secretary. The Company Secretary also assists with the nomination and appointment

of directors. The Company Secretary assists with the director induction and training programmes.


Performance assessment

Executive directors’ performance appraisals are conducted and documented annually in detail. Training needs are identified during performance evaluations. The nomination for the re-appointment of a director occurs after the evaluation of the performance and attendance of the director at required meetings. Shareholders approve the Group’sremuneration policy, in particular the non-executive directors’ remuneration policy. The Group’s directors’ remunerationis put to shareholders’ vote as per the notice to shareholders on page 116.


The Company Secretary will assist in the future. Currentlythe Chairman, Chief Executive Officer and Board membersconduct evaluations.

2.21.13 The company secretary should assist withthe evaluation of the board, committeesand individual directors.


Gap Identified 2011 Integrated Report – Performance Assessments – addressed 2012 financial year

Benchmarking through the Board’s determining of its own rule, functions, duties and performance criteria as well as thatfor directors on the Board and Board committees have been set to serve as a benchmark for the performance appraisal.

Assessment overview

The assessments were performed by a self-evaluation by Board members, Committees of the Board and the Board itselfindividually and as a Board relative to responsibilities of the Board of Directors. The assessment areas constituted thefollowing main areas:

1. The Board role and agenda setting (strategic planning and performance monitoring);

2. Size, composition and independence of the Board;

3. Director orientation and development;

4. Board leadership, teamwork and management relations;

5. Board meetings and Board Committees;

6. Director and Board evaluation, compensation and ownership;

7. Management evaluations, compensation and ownership;

8. Succession planning;

9. Ethics;

10. Constituencies; and

11. Overall Board performance.

The Board found, in its assessment that the Chairman, Directors of the Board and the Board Committees performed wellas a Board and on an individual basis with the appropriate level of commitment to the task at hand assessed accordingto the criteria as set out above. Assessments are appropriately documented and kept on record with the CompanySecretary.

Disclosure of remuneration for directors conforming to the definition of prescribed officers as stipulated in the CompaniesAct is disclosed on page 91 of the Integrated Report.

3. Audit and Risk Committee

The Board is satisfied with the Audit and Risk Committee’s effectiveness and independence. The Board has approved theterms of the reference of the Audit and Risk Committee (“the Committee”). The Committee meets twice per annum or asoften as necessary to fulfil its function.



Membership

Refer to the Audit and Risk Committee Report outlined on pages 45 to 47 for disclosure on membership and attendance.The Board elects the Committee members with shareholders ratifying the appointment at the next annual general meeting. The Chairman of the Committee participates in setting and agreeing the agenda of the Committee and attendsthe annual general meeting. The members are permitted to consult with specialists or consultants subject to a Board-approved process. The Audit and Risk Committee consists of at least three independent non-executive directors.

Responsibilities of the Audit and Risk Committee

The Committee oversees internal audit, integrated reporting and assesses all factors and risks that may impact on theintegrity of the Integrated Report. The Committee reviews and comments on the financial statements included in theIntegrated Report as well as reviewing the disclosure of sustainability issues in the Integrated Report to ensure that it isreliable and does not conflict with the financial information (refer pages 45 to 47 of the Integrated Report).

The Committee ensured that the combined assurance model applied is adequate to provide a coordinated approach toall assurance activities and that the combined assurance received is appropriate to address all the significant risks facing the Group. The Committee is of the opinion that external assurance obtained on the financial statements from theexternal auditors is adequate and that further assurance on the Integrated Report is not required.

The relationship between the external assurance providers and the Group is monitored by the Committee. The Committeeconsiders the need to issue interim results and reviews the content of the summarised information. The external auditorsmay be engaged to provide assurance on the summarised financial information.

Gap Identified 2011 Integrated Report – Integrated Reporting Overseen by Audit and Risk Committee – addressed 2012 financial year

Internal assurance providers and risk management

The Committee satisfies itself of the expertise, resources and experience of the Company’s finance function and performsan annual review thereof. The result of the review is disclosed in the Audit and Risk Committee Report on pages 45 to 47 of the Integrated Report.

The Committee understands that it is an integral component of the risk management process. The Audit and RiskCommittee Charter sets out its responsibilities regarding risk management. Oversight is given to risks relating to financial reporting, internal financial controls as well as fraud and IT risks as it relates to financial reporting. The Committee has approved the 2012/2013 internal audit plan.



The Committee will be responsible for overseeing of internal audit and will approve the 2012/2013 internalaudit plan. The internal audit function will be subject to anindependent quality review once fully established. A CAEhas not been appointed and this issue will be addressed inthe future.

3.7.1 The audit committee should be responsiblefor the appointment, performance assessment and/or dismissal of the ChiefAudit Executive (“CAE”).

3.7.3 The audit committee should ensure that theinternal audit function is subject to an independent quality review.


External assurance providers

The Audit and Risk Committee is responsible for recommending the appointment of the external auditors and overseeingand reviewing the quality and effectiveness of the external audit process. The Committee nominates the external auditorfor appointment; approves the terms of engagement and remuneration for the external audit engagement; monitors andreports on the independence of the external auditor and defines a policy for non-audit services provided by the externalauditors as well as approving the contracts for non-audit services. The external auditors inform the Committee directly ofany reportable irregularities identified and reported.

The Board is of the opinion that the auditors, BDO South Africa Incorporated, observe the highest level of business andprofessional ethics and that their independence is not in any way impaired. The auditors have the right of access to allinformation or personnel within the Group on any matter necessary to fulfil their duties. The external auditors attendAudit and Risk Committee meetings by invitation.

Reporting

The Audit and Risk Committee reports internally to the Board on it statutory duties and duties assigned to it by the Boardand to the shareholders on its statutory duties. Refer to the Audit and Risk Committee Report on pages 45 to 47 forrequired reporting.

4. Governance of risk

RISK MANAGEMENT

The Board

In accordance with King III Principle 4.1 to 4.17, the Board acknowledges its responsibility towards risk managementand that it is inseparable from the Company’s strategic and business procedures and that business involves the undertaking of risk for reward. While we have mitigated certain risks, the Board has decided on the Group’s risk appetiteand proceeded with its business to operate with as little risk as possible. The Board endeavours to provide interventionsthat optimise the balance between risk and reward within the Company.

Risk identification is directed in the context of the Company’s purpose and relevant to the Company’s objectives. The approach includes data analysis, business indicators, market information, loss of data, scenario planning and portfolio analysis. Risk is evaluated in terms of high and low probability and in terms of severity.

The Board’s responsibility for risk management is expressed in the Board Charter and is supported by training and induction processes. Board risk strategy assessments and identification meetings are undertaken once per annum withall Board members being invited to the session.

The Board approves key risk indicators and tolerance levels with operational risk tolerance levels aligned to the Company’s risk appetite. Indicators are used to check whether actual results are within acceptable risk tolerance levels.Risk tolerance levels are established for each key risk. Tolerance levels are considered against the backdrop of the Company’s strategy and business objectives. Tolerance levels are evaluated by studying their potential effect on Company objectives. The Board and management ensure that key risks are quantified to develop a clear understandingof the relevance of these risks and are responded to appropriately with the Board deciding on significant risks. Theassessment of the Company’s resilience to risk and loss is also calculated with the most relevant risks a subject for immediate action.

The risk of uncertainty is considered and a key factor on every strategic decision, often taken knowing that circumstancescould change. Trends are constantly monitored where possible to ensure adequate risk management shouldcircumstances change. The Board is advised as to changes to the internal and external environment that may give riseto new or changed risks with the level of unacceptable risk probability disclosed to the Board as far as possible. Theethics and compliance functions have been combined and forms part of the duties of the Social and Ethics Committee.



The Board ensures that the Group’s reputational risk is protected and acknowledges that external perceptions of the Company’s standing and its reputation are affected by the level of risk and the manner in which the Group manages thisrisk. The Group has a good credit rating and recognises that effective risk management can sustain and improve theGroup’s current credit rating. The Group recognises that reputation and trust can be regarded as the sum of the imagesthat can be equated to the performance and behaviour of the Company over time as well as how matters are communicated to the various stakeholders. The Group also realises that adding value to the reputation of the Group isequal to adding value to the Group.

The Board is satisfied with the extent of which sustainability risks are addressed and reported on to the Board. It is currently in the process of determining the extent to which risks relating to sustainability are reported on to stakeholders.The Board recognises that the essence of sustainability risk management is to protect the value of the Group’s intangibleassets by combining various elements of risk management into a sustainable and economic enterprise risk managementsystem. The Board will consider the undertaking of a formal ethics and stakeholder perception risk assessment in thefuture to formally determine the Company’s risk profile in relation to the relevant stakeholders.

Environmental risks are constantly assessed, considered and mitigated as reported on in the Sustainability Report onpage 33. The Group considers itself to fall within the high impact sector. A formal assessment of the Group companieswill be undertaken in the future to enable it to table total energy use, greenhouse gas emissions and other vulnerabilitiesto environmental risks.

The Group has adopted policies and procedures to develop, retain and manage human capital in an effective mannerand continuously evaluates whether or not it has sufficient skills and expertise to develop the sustainability of the business.

The approved risk philosophy of the Board includes the Group’s appetite for risks, regulatory compliance, safety andhealth, sustainability management, corporate governance, and determining how the risk appetite will differ with the business/industry. The Board also considers materiality levels, insurance excesses and retention levels.

The Board has approved and adopted a Risk Management Plan that is reviewed annually and is inclusive of the Company’s strategic plan. During the design thereof the Board has taken note of the Group’s risk appetite, short- andlong-term philosophies and priorities and target dates for implementation of the Risk Management Plan. Riskmanagement processes were taken account of with the budgeting process.

Financial risks identified are disclosed on pages 92 to 97 of the Integrated Report. The Company risk register is availableat the Company’s registered address.

Audit and Risk Committee and risk management

The Board has delegated the responsibility of risk management and risk management security to the Audit and RiskCommittee. Executive directors and other skilled advisors attend the Audit or Risk Committee meetings in order to maketheir detailed knowledge available for risk management purposes. Risks that may affect the sustainability of the Company are addressed as a matter of priority. The responsibilities of the Audit and Risk Committee include the maintaining of a register of key risks, estimated costs of significant losses and the evaluation of whether risk management costs are consistent with the Group’s risk profile.

Executive and other management and risk management

Management acknowledges that they are responsible for the implementation of risk management processes as delegated by the Board under the leadership of the CEO who is at the forefront of all attempts to manage risk and whocultivates a culture of risk management in the Group, regardless of consultants appointed to provide risk advice. An inclusive team-based approach is used to manage risk. All staff is encouraged to practice risk management in their day-to-day activities. Policies are clearly documented and communicated to all employees to ensure that the risk strategyis incorporated into the language and culture of the Group. Risk management is also part of the duties of the Audit andRisk Committee’s functions. The performance of management in managing risk is evaluated annually. Managementreports in the CEO’s report on page 11 on how a risk management culture is being inculcated in the organisation. A culture of inculcating risk management is firmly established throughout the Group.



Risk assessments

Risk assessments are performed on an ongoing basis with a realistic perspective of material risks available for review bythe Board and management, facilitated by ongoing or annual risk assessments. The risk assessment process quantifies and involves the risks affecting various income streams of the Company, the critical dependencies of the business as well as the sustainability and the legitimate interest and expectations of stakeholders. A top-down approachis followed and the Board regularly reviews and prioritises identified risks. Risks evaluated include: stakeholder risk, reputational risk, compliance risk, ethics risk, sustainability risk and social risk including social investment, employmentequity, BEE, skills development and staff retention. The Board is also made aware of material risks as and when theyarise via e-mail or at relevant meetings with timeous responses being solicited by executive directors. The Board receivesand reviews a register of the Company’s key risks regularly and at least every quarter from the 2013 financial year andonwards. The Board is satisfied that the current framework and processes in place are adequate to anticipate unpredictable risks.

Risk monitoring

The Board is satisfied of the continual risk monitoring by management. The responsibility for monitoring risks is documented in the Risk Management Charter and in the Board Charter.

Internal Audit and risk management

Internal Audit provides independent assurance on the risk management processes. The Internal Audit function reviewsand comments on the level of risk management maturity. Internal Audit does not share reporting lines with risk management which is independent from the Internal Audit function.


Risk assurance

The Board is satisfied with the effectiveness of the risk management process and management has provided assurancethat risk management is integrated in the daily activities of the Company. Internal Audit will provide a written assessmentof the effectiveness of the system of internal controls and risk management to the Board. The Board has satisfied itselfthat risk assessment responses and interventions are effective to adequately mitigate known risks. Presently undue, unexpected or unusual risks; financial, economic or otherwise; resulting in material losses may, in future, impair businessoperations. No undue, unexpected or unusual risks have come to light during the current reporting period.

Processes have been in place for the year under review and, up to the date of the approval of the annual financial statements, nothing has come to the attention of the directors to indicate that any material breakdown in the functioningof the internal financial controls has occurred during the year under review.

Applied risk forms an integral part of the Group’s risk management process. The risk of non-compliance to applicablelaws, rules, codes and standards is identified, assessed and responded to through the risk management processes.

The Group will consider establishing a compliance function at such time as the Board believes that its size justifies theappointment.

A CRO has not been appointed; the Board will giveconsideration to an appointment in the future.

4.4.3 The Chief Risk Officer (“CRO”) should be asuitably experienced person who shouldhave access and interact regularly onstrategic matters with the board and orappropriate board committee and executivemanagement.



The Group insures against losses arising from catastrophic or other events, which include fire, flood, explosion, earthquake and machinery breakdown, as well as business interruption from these events. The Group renews its insurance policies annually in July. The Group has not suffered any material losses during the period under review.

Risk disclosure

The Board ensures that there are processes in place enabling complete, timely, relevant, accurate and accessible risk disclosure to stakeholders. The Board is satisfied that the current risk management processes is effective. Material financial risks identified and the mitigation thereof are explained in detail in note 32 on pages 94 to 97 of the annualfinancial statements.


5. Information Technology governance

The Board is responsible for the governance of Information Technology (“IT”) and this forms part of the Board agenda.An IT charter, security strategy and policy is documented and distributed to all applicable parties. The current policyensures the promotion of an ethical IT governance culture and awareness. The IT strategy in place aligns itself with theperformance and sustainability objectives of the Group and is effectively integrated with the Group’s strategic and business processes. The Board is satisfied that the current IT internal control framework is effective, that IT assets are managed effectively and will obtain independent assurance on the effectiveness of the IT internal controls, where appropriate. The Board is satisfied that adequate disaster recovery measures are in place to ensure business resilienceand continuity in the event of a disaster. IT governance is a regular Board agenda item. The Board, through the Auditand Risk Committee, has delegated the responsibility for the implementation of an IT governance framework to the GroupFinancial Director, who is responsible for the implementation of the structure, processes and mechanism for the IT governance framework.

The Board monitors and evaluates significant IT investments and expenditure and oversees its value delivery. Intellectualproperties contained in information systems are sufficiently protected and managed, including information security andinformation privacy. IT is an integral part of the Company’s risk management. The Board is satisfied that the Companycomplies with IT laws and that IT-related rules, codes and standards are considered regarding IT-related matters.

The Audit and Risk Committee assists the Board in carrying out its responsibility regarding IT risks and the appropriateaddressing and mitigation thereof as well as IT risks relating to financial reporting.

IT laws and IT-related rules, codes and standards are considered on a regular basis. All personal information is treatedby the Company as an important business asset, identified as such, with an adequate Information Security ManagementSystem in place.

Gap Identified 2011 Integrated Report – Documented IT Governance Charter and Policy – addressed during 2012 financial year

An IT Charter and policy as well as a security strategy have been implemented.


Partially compliant. The reporting of relevant risks, otherthan financial risks reported on, will be addressed in thenext Integrated Report.

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



6. Compliance to relevant laws and regulations

Compliance is ethically imperative to the Group and the Board has therefore discharged its responsibility to establish an

effective compliance framework and processes as described below.

The Board ensures that business performance is driven within regulatory frameworks thereby ensuring compliance by the

Group to all relevant laws, regulations and codes of business practices. Risks of non-compliance are considered as part

of the Group’s risk profile. The Board Charter includes the Board’s responsibility towards the compliance with all relevant

laws, consideration of rules, codes and standards. Exceptions permitted in laws, shortcomings and proposed changes

expected are dealt with ethically. The Board understands of the context of the law and its various interactions with other

laws are well supported by the diversity in experience and knowledge of the Board members and invitees, all with a

range of expertise and a working knowledge in applicable laws. Individual directors are required to familiarise

themselves with the general content of applicable laws, rules, codes and standards to discharge their legal duties.

Compliance is a regular agenda item and forms part of risk management. The Board has delegated the implementation

of an effective compliance framework and processes to management and will approve a legal compliance policy to be

implemented by management. The compliance with laws, rules, codes and standards is already embedded in the

day-to-day activities of the Group and will also be incorporated in the code of conduct. Monthly safety, health,

environment and quality management meetings are held by management and attended by executive directors on a

quarterly basis to ensure the integration on a day-to-day activity basis. Applied risk is constantly assessed with the risk

of non-compliance considered on an ongoing basis.

Management and staff have attended training sessions on the Competitions Act and the Consumer Protection Act. Group

management has attended sessions on King III, the Companies Act, No 71 of 2008, as amended, and a session on

changes to JSE Regulations during the period under review. The induction and ongoing training programmes of directors

incorporate an overview of and any changes to applicable laws, rules, codes and standards.

Gap Identified 2011 Integrated Report – Compliance to Relevant Laws and Legislation – addressed during 2012 financial year

The Board has delegated to management the implementation of an effective compliance framework and processes.

Applied risk is constantly assessed with the risk of non-compliance considered on an ongoing day-to-day basis.


The appointment of an IT Steering Committee will also beconsidered by the Board. This function is currently fulfilledby the Audit and Risk Committee. The current size of theGroup does not justify the appointment of a ChiefInformation Officer responsible for the management of IT.The Financial Director, along with a suitably qualifiedexternal consultant, currently manages IT.

5.1.5 The board should receive independentassurance on the effectiveness of the ITinternal controls.

5.3.3 The CEO should appoint a ChiefInformation Officer responsible for themanagement of IT.

5.4.3 The board should obtain independentassurance on the IT governance andcontrols outsourced IT services.


7. Internal audit

Gap Identified 2011 Integrated Report – Internal Audit – addressed during 2012 financial year

The Board accepts the responsibility for an effective risk-based Internal Audit. The Audit and Rick Committee overseesthe Internal Audit function. Internal Audit was established during the 2012 financial year and strategically positioned toachieve its objectives. Internal Audit follows a risk-based approach to its plan. The function provides the Board and Auditand Risk Committee with the necessary assistance in concluding that an effective system of internal controls exists. The Audit and Risk Committee has concluded that the effectiveness of the Company’s system of internal controls and riskmanagement provides adequate risk mitigation and the Board is satisfied that adequate assurance of the effectivenessof the Company’s system of internal controls and risk management has been provided by Internal Audit. The externalauditors and the executive directors provided additional assurance. The Internal Audit plan for the 2012/2013 financialyear has been approved by the Audit and Risk Committee.

8. Governance of stakeholder relationships

The Board appreciates that stakeholders’ perceptions affect the Group’s reputation and stakeholder communication andrelationship is a regular Board agenda item. The gap between stakeholders’ perceptions and the performance of theGroup is therefore managed and measured to enhance and protect the Group’s reputation. The Board strives to achievean appropriate balance between its various stakeholder groupings and the best interest of the Group.

The Board has identified its key stakeholders as employees, shareholders (equity providers), analysts, financial institutions (debt providers), community, producers and business partners, BEE partners, trade unions, media, credit rating agencies, insurers, regulatory bodies, suppliers and customers.

The Board manages communication and relationships with these stakeholders openly, promptly and with substance prevailing over form. The Board ensures that it takes account of legitimate expectations of stakeholders in its decision-making and endeavours to promote and ensure the equitable treatment of all its shareholders, ensuring the protection of non-controlling shareholder rights. Stakeholders are therefore engaged through the media, communicationthrough specifically designed forums and agencies or directly, using appointed representatives appropriate tocircumstances. The CEO is the appointed spokesperson of the Group. Employees are addressed directly throughmanagement, either verbally, by electronic means or through proper notice boards placed strategically at their variousworkplaces. Stakeholder communication forms a regular part of the Board agenda and shareholders are encouraged toattend the annual general meeting.

Group policy encourages dialogue pursuits with institutional investors based on constructive engagement and the mutual understanding of objectives taking due regard of statutory, regulatory and other directives regulating the dissemination of information by companies and their directors.

Transparent and effective communication with stakeholders is essential for building and maintaining trust and confidence.Complete, timely, relevant, accurate, honest, clear, understandable and accessible information is provided to itsstakeholders whilst having regard to legal and strategic considerations. The Group is adopting formal and informal communication guidelines that support a responsible relationship management and communication programme witheach stakeholder grouping. The Board is currently unaware of any requests or refusals of requests for information lodgedwith the Company in terms of the Promotion of Access to Information Act, 2000.

The Integrated Report addresses material matters of significant interest and concern and presents a comprehensive andobjective assessment of the Group so that all relevant stakeholders with a legitimate interest in the Group’s affairs canobtain a full, fair and honest account of its performance.

Grindrod Bank Limited acts as the Company’s sponsors in compliance with the JSE Listings Requirements.




Gap Identified 2011 Integrated Report – Dispute Resolution – addressed in 2012 financial year

Dispute resolution

The Board ensures that disputes are resolved as effectively, efficiently and expeditiously as possible. The Board has

adopted formal dispute resolution processes for internal and external disputes. The policy ensures that disputes are

resolved by as rapid and cost effective a manner as possible. The use of a mediator is recommended by the policy as

one means of resolving disputes considering that Court proceedings often extend over several years and that where

principle and precedent is concerned, legal action may be the only means considering the risks involved with litigation.

