integrated annual report 2011 - rare.co.za

www.rare.co.za

integrated annual report 2011

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Group at a glance 1

Directorate 4

Chairman’s letter to stakeholders 5

Corporate governance 6

Annual financial statements 13

Shareholders’ diary 78

Notice of annual general meeting 79

Form of proxy Attached

Contents

RARE is a designer, distributor, manufacturer and service provider of piping and related products covering the entire fluid conveyance cycle, across all fluid sectors.

Our vision is to become a leading provider of complete fluid conveyance solutions.

general information

Country of incorporation and domicile South Africa

nature of business and principal activities The group’s principal activities are those of a fully integrated provider of complete fluid conveyance products and services to the energy, water and chemical industries

Directors MT Lategan P du Plessis H Odendaal T Siyolo SJDT Potgieter DE Scheepers PJ Willemse

registered office 22 Old Vereeniging Road Klipriver Midvaal 1871

Business address 22 Old Vereeniging Road Klipriver Midvaal 1871

Postal address PO Box 124186 Alrode Johannesburg 1451

auditors Greenwoods Registered Auditors

secretary R Viljoen

Company registration number 2002/025247/06

level of assurance These financial statements have been audited in compliance with the applicable requirements of the Companies Act (No 71 of 2008) of South Africa.

Preparer The financial statements were internally compiled by: R Viljoen under supervision of PJ Willemse CA(SA)

Published 4 November 2011

GREYMATTER & FINCH # 5754

RARE Holdings 2011 Annual Report | 1

Complete fluid ConveyanCe solutionsRARE’s customers are in the petroleum, petrochemical, water, mining, civil engineering, electricity generating, agricultural and chemical industries. In addition to major corporations, RARE includes government, parastatals and municipalities in its customer base. RARE operates mainly in South Africa but it undertakes installation and maintenance contracts in other countries in Africa, including the DRC, Mali, Ghana and Zambia.

RARE’s products, technologies and services cut across all industries and on multiple levels within the same industry. The diverse offerings are focused on complete fluid conveyance solutions, and as such, RARE has one of the widest experience bases of all business entities dealing in this field. Possessing an enviable level of expertise, we also draw from a wide base of technologies to complement our services and product offering. Where most companies focus on a service or product, RARE provides a solution that encompasses the entire lifespan of the asset.

minesMines have a complex network of pipelines that convey a variety of fluids, gases and air, from neutral potable water to abrasive slurries and corrosive acids. Pipeline operating pressures vary from high-pressure pipelines situated deep underground to low pressure above surface pipelines of varying diameters and materials of construction. RARE’s services cover all aspects of mining fluid conveyance. Projects include power management, backfill pipeline installation, the building of process plants and the supply and rehabilitation of slurry pipelines.

power GenerationThe power generation industry consumes large volumes of water that is often conveyed over long distances. In addition, there are thousands of kilometres of pipelines within cooling towers, while in and around the plant, as part of the power generating industry, there are pipelines of varying diameter conveying fluids, steam and pneumatics to keep the system operating effectively. RARE’s services to the power generation industry include the supply of valves, fittings, pipes, maintenance services, pump monitoring and pipeline rehabilitation programmes.

dams, Bulk water pipelines, water retiCulation, sewer and stormwater pipelinesThere are over 300 dams in South Africa, connected through bulk water supply lines to treatment plants. Water is conveyed from treatment plants to reservoirs and from reservoirs reticulated to houses and industries. Wastewater is conveyed from residential areas and industries to treatment plants and from there back into rivers and streams or utilised as grey water. Runoff from rain in towns and cities is collected in and conveyed through stormwater pipelines.

RARE is involved in the design, supply, construction, maintenance, operation and rehabilitation of dams and pipelines, valves, pumps and treatment plants in the water, wastewater and stormwater sector. Services and products provided by RARE cover this entire fluid cycle.

proCess and petroChemiCal industriesRefineries and plants move fluids and gases through an intricate network of pipelines as raw materials are processed into a variety of end products. These industries utilise diverse processes that call for both standard and exotic materials and technologies of varying degrees of sophistication to manage the flow and maintain operational efficiencies. RARE’s services cover the supply, maintenance, operation and rehabilitation of fluid conveyance systems in the process and petrochemical industry.

rare salesRARE Sales offer the following products to clients across industries:

rare produCt offerinGs

pipeAs one of the largest suppliers of valves, pipes and fittings to the fluid conveyance industry in South Africa, RARE sells a comprehensive range of products combining valves, fittings and pipe in a complete package to the contractor or end user. Whether designed and produced by RARE or sourced from reputable local and international suppliers, all products represented by RARE conform to the standards of manufacture and integrity of materials relative to application. – Steel pipe – Ductile iron pipe – Plastic pipes

Group at a GlanCe

2 | RARE Holdings 2011 Annual Report

Group at a GlanCe (continued)

valves, jointing and fittingsRARE’s mission is to provide a solution to the consulting engineer, contractor and end user through the supply of ‘fit for purpose’ products that enhance the performance and overall life cycle of a system. Products represented by RARE are selected for their technical merit and financial benefit to the end user. Each product, beyond the integrity of materials of construction, is considered on a number of criteria, including ease of installation, savings on power consumption, and impact on surge and water hammer and maintenance requirements. – Valves – Fittings – Couplings, repair clamps and dismantling joints

rare pipeline serviCes

RARE’s service offering in pipeline design, operation and maintenance is defined by the Xtender programme and the principle of life cycle costing. The initial cost of a product or service is weighed against long-term performance and cost-efficiency. From the efficient design of new pipelines to maximising the performance of existing systems, the application of the least intrusive and the most financially beneficial solutions is sought.

Services include basic assistance with pipeline design and implementation through to advanced services such as remote pump and pipe component monitoring. Included are turnkey pipeline refurbishment, power management and pressure management projects.

projeCt manaGement

RARE has developed the concept of project management and partnership in the pipeline industry, integrating the company’s resources both regionally and globally with customers’ needs and objectives. This intimate approach to project management ensures efficient planning, organising and managing of resources to bring about the successful completion of projects while honouring project constraints of time and budget.

supply Chain manaGement (sCm)

Increasing sophistication in customer requirements has pushed the industry to higher levels of efficiency with the outsourcing of goods and services to third parties becoming more common. RARE has pioneered the principle of SCM in the fluid conveyance industry. As practised by RARE, SCM is about managing the flow of information, materials, services and money in a way which maximises the effectiveness of the process to the client’s benefit. As a group, RARE currently manages three long-term SCM projects.