The policy also governs private dispute resolution proceedings which will be conducted in confidence and the

appointment of an appropriate specialist to resolve problems, where required.

9. Integrated reporting and disclosures


Partially compliant. A strategy and policy are in place butnot documented as it pertains to individual stakeholder’spolicy in broad terms. The individual stakeholder’s policywill be documented in the future. Consideration will begiven by the Board to publish the policy.

8.2.1 Management should develop a strategy andformulate policies for the management ofrelationships with each stakeholder grouping.

8.2.2 The board should consider whether it isappropriate to publish its stakeholder policies.

8.5.3 The board should adopt communicationguidelines that support a responsiblecommunication programme.

As reported on page 1, this matter will be fully addressedwith all relevant components in the future.

9. Transparency and accountability regarding theIntegrated Report.




SUSTAINABILITY REPORT

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:

• continuous development and marketing of innovative

environmentally friendly products, such as its

lead-free organic pigments product range

manufactured and distributed globally;

• constantly striving to improve employees’ health and

welfare opportunities;

• responsible reputation management to assist with

increasing market share and building the Rolfes

brand;

• contributing authentically to the process of broad-

based black economic empowerment;

• advocating socially responsible environmental

practices;

• regular review of policies and procedures to ensure

relevance, effectiveness and compliance to current

regulatory requirements, while new and improved

measures are frequently developed and implemented

to manage social and environmental impact;

• understanding stakeholder requirements by providing

platforms for regular, mutual, honest and transparent

stakeholder communication; and

• pro-active reputation management assisting with the

strengthening of the Rolfes brand.

Vision

The Rolfes Group will be a leading chemicals manufacturing

and distribution organisation.

Mission

We:

• add value to our customers by providing quality

products and services on time at fair value.

• recognise our suppliers as stakeholders.

• provide an environment where staff can excel through

equal opportunities and training.

• exercise responsible environmental practices.

• reward shareholders with exceptional returns.

Corporate values

The Rolfes Group subscribes to a comprehensive value

system supporting the following:

• Transparency and accountability

• Entrepreneurship, equal opportunity and development

• Fairness, integrity and honesty

• Respect and responsibility

• Environmental protection


Economic

Value added statement

2012 2012 2011 2011R’000 % R’000 %

Group

Revenue 636 172 460 699

Cost of material and services (482 026) (347 788)

Value added by operations 154 146 99,64 112 911 99,96

Interest income 555 0,36 40 0,04

Total wealth created 154 701 100,00 112 951 100,00

Applied as follows:

Employees’ salaries, wages and benefits 67 573 43,68 48 307 42,77

Government taxation 17 116 11,06 13 497 11,95

Providers of capital and interest 9 068 5,86 3 780 3,35

Dividends 10 684 6,91 10 360 9,17

Retained in the Group

Retained earnings 37 268 24,09 32 331 28,62

Minority shareholders 5 624 3,64 – –

Depreciation 7 368 4,76 4 676 4,14

Amortisation – – – –

Total wealth distributed 154 701 100,00 112 951 100,00

2012 2011

43,7%

11,0%12,8%

32,5%

42,8%

11,9%

12,5%

32,8%

Retained in the Group

Providers of capital

Government

Employees



Environmental

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

Products and services

Green products

The Group is continuously developing processes to add lead-free organic pigments to our product range. European distributorshave subjected our organic products to testing and compliance ensured consistent growth in organic pigments sales.

Products suitable for organic farming constitute approximately 10% of the Agricultural Chemicals division’s turnover.

Packaging materials

Packaging material for the majority of the lead-free income stream is not reclaimed as the product is mostly exported toEuropean companies. Pigments supplies to manufacturers and therefore packaging is not returned to the company but disposedproperly by the customers who use the products in their own manufacturing. Silica’s customers also dispose of the packagingthemselves while Chemicals’ products, supplied to both manufacturers and end-users, accept returns on all supplied containers.Approximately 5% of Chemical sales are supplied in bulk and not in containers, while the balance is distributed in containersthat are accepted if returned, with approximately 90% of these returns being recycled.

Agricultural Chemicals has recycling initiatives in place allowing empty containers from farmers to be returned to Agchem tobe recycled.

Compliance

The Group is not aware of any fines or non-monetary sanctions for non-compliance to environmental laws and regulationsissued 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 isa future focus area.

Emission, effluents and waste

Continuous monitoring of effluent treatment plants with assistance of external institutions ensure that particular care is taken towater 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 wasteis properly and legally disposed of.

Harmful discharges from factory emissions are limited through preventative measures. Emissions from our Jet Park plant havebeen reduced further with the conversion from coal to gas. This conversion led to a reduction in CO2 and sulphur emissions andimprovement 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 inmeeting 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 planton 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.

Energy

The 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 theplants carbon footprint.



Social: Labour practices and decent work

Employment

Consolidated total workforce by employment type, gender, nationality and race as per the latest EmploymentEquity Report submission.

FOREIGNMALE FEMALE NATIONAL

Occupation levels

Top management 0 0 0 10 0 0 0 2 1 0 13

Senior management 0 0 2 3 0 0 0 4 0 0 9

Professionally qualified andexperienced specialists inmicro-management 2 1 2 24 0 0 1 8 1 0 39

Skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents 21 0 3 17 1 0 1 12 0 0 55

Semi-skilled and discretionarydecision-making 153 12 4 19 10 8 3 22 3 0 234

Unskilled and defined decision-making 20 0 0 0 22 0 0 0 3 0 45

Total permanent employees 196 13 11 73 33 8 5 48 8 0 395

Temporary employees 89 0 0 0 2 0 0 1 1 0 93

Grand total 285 13 11 73 35 8 5 49 9 0 488

Labour/management relations

% of employees covered by collective bargaining agreements

Total number % covered by collectiveCompany of employees bargaining agreements

Rolfes Asset Holding 13 84,62%Rolfes Chemicals 58 67,24%Rolfes Colour Pigments International 151 61,59%Rolfes Silica 77 61,04%Agchem Africa 44 0%Amazon Colours 24 0%Rolfes Holdings Limited 9 0%Absolute Science 8 0%Acacia Specialty Chemicals 6 0%Galltec 2 0%Introlab Chemicals 2 0%Rolfes Africa 1 0%Temporary employees 93 0%Total 488 38,93%

Afr

ica

n

Colo

ure

d

Ind

ian

Wh

ite

Afr

ica

n

Colo

ure

d

Ind

ian

Wh

ite

Ma

le

Fem

ale

Tota

l



The minimum notice period regarding operational changes is as per the Labour Relations Act and a clause relating thereto isnot included in collective bargaining agreements.

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.

Equity and practices

Rolfes acknowledges that effective human resources management is strategic to Group performance. The Group recognisesworkplace 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 enablescompliance 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.

Diversity and equal opportunity

Consolidated analysis of basic salaries by gender as per the latest Employment Equity Report submission.


Occupational level – Employees

2012 2011

3%19%

2%

8%

11%

48%

9%

2%7% 5%5%

9%

63%

9%

Occupational level – Remuneration

2012 2011

4%

34%

22%

8%

18%

15%

3%

34%

22%

18%

13%10%

Top management

Semi-skilled and discretionary decision-making

Unskilled and defined decision-making

Temporary employees

Senior management

Professional qualified and experienced specialists and mid-management

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


Strategies to be undertaken to improve reporting on labour practises and decent work aspects include:

Health and Safety

Health and safety reporting is compiled monthly and reported to executive directors on a quarterly basis duringGroup Safety, Health, Risk and Environment meetings.Meetings are recorded in formal minutes and kept with thecompany secretary in a formal minute book. No fatalities orserious injuries due to workplace accidents were reported forthe year under review. Measures to prevent workplace accidents and fatalities are in place and enforced throughpolicies, strategies, procedures and infrastructure in place tomitigate environmental, occupational health and safety risks.Regular risk assessments and monitoring assist with ongoingcompliance with all relevant occupational health and safetyregulations. 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

they are exposed to. Personnel are issued with required protective clothing and equipment and trained on preventionstrategies to mitigate potentially harmful exposure risks aswell 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.


0

5

10

15

20

25

30

0

20

40

60

80

100

120

140

160

180

Race levels Gender levels

Male – 2011

A B C D E F A B C D E F G

Female – 2011

Male – 2012

Female – 2012

White and Foreign Nationals – 2011

Black, Coloured and Indian – 2011

White and Foreign Nationals – 2012

Black, Coloured and Indian – 2012

A Top management

B Senior management

C Professional qualified and experienced specialists and mid-management

D Skilled technical and academically qualified workers, junior

management, supervisors, foremen and superintendents

E Semi-skilled and discretionary decision-making

F Unskilled and defined decision-making

G Temporary employees


Training and education

Human 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. Trainingcourses include health and safety training, Hazchem requirements training, plant and equipment operation training, specialisedsales 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 EmploymentEquity 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 ensure compliance to regulations.

Social: Human rights

Non-discrimination

Employees work in an environment which is free from all forms of discrimination. Human resource management respectsemployee 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 responsibleemployer, 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 theBasic Conditions of Employment Act. The Group will immediately terminate agreements and relationships with contractors orsuppliers 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 significantsuppliers and customers that have undergone human rights screening.

Social: Society

Corporate Social Investment (CSI)

The CSI plan has been approved by the Board during the 2012 financial year. The Social and Ethics Committee was established in May 2012 to oversee the implementation of the CSI plan.

Current projects undertaken during the year included:

• Donations of calculators to Ubambiswano used for the Daveyton Educational Programme for Grade 6 to 12 learners inDaveyton and Etatwa;

• A brick-making plant on the Silica mine educating and utilising labour from local communities surrounding the Brits operation;

• Sponsoring of the AgChem Fast11 soccer team consisting of Agchem and CMC employees;

• A golf day with R25 000 donated to a children’s home.



• Regular/monthly donations made to Sibonile School in Kliprivier, Gauteng. The Sibonile School provides schooling,accommodation, food and clothing for 176 children, who are partially sighted, totally blind or deaf and blind.

• Providing learnerships and employment for historically disadvantaged school leavers from a designated children’s home.Approximately 10 positions have been designated Group-wide to be filled by the school leavers providing them with aproper start to life as an accomplished adult.

• Sponsorship of paint as part of an initiative undertaken by BDO and the Mandela Day Project on 16 July 2011. Fifty volunteers painted Amakhaya Children’s Shelter in Lenasia, South of Johannesburg.

Bribery and corruption

The Group is committed to the highest standards of ethical conduct in dealings with all stakeholders. Bribery and corruption arenot tolerated at any level and employees are encouraged to conduct their activities objectively and in a manner that complywith all the requirements of the Anti-Fraud and Corruption Act and the Protected Disclosures Act.

Compliance

No fines or non-monetary sanctions for non-compliance with laws and regulations have been issued to the Group during theyear under review.

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

The Group CSI Plan has been 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.

Quality

Rolfes Colour Pigments International’s Jet Park and Alberton factories are accredited with ISO 9001:2008 Quality ManagementAssurance Standards. Initiatives are currently underway to ensure accreditation in the Rolfes Chemicals Germiston and AgchemAfrica Pretoria manufacturing facilities by June 2013. Amazon Colours is accredited with ISO 9001.

Compliance

No fines or non-monetary sanctions for non-compliance with laws and regulations have been issued to the Group during theyear under review.

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

• Customer health and safetyDevelopment of alternatives for potentially harmful products is being assessed continuously to ensure products areimproved in terms of health and safety.

• Products services and labellingProduct labelling practices are constantly reviewed and revised to ensure proper responsible labelling in accordance withrelevant 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 VuwaInvestments Proprietary Limited (“Vuwa”), a 23,3% 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 with the majority of the Group’s main Board members being black. The Groupis currently in the process of obtaining an updated B-BBEE scorecard which will be issued by 30 November 2012. Target areasidentified for improvement are corporate social investment and procurement. Skills development and employment equity considerations are important to the Group’s commitment to diversity within its workforce.



Page

Directors’ approval and responsibility statement 40

Declaration by company secretary 40

Report of the independent auditors 41

Directors’ report 42

Report of the Audit and Risk Committee 45

Consolidated statements of financial position 48

Consolidated statements of comprehensive income 49

Consolidated statements of changes in equity 50

Consolidated statements of cash flows 51

Notes to the annual financial statements 52

AUDITORSBDO South Africa Incorporated

Registered Auditors

LEVEL OF ASSURANCEThese annual financial statements have been audited in compliance with the applicable requirements of the South

African Companies Act.

PREPARERL Lynch

Financial Director

PUBLISHED14 September 2012

Annual financial statements


The directors of Rolfes Holdings Limited (formerly Rolfes Technology Holdings Limited) have pleasure in presenting theannual financial statements for the year ended 30 June 2012.

In terms of the South African Companies Act, the directors are required to prepare annual financial statements thatfairly present the state of affairs and business of the Company and of the Group at the end of the financial year andof 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 the AC 500 standardsas issued by the Accounting Practices Board or its successor body and have been prepared using appropriate accounting policies, supported by reasonable and prudent judgements and estimates.

The annual financial statements comprise:

• the directors’ report• the statements of financial position• the statements of comprehensive income • the statements of changes in equity• the statements of cash flows• the notes to the financial statements• the interest in subsidiaries• the analysis of shareholding

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 RolfesGroup.

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 andrecorded, 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 theopinion that the annual financial statements fairly present the state of affairs and business of the Company and Groupat 30 June 2012 and of the profit for the year to that date. The external auditors are responsible for reporting onwhether the financial statements are fairly presented.

In addition, the directors have also reviewed the cash flow forecast for the year to 30 June 2013 and believe that theRolfes 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 auditorsconcur.

The annual financial statements were approved by the Board of Directors and were signed on their behalf by:

BT Ngcuka E van der Merwe L LynchChairman Chief Executive Officer Financial DirectorJet Park14 September 2012

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 HoldingsLimited has lodged with the Companies and Intellectual Property 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.

JC SchlebuschCompany SecretaryJet Park14 September 2012

Directors’ approval and responsibility statement


TO THE SHAREHOLDERS OF ROLFES HOLDINGS LIMITED

We have audited the consolidated and separate financial statements of Rolfes Holdings Limited set out on pages 48 to 110 whichcomprise the statements of financial position as at 30 June 2012, the statements of comprehensive income, statements ofchanges in equity and statements of cash flows for the year then ended, and the notes, comprising a summary of significantaccounting policies and other explanatory information.

DIRECTORS’ RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS

The Company’s directors are responsible for the preparation and fair presentation of these consolidated and separate financialstatements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of SouthAfrica, 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 RESPONSIBILITY

Our responsibility is to express an opinion on these consolidated and separate financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply withethical 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 auditor’s judgement, including the assessment of the risks of material misstatement ofthe financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controlrelevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internalcontrol. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Rolfes Holdings Limited as at 30 June 2012, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with InternationalFinancial Reporting Standards, the AC 500 standards as issued by the Accounting Practices Board or its successor body andthe requirements of the Companies Act of South Africa.

OTHER REPORTS REQUIRED BY THE COMPANIES ACT

As part of our audit of the consolidated and separate financial statements for the year ended 30 June 2012, we have read theDirectors’ Report, the Audit and Risk Committee’s Report and the Company Secretary’s Certificate for the purpose of identifyingwhether there are material inconsistencies between these reports and the audited consolidated and separate financialstatements. These reports are the responsibility of the respective preparers. Based on reading these reports we have notidentified 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.

BDO South Africa IncorporatedRegistered AuditorsPer: J Schoeman

Partner

22 Wellington RoadParktown 2193

Johannesburg14 September 2012

Report of the

independent auditors


The directors have pleasure in presenting their report onthe activities of the Company and the Group for the yearended 30 June 2012.

NATURE OF BUSINESS OF THE GROUP

Rolfes Holdings Limited (formerly known as RolfesTechnology Holdings Limited) (Rolfes or the Group) is aholding company incorporated in the Republic of SouthAfrica that, through its divisions and subsidiaries, provides a wide range of market-leading products tocustomers through dedicated teams of industry specialists in the agri-chemicals, mining chemicals,industrial chemical and colour chemicals industries.Rolfes listed on the main board of the JSE Limited on 21 November 2011; its primary listing was previouslyon Altx. The Group has acquired the Agchem Groupand Amazon Colours on 1 November 2011. Details ofthe acquisitions are set out on pages 100 to 103.

RESULTS OF OPERATIONS

The results of the year’s operations are set out in the financial statements from pages 48 to 110 and incorporate the consolidated results of the Company andits subsidiaries.

YEAR UNDER REVIEW

The year under review is fully covered in the Chairman’s,the Chief Executive Officer’s and the Financial Director’sreports.

EVENTS AFTER THE REPORTING PERIOD

The directors are not aware of any significant eventsthat have occurred between the end of the financial yearand the date of this report that may materially affect theresults of the Company for the period under review ortheir financial position as at 30 June 2012.

SHARE CAPITAL

Details of the authorised and issued share capitalappear in note 10 on page 80 of the annual financialstatements.

The Company’s authorised and issued share capitalremained unchanged during the year.

DIVIDENDS

The Group paid an interim dividend to shareholders of5 cents per share on 19 March 2012 and will pay afinal dividend of 5 cents per share on 15 October 2012of R5,2 million.

The salient dates applicable to the final dividend are asfollows:

2012

Last day to trade “CUM” dividend Friday, 4 October

First day to trade “EX” dividend Monday, 8 October

Record date Friday, 12 October

Payment date Monday, 15 October

No share certificates may be dematerialised or

rematerialised between Monday, 8 October, 2012 and

Friday, 12 October 2012, both days inclusive.

• The local dividend tax rate is 15%;

• No STC credits will be utilised for the final ordinarydividend;

• 103 609 469 ordinary shares are in issue;

• The net ordinary dividend is 4,25000 cents per sharefor ordinary shareholders who are not exempt fromdividends tax; and

• Rolfes Holdings Limited’s tax reference number is9492/089/140.

DIRECTORS

Biographical notes of the current directors are set out on

pages 4 and 5.

Details of directors’ remuneration appear on page 91.

CHANGES IN DIRECTORATE

Ms N Mthombeni was appointed on 4 October 2011 and

resigned from the Board of Directors on 29 June 2012.

Ms SS Mafoyane was appointed on 26 August 2012.

In terms of the Company’s Memorandum of

Incorporation, directors retire by rotation every three

years. Messrs BT Ngcuka, L Dyosi, TAM Tshivhase and

Mrs KT Nondumo retire as directors at the

forthcoming annual general meeting and, being eligible,

offer themselves for re-election.

DIRECTORS’ INTERESTS IN CONTRACTS

No material contracts involving directors’ interests were

entered into in the year under review.

Directors’ reportfor the year ended 30 June 2012


COMPANY SECRETARY AND REGISTERED OFFICE

The Company’s registered, physical and postal addresses are:

12 Jet Park Road Jet 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

PROPERTY, PLANT AND EQUIPMENT

Details of additions to property, plant and equipment during the year are disclosed in notes 2 and 3 to the annual financialstatements. 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 EVENTS

Business Combinations

Results were strengthened by the acquisitions and addition of the Agchem Group and Amazon Colours results for eight months

from 1 November 2011. Overall market share in the agriculture and coatings 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 International Financial Reporting Standards.

MAJOR SHAREHOLDERS

Shareholders holding beneficially, directly or indirectly, in excess of 5% of the issued share capital of the Company are detailed

on page 110 of the annual financial statements.

DIRECTORS’ SHAREHOLDING

The direct and indirect beneficial shareholding of the directors in office at the date of this report is as follows:

2012 2011

Direct Indirect Direct Indirect

Executive directors

L Lynch 3 000 – 3 000 –

E van der Merwe 3 696 605 – 3 196 605 –

Non-executive directors

L Dyosi 1 272 754 – 1 355 400 –

AJ Fourie 19 111 943 – 21 511 943 2 230 000

BT Ngcuka 3 818 261 – 4 066 200 –

KT Nondumo – – – –

TAM Tshivhase 101 500 – 71 500 –

28 004 063 – 30 204 648 2 230 000

Directors’ report continued

for the year ended 30 June 2012


ATTENDANCE AT MEETINGS

The number of meetings attended by each of the directors of the Company during the period 1 July 2011 to 13 September

2012 is as follows, with the number in brackets reflecting the number of meetings held, whilst the director was in office.

Remuneration

Audit and Risk and Nomination

Board Committee Committee

meetings meetings meetings

BT Ngcuka 3 (4) 1 (2)** –E van der Merwe 3 (4) 2 (2)** 1 (1)**L Dyosi 3 (4) 2 (2)** 1 (1)AJ Fourie 3 (4) 1 (2)** 1 (1)L Lynch 3 (4) 2 (2)** 1 (1)**KT Nondumo 4 (4) 2 (2) 1 (1)TAM Tshivhase 4 (4) 2 (2) –N Mthombeni**** 1 (3) – –Y Zimbler/D Theodorou*** (representing the Sponsor) 3 (4) 2 (2)** –J Schoeman** (representing BDO South Africa) – 2 (2)** –JC Schlebusch* 3 (4) 2 (2)** –

* Company Secretary** Attended by invitation

*** Sponsor**** Appointed 4 October 2011; Resigned 29 June 2012

SPECIAL RESOLUTIONS

Repurchase of securities

A general authority to repurchase ordinary shares in the Company was granted in terms of a special resolution passed by theCompany’s shareholders on 28 October 2011 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 (2011: nil).