Services rendered by RARE have measurably reduced the client’s procurement costs, while sustaining or improving added value and margins.

power manaGement

It is known empirically that pumps consume 25% of all power in the country and that most pumps run 20% to 45% inefficiently due to being designed for future demand or because they do not match the system to which they were installed. RARE provides a comprehensive power management service that covers the remote monitoring of pumps, interpreting the performance through proprietary software, and providing relevant cost/benefit analysis in addition to complete turnkey projects.

researCh and development

Innovation and technology is at the core of RARE’s existence. The group, in the development of new products and services, draws not only on its own resources but also on constant research for input from the market. As RARE is focused on providing cost-effective and efficient pipeline solutions to both the consultant and end user, research and development is centred on products and services that provide solutions to issues such as water losses, high power consumption, surge and water hammer and other pipeline phenomena. RARE’s innovation is reflected not only in the design of the physical product offerings but also in the innovative services and the manner in which services and products are aligned to provide solutions to the end user.

maintenanCe, refurBishment and rehaBilitation

The ever-increasing demands placed on ageing plant and deteriorating pipeline distribution systems is a global problem. RARE offers cost-effective, and often self-financing, alternatives to capital investment through a proactive approach to the management and optimisation of existing pipeline assets. RARE, directly or in joint-venture arrangement with specialists in various aspects of pipeline performance enhancement and operation cost-reduction technologies, provides a complete turnkey solution to the improvement of entire network systems.

Services include:pipeline rehabilitationRARE has developed a range of services to assist clients with managing their existing pipeline assets more effectively. The range of services includes leak detection, network analysis, rehabilitation planning, and performance monitoring and engineering services. The services have been developed on a modular basis so that they can be offered in entirety,


Cathodic corrosion protection servicesRARE offers complete corrosion control solutions for industries including oil and gas, water, wastewater, marine, power generation and agriculture. Services include cathodic protection products and equipment, engineering services and cathodic protection installation and maintenance services.

surge and water hammer and pipeline component sizingRARE assists the consulting engineer and/or end user in defining the most appropriate surge protection strategy and/or the correct sizing and positioning of components such as air valves, check valves and control valves.

specialised turnkey solutionsRARE has successfully designed, fabricated, installed and commissioned complete industrial process plants such as chemical storage, electroplating, effluent treatment, scrubber, process recovery and handling, copper winning, neutralising and acid recovery plants.

individually or in groups, thereby offering tailored solutions based on clients’ specific needs.

trenchless technologiesRARE is active at the forefront of pioneering trenchless technologies, which negates the need for open trenching, in sub-Saharan Africa. As a rehabilitation option, these technologies cost as little as 30% of the cost of pipeline replacement. Trenchless rehabilitation techniques also minimise the social and environmental disruption caused when undertaking an upgrading programme of buried pipeline systems. Maximising the efficiency and life of a municipality pipeline distribution network using pipeline rehabilitation is therefore a key objective for RARE.

Benefits for the client include maximising the hydraulic efficiency of the asset, improving water quality, reducing leakages, increasing asset life for minimum cost and increasing asset value for minimum investment. RARE currently runs projects across sub-Saharan Africa, in countries such as Ghana, Zambia and in the DRC, utilising various pipeline rehabilitation and trenchless technologies.

maintenance and operationRARE’s site service team practically implements pump, pipeline and dam audit and carries out refurbishment and/or maintenance requirements. The group currently runs the mechanical and dam maintenance on behalf of Department of Water Affairs in a number of provinces.


direCtorate

mt lateGanNon-executive chairman

Theunie obtained a B Accountancy Honours, Masters of Commerce and Doctorate of Commerce degrees as well as a Higher Diploma in Banking. He qualified as a chartered accountant and served as a partner with Price Waterhouse Meyernel (now PricewaterhouseCoopers) specialising in taxation. His prior experience also includes positions as general manager at Rand Merchant Bank, chief executive officer of First National Bank Corporate Division and senior executive of the FirstRand Group. He served on numerous boards, including McCarthy Motor Group, Profurn, Relyant Retail and SA Rugby. He currently serves on the council of University of Witwatersrand and on the board of Steinhoff International.

p du plessis Independent non-executive

Pierre is a chartered accountant and after completion of his articles practised as a group accountant for 18 months. He then joined Volkskas Merchant Bank in the corporate finance and investment banking department for over 10 years. He and his partners started a corporate finance boutique and after the partners emigrated he joined Real Africa Durolink Bank’s corporate finance department. He then joined Real Africa Holdings and as a result of his experience in corporate finance became CEO during the value unlocking phase of the company. After the takeover of Real Africa he and his partners started a specialist corporate finance advisory business trading as Sugarbush Capital.

h odendaal Independent non-executive

After qualifying as a chartered accountant, Hein stayed with Arthur Young and Co (now Ernst & Young) as a manager until May 1987. He joined the South African Reserve Bank as a financial manager until January 1989 after which he joined Price Waterhouse Meyernel (now PricewaterhouseCoopers) as a partner. He left PricewaterhouseCoopers incorporated in February 1992 and joined Vleissentraal as General Manager Finance.

In February 1995 Hein joined Roadway Transport as financial director, a position he held until September 2001 when he was transferred to Steinhoff head office. (Roadway became a subsidiary company of Steinhoff during August 1998.) Hein is the financial director of Steinhoff Africa Holdings (Proprietary) Limited and also the managing director of Steinhoff Africa Group Services.

t siyolo Independent non-executive

Themba obtained a sales diploma from the Ashridge Business School, a SEP from the University of Witwatersrand as well as an IRDP from the Stellenbosch Business School. He currently serves as an executive director of PG Bison Limited while his previous board positions included that of Sanlam Collective Investments and Emergent Office Furniture.

sjdt potGieter Non-executive

Stefan obtained his B Accounting Honours degree in 2004 from the University of Stellenbosch and qualified as a chartered accountant in 2007. His prior experience includes positions as financial director of multiple privately held companies across a wide array of businesses including Mayfair Speculators (Pty) Limited and Stafric Investment and Management Services (Pty) Limited.

de sCheepers Chief executive

David has been instrumental in the growth of RARE. In 2003 he negotiated a black economic empowerment transaction with Don Ncube that led to the transformation of Van Leeuwen Pipe and Tube into the RARE group. David is responsible for the continued identification, development and implementation of RARE’s business strategy.

pj willemse Financial director

Pierre obtained a B Comm Honours degree and qualified as a chartered accountant. He has taken full responsibility for the entire financial function of the various companies in the group, introducing an ERP software package, with all accounting and manufacturing procedures now fully computerised.


Chairman’s letter to stakeholders

I succeeded Mr Don Ncube, who resigned as chairman of the Board from 23 August 2011 after serving in the position for seven years. Don played a prominent role in the establishment of the RARE group. He saw it evolve from a specialist pipe supplier, to a BEE accredited and listed entity with operations in South Africa and across the African continent. I would like to thank Don for his contribution during all these years. I will do my best to fill his shoes and help position RARE for the future.

RARE faced a series of challenges in the past few years whilst trying to reposition itself to overcome stresses experienced from various sources. These included:• Adversemacro-economicconditionswhichgave

rise to slower than expected private and public sector spend in the water, mining and energy sectors;

• Toughcompetitioninthemarket;and

• AninabilitytorevivetheprofitabilityofourAngolan business.

This all brought pressure to bear on our capital and funding resources which in turn, further constrained our ability to do profitable business. As a result, the efforts undertaken by the Board and management to revive the business model and to improve management capacity and operational efficiencies, have not materialised as we envisaged.

An overview of RARE’s financial results and operations for the past financial year is provided in the Directors’ Report on pages 14 to 18. The report also contains information on our strategy for new funding and the new restructuring plan which we believe will reposition RARE for sustainable profits in future. Part of the funding plan is an undertaking of further financing and capital raising from RARE’s new major shareholders.

The Board, management and the new shareholders are in the process of preparing plans to return to the basics required for the running of an efficient fluid conveyance solutions business.

However, our immediate goal is to achieve appropriate sales volumes at acceptable margins, all within an overhead structure that matches our available resources. At the same time, we will introduce working capital management processes and terminate unprofitable business activities. The management team has been bolstered by the addition of senior members who will assist in implementing restructuring plans. No doubt the expensive lessons learnt from the past will be well worth it in the coming years and I am positive that the group will work successfully through the challenges ahead.

The Board and management are committed to good corporate governance. We are aware that the guidelines suggested by King III is possibly not all in place. But we are committed to implementing these principles as they apply to RARE, as we move ahead.

This annual report is also our first step on the road to integrated reporting. This is a journey that will take a number of years and will continue to evolve as the company grows and reinvents itself. We support the reporting requirements dictated by the JSE Listings Requirements and the new Companies Act as a means to improve our communication with all our stakeholders.

Finally, on behalf of the Board, I thank each and every shareholder, client, supplier, financier, employee and stakeholder for standing by RARE through a testing year. I am confident that your faith, invaluable input and hard work will be rewarded as RARE transforms itself for an exciting future.

mt lateganChairman


introduCtionRARE Holdings aspires to the highest level of corporate governance and best practices as enshrined in the King Report on Corporate Governance (King III). The Board not only sees value in subscribing to a system whereby King III ethics, personal and corporate integrity and governance practices set the standards of compliance, it also sees this as a good business practice.

The Board recognises the responsibility of RARE to conduct its affairs with prudence and integrity, transparency, accountability and social responsibility and to account therefor in accordance with International financial reporting standards to safeguard the interests of stakeholders.

Key corporate governance developments during the year included:• Comprehensivereviewofallmandates,charters

and terms of reference;• Implementationofimprovedboardstandards,

procedures and board packs;• Finalisationofthegroup’sriskappetite,risk

register and risk matrix;• AppointmentofaLeadIndependentDirector;• Formulationofthegroup’sstrategy;and• ReviewoftheeffectivenessoftheBoardand

committees.

Board of direCtorsRARE subscribes to a unitary Board. The Board of seven directors comprise a majority of non-executive directors (five), of whom three are independent, who both lead and control the company. This composition of the Board reflects the need to protect the interests of all of RARE’s shareholders as well as the demographics of the country. Having regard to the fact that Mr Ncube was not an independent chairman and in order to comply with the King III Report, Pierre du Plessis was appointed as lead independent director. He continues in this role as Dr Theunie Lategan, who succeeded Mr Ncube as Board Chairman with effect from 24 August 2011, is not independent.

The names and brief curriculum vitae of the directors are set out on page 4 of the annual report. New board appointees are identified and nominated by

the Remuneration, Transformation and Sustainability Committee and the appointment process is conducted at board level in a formal and transparent manner. There is an appropriate balance between the number of executive directors (two) and non-executive directors (five) to avoid any director exercising unrestricted powers of decision-making.

The Board has adopted a board charter which confers amongst others the following responsibilities to the Board:• Retainfullandeffectivecontrolofthecompany;• Givestrategicdirectiontothecompany;• Monitormanagementinimplementingplansand

strategies;• Identifyandregularlymonitorkeyriskareasand

key performance indicators of the business;• Ensurethatthecompanycomplieswithrelevant

laws, regulations and codes of business practice;• Ensurethatthecompanycommunicateswith

shareholders and relevant stakeholders openly and promptly; and

• Regularlyreviewprocessesandprocedurestoensure effectiveness of internal systems of control and accept responsibility for the total process of risk management.

Annually, the Board reviews the company’s strategy as proposed and recommended by the executive management team and monitors the execution and implementation thereof. The company’s chief executive officer is charged with the responsibility of the ongoing operations of the company. Together with the executive management team he develops the company’s long-term strategy and recommends the business plan and budgets to the Board for consideration.