The directors will seek approval at the annual general meeting for authority to repurchase further shares. On approval, at theannual general meeting, of the special resolution required to effect any repurchase of securities, the maximum number of sharesthat the Company may repurchase is limited to 20%, or by a subsidiary is limited to 10%, of the issued share capital of theCompany. The maximum premium payable on any repurchase will be limited to 10% above the weighted average market priceof such shares over the five days immediately preceding the date of repurchase. Such approval is valid until the next annualgeneral 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 theGroup, 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 andthe Group will be adequate and the consolidated assets of the Group will be in excess of its consolidated liabilities, fairly valued for cash.

AUDITORS

The auditors, BDO South Africa Incorporated (appointed during March 2007), 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 auditorsand of the designated auditor, Mr J Schoeman. A resolution to re-appoint BDO South Africa Incorporated as auditors will beproposed at the next annual general meeting scheduled to take place on 2 November 2012.

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.

Purpose

The 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:

• establishing the independence and objectivity of the

registered external auditors, the designated auditor and

their appointment;

• assessing the relevance, impact and resolution of

accounting or auditing issues identified by external

auditors;

• assessing the scope and results of the external audit and

determine the fees to be paid to the external auditor;

• appraising the nature and extent of non-audit

services, seeking to balance the maintenance of

objectivity and value for money;

• pre-approving any proposed contract with the

auditor for the provision of non-audit services to the

Group to ensure that the fees for such services do not

become so significant to call to question the auditor’s

independence;

• ensuring that the appointment of the auditor complies

with the South African Companies Act and any other

legislation relating to the appointment of auditors;

• addressing appropriately any complaints (internal or

external) relating either to accounting practices and

internal audit of the Group or to the content or

auditing of its financial statements, or to any related

matter;

• reviewing and reporting on the functioning of the internal

control system;

• analysing risk areas of the Group’s operations,

taking cognisance of legal, operational and financial

factors;

• assessing Information Technology (“IT”) risks and

controls, business continuity and data recovery

relating to IT and information security and privacy;

• examining the reliability and accuracy of the

financial information provided to management and other

users of financial information;

• assessing the appropriateness of the expertise and

experience of the financial director of the Group;

• assisting the Board in reviewing the integrated reports to

ensure that the information is reliable and that no

conflicts or differences arise when compared with the

financial results or advise the Board of the need to

engage an external assurance provider;

• reviewing interim and provisional financial results and

price sensitive information; and

• assuring the Group’s compliance with legal and

regulatory provisions, its Memorandum of Incorporation,

code of conduct, 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.

Membership

Established with terms of reference from the Board, the Audit

and Risk Committee comprises TAM Tshivhase (Chairman),

KT Nondumo, N Mthombeni (appointed 4 October 2011;

resigned 29 June 2012) and SS Mafoyane (appointed

26 August 2012); independent non-executive directors on

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 2 November 2012.

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 committeefor the year ended 30 June 2012


Attendance at meetings during the year was as follows:

13 Sept 21 Feb

2011 2012

TAM Tshivhase √ √KT Nondumo √ √N Mthombeni ** – xD Theodorou (representing the √ √

Designated Adviser required to

attend up to 21 November 2011)*

* By invitation

** Appointed 4 October 2011; Resigned 29 June 2012

The external auditors and appropriate members of the Board

attend the meetings by invitation.

External audit

In terms of section 90(1) of the Companies Act, the

Committee nominated BDO South Africa Incorporated as the

independent, external auditor and J Schoeman, a registered

auditor, as the designated partner, for appointment for the

2012 audit. This appointment of the independent auditor was

approved by the shareholders at the annual general meeting

on 28 October 2011. The Committee has 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 2012 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 86.

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 necessaryabout the conduct of the audit from key members of theCompany’s management, including the financial director.

The Committee has again nominated, for approval at the annual general meeting, BDO South AfricaIncorporated, as the external auditor and Mr J Schoeman as the designated auditor for the 2013financial year. The Committee confirms that the registered auditors and designated auditor are accredited by the JSE Limited.

Internal Audit

An 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. 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 management

The 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 to the

Company.

Report by the

Audit and Risk committee continued



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 includes actual material financial loss,

fraud and/or material errors as well as corrective action

taken. Any inadequacies are 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) risks

The 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 2012 for approval to the Board. The Board

approved the financial statements on pages 48 to 110 on

14 September 2012 and the financial statements will be

open for discussion at the annual general meeting.

Group Financial Director

The Audit and Risk Committee confirms that it has

satisfied itself of the appropriateness of the expertise and

experience of the Financial Director, Ms Lizette Lynch, of the

Group.

Approval

The 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

Report by the

Audit and Risk committee continued



Group Company

2012 2011 2012 2011Notes R’000 R’000 R’000 R’000

ASSETSNon-current assets 150 775 97 526 254 140 199 798

Plant and equipment 2 52 398 37 352 78 311Property 3 29 226 27 816 – –Investments 4 – – 254 062 199 487Intangible assets 5 69 151 32 358 – –

Current assets 290 190 179 582 24 741 42 212

Inventories 6 170 251 94 953 – –Trade and other receivables 7 112 596 74 454 150 25Short-term loans 8 3 783 – 24 591 32 557Cash and cash equivalents 9 – 4 833 – 9 630Value Added Tax receivable 7 3 560 4 706 – –Tax asset 7 – 636 – –

Total assets 440 965 277 108 278 881 242 010

EQUITY AND LIABILITIESCapital and reserves 213 982 162 291 178 173 186 920

Share capital 10 1 036 1 036 1 036 1 036

Treasury shares 11 (868) (868) – –

Share premium 28 603 28 603 28 603 28 603

Retained income/(loss) 157 094 131 327 (22 935) (14 188)

Revaluation reserve 12 2 193 2 193 171 469 171 469

Interest of shareholders 188 058 162 291 178 173 186 920

Non-controlling interest 25 924 – – –

Non-current liabilities 71 145 23 830 31 900 25 709

Interest-bearing liabilities 13 46 757 8 688 – –

Contingent consideration 14 6 191 – 6 191 –

Deferred tax liability 15 14 854 11 799 25 709 25 709

Provisions 17 3 343 3 343 – –

Current liabilities 155 838 90 987 68 808 29 381

Trade and other payables 18 114 328 82 947 354 561Short-term liabilities 8 15 404 – 64 359 28 007

Cash and cash equivalents 9 1 833 – 1 940 –

Current portion of interest-bearing liabilities 13 20 678 7 213 – 94Derivative liability 19 231 184 – –

Value Added Tax liability 18 – – 1 365 528Tax liability 18 2 299 – 790 191Provisions 17 1 065 643 – –

Total equity and liabilities 440 965 277 108 278 881 242 010

Consolidated statements of

financial positionas at 30 June 2012


Group Company

2012 2011 2012 2011Notes R’000 R’000 R’000 R’000

Revenue 20 636 172 460 699 20 919 11 083Cost of sales (508 970) (373 675) – –

Gross profit 127 202 87 024 20 919 11 083Other operating income 10 112 4 075 – 32Operating expenses (25 538) (14 502) (7 074) (3 118)

Material operating itemsInsurance (2 610) (1 582) (1 831) (1 558)Rent of property and equipment (2 738) – – –Salaries and wages (including

directors’ remuneration) (37 907) (25 447) (6 130) (4 873)

Operating profit before interest 21 68 521 49 568 5 884 1 566Finance cost 24 (9 068) (3 780) (3 587) (867)Finance income 25 555 40 1 382 2 336

Profit before taxation 60 008 45 828 3 679 3 035Tax expenses 26 (17 116) (13 497) (2 066) (1 900)

Profit for the year 42 892 32 331 1 613 1 135

Other comprehensive income for the year, net of tax – – – –

Total comprehensive income for the year 42 892 32 331 1 613 1 135

Profit for the year attributable to:Owners of the parent 37 268 32 331 1 613 1 135Non-controlling interest 5 624 – – –

42 892 32 331 1 613 1 135

Total comprehensive income attributable to:Owners of the parent 37 268 32 331 1 613 1 135Non-controlling interest 5 624 – – –

42 892 32 331 1 613 1 135

Profit for the year attributable to:Continued operations 42 892 32 331 – –

42 892 32 331 – –

Total comprehensive income attributable to:Continued operations 42 892 32 331 – –

42 892 32 331 – –

Earnings per share (cents) 29– Basic 36,2 31,4– Diluted 36,2 31,4


comprehensive incomefor the year ended 30 June 2012


Reva- Non-con-Share Share Treasury Retained luation trolling Total

capital premium shares income reserve interest equityR’000 R’000 R’000 R’000 R’000 R’000 R’000

Group

Balance at 30 June 2010 1 036 28 603 (868) 109 356 2 193 – 140 320Net profit for the year – – – 32 331 – – 32 331Transactions with owners

Dividends declared – – – (10 360) – – (10 360)

Balance at 30 June 2011 1 036 28 603 (868) 131 327 2 193 – 162 291Recognising of

non-controlling interest – – – – – 21 733 21 733Net profit for the year – – – 37 268 – 5 624 42 892Transactions with owners

Dividends declared – – – (10 360) – (324) (10 684)Acquisition of remaining

portion in AmazonColours (Pty) Ltd – – – (1 141) – (1 109) (2 250)

Balance at 30 June 2012 1 036 28 603 (868) 157 094 2 193 25 924 213 982

More information is disclosed in note: 10 11 12

Ordi- Reva-nary Share Retained luation Total

shares premium loss reserve equityR’000 R’000 R’000 R’000 R’000

Company

Balance at 30 June 2010 1 036 28 603 (4 963) 171 469 196 145Net profit for the year – – 1 135 – 1 135Transactions with owners

Dividends declared – – (10 360) – (10 360)

Balance at 30 June 2011 1 036 28 603 (14 188) 171 469 186 920Net profit for the year – – 1 613 – 1 613Transactions with owners

Dividends declared – – (10 360) – (10 360)

Balance at 30 June 2012 1 036 28 603 (22 935) 171 469 178 173


changes in equityfor the year ended 30 June 2012


Group Company

2012 2011 2012 2011

Notes R’000 R’000 R’000 R’000

Cash generated from/(utilised in)

operating activities 34 593 15 602 (7 395) (7 438)

Cash received from customers and subsidiaries 672 198 454 179 20 794 11 106

Cash paid to suppliers and employees (608 445) (413 868) (14 157) (8 617)

Cash generated from

operations 38.1 63 753 40 311 6 637 2 489

Finance income 555 40 1 382 2 336

Finance cost (9 068) (3 780) (3 587) (867)

Tax paid 38.2 (9 963) (10 609) (1 467) (1 036)

Dividends declared and paid (10 684) (10 360) (10 360) (10 360)

Cash (utilised in)/received from

investing activities (70 464) (3 437) (4 081) 14 296

Additions to property, plant and equipment 2, 3 (14 738) (4 110) (15) (40)

Proceeds from disposal 698 459 – –

Loans received (5 860) – 44 318 14 336

Cost of acquisition of companies 38.3 (50 564) 214 – –

Increase in investments – – (48 384) –

Cash generated from/(utilised in)

financing activities 29 205 (13 459) (94) (1 893)

Increase/(decrease) in long-term borrowings 28 208 (6 627) – (94)

Increase/(decrease) in instalment sale

agreements and medium-term loans

– short-term portion 13 465 (1 612) (94) (1 799)

Decrease in short-term interest-bearing liabilities (10 218) – – –

Decrease in acquisition vendor –

short-term portion – (5 220) – –

Acquisition of non-controlling interest (2 250) – – –

Cash (deficit)/surplus for the year (6 666) (1 294) (11 570) 4 965

Cash and cash equivalents

– beginning of the year 4 833 6 127 9 630 4 665

Cash and cash equivalents

– end of the year 9 (1 833) 4 833 (1 940) 9 630


cash flowsfor the year ended 30 June 2012


1. ACCOUNTING POLICIES

1.1 Basis of preparation

The annual financial statements have been prepared in accordance with International Financial ReportingStandards (IFRS and IFRIC – International Financial Reporting Interpretations Committee of the IASB –interpretations) issued by the International Accounting Standards Board (IASB), AC 500 standards asissued by the Accounting Practices Board and its successor and in accordance with the requirements ofthe 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 throughother 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 2011.

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 achievedwhere the Company has the power to govern the financial and operating policies of an entity so as toobtain 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 theowners 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 controlover 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 inthe subsidiaries. Any difference between the amount by which the non-controlling interests are adjustedand the fair value of the consideration paid or received is recognised directly in equity and attributed toowners of the Company.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the differencebetween –

• the aggregate of the fair value of the consideration received and the fair value of any retainedinterest; and

• the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary andany non-controlling interests.

When assets of the subsidiary are carried at revalued amounts of fair values and the related cumulativegain or loss has been recognised in other comprehensive income and accumulated in equity, the amountspreviously recognised in other comprehensive income and accumulated in equity are accounted for as ifthe Company had directly disposed of the relevant assets (ie reclassified to profit or loss or transferred

Notes to the

annual financial statementsfor the year ended 30 June 2012


1. ACCOUNTING POLICIES continued

1.2 Basis of consolidation continued

directly to retained earnings as specified by applicable IFRSs). The fair value of any investment retainedin 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 andMeasurement or, when applicable, the cost on initial recognition of an investment in an associate or ajointly controlled entity.

Initial recognition and measurement

All business combinations are accounted for by applying the acquisition method. The cost of the businesscombination is 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 whichare 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 combinationare 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 atthe date of acquisition. Subsequent changes to the assets, liabilities or equity which arise as a result ofthe contingent consideration are not effected against goodwill, unless they are valid measurement periodadjustments. The interest of non-controlling shareholders may be measured either at fair value or at thenon-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 isachieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fairvalue 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 cumulativefair 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 costof 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 accountingpolicy for goodwill. The acquisition date is the date on which the Group effectively obtains control of theacquiree. The excess of the fair value of the net identifiable assets and contingent liabilities of the entityacquired over the cost of acquisition results in a bargain purchase which is recognised immediately inprofit 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 obtainedabout 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.

1.4 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

Notes to the

annual financial statements continued




1.4 Borrowings costs continued

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.

1.5 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.

1.6 Dividends

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

the liability arises.

1.7 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits (those payable within twelve 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.

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.

Notes to the





1.8 Financial instruments

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 thefollowing instruments: Loans and receivables, cash and cash equivalents, trade and other receivables andother current financial assets; and the following financial liabilities: borrowings, trade and other payablesand other current financial liabilities.

The Group recognises a financial asset or a financial liability in its statement of financial position whenthe 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 thatshould be received to sell on asset or paid to transfer a liability in an orderly transaction between marketparticipants on measurement date. Fair values have been determined as follows:

• Where market prices are available, these have been used;

• Where market prices are not available, fair values have been determined using valuation techniques incorporating observable market inputs or discounting expected cash flows at marketrates.

Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or lossrecognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend orinterest 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 usedin making the fair value measurement. The fair value hierarchy has the following levels:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);

• Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie as a price) or indirectly (ie derived from prices) (Level 2); and

• Inputs for the asset or liability that are not based on observable market data (unobservable inputs)(Level 3).

The level in the fair value hierarchy within which the financial asset or financial liability is categorised isdetermined on the basis of the lowest level input that is significant to the fair value measurement. Financialassets 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 feeson points paid or received that form an integral part of the effective interest rate, transaction cost andother premiums or discounts) through the expected life of the financial asset, or, where appropriate, ashorter period. Income is recognised on an effective interest basis for debt instruments other than thosefinancial assets designated as at fair value through profit or loss.

Notes to the





1.8 Financial instruments continued

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 heldto 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 realisethe 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 arenot 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 quotedin 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 ratemethod, 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 willbe unable to collect all of the amounts due under the terms receivable, the amount of such a provisionbeing the difference between the net carrying amount and the present value of the future expected cashflows 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 associatesand 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 recognisedto reflect irrecoverable amounts.

On loans receivable an impairment loss is recognised in profit or loss when there is objective evidencethat it is impaired. The impairment is measured as the difference between the investment’s carryingamount 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 amountcan be related objectively to an event occurring after the impairment was recognised, subject to therestriction that the carrying amount of the loan at the date the impairment is reversed shall not exceedwhat the amortised cost would have been had the impairment not been recognised.

Notes to the






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:

• significant financial difficulty of the debtor,

• a breach of contract, such as a default or delinquency in interest or principal repayments, and

• it is becoming probable that the debtor will enter bankruptcy or other financial re-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.

Notes to the






Equity instruments

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

Where the group or its subsidiaries purchase the company’s equity share capital (treasury shares), theamount 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 andthe 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 whichthe 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 whichare not designated as hedges in terms of IAS 39 – Financial Instruments: Recognition and Measurement.

Other financial liabilities

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, andare subsequently measured at amortised cost, using the effective interest rate method. Any differencebetween 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.

1.9 Impairment of assets (other than goodwill)

The Group assesses at the end of each reporting period whether there is any indication that an asset maybe 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 tosell 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.

Notes to the





1.9 Impairment of assets continued

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 thanthe carrying amount of collective units. The impairment loss is allocated to reduce the carrying amount ofthe assets of the unit on the following basis:

• to the assets of the unit pro 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 indicationexists, the recoverable amounts of those assets are estimated.

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

1.10 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 theinventories 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 coststo be incurred in marketing, selling and distribution.

1.11 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 subsequentlymeasured at fair value through other comprehensive income.

1.12 Intangible assets

In the companies separate financial statements, intangible assets are recognised if it is probable that theexpected future economic benefits that are attributable to the asset will flow to the entity and the cost ofthe asset can be measured reliably.

Intangible assets are recognised on business combinations if they are separable from the acquired entityor give rise to other contractual/legal rights. The amounts ascribed to such intangibles are arrived at byusing appropriate valuation techniques.

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

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

• it is technically feasible to complete the asset so that it will be available for use or sale.

• there is an intention to complete and use or sell it.

• there is an ability to use or sell it.

Notes to the





1.12 Intangible assets continued

• it will generate probable future economic benefits.

• there are available technical, financial and other resources to complete the development and to useor sell the asset.

• the expenditure attributable to the asset during its development can be measured reliably.

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 reviewedannually.

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

1.13 Leases

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

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

Finance leases

Finance leases are recognised as assets and liabilities in the statement of financial position at amountsequal 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 afinance lease obligation.

The discount rate used in calculating the present value of the minimum lease payments is the interest rateimplicit in the lease. The lease payments are apportioned between the finance charge and reduction ofthe 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 presentthem as a receivable at an amount equal to the net investment in the lease.

Notes to the





1.13 Leases continued

Operating leases

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Thedifference between the amounts recognised as an expense and the contractual payments are recognisedas 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 leaseterm, unless another systematic basis is more representative of the time pattern in which the use benefitderived from the leased asset is diminished.

1.14 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

• the cost of the item can be measured reliably.

Property, plant and equipment is initially recognised at cost. Costs include costs incurred initially toacquire an item of property, plant and equipment and costs incurred subsequently to add to or replace apart. 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.

Property, plant and equipment, excluding land, is depreciated on the straight-line basis at ratesconsidered 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 residualvalue equals to 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 andequipment are reviewed on an annual basis and any revision to these are accounted for as a change inaccounting estimate.

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

Furniture and fittings 6 years

Computer equipment 3 years

Earth-moving equipment 4 years

Vehicles 5 years

Plant and equipment 5 to 15 years

Rehabilitation asset 53 months

Buildings 30 to 50 years

Land Indefinite

Development costs 15 years

Notes to the





1.14 Property, plant and equipment continued

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 depreciatedin 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 willbe recognised in profit or loss in the current year.

1.15 Provisions

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

1.16 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 thedate of exchange, liabilities incurred or assumed and the fair value of the equity instruments issued bythe Group in exchange for shares purchased in a controlled entity with the excess of the cost of thepurchase of shares recognised in equity. Any costs directly attributable to the transaction, are recognisedimmediately as an expense.

Notes to the





1.17 Revenue recognition

Sales

Revenue is measured at the fair value of the consideration received or receivable and represents amountsreceivable for goods and services provided in the normal course of business, net of trade discounts, volume rebates and Value Added Tax.

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

• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;

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

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the Group; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Other revenue earned by the Group is recognised on the following basis:

Services

Revenue from the rendering of services will be recognised when the outcome of the transaction involvingthe 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.

1.18 Share Capital

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

1.19 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 intersegment transactions areeliminated.

Notes to the





1.20 Critical accounting estimates and assumptions

In preparing the financial statements, management is required to make estimates and assumptions thataffect 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 bythe returning of defective products by customers. Refer to note 17.

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. Baddebts 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. Indetermining whether an impairment loss should be recorded in profit or loss, the directors makejudgements as to whether there is observable data indicating a measurable decrease in the estimatedfuture 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 accountthe individual items of the class and the present condition along with any major capital expenditure thatis budgeted in the near future.

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 thedirectors. The estimate is made after taking into account the condition of the item, age and judgementrelating to useful lives.

Notes to the





1.20 Critical accounting estimates and assumptions continued

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

requirements in the mining license. Refer to note 17.

Determination of fair values of intangibles acquired in business combination

The fair values of product licenses 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.

Notes to the





1.20 Critical accounting estimates and assumptions continued

Impairment testing

The recoverable amounts of individual assets have been determined based on the higher of value-in-usecalculations 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 thenrequire 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 1.5 for goodwill. The recoverable amounts of cash-generating units have beendetermined based on value-in-use calculations. These calculations require the use of estimates.

1.20.1 Critical judgements in applying the entity’s accounting policy

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

1.21 Treasury shares

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

1.22 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 rulingwhen the transactions occur. Foreign currency monetary assets and liabilities are translated at the ratesruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assetsand liabilities are recognised immediately in profit or loss, except for foreign currency borrowingsqualifying as a hedge of a net investment in a foreign operation, in which exchange differences arerecognised in other comprehensive income and accumulated in the foreign currency translation reservealong 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 exchangecomponent 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 exchangecomponent of that gain or loss shall be recognised in profit or loss.