In accordance with the Articles of Association, one-third of the directors of the company are required to retire by rotation at every Annual General Meeting and their re-appointment is subject to shareholders’ approval. In addition, the appointments of all new directors are subject to confirmation by shareholders at the first Annual General Meeting after their initial appointment

Four board meetings and two special board meetings took place during the financial year and attendance is indicated in the schedule on the following page.

Corporate GovernanCe


suCCession planninG

The formal succession plan for the chief executive officer, chairman and Board is reviewed annually by the Remuneration, Transformation and Sustainability Committee. In addition the committee regularly reviews the group’s succession strategy and makes recommendations to the Board.

Board CommitteesThree committees functioned during the year to assist the Board in discharging its responsibilities, namely the Audit, Risk and Remuneration, Transformation and Sustainability Committees. Subsequent to year end the Audit and Risk Committees were merged to form the Audit and Risk Committee.

The committees have an important role in enforcing the high standards of governance and achieving increased effectiveness within the group. Whilst the Board has delegated certain of its functions to these committees, it remains fully accountable for the proper discharging of the responsibilities. Other than for the Risk Committee, only non-executive directors are members of these committees of the Board. The chief executive and other members of executive management whose presence is required for such committees’ effective performance of their responsibilities are invited to be in attendance at committee meetings.

audit Committee

The Audit Committee consisted of two independent non-executive directors, Mr A Dlamini (chairman) and Mr M Meehan, who both resigned and were succeeded by Mr P du Plessis (independent non-executive and new chairman) and Mr H Odendaal (independent non-executive). Mr S Potgieter (non-executive) was appointed as a member subsequent to year end but before the date of this report. The attendance at meetings of the committee was as follows:

27 october 2 junename 2010 2011

Mr A Dlamini 3 Mr M Meehan 3

Mr P du Plessis 3 3

Mr H Odendaal 3 3

report of the audit CommitteeThe information below constitutes the report of the Audit Committee in respect of the past financial year of the company, as required by section 94 of the Companies Act (No 71 of 2008).

The Audit Committee operates under written terms of reference, which have been confirmed by the Board, and has satisfied its responsibilities as set out in the terms of reference.

In performing its responsibilities the Audit Committee has reviewed the following:• Theeffectivenessoftheinternalcontrolsystems;• Theoutputofariskassessmentworkshopto

identify the major risks faced by RARE;• Theriskareasoftheentity’soperationstobe

covered in the scope of external audits;• Theadequacy,reliabilityandaccuracyoffinancial

information provided to management;• Theaccountingorauditingconcernsidentifiedas

a result of the external audits;• Theadequacyofpoliciesandprocedures

considered necessary to comply with the requirements of the Companies Act;

• Theentity’scompliancewithlegalandregulatoryprovisions;

• TheadequacyofthetermsofreferenceoftheAudit Committee; and

• Thescopeandresultsoftheexternalauditandits cost effectiveness.

sChedule of attendanCe at Board of direCtors meetinGs

Board 13 august 27 august 4 november 19 november 29 march 2 junename 2010 2010 2010 2010 2011 2011

Mr D Ncube 3 3 3 3 3 3

Mr M Meehan 3 3 3 3 3 3

Mr A Dlamini 3 3 3 3 3 3

Mrs B Masinga 3 3 3 3 3 3

Mr D Scheepers 3 3 3 3 3 3

Mr P Willemse 3 3 3 3 3 3

Mr P du Plessis 3 3 3 3

Mr H Odendaal 3 3 3 3


The Audit Committee has also been responsible for:• Ensuringadequate segregation between non-

audit services and the audit services, where these services were provided by the same accounting firm; and

• Recommendingtheappointmentofaconsultanttoassist RARE in setting up an internal audit function.

The policy on non-audit services, which is reviewed annually by the Audit Committee, sets out the detail of and which services may or may not be provided to RARE by the external auditors.

The Audit Committee has assessed and positively endorsed the experience and expertise of the financial director.

The committee has nominated, subject to the endorsement of the Board and the approval of shareholders, the re-appointment of Greenwoods Chartered Accountants and Mr C Lakhani as the independent registered audit firm and the individual registered auditor of the company respectively.

The Audit Committee is of the view that the internal controls and the financial management systems are sound and as a result the organisation’s major risks have been maintained at an acceptable level.

The company does not have a separate internal audit function, although certain internal audit aspects are performed by the company’s finance function. The committee has decided to establish an independent and properly resourced internal audit function in the year ahead.

The Audit Committee has evaluated the annual financial statements of RARE Holdings Limited and its subsidiaries for the year ended 30 June 2011 and concluded that they comply with the recognition and measurement requirements of International Financial Reporting Standards (IFRS) in all material respects, the JSE Listings Requirements and with the requirements of the Companies Act (No 71 of 2008).

The Audit Committee concurs with the going concern premise in preparing the annual financial statements, and has recommended their adoption by the Board of Directors.

risk Committee The Risk Committee, which was charged with the responsibility of overseeing Risk and Investment matters, consisted of two independent non-executive

directors, Mr M Meehan (chairman) and Mr A Dlamini who both resigned and were succeeded by Mr H Odendaal and Mr P du Plessis. In addition, the CEO and financial director were invitees. The committee acted under the auspices of a Board approved charter, which is reviewed and if necessary, revised annually.

The committee met on two occasions during the year and enjoyed full attendance at all meetings.

27 october 2 junename 2010 2011Mr A Meehan 3

Mr A Dlamini 3

Mr H Odendaal 3

Mr P du Plessis 3

The committee focused on the implementation of a comprehensive risk management structure. This required the determination of the risk appetite, the risk policy and the population of the risk register or matrix. Risks are identified under the headings of:• Enterpriserisk• Operationalrisk• Financialrisk• Reputationalrisk

RARE is willing to take on risks at manageable levels for operations and finance, recognising that reward and opportunities flow from the acceptance of risk. The committee reviews the risk register quarterly and makes recommendations to management and the Board. It has still to align the risk appetite with its strategic plans.

The company operates in a field which is heavily influenced by the infrastructure spend at public and private sector levels. The recovery of this sector remains promising in terms of potential investment but uncertain in terms of timing.

In the light of the difficult financial circumstances in which the company has been trading, the current risk appetite is naturally low. However, these circumstances make the company vulnerable to outside events and aggressive competition, hence the risk register identifies risks in excess of those acceptable in terms of the appetite. This requires close monitoring and vigilance and the company has adopted a policy which requires every level of management to accept that risk management is an integral part of his/her job responsibilities.

Corporate GovernanCe (continued)


The company has taken steps to reduce the risks in its operations by centralising controls, cutting costs through rationalisation of corporate and organisation structures, upgrading information systems and introducing an enterprise management system which will give management greater access to pertinent real time management information.

In addition the company has been addressing the risks associated with its current funding structure and will be recommending the introduction of additional capital.

The Risk Committee took over the functions of the Investment Committee during the year. There were no major investments considered in the year.

remuneration, transformation and sustainaBility Committee

During the year this committee was made up of two members, Mr D Ncube (Chairman of the committee) and Mrs B Masinga, who both resigned. The CEO, Mr D Scheepers, attended meetings on invitation. Attendance of meetings is indicated in the schedule below.

26 august 2 junename 2010 2011Mr D Ncube 3 3

Mrs B Masinga 3 3

Dr MT Lategan (non-executive and new Chairman of the committee), Mr P du Plessis (independent non-executive) and Mr T Siyolo (independent non-executive) were appointed as members of the committee subsequent to year end but before the date of this report.

The committee operates under written terms of reference which are reviewed annually. It assists the Board with various remuneration, transformation and sustainability matters, including the group’s short-, medium- and long-term incentive schemes, remuneration policy and strategy, executive succession planning, transformation and director nominations.

remunerationRARE has implemented an incentive scheme which comprises three elements namely:• GuaranteedRemunerationPackage• Short-TermIncentiveScheme(AnnualPerformance

Bonus)• Long-TermIncentiveScheme(SharePlan)

Guaranteed Remuneration PackageDue to the company’s current performance the Board has decided to not implement any increases to guaranteed remuneration packages of the executive management team from Patterson Band D to F with effect from 1 July 2010. The GRP for executive board members are as follows:

title Band 2011 2010Mr DE Scheepers CEO F R1 941 440 R1 954 858Mr PJ Willemse CFO E R1 325 000 R1 312 500

Short-Term Incentive SchemeNo executive bonuses were paid, as the required profit targets were not met.

Long-Term Incentive Scheme The Long-Term Incentive Scheme consists of two elements: Share Appreciation Rights (SARs) and Performance Units (PUs).

No allocation of SARs and PUs was recommended by the committee in view of the company’s performance for the year ended 30 June 2011.

RARE will review its incentive schemes during the next financial year.

Non-executive directors’ feesThe Board again decided not to implement any increases in view of the present economic downturn and the current performance of the company. Accordingly the non-executive directors’ fee structure for 2011 was the same as for 2010.

annual attendance retainer feeBoard chairman R120 000 R16 100Non-executive R105 000 R14 000

transformationEmployment equityThe company’s approach to employment equity is set out in the company’s Human Resources Policy which outlines the company’s commitment to non-discriminatory employment practices. Each division is responsible for developing and submitting employment equity plans which outline employment equity goals in terms of hiring, training and promotion. The detailed employment equity plans are made available to employees of the respective operating entities. Further targets, strategies and specific action plans are agreed and are revised annually. Certain employment equity targets have been set and performance against these is monitored.


Community and broad based black economic empowermentRARE Holdings acknowledges its social responsibility towards the communities in which it operates through a number of social investment programmes. RARE is an equal opportunity employer and there is no discrimination on the basis of ethnic origin or gender.

A number of programmes are in place to ensure that the group’s employee profile is more representative of the demographics of the regions in which it operates whilst maintaining the group’s high standards. The group is rated as Level 4 in terms of the Department of Trade and Industry’s B-BBEE Codes of Good Practice (the Codes).

Preferential procurementPreferential procurement is dealt with via the company’s quality system, which sets out the company’s objective of annually increasing the proportion of procurement from suitably qualified vendors.

sustainability EthicsRARE is committed to an organisational integrity and code of ethics by:• Creatingsystemsandprocedurestointroduce,

monitor and enforce its ethical code;• Assessingtheintegrityofnewappointeesin

selection and promotion procedures;• Exercisingduecareindelegatingdiscretionary

authority;• Communicatingwithandtrainingallemployees

regarding enterprise values, standards and compliance procedures; and

• Providing,monitoringandauditingsafesystemsfor reporting of unethical or risky behaviour.

Communication with stakeholdersThe Board accepts its duty to present a balanced and understandable assessment of the group’s position in reporting to stakeholders, taking into account the circumstances of the communities in which it operates and the greater demands for transparency and accountability regarding both financial and non-financial matters. The chief executive officer conducts regular presentations on the group’s performance and strategy to the media and investors. RARE Holdings also maintains a website giving access to the company’s latest financial statements, operations and the annual report.

Enterprise developmentThe company assists smaller businesses through its enterprise development programme.

Skills development and trainingThe company is committed to ongoing training and development to further the skills base and empower employees to perform better in their current positions and so accelerate advancement. Total training spend for the year amounted to 0,68% of payroll.

Eight African learners are currently benefiting from the group’s customised Leadership Development Programme designed to develop and promote future managers within the group.

SHE (Safety, health and environment)RARE operates and complies with the related regulations defined in the OHS Act 85 of 1993 requirements. Operational risk assessments and safe work procedures (SWP) are developed to mitigate and eliminate potential hazards associated within a particular work environment, be it in a warehouse, factory or construction site. Scheduled internal location audits are performed annually to ensure compliance. Perpetual inspections are performed to detect any unsafe acts or equipment not safe for use. Group SHE audits are performed annually at all locations to ensure compliance to applicable regulations within the OHS Act.