Notes to the





1.23 Taxation

Tax expenses

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

• a transaction or event which is recognised, in the same or a different period, directly in equity, or

• a business combination.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items thatare 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 amountalready paid in respect of current and prior periods exceeds the amount due for those periods, the excessis recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected tobe paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively 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 theconsolidated statement of financial position differs from its tax base, except for differences arising on:

• the initial recognition of goodwill;

• the initial recognition of an asset or liability in a transaction which is not a business combinationand at the time of the transaction affects neither accounting or taxable profit; and

• investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in theforeseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profitwill 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 substantivelyenacted by the reporting date and are expected to apply when the deferred tax liabilities/(assets) are settled/(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.

Notes to the





1.24 Standards, interpretations and amendments for the year 2012

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

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

IFRS 9 – Financial Instruments 1 January 2013New standard that forms the first part of a three-part project to replace IAS 39 – Financial Instruments: Recognition and Measurement.

IFRS 10 – Consolidated Financial Statements 1 January 2013Replacement of the consolidation requirements in SIC12 – Consolidation: Special Purpose Entities and IAS 27 – Consolidated and Separate Financial Statements. The standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company and provides additional guidance to assist in the determination of control where this is difficult to assess.

IFRS 11 – Joint Arrangements 1 January 2013New standard that deals with the accounting for joint arrangements and focuses on the rights and obligations of the arrangement rather than its legal form and requires a single method for accounting for interest in jointly controlled entities.

IFRS 12 – Disclosure of Interests in Other Entities 1 January 2013New and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other unconsolidated structured entities.

IFRS 13 – Fair Value Measurement 1 January 2013New guidance on fair value measurement and disclosure requirements.

IFRIC 20 – Stripping Costs in the Production Phase 1 January 2013of a Surface MineIFRIC 20 considers when and how to account separately for the two benefits arising from the stripping activity namely, usable ore that can be used to produce inventory and improved access to further quantities of material that will be mined in future periods as well as how to measure these benefits both initially and subsequently. The standard only deals with waste removal costs that are incurred in surface mining activity during the production phase of the mine.

Notes to the





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

IAS 19 – Employee Benefits 1 January 2013Amendments to the accounting for current and future obligations resulting from the provision of defined benefit plans.

IAS 27 – Consolidated and Separate Financial Statements 1 January 2013Consequential amendments resulting from the issue of IFRS 10, 11 and 12.

IAS 28 – Investments in Associates 1 January 2013Consequential amendments resulting from the issue of IFRS 10, 11 and 12.

IAS 32 – Financial Instruments: Presentation 1 January 2013Amendments to clarify the tax effect of distribution to holders of equity instruments.

IFRS 1 – First-Time Adoption of IFRS 1 January 2013Amendments to borrowing costs.

IFRS 7 – Financial Instruments: Disclosures 1 January 2013Amendments require entities to disclose gross amounts subject to rights of set-off, amounts set off in accordance with the accounting standards followed 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 effect of rights of set-off on the entity’s right and obligation.

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

1.25 Related Parties

Related parties are considered to be related if one party has the ability to control or jointly control theother 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 thosepersons having authority and responsibility for planning.

1.26 Earnings per Share

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

1.27 Headline Earnings per Share

Headline earnings per ordinary share are calculated using the weighted average number of ordinaryshares in issue during the period and are based on the earnings attributable to ordinary shareholders,after excluding those items as required by Circular 3/2012 issued by the South African Institute ofChartered Accountants (“SAICA”).

Notes to the




Earth- Plant

Furniture Computer moving and Rehabi-

and equip- equip- equip- litation

fittings ment Vehicles ment ment asset Total

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

2. PLANT AND EQUIPMENT

Group – 2012

Beginning of yearCost 1 087 2 097 11 200 6 265 47 084 266 67 999

Accumulated depreciation (934) (1 368) (6 480) (3 909) (17 691) (265) (30 647)

Net book value 153 729 4 720 2 356 29 393 1 37 352

Current year movement

Additions 315 433 1 951 – 10 629 – 13 328

Disposals (29) (62) (1 391) – (637) – (2 119)

Depreciation (120) (685) (2 033) (760) (3 770) – (7 368)

Depreciation of disposals 62 58 1 153 – 225 – 1 498

Acquisition of subsidiary 333 338 2 368 – 6 668 – 9 707

Carrying value 30 June 2012 714 811 6 768 1 596 42 508 1 52 398

End of year

Cost 1 706 2 806 14 128 6 265 63 744 266 88 915


Net book value 714 811 6 768 1 596 42 508 1 52 398

Estimated residual values 75 3 3 062 1 103 26 687 1 30 931

Group – 2011

Beginning of yearCost 1 030 1 459 11 016 6 094 44 887 266 64 752

Accumulated depreciation (876) (889) (5 748) (3 100) (15 578) (265) (26 456)

Net book value 154 570 5 268 2 994 29 309 1 38 296

Current year movement

Additions 57 645 867 171 2 280 – 4 020

Disposals – (7) (683) – (83) – (773)

Depreciation (58) (486) (1 194) (809) (2 129) – (4 676)

Depreciation of disposals – 7 462 – 16 – 485

Carrying value 30 June 2011 153 729 4 720 2 356 29 393 1 37 352

End of year

Cost 1 087 2 097 11 200 6 265 47 084 266 67 999


Net book value 153 729 4 720 2 356 29 393 1 37 352

Estimated residual values 103 1 2 735 1 959 11 254 1 16 053

Notes to the




Furniture Computer

and equip-

fittings ment Total

R’000 R’000 R’000

2. PLANT AND EQUIPMENTcontinued

Company – 2012Opening net book value 47 264 311

Current year movementAdditions 12 3 15

Disposals – (50) (50)

Depreciation (13) (235) (248)

Depreciation on disposals – 50 50

Total movement 46 32 78

End of yearCost 85 731 816

Accumulated depreciation (39) (699) (738)

Net book value 46 32 78

Estimated residual values 1 1 2

Company – 2011Opening net book value 53 478 531

Current year movementAdditions 5 35 40

Depreciation (11) (249) (260)

Total movement 47 264 311

End of yearCost 73 778 851

Accumulated depreciation (26) (514) (540)

Net book value 47 264 311

Estimated residual values 1 1 2

Total plant and equipment held by the Group at 30 June 2012 amounted to R52,4 million (2011: R37,4 million), comprising

the amounts analysed above.

Plant and equipment with a carrying value of R6,6 million (2011: R6,7 million) have been pledged by way of a notarial bond

to the value of R1,4 million in favour of Engen Petroleum as security for trade creditors.

Additions include R2,9 million (2011: R1,1 million) assets under instalment sale agreements and disposals with a cost of

RNil million (2011: R0,2 million) 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 13)

Depreciation expense of R4,6 million (2011: R3,3 million) has been charged in the cost of goods sold and R2,8 million (2011:

R1,4 million) has been charged to overheads.

During the year under review the directors performed an impairment test on the assets of the Group and found that none of the

Group’s assets were impaired and no impairment loss was recognised.

Notes to the




Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

3. PROPERTY

Cost 20 279 20 189 – –

Revaluation 7 537 7 537 – –

At beginning of year 27 816 27 726 – –

Additions 1 410 90 – –

At end of year 29 226 27 816 – –

Total property held by the Group at 30 June 2012 amounted to R29,2 million (2011: R27,8 million),

comprising the amounts analysed above.

Property of Rolfes Asset Holding (Pty) Ltd and New Heights 390 (Pty) Ltd to the amount of R12,5 million (2011:

R12,6 million) has been pledged as security for Group borrowings. A second mortgage bond of

R10 million over property held in the name of Rolfes Asset Holding (Pty) Ltd was registered as

security in favour of Sasol Chemical Industries who also holds a first mortgage bond to the value of R2,5 million

on property registered in the name of New Heights 390 (Pty) Ltd.

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

During the prior financial year, Anton Smit and Associated Valuers, an independent third party, performed a

revaluation on the Group property based on discounted future cash flows, based on market-related rentals and

a capitalisation rate of 14%.

The directors are of the opinion that the fair market value equals the estimated residual values 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 dividendout of profits or reserves, realised or unrealised, whether revenue or capital in nature.

Notes to the




Group Company

Number of 2012 2011 2012 2011

shares R’000 R’000 R’000 R’000

4. INVESTMENTS

Unlisted

At cost

Rolfes Colour Pigments International (Pty) Ltd 1 000 – – 1 1

Rolfes Asset Holding (Pty) Ltd 100 – – – –

Rolfes Chemicals (Pty) Ltd 100 – – – –Rolfes Silica (Pty) Ltd 200 000 – – 2 308 2 308Rolfes Europe Trading

(Pty) Ltd 100 – – – –Agchem Holdings (Pty) Ltd 70 – – – –

– – 2 309 2 309

At fair value

Rolfes Colour Pigments International (Pty) Ltd – – 67 955 67 955

Rolfes Asset Holding (Pty) Ltd – – 47 710 47 710Rolfes Chemicals (Pty) Ltd – – 67 183 67 183Rolfes Silica (Pty) Ltd – – 16 639 16 639Agchem Holdings (Pty) Ltd – – 54 575 –

– – 254 062 199 487

Fair values are determined annually at the end of the reporting period, using the discounted future cash flowmethod. The directors believe that the fair value of the investments in subsidiaries did not materially change during theyear and the value presented approximates the fair value of the investment in subsidiaries. Consequently, thereis no impact on profit or loss in the current year.The fair value of investments in subsidiaries is based on a Level 3 for fair value hierarchy. Level 3 is inputs forthe asset or liability that are not based on observable market data (unobservable inputs). Refer to note 5 for theassumptions used in the fair value of investments.Refer to pages 108 and 109 for details of shareholding.

Group Company

2012 2011 2012 2011R’000 R’000 R’000 R’000

5. INTANGIBLE ASSET

GoodwillGross 37 691 37 691 – –Impairment (5 333) (5 119) – –

Opening balance 32 358 32 572 – –Recognition of goodwill

– acquisition of New Heights 390 (Pty) Ltd – (214) – –

– acquisition of Amazon Colours (Pty) Ltd by Rolfes Colour Pigments International (Pty) Ltd 1 074 – – –

– acquisition of Agchem Holdings (Pty)Ltd 22 993 – – –

Closing balance 56 425 32 358 – –

Notes to the




5. INTANGIBLE ASSET continued

Impairment of goodwill

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill maybe 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 individualcash-generating operations (after impairment testing) as follows:

• Rolfes Resins (arose on the acquisition of Chempoint Chemical Technologies (Pty) Ltd) R7,5 million (2011:R7,5 million), effective 1 July 2005;

• Rolfes Silica (Pty) Ltd R1,6 million (2011: R1,6 million), effective 1 August 2005;

• Rolfes Dispersion (arose on the acquisition of Leather-Chem (Pty) Ltd) R5,1 million (2011: R5,1 million), effective 1 December 2007;

• Rolfes Chemicals (arose on the acquisition of New Heights 390 (Pty) Ltd) R18,2 million (2011: R18,2million), effective 1 December 2008;

• Amazon (arose on the acquisition of 70% of Amazon Colours (Pty) Ltd) R1,1 million, effective 1 November 2011;

• Agchem (arose on the acquisition of 70% of Agchem Holdings (Pty) Ltd) R23,0 million, effective 1 November 2011, and the cash-generating unit to which goodwill can be attributed consists mainly ofAgchem Africa (Pty) Ltd.

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, overa 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’sviews and estimates.

The discount rate used in the cash flow models is 20%. This rate reflects the current market assessments of thetime-value of money and specific risks of the cash-generating unit. The discount rate is arrived at after takinginto 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 ofmanagement and the economic environment in which the cash-generating unit operates and are as follows:

• Rolfes Resins – a compound annual growth rate of 13,5% per annum;• Rolfes Silica – a compound annual growth rate of 12,6% per annum;• Rolfes Dispersion – a compound annual growth rate of 14,7% per annum;• Rolfes Chemicals – a compound annual growth rate of 13,5% per annum;• Amazon – a compound annual growth rate of 11,9% per annum; and• Agchem – a compound annual growth rate of 8,3% per annum.

Management believes that any reasonable possible change in the key assumptions on which Rolfes Dispersion,Rolfes Resins, Rolfes Silica, Rolfes Chemicals, Amazon and Agchem recoverable amounts are based would notcause any of the individual carrying amounts to exceed its recoverable amount.

The prior year decrease in goodwill of New Heights 390 (Pty) Ltd relates to adjustment of the purchase consideration due to profit warranties not being met.

Notes to the




Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

5. INTANGIBLE ASSET continued

Product licencesOpening balance – – – –Acquired through business combination 12 726 – – –

Closing balance 12 726 – – –

The product licences was acquired during this year with the acquisition ofAgchem and is amortised over a period of fifteen years. The remaining amortisation period is 180 months. An intangible asset and related deferred tax were recognised on the product licences of Agchem. The valuation was performed by an independentconsultant, using the discounted estimated royalty payments method with a discount rate of 11,54% over a 4-year period.

Total intangible assets 69 151 32 358 – –

The website was acquired during the year ended 30 June 2007 and is amortised over a period of three years and was completely amortised by June 2010.

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

6. INVENTORIES

Finished goods 117 436 69 669 – –Raw materials 42 102 17 219 – – Work-in-progress 12 287 8 065 – – Marketing 382 – – –Packing 1 658 – – –Consumable stores 1 066 – – –Stock provisions (4 839) – – –Other 159 – – –

170 251 94 953 – –

Stock written off during the year 2 596 486 – –

No inventories are currently carried at fair value less cost to sell.

The cost of inventories recognised as an expense during the year and included in cost of sales amounted to R481,7 million (2011: R343,1 million).

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 thevalue of R10 million as security in favour of Sasol Solvents. Agchem Africa (Pty) Ltd inventories are encumberedunder a notarial bond to the value of R24 million as security for overdraft facilities in favour of Nedbank.

Notes to the




Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

7. TRADE AND OTHER RECEIVABLES

Local trade receivables 89 847 63 182 – 25Foreign trade receivables

– US$ (2012: $1 630 158; 2011: $209 610) 13 351 1 421 – –

– Euro (2012: Û€508 857; 2011: Û€1 002 639) 5 287 9 846 – –

– Pound (2012: £22 380; 2011: £37 637) 288 409 – –

– Kwacha (2012: 2 102 353 461; 2011: Nil) 3 335 – – –

Prepaid debtor 98 – – – Provision for bad debts (1 909) (913) – –Deposits 500 475 – –Sundry debtors 1 797 – 148 –Staff loans 2 34 2 –

112 596 74 454 150 25

Value Added Tax asset 3 560 4 706 – –Tax asset – 636 – –

116 156 79 796 150 25

Trade receivables have been ceded to thebank as security for bank overdrafts. (Refer note 9)

Included in trade receivables that relate to the discontinued operations in2009 and handed over for litigation to attorneys amounted to – 2 014 – –

7.1 Trade receivables

Trade receivables (net of allowances) held by the Group amounted to R112,6 million (2011: R74,5 million) comprising the amounts as presented above. The average age of these receivables is 56,7 (2011:51,7) days. No interest is charged on trade receivables. Recalculated on a proportionate basis due toacquisitions from 1 November 2012, the average days for 2012 is 51,3 days.

Before accepting any new customers, the Group uses credit references, credit history, bank codes andcredit rating information to assess the potential customer’s credit quality and credit limits are defined bycustomers. 70% of the trade receivables that are neither past due nor impaired have good ratings. Theremaining 30% of these trade receivables are monitored closely.

Included in the Group’s trade receivables with carrying amount of R5,5 million (2011: R1,9 million) whichare 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 defaultrate for debtors that are not past due and not impaired is less than 2%. The Group holds personal or othersurety over some of these balances. The Group has registered a notarial bond of R1,1 million overequipment of a certain debtor as security over their outstanding balances.

Notes to the




Group Company

2012 2011 2012 2011R’000 R’000 R’000 R’000

7. TRADE AND OTHER RECEIVABLES continued

Not past due nor impaired 98 375 71 062 – 25

Ageing of past due but not impaired90 days 6 314 958 – –120 days 7 419 2 838 – –

Total 13 733 3 796 – –

Movement in the allowance for doubtful debt

Balance at beginning of the year 913 8 076 – –Increase due to acquisitions 1 950 – – –Movement in provision 31 (164) – –Amounts written off as uncollectible (985) (6 999) – –

Balance at the end of year 1 909 913 – –

Impairment losses recognised on receivables 426 575 – –

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality ofthe 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 isno further credit provision required in excess of the allowance for doubtful debts.

Group Company

2012 2011 2012 2011R’000 R’000 R’000 R’000

8. SHORT-TERM LOANS

Current assetsRolfes Chemicals (Pty) Ltd – – – 22 347Rolfes Silica (Pty) Ltd – – 18 005 9 518New Heights 390 (Pty) Ltd – – 1 269 692Agchem Africa (Pty) Ltd – – 3 493 –Amazon Colours (Pty) Ltd – – 1 824 –Maxipil (Pty) Ltd 3 783 – – –

3 783 – 24 591 32 557

Current liabilitiesRolfes Colour Pigments International

(Pty) Ltd – – (37 269) (12 660)Rolfes Asset Holding (Pty) Ltd – – (16 622) (15 347)Rolfes Chemicals (Pty) Ltd – – (10 468) –Nexus Finance (Pty) Ltd (1 979) – – –Indicator Trust (2 382) – – –Debtor financing (11 043) – – –

(15 404) – (64 359) (28 007)

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 nofixed terms of repayment.

The debtor financing represents short-term borrowings from Nedbank and carry interest at market rates with nofixed 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.

Notes to the




Group Company

2012 2011 2012 2011R’000 R’000 R’000 R’000

9. CASH AND CASH EQUIVALENTS

For the purpose of the cash flow statement, 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 flows can be reconciled to the related items in the statement of financial position as follows:

(Bank overdraft)/cash on hand (2 938) 4 637 (1 943) 9 628Call account 85 82 – –Dollar account

(2012: US$127 655; 2011: US$913) 1 045 6 – –Euro account

(2012: €(7 527); 2011: Û€5 825) (78) 57 – –Petty cash 46 51 3 2Trading account 7 – – –

(1 833) 4 833 (1 940) 9 630

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.

Banking facilities are available as follows:

– Multi-Optional Facility (35 000) (35 000) (35 000) (35 000)Available by way of overdraft and/or Letter of Credit/Guarantees.Shared with Rolfes Colour Pigments International (Pty) Ltd, Rolfes Silica (Pty) Ltd, Rolfes Chemicals (Pty) Ltd, Rolfes Asset Holding (Pty) Ltd, Rolfes Logistics (Pty) Limited.

– Forward exchange facility (2 000) (1 000) – –Shared between Rolfes Colour Pigments International (Pty) Ltd, Rolfes Chemicals (Pty) Ltd, Acacia Specialty Colours (Pty) Ltd, Amazon 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 and Agchem Holdings(Pty) Ltd and its subsidiaries.

Notes to the




Group Company

2012 2011 2012 2011R’000 R’000 R’000 R’000

9. CASH AND CASH EQUIVALENTS continued

– Overdraft facility (17 500) – – –Available with fixed overdrafts to Agchem Africa (Pty) Ltd, Absolute Science (Pty) Ltd, Acacia Specialty Chemicals (Pty) Ltd, Introlab Chemicals (Pty) Ltd and Amazon Colours (Pty) Ltd

– Debtor financing (40 000) – – –Agchem Africa (Pty) Ltd

– Medium-term loan facility (1 401) (4 041) – –Reducing with a remaining term of 7 months

– Medium-term loan facility (5 499) (8 429) – –Reducing with a remaining term of 20 months

– Medium-term loan facility (19 653) – – –Reducing with a remaining term of 35 months




– Overdraft facility – 1 719 – 1 719Reducing at R340 000 per month and repayable over the remaining term of 5 months

Facilities are secured as follows:

– Unlimited cross suretyship (incorporating cession of loan funds) by Rolfes Asset Holding (Pty) Ltd, RolfesSilica (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, Agchem Services (Pty) Ltd, Agchem Africa (Pty) Ltd, Gallus Technologia(Pty) Ltd and Gallus Technologia Ventersdorp (Pty) Ltd.

– First covering mortgage bond of R4,6 million and a second covering mortgage bond of R1 million overremaining portion 273 I.R. Remaining extent of portion 174 and 147 of the farm Rietfontein 63 I.R.Edenvale, Modderfontein with Rolfes Asset Holding (Pty) Ltd reflected as mortgagor and Nedbank Limitedreflected as mortgagee.

– Second covering mortgage bond of R7,5 million over Erf 1322 Germiston South Extension 2 with NewHeights 390 (Pty) Ltd reflected as mortgagor and Nedbank Limited reflected as mortgagee.

– Cession of insurance policy required in terms of covering mortgage bond.

– Agreement of pledge, cession and set-off by Rolfes Holdings Limited, Rolfes Colour Pigments International(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.

Notes to the




Notes to the



9. CASH AND CASH EQUIVALENTS continued

– Cession of all present and future debtors of Rolfes Colour Pigments International (Pty) Ltd, Rolfes Chemicals(Pty) Ltd, Rolfes Silica (Pty) Ltd, Amazon Colours (Pty) Ltd, Introlab Chemicals (Pty) Ltd, Acacia SpecialtyChemicals (Pty) Ltd and Agchem Africa (Pty) Ltd.

– Cession of customer foreign currency account.

– Limited cross suretyship in the sum of R5,25 million between Rolfes Colour Pigments International (Pty) Ltd and Amazon Colours (Pty) Ltd.