QualityRARE’s quality management systems are still effective under the old RARE Energy, Water and Chemical in compliance with the revised requirements of ISO 9001:2008. All locations (Kliprivier, Durban, Polokwane Sales, Polokwane factory and Centurion factory and installation) are certified to ISO 9001:2008. Internal quality audits are currently performed under the old quality management structure, which is a mandatory requirement within ISO. Group quality audits and external audits (UKAS accredited certification body) are performed annually.

Only minor observations were noted and reported during our external audits performed to date by BM Trada (Accredited Certification Body). No non-conformances (NCRs) were raised to date.

Corporate GovernanCe (continued)


The SHEQ department is currently in the process of reviewing and re-developing all procedures and work instructions within RARE to achieve re-certification by 2012, based on the scope of areas listed below:• Warehousingandsales:Kliprivier,Polokwaneand

Durban;• Construction,installation,anderection:

For construction and maintenance activities; and• Manufacturing:PolokwaneandCenturionfactories.

hiv/aidsThe purpose of the AIDS policy is to reassure employees that HIV/AIDS is not spread through casual contact during normal work practices and to reduce unrealistic fears about contracting an HIV/AIDS virus-related condition. This policy also protects the legal right to work of employees who are diagnosed with an HIV/AIDS virus-related condition and provides guidelines for situations where infection with the HIV/AIDS virus is suspected. Our policy is to encourage sensitivity to and understanding for employees affected with a condition of the HIV/AIDS virus.

other Corporate GovernanCe mattersCompany seCretaryThe company secretary attends all Board and Board committee meetings and provides advice and guidance to directors on governance and related issues. The company secretary has the responsibility for the induction of new directors and assists the CEO and chairperson in determining the annual board plan and meeting agendas.

desiGnated adviserThe Board is also supplemented by the services of a designated adviser, PSG Capital (Pty) Limited, whose representatives attend all Board and Audit Committee meetings.

share dealinGsRARE Holdings has a policy which precludes directors and staff with access to price sensitive information from dealing in the group’s shares during closed and prohibited periods.

mt lateganChairman

4 November 2011


directors’ responsibilities and approval

The directors are required in terms of the Companies Act (No 71 of 2008) of South Africa to maintain adequate accounting records and are responsible for the content and integrity of the financial statements and related financial information included in this report. It is their responsibility to ensure that the financial statements fairly present the state of affairs of the group as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with International Financial Reporting Standards. The external auditors are engaged to express an independent opinion on the financial statements.

The financial statements are prepared in accordance with International Financial Reporting Standards and are based on appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the group and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the directors sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the group and all employees are required to maintain the highest ethical standards in ensuring the group’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the group is on identifying, assessing, managing and monitoring all known forms of risk across the group. While operating risk cannot be fully eliminated, the group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The directors have reviewed the group’s cash flow forecast for the year to 30 June 2012 and, in the light of this review and the current financial position, they are satisfied that the group has or has access to adequate resources to continue in operational existence for the foreseeable future.

The external auditors are responsible for independently reviewing and reporting on the group’s financial statements. The financial statements have been examined by the group’s external auditors and their report is presented on page 13.

The financial statements set out on pages 14 to 77, which have been prepared on the going concern basis, were approved by the directors on 4 November 2011 and were signed on their behalf by:

Mt lateganChairman

stateMent by the coMpany secretary

I, R Viljoen, company secretary of RARE Holdings Limited and its subsidiaries, hereby certify that the company has, for the year under review, lodged with the Registrar of Companies all such returns as are required of a public company in terms of the Companies Act (No 71 of 2008) of South Africa, and that all such returns are true, correct and up to date.

Company secretary


report of the independent auditors

to the shareholders of rare holdings liMited and its subsidiariesWe have audited the accompanying group financial statements of RARE Holdings Limited and its subsidiaries, which comprise the directors’ report, the separate and consolidated statement of financial position as at 30 June 2011, the separate and consolidated statement of comprehensive income, the separate and consolidated statement of changes in equity and separate and consolidated statement of cash flows for the year then ended, a summary of significant accounting policies and other explanatory notes and the directors’ report, as set out on pages 14 to 77.

directors’ responsibility for the consolidated and separate financial stateMentsThe company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, the AC 500 Standards as issued by the Accounting Practices Board, Interpretations adopted by the International Accounting Standards Board (IASB), and in the manner required by the Companies Act (No 71 of 2008) of South Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

auditors’ responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, 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.

opinionIn our opinion, the financial statements present fairly, in all material respects, the consolidated and separate financial position of the company and the group as of 30 June 2011, and of its separate and consolidated financial performance and its separate and consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards, JSE Listings Requirements and in the manner required by the Companies Act (No 71 of 2008) of South Africa.

greenwoodsper: cp lakhaniRegistered auditor

4 November 2011Cape Town


directors’ report

The directors submit their report for the year ended 30 June 2011.

1. review of activitiesMain business and operationsRARE supplies a comprehensive range of services and products to the fluid conveyance industry. Services include the design, manufacture, installation and maintenance of pipelines and process plants across all sectors of industry (particularly oil and gas, mining and local government).

The group’s business operations are carried out in South Africa, Angola and Zambia and it conducts project work in sub-Saharan Africa.

The group incurred a total loss before taxation from continuing and discontinued operations of R127,4 million (2010: R75,4 million) and an after taxation loss of R125,4 million (2010: R69,2 million).

The company incurred a total comprehensive loss before taxation of R104,7 million (2010: R3,5 million profit) and an after taxation loss of R104,7 million (2010: R2,5 million profit).

It has been another disappointing year for RARE, shown by the poor financial results with revenue from continuing operations down by 19,7% at R315,2 million (2010: R392,5 million). Gross margin from continuing operations declined to 16,88% (2010: 21,05%). Liquidation of old stock purchased when the rand was weaker and a very competitive market contributed to the decline in margin.

Operating expenses from continuing operations, excluding impairments, decreased by 16,19% to R78,6 million (2010: R93,8 million) due to concerted efforts to reduce these. Included in operating expenses for the year is an impairment of the Angolan investment and loan account of R59,8 million (2010: Rnil) as well is an impairment of goodwill of R5,3 million (2010: R29,5 million).