– Unlimited cross deed of suretyship in favour of Nedbank by New Heights 390 (Pty) Ltd and Rolfes Chemicals(Pty) Ltd as well as Rolfes Holdings Limited and Agchem Holdings (Pty) Ltd.

– General notarial bond in favour of Nedbank on stock in the amount of R24 million.

Group Company

2012 2011 2012 2011R’000 R’000 R’000 R’000

10. SHARE CAPITAL

Authorised

500 000 000 (2011: 500 000 000) ordinary shares of R0,01 each 5 000 5 000 5 000 5 000

Issued

103 609 469 (2011: 103 609 469) ordinary shares of R0,01 each 1 036 1 036 1 036 1 036

Unissued ordinary shares of R0,01 each 3 964 3 964 3 964 3964

10.1 Fully paid ordinary shares

Number Share Shareof shares capital premium

‘000 R‘000 R‘000

Balance at 30 June 2010 103 609 1 036 28 603

Balance at 30 June 2011 103 609 1 036 28 603

Balance at 30 June 2012 103 609 1 036 28 603

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

Group Company

2012 2011 2012 2011R’000 R’000 R’000 R’000

11. TREASURY SHARES

Listed

At cost (2011: 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.


Notes to the



Group Company

2012 2011 2012 2011R’000 R’000 R’000 R’000

12. REVALUATION RESERVE

Investment in shares

Revaluation – – 197 178 197 178Deferred tax – – (25 709) (25 709)

Carrying value at 30 June – – 171 469 171 469

Property

Revaluation 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 2 193 171 469 171 469

13. INTEREST-BEARING LIABILITIES

Secured 67 435 15 901 – 94

Instalment sale agreements 9 044 3 431 – 94Medium-term bank loans 58 391 12 470 – –

Short-term portion (20 678) (7 213) – (94)

46 757 8 688 – –

Instalment sale agreements are secured over motor vehicles with a carrying amount of R1,3 million (2011: R1,3million) and equipment with a carrying amount of R3,1 million (2011: R5,4 million) and bear interest between11,05% and 7,7% (2011: 6,80% and 9,37%) per annum.

Instalment sale agreements relate to motors vehicles and equipment with lease terms of 4 years on average. TheGroup’s obligation under instalment sale agreements are secured by the lessor’s title to the leased assets. TheGroup has an option to purchase the motor vehicles and equipment for a nominal amount at conclusion of theagreement.

A medium-term loan was obtained for the purchase of Rolfes Logistics (Pty) Ltd (previously Leather-Chem (Pty)Ltd) with carrying amounts of R1,4 million (2011: R4,0 million). The instalment bears interest at 10,21% and isrepayable over 60 months with the last payment being on 1 January 2013.

A medium-term loan was obtained for the purchase of New Heights 390 (Pty) Ltd with carrying amounts of R5,5million (2011: R8,4 million). The instalment bears interest at 8,91% (2011: 8,91%) and is repayable over 60 months with the last payment being on 1 February 2014.

A medium-term loan was obtained for the purchase of Agchem Holdings (Pty) Ltd with carrying amounts ofR19,7 million (2011: RNil). The instalment bears interest at 8,7% (2011: Nil) and is repayable over 38 months with the last payment being on 1 May 2015.

A medium-term loan was obtained for the purchase of Agchem Holdings (Pty) Ltd with carrying amounts ofR24,7 million (2011: RNil). The instalment bears interest at 8,97% (2011: Nil) and is repayable over 60 months with the last payment being on 1 October 2016.

A medium-term loan was obtained for the purchase of Amazon Colours (Pty) Ltd with carrying amounts of R4,9million (2011: RNil). The instalment bears interest at 8,93% (2011: Nil) and is repayable over 48 months with the last payment being on 1 February 2016.

A medium-term loan was obtained for the purchase of Amazon Colours (Pty) Ltd with carrying amounts of R2,3million (2011: RNil). The instalment bears interest at 8,97% (2011: Nil) and is repayable over 48 months with the last payment being on 1 July 2016. Refer to note 9 for security over this overdraft facility.


Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

13. INTEREST-BEARING LIABILITIEScontinued

Total minimum payments

Total payments– Lease payments 78 076 17 802 – 97

– Finance costs (10 641) (1 901) – (3)

Present value 67 435 15 901 – 94

Payments – up to one year– Minimum lease payments 25 591 8 462 – 97

– Finance costs (4 913) (1 249) – (3)

Present value 20 678 7 213 – 94

Payments – two to five years– Minimum lease payments 52 485 9 340 – –

– Finance costs (5 728) (652) – –

Present value 46 757 8 688 – –

The fair value of the medium-term loans

and instalment sale agreements

is approximately equal to their carrying

amounts.

14. CONTINGENT CONSIDERATION Purchase of Agchem Holdings

(Pty) Ltd

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

6 191 – 6 191 –

Opening balance – – – –

Arising on business combination 5 938 – 5 938 –

Finance cost 253 – 253 –

Closing balance 6 191 – 6 191 –

This represents the present value of a top-up for the existing 70% of the Agchem Holdings (Pty) Ltd shareholding

for a maximum value of R8,25 million pending profit warranties being met by 30 June 2015, computed at a

9% interest rate. The amount allocated to the purchase price was R5,94 million.

Notes to the




Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

15. DEFERRED TAX LIABILITY

Deferred tax is calculated in full on temporary differences under the balance sheet method using a tax rate of 28% (2011: 28%).

Movement on the deferred tax account is indicated below:

Opening balance 11 799 7 036 25 709 25 036Provisions (584) 1 265 – –Originating temporary difference on

tangible fixed assets 951 (134) – –(Decrease)/increase in tax losses available

for set-off against future taxable income (1 404) 1 541 – 673Unredeemable capital allowances 529 2 037 – –Capital loss – 54 – – Arising on business combination 3 563 – – –

Closing balance 14 854 11 799 25 709 25 709

Movement on deferred tax was chargedas follows:To profit and loss 3 334 4 763 – 673In statement of financial position due

to a business combination (279) – – –

Reconciliation of deferred tax liability:

Provisions (2 303) (1 719) – –Property, plant and equipment 13 250 12 299 – –Revaluation reserve 1 991 1 991 – –Investments – – 25 709 25 709Tax losses available for set-off against

future taxable income (1 614) (210) – –Unredeemable capital allowances – (529) – –Capital loss (33) (33) – –Arising on business combination 3 563 – – –

Closing balance 14 854 11 799 25 709 25 709

deferred tax liability 18 804 14 290 25 709 25 709deferred tax asset (3 950) (2 491) – –

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

Notes to the




Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

16. ESTIMATED TAX LOSS ANDCAPITAL REDEMPTION FUND

Rolfes Chemicals (Pty) Ltd – 750 – –Agchem Group 5 764 – – –

Estimated tax loss 5 764 750 – –

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

Unredeemed capital expenditure– Rolfes Silica (Pty) Ltd – 1 889 – –

17. PROVISIONS

Warranty provisionOpening balance 1 July 643 470 – –Increases 446 173 – –Utilised during the year (24) – – –

Closing balance 30 June 1 065 643 – –

Rehabilitation provisionOpening balance 1 July 3 343 3 136 – –Estimate – – – –Finance charges – 207 – –

Closing balance 3 343 3 343 – –

Due within one year or less 1 065 643 – –Due after more than a year 3 343 3 343 – –

Total provisions 4 408 3 986 – –

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

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

Details regarding the provisions are indicated in the accounting policies note 1.22.

Notes to the




Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

18. TRADE AND OTHER PAYABLES

Local trade payables 75 742 56 199 226 561Foreign trade payables

– US Dollar (2012: $3 693 346; 2011: $2 780 677) 30 249 18 853 – –

– Euro (2012: €nil ; 2011: €358 569) – 3 521 – –

Salary control 657 – – –Accruals 2 447 2 434 – –Leave day accrual 3 248 881 128 –Bonus accrual 476 586 – –Commission accrual 77 – – –Credit cards (171) – – –Salary advances 84 – – –Sundry creditors – 307 – –Deposits 489 166 – –Dividends for non-controlling shareholders 1 030 – – –

Total trade and other payables 114 328 82 947 354 561Value Added Tax liability – – 1 365 528Income tax liability 2 299 – 790 191

116 627 82 947 2 509 1 280

19. DERIVATIVE LIABILITIES

Forward exchange contracts 231 184 – –

The forward exchange contracts will besettled within 12 months.

The notional principal amounts of the outstanding forward foreign exchange contracts at 30 June 2012 are US$394 065 (2011: US$2 251 944); (€nil) (2011: €339 695).

20. REVENUE

Revenue arises from the following activities:

Sale of goods 633 549 458 493 – –Rentals 2 623 2 206 – –Management fee – – 20 919 11 083

636 172 460 699 20 919 11 083

Notes to the




Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

21. OPERATING PROFIT BEFORE INTEREST

Operating profit before interest is arrived

at after taking the following items

into account:

Gains in foreign currency transaction/translation (1 965) (2 669) – –

– Realised (1 772) (2 086) – –

– Unrealised (254) (583) – –

– Foreign currency translation 61 – – –

Depreciation and amortisation 7 368 4 676 248 260

– Cost of goods sold 4 591 3 291 – –

– Operating expenses 2 777 1 385 248 260

Operating profit before interest is arrived

at after taking the following items

into account:

Audit fees 541 498 525 498

– for audit 541 478 525 478

– for other services – 20 – 20

Legal fees 515 716 – 14

Research costs expensed immediately 1 598 1 893 – –

Direct expenses relating to rental income 686 722 – –

Finance costs relating to rental income 6 38 – –

Gain on disposal of property, plant

and equipment (77) (171) – –

Change in financial liability at fair

value through profit and loss – held for

trading (47) (84) – –

Directors’ emoluments for services as director 16 669 8 741 3 590 3 459

– Basic salaries 13 824 5 884 2 590 2 080

– Allowances 1 224 1 070 553 566

15 048 6 954 3 143 2 646

– Bonuses 1 621 1 787 447 813

Independent non-executive directors’ emoluments for services rendered 127 130 127 130

Notes to the




Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

21. OPERATING PROFIT BEFORE INTEREST continued

Other staff costs 47 883 37 595 3 003 1 447

– Refreshments and entertainment 327 257 16 33– Salaries and wages 22 859 16 706 2 987 1 414– Salaries and wages (included in

cost of sales) 24 697 20 632 – –

Contributions to provident fund 1 555 259 – –

Contributions to pension fund 1 466 1 712 127 147

Operating lease arrangementsMinimum lease payments under operating

leases recognised in profit and loss for the year 562 556 – –

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 514 575 – –In the second to fifth years 4 081 1 716 – –

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

The rental payment for the lease of plant will continue for a further four years.

Intercompany transactions – – 17 253 11 060

– Management fees – – 17 269 11 083– Telephone and security – – (16) (23)

Lease costs, renewable annually, for theyear are represented by rentals payable by the subsidiaries for certain plant and equipment eliminated on consolidation. 4 120 4 500 – –

– Premises 120 120 – –– Equipment 4 000 4 380 – –

Notes to the




Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

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 reviewclauses 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.

Rental income earned by the Groupfrom property, which is leasedout under operating leases, amounted to 2 623 2 206 – –

Direct operating expenses arising fromthe leased property amounted to 686 722 – –

Total future minimum rental income under fixed term operating leases for the following periods:– not later than on year 2 654 2 585 – –

23. CONTINGENT LIABILITIES

Court proceedings 250 250 – –

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 COST

Interest paid includes: 9 068 3 780 3 587 867

Creditors and outstanding balances 26 1 – –Finance charges 3 418 1 839 17Current account 5 036 1 733 2 850Subsidiaries’ loan accounts – – 3 332 –Rehabilitation provision – 207 – –Contingent consideration 253 – 253 –Related party loans 335 – – –

Notes to the




Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

25. FINANCE INCOME

Interest received including interest received from: 555 40 1 382 2 336

Subsidiaries’ loan accounts – – 1 265 2 336Related party loans 250 – – –Current account 305 40 117 –

Investment revenue earned on financial assets, categorised as loans and receivables (including cash and bank balances) 555 40 1 382 2 336

26. TAXATION

Taxation 17 116 13 497 2 066 1 900

South African normal taxation 12 746 7 698 1 030 191Deferred taxation 3 334 4 763 – 673South African secondary tax on

companies 1 036 1 036 1 036 1 036

Tax rate reconciliation % % % %

Effective rate 28,53 29,45 56,16 62,60

Statutory rate 28,00 28,00 28,00 28,00– (Exempt income)/non-allowable

expenditure (1,13) (0,73) – 0,46– Tax allowances (0,07) (0,08) – –– STC on dividends 1,73 2,26 28,16 34,14

27. TAX CONSEQUENCE OF UNDISTRIBUTED RESERVE

STC on remaining reserves – 13 133 – –

28. OTHER GAINS AND LOSSES

Gain on disposal of property, plant and equipment 77 171 – –

Net foreign exchange gains 1 965 2 669 – –

Notes to the




Group

2012 2011

R’000 R’000

29. EARNINGS PER SHARE

NumeratorProfit for the year 37 268 32 331

Earnings used in basic earnings per share 37 268 32 331

Earnings used in diluted earnings per share 37 268 32 331Gain from sale of fixed asset (net of taxation) (55) (171)

Earnings used in headline earnings per share 37 213 32 160

2012 2011’000 ’000

DenominatorOpening balance 20 20Issue of shares on 1 July 2006 1 1Share capitalisationShare issue on 11 April 2007 89 979 89 979 Share issue on 23 May 2007 12 500 12 500Issue of shares on 12 December 2007 1 109 1 109Treasury shares (641) (641)

Weighted average number of shares used in basic earnings per share, diluted earnings per share and headline earnings per share and diluted headline earnings per share (‘000) 102 968 102 968

Earnings per share (cents)

– Basic 36,2 31,4– Headline 36,1 31,2– Diluted 36,2 31,4– Diluted headline 36,1 31,2

30. DIVIDENDS PER SHARE

Final dividend declared on 25 October 2010 – 5 180Interim dividend declared on 22 March 2011 – 5 180Final dividend declared on 24 October 2011 5 180 –Final dividend declared on 19 March 2012 5 180 –Cents per ordinary share 10,0 10,0

Issued number of shares (‘000) 103 609 103 609

A final dividend of R0,05 per share will be paid during October 2012 being R5,2 million.

In terms of the dividend tax effective 1 April 2012, the following additional information is disclosed:• The local dividend tax rate is 15%;• No STC credits will be utilised for the final ordinary dividend;• 103 609 469 ordinary shares are in issue;• The net ordinary dividend is 4,25 cents per share for ordinary shareholders who are not exempt from

dividends tax; and• Rolfes Holdings Ltd tax reference number is 9492/089/140.

Notes to the




E van der

L Lynch Merwe Total

R’000 R’000 R’000

31. DIRECTORS’ REMUNERATION

Executive directorsServices as directors

Remuneration– Basic 767 1 823 2 590

– Allowances 246 307 553

1 013 2 130 3 143

– Bonuses 50 397 447

For the year ended June 2012 1 063 2 527 3 590

Remuneration– Basic 646 1 434 2 080

– Allowances 254 312 566

900 1 746 2 646

– Bonuses 163 650 813

For the year ended June 2011 1 063 2 396 3 459

N TAM KT

Mthombeni * Tshivhase Nondumo Total

R’000 R’000 R’000 R’000

2012

Independent non-executive directorsRemuneration

– Basic 11 53 63 127

2011

Independent non-executive directorsRemuneration

– Basic – 60 70 130

* Appointed 4 October 2011; Resigned 29 June 2012

Non-independent non-executive directors did not receive any directors’ emoluments for the years presented.

The directors did not receive remuneration from subsidiaries.

Employment contracts of the individual executive directors all incorporate 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 its directors. 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 indicate retirement of directors.

Notes to the




32. FINANCIAL 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 managementThe Group manages its capital to ensure that entities in the Group will be able to continue as a going concern

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 13,

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 and 12 respectively.

Gearing ratioThe 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

2012 2011

R’000 R’000

The gearing ratio at the year-end was as follows:

Interest-bearing debt 80 311 15 901

Net debt 80 311 15 901

Equity 213 982 162 291

Net debt to equity ratio 0,4 0,1

Debt is defined as long- and short-term interest-bearing borrowings and bank overdraft, as detailed in

notes 8, 9 and 13. 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 June 2012.

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.

Notes to the




Fair value

through

Loans Other profit and

and financial loss (held Fair

receivables liabilities for trading) value

R’000 R’000 R’000 R’000

32. FINANCIAL RISK continued

Group2012

Categories of financial instruments

Financial assetsTrade and other receivables 112 108 – – 112 108

Short-term loans 3 783 – – 3 783

Financial liabilitiesInterest-bearing liabilities – 67 435 – 67 435

Trade and other payables – 112 808 – 112 808

Financial liabilities* – forward

exchange contracts – – 231 231

Short-term loans – 15 404 – 15 404

Cash and cash equivalents – 1 833 – 1 833

2011


Financial assetsTrade and other receivables 74 454 – – 74 454

Cash and cash equivalents 4 833 – – 4 833

Financial liabilitiesInterest-bearing liabilities – 15 901 – 15 901

Trade and other payables – 82 947 – 82 947

Financial liabilities* – forward

exchange contracts – – 184 184

Current and future debtors are ceded to the bank. Refer note 9.

* The fair value of financial assets and financial liabilities relating to forward exchange contracts is based on aLevel 1 fair value measurement hierarchy. Level 1 uses quoted prices (unadjusted) in active markets for identicalassets or liabilities.

Notes to the




Fair valuethrough

Loans Other profit andAvailable- and financial loss (held Fair

for-sale receivables liabilities for trading) valueR’000 R’000 R’000 R’000 R’000


Company2012


Financial assetsTrade and other receivables – 150 – – 150Short-term loans – 24 591 – – 24 591Investment in subsidiaries 254 062 – – – 254 062

Financial liabilitiesShort-term loans – – 64 359 – 64 359Trade and other payables – – 354 – 354Cash and cash equivalents – – 1 940 – 1 940

2011


Financial assetsTrade and other receivables – 25 – – 25Short-term loans – 32 557 – – 32 557Cash and cash equivalents – 9 630 – – 9 630Investment in subsidiaries 199 487 – – – 199 487

Financial liabilitiesInterest-bearing liabilities – – 94 – 94Short-term loans – – 28 007 – 28 007Trade and other payables – – 561 – 561

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 analysisusing 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.

Notes to the





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.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at

the reporting date are as follows:

Liabilities Assets

2012 2011 2012 2011

‘000 ‘000 ‘000 ‘000

Euro (€) 8 359 509 1 008

Dollar (US$) 3 693 2 781 1 758 211

Pound (£) – – 22 38

Kwacha – – 2 102 –

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

payments and receipts within 50% to 60% of the exposure generated. The Group also enters into forward

contracts up to two months within 40% to 50% of the exposure generated. Basis adjustments are made to the

carrying 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.

Notes to the





Foreign currency sensitivity analysisThe Group is mainly exposed to currency in Euro and US Dollars.

The following table details the Group’s sensitivity to a 10% increase and decrease against the relevant foreigncurrencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items andadjusts their translation at the period-end for a 10% change in foreign currency rates. The sensitivity analysisincludes external loans as well as loans to foreign operations within the Group where the denomination of theloan is in a currency other than the currency of the lender or the borrower. A positive number below indicatesan increase in profit and other equity where the currency strengthens 10% against the relevant currency. For a10% weakening of the currency against the relevant currency, there would be an equal and opposite impact onthe 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.

Group

2012 2011

R’000 R’000

Dollar (US$) (1 585) (1 743)

Euro (€) 521 638

Pound (£) 29 41

Profit or loss (1 035) (1 064)

Interest rate risk

The Group limits its long-term interest-bearing liabilities as far as possible to limit the exposure to interest raterisk. The Group has made arrangements with its bankers to limit the exposure to interest rate risk, but this doesnot 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 interestrates.

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for both derivativesand 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 riskinternally to key management personnel and represents management’s assessment of the reasonably possiblechange in interest rates.

If interest rates had been 50 basis points higher and all other variables were held constant, the Group’s profitfor the year ended 30 June 2012 would decrease by R4,5 million (2011: R1,9 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 rates, there would be an equal and opposite impact on the profit and other equity.

Notes to the




Notes to the




Credit riskFinancial assets potentially subject to Group concentrations of credit risk consist principally of trade receivables,ie credit sales, which was R112,1 million (2011: R74,5 million).

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. Thecredit risk, with respect to trade receivables, is limited due to the fact that the customer base is spread over awide variety of small and large receivables. The Group does not enter into complex derivatives to manage creditrisk. 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 financialloss 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 fromdefaults. This information is supplied by independent rating agencies where available and, if not available, theGroup 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 geographicalareas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.

Liquidity risk

The Group has minimised its liquidity risk by ensuring it has adequate banking facilities and reserve borrowingcapacity 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 tobe suitably anticipated. Where facilities for Group need to be increased, approval is sought in accordance withauthority limits set by the Board.

The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowingfacilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Included in note 9 is a listing of additional undrawn facilities that the Group hasat its disposal to further reduce liquidity risk.

The Group has access to financing facilities, the total unused amount which is R79,2 million at the end of thereporting period. The Group expects to meet its other obligations from operating cash flows and proceeds ofmaturing financial assets.

The following table sets out contractual maturities analysis:

Up to 3 to 12 1 to 2 2 to 53 months months years years

2012

Forward exchange contracts 231 – – –Trade and other payables 99 528 14 800 – –Loans and borrowings 4 995 15 683 18 607 28 150

2011

Forward exchange contracts – 184 – –Trade and other payables 70 000 12 947 – –Loans and borrowings – 7 213 5 586 3 102

DerivativesForeign currency forward exchange contracts are measured using quoted forward exchange rates and yieldcurves derived from quoted interest rates matching maturities of the contracts.