An operating loss from continuing operations before tax of R69,0 million (2010: R59,4 million) was recorded for the year and excluding finance cost, investment income, impairments and the net result of the Angolan business disposal amounted to R28,8 million (2010: R8,8 million).

Efforts to revive the profitability of our Angolan business was not successful and as a result a decision to exit this market was taken. RARE’s 61% shareholding was reduced during March 2011 to a 10% effective shareholding in the Angolan group, through the sale to an Angolan investor. The new shareholder provided a US$5 million cash injection to secure the continuation of the business and although we will use our best endeavours to recover our investment, the board deemed it prudent to impair the investment in full.

The financial results were prepared on the basis that the Angolan business was discontinued during March 2011 and the prior year results have been restated for comparative purposes. The loss from the discontinued Angolan operations amounted to R58,5 million (2010: R16,0 million).

Efforts during the year under review to revise the business model and to improve management capacity, working capital management, processes and operational efficiencies have clearly not yet materialised as envisaged. Adverse trading conditions contributed to the underperformance, but an internal focus and limited working capital resources also contributed to the decline.

Trading conditions remained tough during the year with no significant increase in private or public sector spend realised. RARE’s restructuring programme undertaken in 2010 to bring synergies between the water, energy and chemical businesses now sees the company operating under three divisions, namely Trading, Pipeline Services and Water Utilities Services.

The Trading division covers our Kliprivier, Durban and Polokwane sales outlets with revenue of R237,3 million (2010: R329,1 million).


The Pipeline Services division operates out of our Centurion premises. Revenue of R61,6 million (2010: R52,6 million) was realised. This unit supplies, installs and commissions pipe systems and pipelines. It operates within South Africa with cross-border activities in Botswana, Zambia, the Democratic Republic of Congo and Ghana. The client base is primarily from the private sector, with pipe rehabilitation offerings making inroads into the South African public sector.

The Water Utilities Services division also operates out of our Centurion premises with revenue amounting to R16,3 million (2010: R10,8 million). This division operates primarily in the public sector and has secured long-term contracts with the Department of Water Affairs (DWA). Project work to both regional and local municipalities also forms part of the division’s activities. This work is secured through leveraging our existing contract with the DWA and through the government tender process.

2. going concernWe draw attention to the fact that at 30 June 2011, the company and group had accumulated losses of R44,0 million (2010: R60,7 million profit) and R53,2 million (2010: R38,2 million) respectively.

The financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

The ability of RARE to continue as a going concern is dependent on a number of factors. The most significant of these is that the directors continue procuring funding for the ongoing operations as detailed below.

After careful analysis of the budgets and the cash flow forecasts a funding plan was devised which involves the following:

debtors’ financingRARE’s three-year securitisation term loan maturing in October 2011 has successfully been refinanced. The refinancing transaction took place on 17 October 2011.

stock financingRARE reduced the utilisation of its stock finance facility after year-end by R29,0 million, creating capacity for the continued funding of stock purchases. The terms of the stock facility are disclosed in note 25.

short-terM loan financingSubsequent to year end a secured bridging facility amounting to R50 million was obtained from Mayfair Speculators (Proprietary) Limited to fund working capital shortfalls during the remainder of the financial year.

Based on RARE’s funding and restructuring plans, operational budget and cash flow forecasts for the ensuing year, which are based on the current expected economic and market conditions, the directors believe that RARE has adequate financial resources for the ensuing financial year and there is no material uncertainty as to the going concern assumption adopted in the preparation of the annual financial statements.

3. authorised and issued share capitalRARE was recapitalised during June 2011 by raising equity of R40 million by way of a subscription by Stafric Investment and Management Services (Proprietary) Limited. 200 million shares were issued at a consideration of 20 cents each. Shareholders were offered the opportunity to participate by way of a clawback offer.

The clawback offer was concluded on 11 July 2011 whereby applications for 10 342 472 shares were received from shareholders for a subscription price of R2 068 494.

4. borrowing liMitationsIn terms of the articles of association of the company, the directors may exercise all the powers of the company to borrow money, subject to the JSE Listings Requirements and any regulation made from time to time by the company at a general meeting.


5. non-current assetsThere were no major changes in the nature of the non-current assets of the group during the year or in the policy relating to their use during the year under review. Refer to notes 3 to 6 of these financial statements for details regarding additions, revaluations and disposals made during the year.

The group disposed of its majority shareholding in RARE Group Angola SA during the year under review.

6. directors’ shareholdingThe direct and indirect beneficial interests of the directors in the issued share capital of the company as at 30 June 2011 are set out below.

beneficialdirect

beneficial indirect

total direct and

indirect

% of issued share

capitalBeneficial

directBeneficial

indirect

Total direct and

indirect

% of issued share

capitalDirectors 2011 2011 2011 2011 2010 2010 2010 2010DMJ Ncube – 14 902 360 14 902 360 5,16 0 14 902 360 14 902 360 16,80DE Scheepers 133 000 16 172 471 16 305 471 5,65 133 000 16 172 471 16 305 471 18,30PJ Willemse 80 002 894 507 974 509 0,34 80 002 894 507 974 509 1,10H Odendaal – 2 236 508 2 236 508 0,77 P du Plessis 2 364 481 – 2 364 481 0,82 MG Meehan (resigned) 30 000 30 000 0,10Issued share capital held by directors 2 577 483 34 205 846 36 783 329 12,74 213 002 31 999 338 32 212 340 36,30Total issued share capital 288 750 000 88 750 000

Number of shareholdings

% of total shareholdings

Number of shares

% of shares in issue

size of holdings1 – 1 000 shares 81 14,70 45 706 0,021 001 – 10 000 shares 200 36,30 1 139 281 0,3910 001 – 100 000 shares 213 38,66 6 599 004 2,29100 001 – 1 000 000 shares 40 7,26 13 266 151 4,591 000 001 shares and over 17 3,09 267 699 858 92,71total 551 100,00 288 750 000 100,00distribution of shareholdersClose Corporations 7 1,27 228 003 0,08Collective Investment Schemes 1 0,18 579 352 0,20Foreign Custodian 2 0,36 1 733 000 0,60Foundations and Charitable Funds 2 0,36 2 836 354 0,98Individuals 462 83,85 36 308 641 12,57Other Corporations 1 0,18 18 000 0,01Private Companies 12 2,18 200 657 765 69,49Public Companies 2 0,36 21 700 0,01Retirement Benefit Funds 2 0,36 1 527 497 0,53Stockbrokers and Nominees 1 0,18 75 037 0,03Trusts 59 10,71 44 764 651 15,50total 551 100,00 288 750 000 100,00