33. RELATED PARTIES

Transactions between the Company and its subsidiaries, as listed in note 21 which are related parties of theCompany, have been eliminated on consolidation and are not disclosed in this note. Details of transactionsbetween the Group and other related parties are now disclosed. Except for repayment terms of related partyloans, all related party transactions are no less favourable than those entered into with third parties and occuron an arm’s length and commercial basis.

Group Company

2012 2011 2012 2011Relationship R’000 R’000 R’000 R’000

Trading transactions

Management fees Rolfes Colour Pigments International

(Pty) Ltd Subsidiary – – 4 344 5 005Rolfes Chemicals (Pty) Ltd Subsidiary – – 2 173 3 872Rolfes Silica (Pty) Ltd Subsidiary – – 6 000 –Rolfes Asset Holding (Pty) Ltd Subsidiary – – 2 701 1 599 New Heights 390 (Pty) Ltd Subsidiary – – 451 607Amazon Colours (Pty) Ltd Subsidiary – – 1 600 –

Rolfes Holdings Ltd 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 and (paid)Rolfes Colour Pigments International

(Pty) Ltd Subsidiary – – (1 845) 364Rolfes Asset Holding (Pty) Ltd Subsidiary – – (1 427) 1 120Rolfes Chemicals (Pty) Ltd Subsidiary – – (60) (2 397)Rolfes Silica (Pty) Ltd Subsidiary – – 1 008 (1 423)New Heights 390 (Pty) Ltd Subsidiary – – 62 –Agchem Africa (Pty) Ltd Subsidiary – – 195 –Indicator trust Non-controlling interest (202) – – –Nexus Finance (Pty) Ltd Non-controlling interest (133) – – –Maxipil (Pty) Ltd Common director 250 – – –

TelephonesRolfes Asset Holding (Pty) Ltd Subsidiary – – 16 23

Other

Loans

Rolfes Colour Pigments International (Pty) Ltd Subsidiary – – (37 269) (12 660)

Rolfes Asset Holding (Pty) Ltd Subsidiary – – (16 622) (15 347) Rolfes Chemicals (Pty) Ltd Subsidiary – – (10 468) 22 347Rolfes Silica (Pty) Ltd Subsidiary – – 18 005 9 518New Heights 390 (Pty) Ltd Subsidiary – – 1 269 692Agchem Africa (Pty) Ltd Subsidiary – – 3 493 –Amazon Colours (Pty) Ltd Subsidiary – – 1 824 –Maxipil (Pty) Ltd Common director 3 783 – – –Nexus Finance (Pty) Ltd Non-controlling interest (1 979) – – –Indicator Trust Non-controlling interest (2 382) – – –

Refer note 8 for terms and conditions of loans.

Notes to the




Group Company

2012 2011 2012 2011Relationship R’000 R’000 R’000 R’000

33. RELATED PARTIES continued

Compensation

The remuneration of executive directors during the year was as follows:

Short-term benefits 16 669 8 741 3 590 3 459

The remuneration of directors is determined by the Remuneration and Nomination Committee having regard to the performance of individuals and related market trends.

Additions to computer equipmentPinnacle Micro

AJ Fourie Director 224 107 3 7

Group Company

2012 2011 2012 2011R’000 R’000 R’000 R’000

34. 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.

Contributions made

– Pension fund 1 466 1 712 127 147– Provident fund 1 555 259 – –

3 021 1 971 127 147

Notes to the




34. RETIREMENT BENEFIT SCHEMES continued

Certain Group companies are members of the Crystal Pension Fund and the contributions to the fund arecalculated as follows:

– The Group 9,0% (including 1,5% administrative fees)– The employees 7,5%

Certain Group companies are also members of the Chemical Industry National Provident Fund and thecontributions to the fund are calculated as follows:

– The Group 6,0%– The employees 6,0%

Certain Group companies are also members of the Liberty Life Provident Fund and the contributions to the fundare calculated as follows:

– The Group 7,5% and 5%– The employees 7,5% and 5%

In the above funds the companies have various brokers and are represented by trustees and have managementboards that ensure the companies’ interest in the above funds are not dismissed. The funds’ trustees invest theassets of the funds to obtain the best results.

The total expense recognised in the statement of comprehensive income of R3 million (2011: R2 million) represents contributions payable to these plans by the companies at rates specified in the rules of the plans. Asat 30 June 2012, all contributions to the retirement benefit schemes were paid in full.

35. SUBSIDIARIES ACQUIRED

Proportion Principal Date of of shares

activity acquisition acquired

2012

Amazon Colours (Pty) Ltd Water-based pigments 1 November 2011 70%dispersion manufacturer

Analysis of assets and liabilities acquiredOn acquisition the book value of the assets and liabilities acquired were considered to equal the fair value.

R’000

Current assets

Trade 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 Tax liability (140)Tax liability (283)Non-controlling interest (1 259)

Notes to the




35. SUBSIDIARIES ACQUIRED continued

R’000

Non-current liabilitiesLong-term liabilities (1 801)Goodwill on acquisition 1 074

Fair values determinedThe calculation has been finalised.– Fair value of net assets purchased 4 176– 30% non-controlling interest (1 259)– Less: consideration settled in cash (3 991)

– Goodwill (1 074)

Cost of acquisitionThe cost of acquisition for the 70% acquired effective 1 November 2011 was R5,25 million paid in cash. The cost of acquisition for the 30% acquired effective 30 June 2012 was R2,25 million paid in cash, refer to note 36.

Net outflow on acquisitionTotal 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

Primary reason for the business combinationThe desire to inter alia gain a presence in the point-of-sale dispersions market which Rolfes had as yet notentered.

Proportion Principal Date of of shares

activity acquisition acquired

2012

Agchem Holdings (Pty) Ltd Development, manufacturing, 1 November 2011 70%import and distribution of high

quality agricultural-chemicals and specialty nutrition fertiliser

for soil and plants

Analysis of assets and liabilities acquiredOn acquisition the book value of the assets and liabilities acquired were considered to equal the fair value.

R’000

Current assetsCash and cash equivalents 2 527Trade and other receivables 61 295

– Gross trade receivables 63 045– Provision for bad debts (1 750)

Inventories 45 161Value Added Tax asset 809Tax asset 1 167

Non-current assetsPlant and equipment 8 705Deferred tax asset 279Intangible assets 12 726

Notes to the





R’000

Current liabilitiesTrade and other payables (44 883)Short-term liabilities (27 699)Provisions (294)

Non-current liabilitiesLong-term liabilities (8 060)Goodwill on acquisition 22 993Contingent consideration (5 938)Non-controlling interest (20 474)

Fair values determinedThe calculation has been finalised.– Fair value of net assets purchased 42 570– Fair value adjustment (intangibles) 12 726– Deferred tax on fair value adjustment (3 563)– Non-controlling interest (20 474)– Contingent consideration (5 938)– Less: consideration settled in cash (48 314)

– Goodwill (22 993)

Cost of acquisitionThe cost of acquisition of R48,31 million was paid in cash. An amount of R8,25 million represents the top-up on the 70% of the Agchem Holdings (Pty) Ltd purchase, pending profit warranties being met by 30 June 2015. The contingent consideration represents the present value of the above top-up.

Net outflow on acquisitionTotal purchase consideration 48 314Less: Cash and cash equivalent balances acquired (2 527)

45 787

Primary reason for the business combinationTo gain entry into the highly attractive agricultural chemical sector and to add a total new range of chemicalproducts to the existing large product basket of the Rolfes Group.

Goodwill arising on acquisitionsGoodwill, in the business combinations, arose because the cost of combination included a control premium paidto acquire 70% of Amazon Colours (Pty) Ltd (“Amazon”) and Agchem Holdings (Pty) Ltd (“Agchem”). Inaddition, the consideration paid for the combination effectively included amounts in relation to the benefit ofexpected 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 arisingfrom them cannot be measured reliably. No amount of goodwill is expected to be deducted for tax purposes.

The Group also acquired the customer lists and customer relationships as part of the acquisitions. These assetscould not be reliably measured and separately recognised from goodwill because they are not capable of beingseparated from the Group and sold, transferred, rented or exchanged, either individually or together with anyrelated contracts.

Notes to the





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 andR15,8 million by the Agchem business.

Had these business combinations been effected 1 July 2011, the revenue of the Group would have been R718,5 millionand profit and loss would have been R50,1 million.

36. PURCHASE OF NON-CONTROLLING INTEREST IN SUBSIDIARY

The remaining 30% portion of Amazon Colours (Pty) Ltd was acquired on 30 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:

R’000

Retained earnings 31 October 2011 4 176Loss from 1 November 2011 to 30 June 2012 (479)

3 697

30% non-controlling interest acquired 1 109Consideration settled in cash 2 250

Recognised in equity attributable to owners (1 141)

37. SEGMENT REPORTING

The principal source of the Group’s risk and rates of return is as follows:

Business segmentsFor management purposes the entity is organised on an international basis in five operating divisions, ie Colour

Chemicals, Industrial Chemicals, Mining and Water Chemicals, Agricultural Chemicals and other. These divisions are the

basis on which the entity report its primary information. Only four of the five operating divisions qualify as reportable

segments namely:

• Colour Chemicals – involving the production, purchase and sale of organic and inorganic colour pigments for the

coatings, plastics, vinyl, leather, ink and construction markets;

• Industrial Chemicals – involving the production, purchase and sale of commodities and other specialty chemicals for the

coatings, automotive, general chemical, plastics, fertiliser and construction industries; and

• Mining and Water Chemicals – involving the quarrying and processing of pure beneficiated silica for the metallurgical,

filtration and construction industries.

• Agricultural Chemicals – involving the development, manufacturing, import and distribution of high quality

agricultural chemicals and specialty nutrition fertiliser for soil and plants.

Other non-reportable segments include the letting of property, plant and equipment.

Geographical segmentsThe 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.

Notes to the




37. SEGMENT REPORTING continued

Certain intergroup management fees were eliminated in the separate segments to ensure comparability with the prior year.The following table provides financial information on the forementioned segments:

Mining Elimina-

Agri- and tion of

Industrial cultural Water Colour intergroup

Chemicals Chemicals Chemicals Chemicals Other items Total

2012 2012 2012 2012 2012 2012 2012

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

Revenue– External 178 429 120 021 45 199 289 900 2 623 – 636 172– Intercompany – – – – – – –

Total revenue 178 429 120 021 45 199 289 900 2 623 – 636 172Total cost of sales (150 874) (81 311) (33 445) (239 228) (4 112) – (508 970)

Gross profit 27 555 38 710 11 754 50 672 (1 489) – 127 202Gross profit (%) 15 32 26 17 – – 20Other income 2 235 1 843 318 1 634 11 859 (7 777) 10 112Operating expenses (13 502) (17 534) (3 965) (26 731) (14 838) 7 777 (68 793)

Profit before interest 16 288 23 019 8 107 25 575 (4 468) – 68 521Profit before interest (%) 9 19 18 9 – – 11Interest paid (1 778) (2 006) (344) (2 111) (2 891) 62 (9 068)Interest received 26 314 – 22 255 (62) 555

Profit before tax 14 536 21 327 7 763 23 486 (7 104) – 60 008Tax expenses (4 146) (5 513) (2 175) (6 278) 996 – (17 116)

Profit after tax 10 390 15 814 5 588 17 208 (6 108) – 42 892Profit after tax % 6 13 12 6 – – 7

Equity holders of the parent 9 256 11 173 5 588 17 359 (6 108) – 37 268Non-controlling interest 1 134 4 641 – (151) – – 5 624

Total assets 92 705 100 768 54 067 194 330 37 187 (38 092) 440 965

Total liabilities 71 559 42 387 23 984 96 740 7 882 (15 569) 226 983

Capital expenditure incurred 991 8 247 1 260 3 001 1 239 – 14 738

Depreciation (492) (2 064) (2 790) (1 774) (248) – (7 368)

Bad debt provision 50 1 219 30 180 430 – 1 909

Geographical areas

Revenue from external customers can be allocated to identifiable countries as follows:

Africa 22 678 573 755 20 711 – – 44 717Asia – 882 – 1 923 – – 2 805Europe – 5 549 – 16 988 – – 22 537South Africa 155 751 113 017 44 444 250 278 2 623 – 566 113

178 429 120 021 45 199 289 900 2 623 – 636 172

All non-current assets are domiciled in South Africa.

Major customersRevenues from transactions with single customers does not exceed 10% of the above reporting segments revenue and is thus not disclosed.

Basis of measurement for inter-segment transactionsIntersegment transactions are eliminated on presentation of the segment report to present a more feasible segment. All related partytransactions occur at arm’s length on the same terms and conditions that are available commercially.

Rolfes Logistics (Pty) Ltd, a subsidiary of Rolfes Chemicals, is included proportionately in the Industrial and Colour Chemicals segment.

The Amazon business acquisition is included in the Colour Chemicals segment, while the Agchem business acquisition, excluding AcaciaSpecialty Chemicals (included in the Industrial Chemicals segment) forms the Agricultural Chemicals sector.

Notes to the




37. SEGMENT REPORTING continued

Elimina-Mining tion of

Industrial and Water Colour intergroupChemicals Chemicals Chemicals Other items Total

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

Revenue– External 131 431 41 387 285 675 2 206 – 460 699– Intercompany – – – – – –

Total revenue 131 431 41 387 285 675 2 206 – 460 699Total cost of sales (110 256) (29 810) (233 461) (148) – (373 675)

Gross profit 21 175 11 577 52 214 2 058 – 87 024Gross profit (%) 16 28 18 93 – 19Other income 318 544 2 735 8 254 (7 776) 4 075Operating expenses (9 296) (4 220) (23 263) (12 528) 7 776 (41 531)

Profit before interest 12 197 7 901 31 686 (2 216) – 49 568Profit before interest (%) 9 19 11 – – 11Interest paid (1 428) (498) (1 191) (906) 243 (3 780)Interest received 1 79 36 167 (243) 40

Profit before tax 10 770 7 482 30 531 (2 955) – 45 828Tax expenses (3 009) (2 124) (8 173) (191) – (13 497)

Profit after tax 7 761 5 358 22 358 (3 146) – 32 331Profit after tax % 6 13 8 – – 7

Equity holders of the parent 7 761 5 358 22 358 (3 146) – 32 331

Total assets 67 170 48 713 130 644 30 776 (195) 277 108

Total liabilities 49 440 23 222 49 502 (7 147) (200) 114 817

Capital expenditure incurred 1 424 1 773 783 130 – 4 110

Depreciation (323) (2 924) (1 169) (260) – (4 676)

Bad debt provision 401 – 512 – – 913

Geographical areas

Revenue from external customers can be allocated to identifiable countries as follows:

Africa 5 443 158 12 509 – – 18 110Asia – – 7 249 – – 7 249Europe – – 30 310 – – 30 310South Africa 125 988 41 229 235 607 2 206 – 405 030

131 431 41 387 285 675 2 206 – 460 699

Notes to the




Notes to the



Group Company

2012 2011 2012 2011

R’000 R’000 R’000 R’000

38.1 RECONCILIATION OF PROFIT BEFORE INTEREST TO CASH GENERATED FROMOPERATIONS

Operating profit before interest 68 521 49 568 5 884 1 566

Adjustments for non-cash items:– Depreciation 7 368 4 676 248 260

– Movement in bad debt provision 996 (7 163) – –

– Movement in warranty provision 95 173 – –

– Movement in leave day accrual 2 367 (170) – –

– Movement in bonus accrual (110) 586 – –

– Profit on sale of asset (77) (171) – –

– Finance charges on rehabilitation

provision – 207 – –

– Changes on contingent liability 253 – – –

– Unrealised exchange rate fluctuations (254) (583) – –

Change in working capital: (15 406) (6 812) 505 663

– Increase in inventories (25 695) (17 235) – –

– Decrease/(increase) in receivables 25 914 (6 520) (125) 23

– Increase in forward exchange

contract liability 47 84 – –

– (Decrease)/increase in payables and

Value Added Tax (15 672) 16 859 630 640

63 753 40 311 6 637 2 489

38.2 TAX PAID

Opening balance: SARS 636 (1 239) (191) –

Tax asset from acquisition 884 – – –

Tax liability for the year (12 746) (7 698) (1 030) (191)

STC liability for the year (1 036) (1 036) (1 036) (1 036)

Closing balance: SARS 2 299 (636) 790 191

Tax paid during the year (9 963) (10 609) (1 467) (1 036)


Notes to the



Group Company

2012 2011 2012 2011R’000 R’000 R’000 R’000

38.3 COST WITH ACQUISITION OF COMPANY

Plant and equipment 9 707 – – –Trade receivables 65 052 – – –Inventory 49 603 – – –Accounts payable (46 865) – – –Long-term liabilities (9 861) – – –Short-term liabilities (27 699) – – –SARS VAT 669 – – –SARS income tax 884 – – –Provisions (327) – – –Deferred tax 3 842 – – –Cash 1 741 – – –

46 746 – – –

Goodwill 24 067 214 – –Intangible asset 12 726 – – –Deferred tax on intangible asset (3 563) – – –Non-controlling interest (21 733) – – –

Contingent consideration (5 938) – – –Cash of subsidiary acquired (1 741) – – –

Cash cost 50 564 214 – –

Cash cost relates to R4,777 million for Amazon Colours (Pty) Ltd and R45,787 million for Agchem Holdings (Pty)

Ltd. Refer note 35.


39. INTEREST IN SUBSIDIARIES

Share

Activity and capital 2012 2011 2012 2011 2012 2011

Name description R % % R’000 R’000 R’000 R’000

Rolfes Colour The manufacturing and 1 000 100 100 67 995 67 955 (37 269) (12 660)Pigments distribution of resins, International dispersions organic and (Pty) Ltd inorganic pigments,

pigments pastes, additives and dyes.

Rolfes Chemicals The distribution of (Pty) Ltd drummed solvents, 100 100 100 67 183 67 183 (10 468) 22 347

lacquer thinners,creosotes, waxes and other speciality chemicals.

Rolfes Silica The manufacturing and 200 000 100 100 16 639 16 639 18 005 9 518(Pty) Ltd distribution of pure

beneficiated silica.

Rolfes Asset The company invests in 100 100 100 47 710 47 710 (16 622) (15 347)Holding (Pty) and lets out property, Ltd plant and equipment.

Rolfes Europe Dormant 100 100 100 – –Trading (Pty) Ltd

Rolfes Logistics Distribution of pigments 100 100* 100* – –(Pty) Ltd 1 and industrial chemicals

throughout Africa continent.

New Heights 390 Property holding 100 100* 100* 1 269 692(Pty) Ltd 1 company

Amazon Colours Water-based pigments 100 100* – 1 824 –(Pty) Ltd 2 dispersion manufacturer.

Agchem Holdings Holding and investment 1 000 70 – 54 575 – – –(Pty) Ltd company.

Agchem Africa Development and 100 70* – 3 493 –(Pty) Ltd 3 manufacturing of

high quality agro-chemicals.

Acacia Specialty Distribution of industrialChemicals and specialty chemical 100 35,7* – – –(Pty) Ltd 3 raw materials.

Introlab Chemicals Importer and distribution 100 35* – – –(Pty) Ltd 3 of specialty nutrition

fertilisers for foliarapplication.

Absolute Science Accredited laboratory 100 70* – – –(Pty) Ltd 3 that provides high

quality analytical data.

Gallus Technologia Dormant 100 70* – – –(Pty) Ltd 3

Gallus Technologia Dormant 100 70* – – –Ventersdorp(Pty) Ltd 3

Notes to the



Amount owingby/(to)

subsidiariesInvestment

Effective

holding


39. INTEREST IN SUBSIDIARIES continued

Share

Activity and capital 2012 2011 2012 2011 2012 2011

Name description R % % R’000 R’000 R’000 R’000

Gallus Technologia The manufacturing and 100 35,7* – – –Western Cape distribution of ground(Pty) Ltd 3 and plant nutrition

products.

Agchem Services Dormant 100 70* – – –(Pty) Ltd 3

Agchem Herbicides Dormant 100 70* – – –(Pty) Ltd 3

Bungor Trading Dormant 100 70* – – –(Pty) Ltd 3

Agchem Recycling Dormant 100 70* – – –(Pty) Ltd 3

(39 768) 4 550

Amounts owing by subsidiaries 24 591 32 557

Amounts owing to subsidiaries (64 359) (28 007)

(39 768) 4 550

All subsidiaries are incorporated in South Africa.

* Indirect1 Subsidiary of Rolfes Chemicals (Pty) Ltd2 Subsidiary of Rolfes Colour Pigments International (Pty) Ltd3 Subsidiary of Agchem Holdings (Pty) Ltd

The following companies had year-ends of May 2012:

• Agchem Holdings (Pty) Ltd • Gallus Technologia Western Cape (Pty) Ltd

• Acacia Specialty Chemicals (Pty) Ltd • Agchem Services (Pty) Ltd

• Introlab Chemicals (Pty) Ltd • Agchem Herbicides (Pty) Ltd

• Absolute Science (Pty) Ltd • Bungor Trading (Pty) Ltd

• Gallus Technologia (Pty) Ltd • Agchem Recycling (Pty) Ltd

• Gallus Technologia Ventersdorp (Pty) Ltd

40. GOING CONCERN

The directors confirm that they are satisfied that the Group has adequate strategic, financial and operationalresources to continue in business for the forseeable future. The basis on which that assessment is made isrecorded at the time of approval of the annual financial statements. The Board continues adopting the goingconcern basis for preparing the financial statements.

41. CAPITAL COMMITMENTS

Capital commitments include estimated expenditure relating to the upgrade of certain plant and equipment tothe amount of R6 million for which specific Board approval has been obtained. Expenditure on estimatedcommitments will occur within one year. Capital commitments will be funded from existing facilities.

Notes to the



Amount owingby/(to)

subsidiariesInvestment

Effective

holding


Notes to the



42. ANALYSIS OF SHAREHOLDINGas at 30 June 2012

Number of Number ofshareholders % shares %

Shareholder spread

1 to 5 000 440 57,52 941 139 0,915 001 to 10 000 122 15,95 997 671 0,96

10 001 to 50 000 131 17,12 2 968 112 2,8650 001 to 100 000 27 3,53 2 070 128 2,00

100 001 to 1 000 000 32 4,18 10 887 419 10,511 000 001 shares and over 13 1,70 85 744 998 82,76

765 100,00 103 609 467 100,00

Distribution to shareholdersBanks 1 0,13 49 469 0,05Brokers 2 0,26 86 565 0,08Close Corporations 11 1,44 71 200 0,07Individuals 661 86,41 8 608 459 8,31Insurance Companies 2 0,26 881 155 0,85Investment Companies 2 0,26 11 301 000 10,91Mutual Funds 12 1,57 12 655 934 12,22Nominees and Trusts 47 6,14 54 190 179 52,30Other Corporations 4 0,52 263 700 0,25Pension Funds 2 0,26 1 007 497 0,97Private Companies 21 2,75 14 494 309 13,99

765 100,00 103 609 467 100,00

Public/non-public shareholders

Non-public shareholders 13 1,70 61 369 307 59,23

Directors and associates of the Company holdings 10 1,31 24 655 789 23,80

Strategic holdings (more than 10%) 3 0,39 36 713 518 35,43

Public shareholders 752 98,30 42 240 160 40,77

765 100,00 103 609 467 100,00

Beneficial shareholders holding 5% or more

Carmen Fourie Family Trust 19 111 943 18,45Vuwa Industrials (Pty) Ltd 12 863 750 12,42Elandre Fourie Trust 12 554 768 12,12Vuwa Investments (Pty) Ltd 11 295 000 10,90Louis Fourie Trust 6 748 499 6,51


Shareholders’ diary

Interim results published Wednesday, 22 February 2012

Audited results published Monday, 17 September 2012

Summarised annual financial statements mailed to shareholders and Integrated Report posted on website Friday, 28 September 2012

Dividend declaration

Last day to trade “CUM” dividend Friday, 5 October 2012

Ordinary shares trade “EX” dividend Monday, 8 October 2012

Record date to be recorded in the register to participate in the dividend distribution Friday, 12 October 2012

Payment to shareholders in respect of the dividend distribution Monday, 15 October 2012Posting 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, 8 October 2012, and Friday, 12 October 2012, both days inclusive.

Where applicable, payment in terms of certificated shareholders will be transferred electronically to the shareholder bankaccounts 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 Central Securities DepositoryParticipant or broker credited on the payment date.

Annual general meeting

Record date to receive notice of the annual general meeting Friday, 21 September 2012

Record date to participate and vote at the annual general meeting Friday, 26 October 2012

Forms of proxy for annual general meeting of shareholders to be received by 09:00 Wednesday, 31 October 2012

Annual general meeting of the shareholders held at 09:00 Friday, 2 November 2012

Results of annual general meeting announcement published on SENS Friday, 2 November 2012


ROLFES HOLDINGS LIMITED (formerly known as Rolfes Technology Holdings Limited)Registration number: 2000/002715/06Share Code: RLFISIN: ZAE000159836(“the Company” or “the Rolfes Group” or “the Group”)

This document is important and requires your immediateattention. If you are in any doubt as to what action youshould take in respect of the resolutions contained in thisnotice, please consult your Central Securities DepositoryParticipant (“CSDP”), broker, banker, attorney,accountant or other professional adviser immediately.

If you have sold or otherwise transferred all your ordinaryshares in the Company, please send this documenttogether with the accompanying form of proxy at once tothe relevant transferee or to the stockbroker, bank or otherperson 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, theMemorandum of Incorporation (“MOI”) of companiescomprised the Memorandum of Association and Articlesof Association. On the date that the Act came into effect,the Memorandum of Association and Articles ofAssociation were deemed to be a company’s MOI.Accordingly, for consistency of reference in this notice ofannual general meeting, the term “MOI” or“Memorandum of Incorporation” is used throughout torefer to the Company’s Memorandum of Incorporation(which previously comprised the Company’sMemorandum of Association and its Articles ofAssociation, as aforesaid).

All references in this notice of annual general meeting(including all of the ordinary and special resolutionscontained herein) to the Company’s MOI refer toprovisions of that portion of the Company’s MOI that waspreviously called the Company’s Articles of Association.

Identification of meeting participants

Section 63(1) of the Act requires that, before any personmay attend or participate in a shareholders’ meeting,that person must present reasonably satisfactoryidentification and the person presiding at such meetingmust be reasonably satisfied that the right of that personto participate and vote, either as a shareholder, or as aproxy to a shareholder, has been reasonably verified.Forms of identification that will be accepted includeoriginal and valid identity documents, drivers’ licensesand passports.

Electronic participation by shareholders

Please 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 Meeting

Notice is hereby given to the shareholders of Rolfes

Holdings Limited as at Friday, 21 September 2012,

being the record date to receive notice of the annual

general meeting in terms of section 59(1)(a) of the Act,

that the annual general meeting of shareholders of the

Company will be held in the boardroom at 12 Jet Park

Road, Jet Park, Boksburg, on Friday, 2 November 2012,

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, 26 October

2012, being the record date to participate in and vote

Notice of

annual general meetingfor the year ended 30 June 2012


Notice of

annual general meeting continued


at the annual general meeting in terms of section

62(3)(a), read with section 59(1)(b) of the Act, and to

consider and, if deemed fit, to pass the following

ordinary and special resolutions, with or without

amendment:

ORDINARY BUSINESS

PRESENTATION OF ANNUAL FINANCIALSTATEMENTS AND REPORTS

The consolidated audited annual financial statements forthe Company and its subsidiaries, including the externalauditors’, Audit and Risk Committee’s and Directors’reports for the year ended 30 June 2012, have beendistributed as required and will be presented toshareholders at the annual general meeting.

The complete set of consolidated audited annual financialstatements, together with the abovementioned reports,are set out on pages 40 to 110 of the Integrated Report.

SOCIAL & ETHICS COMMITTEE

In accordance with Regulation 43(5)(c) of the Act, theChairperson of the Social and Ethics Committee willreport to shareholders at the annual general meeting.

ORDINARY RESOLUTION 1

Re-election of directors

1.1 “RESOLVED THAT Mr BT Ngcuka who retires in terms ofthe Company’s MOI, and who is eligible and available forre-election, is re-elected as a non-executive director of theCompany.”

1.2 “RESOLVED THAT Mr L Dyosi, who retires in terms ofthe Company’s MOI, and who is eligible andavailable for re-election, is re-elected as a non-executive director of the Company.”

1.3 “RESOLVED THAT Mr TAM Tshivhase, who retires interms of the Company’s MOI, and who is eligible andavailable for re-election, is re-elected as anindependent non-executive director of the Company.”

1.4 “RESOLVED THAT the re-election of Mrs KT Nondumo, who retires in terms of theCompany’s MOI, and who is eligible and availablefor re-election, is re-elected as an independent non-executive director of the Company.”

Reason for and effect of ordinary resolution 1

In terms of the Company’s MOI, 1/3 (one third) of the non-executive directors shall retire from office at each annual

general meeting. Retiring non-executive directors shall beeligible for re-election. The Board has evaluated the pastperformance and contributions of the retiring directorsand recommend that they are re-elected. In determiningthe number of non-executives directors to retire, noaccount shall be taken of any executive directors. A briefcurriculum vitae of the directors appear on pages 4 and 5of the Integrated Report which this notice forms part.

A majority of more than 50% (fifty percent) of votes cast bythose shareholders present or represented and voting atthe annual general meeting is required for this resolutionto be adopted.


Election of appointment as director

“RESOLVED THAT Ms SS Mafoyane, who was appointedto the Board during the ensuing year and who retires interms of the Company’s MOI, and who is eligible andavailable for election, is elected as a director of theCompany.”


In terms of the Company’s MOI, 1/3 (one third) of the non-executive directors shall retire from office at eachannual general meeting. The non-executives so to retire ateach annual general meeting shall firstly be vacanciesfilled or additional directors appointed since the lastannual general meeting. A brief curriculum vitae of thedirector appears on page 5 of the Integrated Report ofwhich this notice forms part.

A majority of more than 50% (fifty percent) of votes castby those shareholders present or represented and votingat the annual general meeting is required for thisresolution to be adopted.


Re-appointment of auditors

“RESOLVED THAT upon recommendation of the Auditand Risk Committee of the Company, BDO South AfricaIncorporated be re-appointed as independent auditors ofthe Company, with J Schoeman as the designated auditpartner, until the conclusion of the next annual generalmeeting, and that their remuneration be determined bythe Audit and Risk Committee in terms of the Audit andRisk Committee Charter, which amount the directors shallbe empowered to ratify.”


In terms of section 90(1) of the Act, each year at itsannual general meeting, the Company must appoint an


auditor who complies with the requirements of section90(2) of the Act. The Audit and Risk Committee hasrecommended that BDO South Africa Incorporated is re-appointed as the independent auditors of theCompany. The Audit and Risk Committee shall beempowered to ratify their remuneration, as determined bythe Audit and Risk Committee in terms of the Audit andRisk Committee Charter, which amount shall be approvedand endorsed by the Board.

A majority of more than 50% (fifty percent) of votes cast

by those shareholders present or represented and voting

at the annual general meeting is required for this

resolution to be adopted.


Election of a member and Chair of the Audit and

Risk Committee

“RESOLVED THAT TAM Tshivhase is elected as member

and Chairman of the Company’s Audit and Risk

Committee, with effect from the end of this meeting, in

terms of section 94(2) of the Act, subject to his

re-election as a director pursuant to ordinary resolution

number 1.3.”

A brief curriculum vitae of the member appears on page

5 of the Integrated Report of which this notice forms part.

A majority of more than 50% (fifty percent) of votes cast by

those shareholders present or represented and voting at

the annual general meeting is required for this resolution

to be adopted.


Election of a member of the Audit and Risk

Committee

“RESOLVED THAT KT Nondumo 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 Act,

subject to her re-election as a director pursuant to ordinary

resolution number 1.4.”

A brief curriculum vitae of the member appears on page 5

of the Integrated Report of which this notice forms part.

A majority of more than 50% (fifty percent) of votes cast by

those shareholders present or represented and voting at the

annual general meeting is required for this resolution to be

adopted.


Election of a member of the Audit and RiskCommittee

“RESOLVED THAT SS Mafoyane is elected as member of theCompany’s Audit and Risk Committee, with effect from theend of this meeting, in terms of section 94(2) of the Act,subject to her election as a director persuant to ordinaryresolution number 2.”

A brief curriculum vitae of the member appears on page 5of the Integrated Report of which this notice forms part.

A majority of more than 50% (fifty percent) of votes cast bythose shareholders present or represented and voting at theannual general meeting is required for this resolution to beadopted.

Reason for and effect of ordinary resolutions 4, 5 and 6

The members of the Audit and Risk Committee have beennominated by the Board for election as members of theAudit and Risk Committee in terms of section 94(2) of theAct. The Board has reviewed the proposed composition ofthe Audit and Risk Committee in accordance with therequirements of the Act and the Regulations under the Actand confirm that if all the above persons are elected, thecommittee will comply with the relevant requirements andhave the necessary knowledge, skills and experience toenable it to perform is statutory duties.


Approval for the issue of authorised but unissuedordinary shares

“RESOLVED THAT as required by the Company’s MOIand subject to the provisions of section 41 of the Act andthe requirements of any recognised stock exchange onwhich the shares in the capital of the Company may fromtime to time be listed, the Board is authorised, as they intheir discretion think fit, to allot and issue, or grantoptions over, shares representing not more than 15%(fifteen percent) of the number of ordinary shares in theissued share capital of the Company as at 30 June 2012(for which purposes any shares approved to be allottedand issued by the Company in terms of any share plan orincentive scheme for the benefit of employees shall beexcluded), such authority to endure until the next annualgeneral meeting of the Company (whereupon thisauthority shall lapse, unless it is renewed at theaforementioned annual general meeting).”

In terms of the Company’s MOI, read with the JSE ListingsRequirements, the shareholders of the Company mayauthorise the Board to, inter alia, issue any unissuedordinary shares and/or grant options over them, as theBoard in their discretion think fit.

Notice of




Notice of



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 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, shall be limited to 15%

(fifteen percent) of the number of ordinary shares in issue

as at 30 June 2012.

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.


Approval 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 Act on the

following basis:

(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 the

Company’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 maybe issued (the 15% (fifteen percent) limit referredto in (i)), same shall be based on the number ofsecurities of that class in issue added to those thatmay be issued in future (arising from theconversion of options/convertible securities), atthe date of such application, less any securities ofthe class issued, or to be issued in future arisingfrom options/convertible securities issued,during the current financial year, plus anysecurities of that class to be issued pursuant to arights issue which has been announced, isirrevocable and is fully underwritten, or anacquisition (which had final terms announced)which acquisition issue securities may beincluded as though they were securities in issueat the date of application;

(c) the maximum discount at which equity securities maybe issued is 10% (ten per cent) of the weightedaverage traded price on the JSE Limited of suchequity securities over the 30 (thirty) business daysprior to the date that the price of the issue isdetermined or agreed by the directors of theCompany;

(d) after the Company has issued equity securities forcash, which represent, on a cumulative basis within afinancial year, 5% (five percent) or more of thenumber of equity securities of that class in issue priorto that issue, the Company shall publish anannouncement containing full details of the issue,including the effect of the issue on the net asset valueand earnings per share of the Company;

(e) the equity securities which are the subject of the issuefor cash are of a class already in issue or where thisis not the case, must be limited to such securities orrights that are convertible into a class already inissue.”

In terms of the JSE Listings Requirements, a 75% (seventy-five percent) majority in favour of the above ordinaryresolution by all equity securities holders present orrepresented by proxy at the annual general meeting, isrequired to approve this resolution.

In terms of ordinary resolution 8, the shareholdersauthorise the Board to allot and issue a portion of theauthorised but unissued shares, as the Board in theirdiscretion think fit.

In terms of the JSE Listings Requirements, when shares areissued, or considered to be issued, for cash (including theextinction of a liability, obligation or commitment,restraint, or settlement of expenses), the shareholdershave to authorise such issue with a 75% (seventy-fivepercent) majority.


The existing general authority to issue shares for cashgranted by the shareholders at the previous annualgeneral meeting, held on Friday, 28 October 2011, willexpire at the annual general meeting, unless renewed.The authority will be subject to the provisions of the Actand the JSE Listings Requirements. The aggregate numberof ordinary shares capable of being allotted and issuedfor cash are limited as set out in the resolution.

The Board considers it advantageous to renew thisauthority to enable the Company to take advantage ofany business opportunity that may arise in future.

SPECIAL BUSINESS

SPECIAL RESOLUTION 1

Remuneration of independent non-executivedirectors

“RESOLVED THAT, in terms of section 66(9) of the Act, theremuneration payable to the non-executive directors forthe year 1 July 2012 to 30 June 2013, as set out belowbe approved:

Per annum

R

L Dyosi 45 000AJ Fourie 90 000SS Mafoyane 90 000BT Ngcuka 45 000KT Nondumo 90 000TAM Tshivhase 90 000

Reason for and effect of special resolution 1

The reason for special resolution 1 is to, in compliancewith the provisions of the Act, enable the Company tocomply with the provisions of sections 65(11)(h), 66(8)and 66(9) of the Act, which stipulate that remuneration ofdirectors for their services as directors may only be paidin accordance with a special resolution approved by theshareholders.

A 75% (seventy-five percent) majority of votes cast bythose shareholders present or represented and voting atthe annual general meeting is required for this resolutionto be adopted.


General authority to acquire issued shares

“RESOLVED THAT the Company and/or any of itssubsidiaries, are authorised by way of a general authorityto repurchase or purchase, as the case may be, sharesissued by the Company from any person, on such terms

and conditions and in such numbers as the directors ofthe Company or the subsidiary may from time to timedetermine, to the applicable provisions in the Company’sMOI, the provisions of the Act and the JSE ListingsRequirements when applicable, and subject to thefollowing:

• the repurchase of securities will be effected throughthe order book operated by the JSE trading systemand done without any prior understanding orarrangement between the Company and thecounterparty;

• this general authority shall only be valid until theCompany’s next annual general meeting, providedthat it shall not extend beyond fifteen months from thedate of passing this special resolution;

• in determining the price at which the Company’sordinary shares are acquired by the Companyand/or subsidiary of the Company, in terms of thisgeneral authority, the maximum premium at whichsuch ordinary shares may be acquired will be 10% ofthe weighted average of the market price at whichsuch ordinary shares are traded on the JSE, asdetermined over the five days immediately precedingthe date of the repurchase of such ordinary shares;

• the acquisitions of ordinary shares in the aggregatein any one financial year do not exceed 20% of theCompany’s issued ordinary share capital from thebeginning of the financial year;

• the Company only appoints one agent to effect anyrepurchase(s) on its behalf;

• when the Company has cumulatively repurchased 3%(three percent) of the initial number of the relevantclass of securities, and for each 3% (three percent) inaggregate of the initial number of that class acquiredthereafter, an announcement will be made;

• the Company or its subsidiaries will not repurchasesecurities during a prohibited period as defined in theJSE Listings Requirements unless they have in place arepurchase programme where the dates andquantities of the securities to be traded during therelevant period are fixed (not subject to anyvariation) and full details of the programme havebeen disclosed in an announcement over SENS priorto the commencement of the prohibited period;

• the Board of Directors authorising the repurchase,and that after considering the effect of such maximumrepurchase the Company and its subsidiary/ies havepassed the solvency and liquidity test, i.e.;

Notice of




“

Notice of



(i) the Company and the Group will be able in theordinary course of business to pay its debts for aperiod of 12 months after the date of the noticeof the annual general meeting;

(ii) the assets of the Company and the Group will bein excess of the liabilities of the Company andthe Group for a period of 12 months after thedate of the notice of the annual general meeting.

(iii) the ordinary share capital and reserves of theCompany and the Group will be adequate forbusiness purposes for a period of 12 monthsafter the date of the notice of the annual generalmeeting;

(iv) the working capital of the Company and theGroup will be adequate for ordinary businesspurposes for a period of 12 months after the dateof the notice of the annual general meeting; and

(v) that since the solvency and liquidity test has beenapplied there have been no material changes tothe financial position of the Group.

The JSE Listings Requirements require, in terms ofparagraph 11.26, the following disclosures, whichappear in the Integrated Annual Report.

• Directors and management – pages 4 and 5;

• Major shareholders of the Company – page 110;

• Directors’ interests in securities – page 43;

• Share capital of the Company – page 80;

• Directors’ responsibility statement – page 40.

Litigation statement

There are no legal or arbitration proceedings, eitherpending or threatened against the Company or itssubsidiaries, of which the Company is aware, which mayhave, or have had in the last twelve months, a materialeffect on the financial position of the Company or itssubsidiaries.

Material change

Other than the facts and developments reported on in theIntegrated Report, there have been no material changesin the affairs or financial position of the Company andGroup since the date of signature of the audit report andthe date of this notice.

The Board of Directors has no immediate intention to usethis authority to repurchase Company shares. However,the Board of Directors is of the opinion that this authorityshould be in place should it become apparent toundertake a share repurchase in the future.

Directors responsibility statement

The directors whose names are given on pages 4 and 5of the Integrated Report, collectively and individuallyaccept full responsibility for the accuracy of theinformation given in this notice of annual general meetingand certify that to the best of their knowledge and beliefthere are no facts that have been omitted which wouldmake any statement false or misleading, and that allreasonable enquiries to ascertain such facts have beenmade and that the notice contains all informationrequired by law and the JSE Listings Requirements.

Statement by the Company’s Board of Directors inrespect of repurchases of securities:

Pursuant to and in terms of the JSE Listings Requirements,the directors of the Company hereby state that theintention of the directors is to utilise the authority at theirdiscretion during the course of the period so authorised.

The directors are of the opinion that, after considering theeffect of the maximum repurchase permitted and for aperiod of 12 (twelve) months after the date of this annualgeneral meeting:

1. the Company and the Group will be able in theordinary course of business to pay its debts for aperiod of 12 months after the date of the notice of theannual general meeting;

2. the assets of the Company and the Group will be inexcess of the liabilities of the Company and theGroup for a period of 12 months after the date of thenotice of the annual general meeting.

3. the share capital and reserves of the Company andthe Group will be adequate for ordinary businesspurposes for a period of 12 months after the date ofthe notice of the annual general meeting;

4. the working capital of the Company and the Groupwill be adequate for ordinary business purposes fora period of 12 months after the date of the notice ofthe annual general meeting; and

5. the Company will provide its sponsor and the JSEwith all documentation as required in schedule 25 ofthe JSE Listings Requirements, and will not undertakeany such repurchase until the sponsor has signed offon the adequacy of its working capital, advised theJSE accordingly and the JSE has approved thisdocumentation.


The reason for and the effect of the special resolution is toauthorise the Company and/or its subsidiary by way of a


general authority to acquire its/their own issued shareson such terms and conditions and in such numbers asdetermined from time to time by the directors, subject tothe limitations above. A repurchase of shares is notcontemplated at the date of this notice. However, theBoard believes it to be in the best interest of the Companythat shareholders grant a general authority to provide theBoard with optimum flexibility to repurchase shares asand when an opportunity that is in the best interest of theCompany arises.



Financial assistance

"RESOLVED THAT to the extent required by sections 44and/or 45 of the Act, the Board of Directors of theCompany may, subject to compliance with therequirements of the Act, the Company’s MOI and therequirements of any recognised stock exchange on whichthe shares of the Company may be listed from time totime, authorise the Company to provide direct or indirectfinancial assistance by way of loan, guarantee, theprovision of security or otherwise, to:

• any of its present or future subsidiaries and/or anyother company or corporation that is or becomesrelated or inter-related to the Company for anypurpose or in connection with any matter, including,but not limited to, acquisition of or subscription forany option or any securities issued or to be issued bythe Company or a related or inter-related company,or for the purchase of any securities of the Companyor a related or inter-related company; and

• any of its present or future directors or prescribedofficers (or any person related to any of them or toany company or corporation related or inter-relatedto any of them), or to any other person who is aparticipant, in any of the Company’s or group ofcompanies share or other employee incentiveschemes, for the purpose of, or in connection with,the acquisition of or subscription for any option orany securities issued or to be issued by the Companyor a related or inter-related company, or for thepurchase of any securities of the Company or arelated or inter-related company, where suchfinancial assistance is provided in terms of any suchscheme that does not satisfy the requirements ofsection 97 of the Act, at any time during a periodcommencing on the date of the passing of thisresolution and ending at the next annual generalmeeting of the Company for the year ending 30 June2013.”


Sections 44 and 45 of the Act essentially require, subjectto limited exceptions, approval by way of a specialresolution for the provision of financial assistance. Theregulated financial assistance, as contemplated insections 44 and 45 may only be provided pursuant to aspecial resolution passed by shareholders within theprevious two years.



Approval of the Memorandum of Incorporation

“RESOLVED THAT the existing MOI (formerly theCompany’s Memorandum and Articles of Association) isabrogated in its entirety and replaced with the MOI, adraft of which has been tabled at this annual generalmeeting and initialled by the chairperson of the annualgeneral meeting for purposes of identification.”


The reason for special resolution 4 is that the Actabolishes the distinction between the Memorandum ofAssociation and the Articles of Association and providesthat there will only be one constitutional document for acompany, namely the MOI. The Company proposes toadopt a new MOI, in substitution for its Memorandum ofAssociation and the Articles of Association which in thecourse of law became its MOI, upon the advent of the Act,but is required to be brought in harmony with the Act andchanges to the JSE Listings Requirements.

Shareholders are advised of the fact that the Act affordsrelief to holders of a class of shares where a company’sMOI is amended by altering the preferences, rights,limitations or other terms of such class of shares in anymanner material and adverse to the rights or interests ofthe holders thereof, provided that the holders takeappropriate action as prescribed in sections 37(8) and164 of the Act. In order to enable shareholders to makean assessment of whether they consider their rights orinterests to be affected as aforesaid, the complete newMOI and the existing MOI (formerly the Company’sMemorandum and Articles of Association) have beenposted on the Company’s website which iswww.rolfesza.com. Copies of both the new MOI and theexisting MOI are also available for inspection at theCompany’s registered office during normal businesshours at any time prior to the commencement of theannual general meeting. The new MOI should be read inits entirety for a full appreciation of the contents thereof.


Notice of




GENERAL BUSINESS


Advisory endorsement of the remunerationpolicy

“To endorse through a non-binding advisory vote, theCompany’s remuneration policy (excluding theremuneration of the non-executive directors for theirservices as directors and members of the Board or statutorycommittees), as set out in the Remuneration Reportcontained in the Integrated Report on pages 16 and 17.”

In terms of the King Code of Governance Principles forSouth Africa 2009, an advisory vote should be obtainedfrom shareholders on the Company’s annualremuneration policy. The vote allows shareholders toexpress their views on the remuneration policies adoptedand their implementation, but will not be binding on theCompany.


Authority to action all ordinary and specialresolutions

“RESOLVED THAT any one director of the Company orthe Company Secretary be and is hereby authorised to doall such things as are necessary and to sign all suchdocuments issued by the Company so as to give effect tosuch ordinary resolutions and special resolutions with orwithout amendment and where applicable, registered.”

To transact any other business capable of beingtransacted at an annual general meeting.

VOTING

On a show of hands, every Rolfes shareholder who ispresent in person, by proxy or represented at the annualgeneral meeting shall on show of hands have one vote(irrespective of the number of ordinary shares held), andon a poll, every Rolfes shareholder present in person, byproxy or represented at the annual general meeting, shallhave one vote for every ordinary share held.

PROXIES

A shareholder entitled to attend, participate inand vote at the annual general meeting is entitled to appoint one or more proxies toattend, participate in and vote at the annualgeneral meeting in his or her stead.

A proxy need not be a shareholder of theCompany.

For the convenience of holders of certificated shares andholders of dematerialised shares with own nameregistration, a form of proxy is attached to this notice ofannual general meeting. Duly completed forms of proxy

must be lodged with and received by the transfersecretaries (at either the transfer secretaries’ physical orpostal address set out below) at any time before thecommencement of the annual general meeting (or anyadjournment of the annual general meeting) or handed tothe chairman of the annual general meeting before theappointed proxy exercises any of the relevantshareholder’s rights at the annual general meeting (or anyadjournment of the annual general meeting), providedthat should the transfer secretaries receive a shareholder’sform of proxy less than 48 hours before the annualgeneral meeting, such shareholder will also be requiredto furnish a copy of such form of proxy to the chairmanof the annual general meeting before the appointedproxy exercises any of such shareholder’s rights at theannual general meeting (or any adjournment of theannual general meeting).

Holders of dematerialised shares without own nameregistration who wish to attend the annual generalmeeting in person should request their CSDP or broker toprovide them with the necessary letter of representation interms of their custody agreement with their CSDP orbroker. Holders of dematerialised shares without ownname registration who do not wish to attend the annualgeneral meeting but who wish to be represented at theannual general meeting should advise their CSDP orbroker of their voting instructions and should not completethe form of proxy attached to this notice of annual generalmeeting.

Holders of dematerialised shares without own nameregistration should contact their CSDP or broker withregard to the cut-off time for their voting instructions.

Shareholders who have any doubt as to the action theyshould take, should consult their stockbroker, accountant,attorney, banker or other professional adviserimmediately.

By order of the Board

JC SchlebuschCompany Secretary

14 September 2012

Registered address Rolfes Holdings Limited12 Jet Park Road, Jet Park, Boksburg 1406

Transfer secretaries Computershare Investor Services (Pty) LtdPO Box 61051, Marshalltown 2107

Notice of




Salient features of the

new Memorandum of Incorporation

Theme or clause Content of new MOI

Definitions

Amendments to the MOI

Authorised Securities

Shareholders’ Voting Rights

Authority to Issue and Repurchase Securities

Pre-emption on Issue for Cash

Holding of Beneficial Interest

Audit Committee and Auditor

Definitions and terms introduced by the Act such as “Deliver”,“Electronic Address” and “Ineligible or Disqualified”.

Subject to the provisions of the Act and the JSE Listings Requirements,the new MOI may only be amended in accordance S16(1)(c) of theAct and amendments must be approved by special resolution. TheBoard is empowered to correct errors substantiated as such fromobjective evidence or which are self evident errors in the new MOI.

The Company is authorised to issue 500 000 000 ordinary par valueshares of R0,01 each. Clause 7 of the new MOI sets out the voting,ranking, rights and privileges of the ordinary shares in accordancewith sections 36 to 40 and section 63 of the Act and Schedule 10 ofthe JSE Listings Requirements.

Every person entitled to attend, participate in and vote at shareholdersmeetings:

(i) shall have 1 vote on a show of hands irrespective of the number ofordinary par value shares he holds or represents; provided that aproxy shall irrespective of the number of shareholders he represents,have only 1 vote;

(ii) shall, if voting is decided by polling, be entitled to that proportionof the total votes in the Company which the aggregate amount of thenominal value of the ordinary par value shares held by him bears tothe aggregate amount of the nominal value of all the ordinary parvalue shares issued by the Company in respect of every matter.

In terms of clause 8 of the new MOI, the directors will not have theauthority to allot or issue shares without having obtained the requisiteapproval of shareholders in terms of the JSE Listings Requirements.Furthermore, an allotment or issue to certain persons, such as directorsand prescribed officers, may require the approval of shareholders byspecial resolution, as contemplated in section 41 of the Act. Clause 36of the new MOI authorises the Company to repurchase its securities,subject to the requirements of the JSE Listings Requirements.

Where the Company contemplates an issue of shares for cash, suchoffer will be made to the existing holders of that class of shares by wayof a pro rata rights offer, before being made to other holders ofsecurities, except with the prior approval of shareholders by special orordinary resolution, as may be required in the circumstances.

The Company will allow securities to be held by one shareholder forthe beneficial interest of another, however, these securities may not bevoted upon by the holder of the beneficial interest who does not holda proxy form from the registered holder, notwithstanding anyagreement permitting the holder of the beneficial interest to vote theregistered securities.

Section 94 of the Act prescribes that the Company is required to havean Audit Committee elected by shareholders at its annual generalmeeting. Clause 17 of the new MOI sets out the manner and process ofthe election, as well as the duties of this Committee. This clause also dealswith the requirements of the Act in respect of independent auditors.



new Memorandum of Incorporationcontinued


Shareholders Meetings

Record Date

Election of Directors and Alternate Directors and Filling of Vacancies

Cessation of office as Director or Alternate Director

Remuneration of Directors

Retirement of Directors in Rotation

Executive Directors

No shareholders resolutions may be dealt with by round robinresolution and all shareholders’ meetings must be convened inaccordance with the Act and the JSE Listings Requirements.Shareholders may not resolve to ratify any act which is contrary to theAct or the JSE Listings Requirements. Shareholders may appointproxies, who need not be a holder of the Company’s securities, butmay not delegate authority granted to him as a proxy. Provision is alsomade for shareholders to participate in meetings by electroniccommunication as provided for in section 61(10) of the Act. Thequorum for a shareholders’ meeting is at least 25% of all the votingrights that are entitled to be exercised provided at least three holdersare present at the meeting. The quorum requirements must continue tobe present throughout a meeting.

The new MOI requires the Board to determine the record dates toascertain participation and rights of shareholders, in accordance withthe applicable rules of the Central Securities Depository and the JSEListings Requirements.

The minimum number of directors shall be 4. The appointment ofalternate directors is permitted. The Board is authorised to fill anyvacancy occurring on the Board, however such director shall cease tohold office at the first annual general meeting held after hisappointment, unless he is elected at that annual general meeting orany other shareholders meeting.

A director or alternate director shall cease to hold office as such if interalia he becomes ineligible or disqualified, when his term of officeexpires, he resigns or is declared delinquent by a court. A directormay also be removed by ordinary resolution in terms of section 71 ofthe Act.

The directors may be paid all their travelling and other expenses,properly and necessarily incurred by them in attending to the businessof the Company. If any director is required to perform extra servicesor be specially occupied about the Company’s business, he shall beentitled to receive a remuneration determined by a disinterestedquorum of directors, comprising a quorum of directors excluding anydirector whose remuneration would or may be affected by the relevantresolution. Section 66(9) of the Act has introduced the approval ofdirectors’ remuneration for their services as directors. Therefore, interms of clause 23 of the new MOI, directors or members of Boardcommittees shall be entitled to such remuneration for their services asdirectors or members of the Board or statutory committees as mayhave been determined from time to time by special resolution withinthe previous 2 years.

One-third of the non-executive directors shall retire from office at eachannual general meeting. The non-executive directors so to retire ateach annual general meeting shall firstly be vacancies filled oradditional directors appointed since the last annual general meetingand then those who have been longest in office since their last election.Retiring non-executive directors shall be eligible for re-election.

A director may be employed in any other capacity in the Companyinter alia as a director or employee of a company or by a majorsubsidiary of the Company. In such event, his appointment andremuneration in respect of such other office will be determined by adisinterested quorum of directors. An executive director’s appointmentis not subject to rotation.



new Memorandum of Incorporationcontinued


Personal Financial Interest

Proceedings of Directors

Distributions

Notices

Indemnity

Social and Ethics Committee

The new MOI should be read in its entirety for a full appreciation of the contents thereof. A copy of the new MOI isavailable for inspection at the Company’s registered office and on the Company’s website which is www.rolfesza.comand available on request from the Company Secretary via e-mail at [email protected].

The Act defines a personal financial interest as a direct materialinterest of a person of a financial, monetary or economic nature. Theduty to disclose personal financial interests applies to a director, analternate director, prescribed officer and a member of a Boardcommittee. Such duty to disclose personal financial interests alsoincludes observations and insights as well as what is “known” inrespect of a related party.

The quorum for a directors’ meeting shall be the majority in number ofthe directors. The directors may elect a Chair of their meetings. Eachdirector has 1 vote on a matter before the Board and a majority of thevotes cast on a resolution is sufficient to approve that resolution. In thecase of a tied vote the Chair may not cast a deciding vote.Furthermore, directors are permitted to make decisions by way ofround robin resolutions, where proper notice of the matter to bedecided upon has been received by each director and that the majorityof the directors have voted in favour of the matter. A round robinresolution may be executed in any number of counterparts and willhave the same effect as if the signatures on the counterparts were ona single copy of the round robin resolution.

The Company shall be entitled to make distributions (includingdividends) provided that it reasonably appears that the Company willsatisfy the solvency and liquidity test (as contained in section 4 of theAct) immediately after completing the proposed distribution and theBoard, by resolution, has acknowledged that it has applied thesolvency and liquidity test and reasonably concluded that theCompany will satisfy the solvency and liquidity test immediately aftercompleting the proposed distribution. Holders of ordinary shares shallbe entitled to receive the net assets of the company upon its liquidation.

The Company may give notices, documents, records or statements ornotices of availability of the aforegoing by personal delivery to ashareholder or, if required, a holder of beneficial interests or bysending them prepaid through the post or by transmitting them byelectronic communication. The Company must give notice of any meetingto each person entitled to vote at such meeting who has elected toreceive such notice other than proxies. Such notices, documents, recordsor statements or notices of availability may, where permitted by the Actand the JSE Listings Requirements, be delivered in an abridged versiontogether with instructions as to how the recipient may obtain anunabridged version thereof.

The Company may not directly or indirectly pay any fine that may beimposed on a director (which includes a former director, an alternatedirector, a prescribed officer and a member of a Board committee) asa consequence of an offence, but may advance expenses to thedirector to defend litigation arising out of the director’s service to thecompany, unless the liability arose in terms of section 77(3)(a),(b) or(c) of the Act, or from wilful misconduct or wilful breach of trust on thepart of the director. The Company may purchase insurance in respectof these indemnities and may also claim restitution from a director inrespect of any amounts paid which were not consistent with section 78of the Act.

In accordance with section 72(4) of the Act, the Company has astatutory obligation to establish a Social and Ethics Committee in linewith Regulation 43. The new MOI sets out the requirements for thiscommittee, including to report to shareholders, in order to ensurecompliance with the Act.


Rolfes Holdings Limited(Formerly Rolfes Technology Holdings Limited)

(Registration number 2000/002715/06Share code: RLF • ISIN: ZAE0000159836

(“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 shareholdersother than those with “own name” registration who wish to attend the annual general meeting, must inform their CSDP or broker of theirintention to attend and request their CSDP or broker to issue them with the relevant Letter of Representation to attend the annual generalmeeting in person and vote, or, if they do not wish to attend the meeting in person, but wish to be represented thereat, provide their CSDPor broker with their voting instructions in terms of the relevant custody agreement entered into between them and their CSDP or broker inthe 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 at12 Jet Park Road, Jet Park, Boksburg, on Friday, 2 November 2012 at 09:00, is entitled to appoint a proxy to attend, speak or vote thereatin his/her stead. A proxy need not be a shareholder of the Company.

All forms of proxy must be lodged at the Company’s transfer secretaries, Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street, Johannesburg 2001, (PO Box 61051, Marshalltown 2107), by no later than 09:00 on Wednesday, 31 October 2012.

I/We

of (address)

being an ordinary shareholder(s) of the Company holding ordinary shares in the Company do hereby appoint

1. or failing him/her

2. or failing him/her

3. the chairman of the annual general meetingas my/our proxy to vote on my/our behalf at the abovementioned annual general meeting (and any adjournment thereof) to be held at 09:00 in the Rolfes Holdings Limited boardroom at 12 Jet Park Road, Jet Park, Boksburg, on Friday, 2 November2012, for the purpose of considering and, if deemed fit, passing with or without modifications, the following resolutions to be consideredat such meeting:

Number of votes (one per share)In favour of Against Abstain

Ordinary resolutions1. Re-election of directors

1.1 BT Ngcuka1.2 L Dyosi1.3 TAM Tshivhase1.4 Mrs KT Nondumo

2. Election of SS Mafoyane

3. Approval to appoint BDO South Africa Incorporated as auditors andJ Schoeman as the designated audit partner

4. Confirm the election of TAM Tshivhase as Audit and Risk Committee member and Chairman

5. Confirm the election of KT Nondumo as Audit and Risk Committee member6. Confirm the election of SS Mafoyane as Audit 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 resolutions

Special resolutions1. Remuneration of independent non-executive directors2. Authority to acquire issued shares of the Company3. Approval of financial assistance4. Approval of new Memorandum of Incorporation

Insert an “X” in the appropriate block. If no indications are given, the proxy will vote as he/she deems fit. Each member entitled to attendand vote at the meeting may appoint one or more proxies (who need not be a member of the Company) to attend, speak and vote inhis/her stead.

Signed at on 2012

Signature

Assisted by (where applicable)

Please read the notes on the reverse side hereof.

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 meeting”, but any such

deletion must be initialled by the shareholder. The

person whose name appears first on the 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 the

shareholder’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 notice 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 that

his/her proxy is to vote in favour of or against 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 to vote as

he/she thinks fit.

5. The authority of a person signing a proxy in a

representative capacity must be attached to the

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. A minor or any other person under legal incapacity

must be assisted by his/her parent or guardian

as 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 not later than 9:00 on Wednesday,

31 October 2012.

9. Any alteration or correction made to this form of

proxy other than the deletion of alternatives, must be

initialled by the signatory/ies.

10. The completion and lodging of this proxy shall not

preclude the relevant shareholder from attending the

meeting and speaking and voting in person thereat

to the exclusion of any proxy appointed in terms

hereof.

11. The chairman of the meeting may reject or accept a

proxy that is completed other that in accordance

with these instructions, provided that he 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.

Notes to the

proxy form


Form for

electronic communications

Rolfes Holdings Limited(Formerly Rolfes Technology Holdings Limited

(Registration number 2000/002715/06Share code: RLF • ISIN: ZAE0000159836

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

FORM OF ELECTION TO RECEIVE INTEGRATED/INTERIM REPORTS AND OTHER SHAREHOLDERCOMMUNICATIONS ELECTRONICALLY

Rolfes is in the process of establishing a database to distribute their Integrated/Interim Reports, Circulars and other

shareholder communications electronically to shareholders who prefer this type of communication instead of hard copies.

A shareholder may also elect not to receive any copies of the aforementioned communications if he/she is a certificated

shareholder. Dematerialised shareholders, who do not wish to receive copies of reports, should advise their CSDP or

Stockbroker to amend their flags accordingly on the BDA System.

In order for Rolfes 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 (Pty) Ltd, with the following information:

Name

COY code/Holder number

Postal address

E-mail address

Telephone numbers Home: Work: Cell:

Fax number

Copy of shareholder communications required (either an electronic or a hard copy) YES NO

Kindly complete the above details, where applicable, and return this shareholder communication form to Computershare

Investor Services (Pty) Ltd, PO Box 61051, Marshalltown 2107 or fax/e-mail to:

Fax number: (011) 688-5248

E-mail: [email protected]

Should any of the above details change, please advise Computershare Investor Services (Pty) Ltd 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 2012

Signature .

Assisted by (where applicable)



Corporate

information

ROLFES HOLDINGS LIMITED(FORMERLY ROLFES TECHNOLOGY HOLDINGS LIMITED)(“the Company” or “the Rolfes Group” or “the Group”)

Incorporated in the Republic of South Africa

Registration number 2000/002715/06

Share code: RLF

ISIN: ZAE0000159836

COMPANY SECRETARY AND REGISTERED ADDRESSJC Schlebusch (CA(SA))

12 Jet Park Road

Jet Park

Boksburg 1459

(PO Box 8112, Elandsfontein 1406)

Telephone number (011) 874 0634

Facsimile number (011) 874 0784

SPONSORS AND CORPORATE ADVISERGrindrod Bank Limited

1st Floor, Building Three

Commerce Square

39 Rivonia Road

Sandton 2196

(PO Box 78011, Sandton 2196)



AUDITORS AND REPORTING ACCOUNTANTSBDO South Africa Incorporated

Practice number 905526E

22 Wellington Road

Parktown 2193

(Private Bag X60500, Houghton 2041)



TRANSFER SECRETARIESComputershare Investor Services

Proprietary Limited


Ground Floor

70 Marshall Street

Johannesburg 2001

(PO Box 61051, Marshalltown 2107)



ATTORNEYSVan der Merwe du Toit Inc.


Brooklyn Place

Corner Bronkhorst and Dey Streets

Brooklyn 0181

(PO Box 499, Pretoria 0001)



COMMERCIAL BANKERNedbank Limited


1st Floor, Emerald Place

Stoneridge Office Park

8 Greenstone Place

Edenvale 1609

(PO Box 282, Edenvale 1610)



GRA

PHIC

ULT

URE


w w w . r o l f e s z a . c o m

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