% of total shareholdings

Number of shares

% of shares in Issue

shareholder typeNon-public Shareholders 5 0,91 36 783 329 12,74Directors of the company or its subsidiaries Directors and Associates 5 36 783 329 12,74Public Shareholders 546 99,09 251 966 671 87,26total 551 100,00 288 750 000 100,00

directors’ report (continued)



Total shareholding

% of shares in issue

beneficial shareholders with a holding greater than 3% of the shares in issueStafric Investments and Management Services (Pty) Ltd 1 200 000 000 69,26Lion Steel Trust 1 16 172 471 5,60Nkulukelo Trust 1 14 902 360 5,16total 3 231 074 831 80,03

7. dividendsNo dividends were declared or paid to shareholders during the year.

8. directorsThe directors of the company during the year and to the date of this report are as follows:

name executive/non-executive changesMT Lategan Non-executive/Chairman Appointed 24 August 2011P Du Plessis Lead independent non-executive Appointed 9 November 2010H Odendaal Independent non-executive Appointed 9 November 2010T Siyolo Independent non-executive Appointed 24 August 2011SJDT Potgieter Non-executive Appointed 24 August 2011DE Scheepers Executive PJ Willemse Executive DMJ Ncube Non-executive Resigned 23 August 2011MG Meehan Non-executive Resigned 11 November 2010S Masinga Non-executive Resigned 11 November 2010AZ Dlamini Independent non-executive Resigned 11 November 2010

No contracts in which directors of the company had an interest and that significantly affected the affairs or business of the company or any of its subsidiaries or which could have resulted in a conflict of interest were entered into during the year.

9. secretaryDuring the year W Somerville resigned as company secretary and was replaced by PJ Willemse. After year-end, R Viljoen was appointed in his stead on 24 August 2011.

Business address22 Old Vereeniging RoadKliprivierMidvaal1851

Postal addressPO Box 124186AlrodeJohannesburg1451


10. interest in subsidiaries and associates

issued share capital

percentage holding

shares at cost/ fair value

amount due (to)/by entities after impairments

2011 2010 2011 2010 2011 2010 2011 2010r R % % r R r R

2011directly heldRARE Group (Proprietary) Limited 171 170 100 100 10 618 284 89 538 417 58 651 449 44 765 280indirectly heldRARE Construction Zambia 100 100 100 100 100 100 – –RARE Tech (Proprietary) Limited 100 100 100 100 834 419 834 419 – –Isici Trading and Investments (Proprietary) Limited 100 100 100 100 100 100 – –Xylo Pipe (Proprietary) Limited 100 100 75 75 75 75 – –RARE Group Angola SA 142 912 142 912 10 51 – 393 056 – –RARE Petrochemical Angola Energy SA 142 912 142 912 7 31 – 88 357 – –Zeta Training Solutions (Proprietary) Limited 100 100 49 49 49 49 550 223 1 244 693Tasonline Software (Proprietary) Limited 100 100 25 25 900 000 900 000 2 638 942 1 826 058

12 353 027 91 754 573 61 840 614 47 836 031

The aggregate amount of net loss incurred by subsidiaries for the year from continuing and discontinued operations amounted to R129,3 million (2010: R59,0 million).

The company’s voting power is in direct proportion to its percentage holding.

Details of the company’s investment in subsidiaries and associates are set out in notes 6 and 7 of the financial statements, respectively.

details of subsidiaries’ and associates operationsThe RARE Group (Proprietary) Limited is engaged in sourcing, supplying and distributing pipes, valves, fittings and associated commodities within the engineering, energy and resources sector as well as logistics relating to the supply of the valves, fittings and associated commodities, manufacturing and installation of plastic engineering projects and civil maintenance work.

RARE Tech (Proprietary) Limited’s primary business is that of a property holding company.

Xylo Pipe (Proprietary) Limited is engaged in the development of solutions for rehabilitation of pipeline infrastructure. Isici Trading and Investments (Proprietary) Limited and RARE Botswana was dormant in the year under review. RARE Construction Zambia is engaged in the sourcing, supplying and distribution of pipes, valves, fittings and associated commodities in Zambia.

During the year under review, the majority shareholding in RARE Group Angola SA, former subsidiary of the RARE Group (Proprietary) Limited was disposed of on 29 March 2011. RARE Group Angola SA is engaged in servicing the water industry in Angola.

Zeta Training Solutions (Proprietary) Limited is engaged in providing training solutions. Tasonline Software (Proprietary) Limited is engaged in pump monitoring.

directors’ report (continued)


The following subsidiaries are not incorporated in South Africa:

name of subsidiary country of incorporationRARE Construction Zambia (indirectly held via the RARE Group (Proprietary) Limited) ZambiaRARE Botswana Botswana

In terms of SIC Interpretation 12 Consolidated Special Purpose Entities, the following entities were consolidated in the annual financial statements of the group:

RARE Capital (Proprietary) LimitedThe RARE Employee Share Incentive Trust

11. liquidity and solvencyThe directors have performed the required liquidity and solvency tests required by the Companies Act (No 71 of 2008).

12. auditorsGreenwoods will continue in office in terms of section 90 of the Companies Act (No 71 of 2008).


group coMpany2011 2010 2011 2010

Note r R r Rassetsnon-current assetsProperty, plant and equipment 3 60 443 536 96 226 594 – – Goodwill 4 456 516 6 088 557 – –Intangible assets 5 6 092 905 11 850 220 – – Investment in subsidiary 6 – – 10 618 284 89 538 417Investments in associates 7 900 049 900 049 – – Loans to group companies 8 – – 58 651 449 44 765 280Other financial assets 9 285 080 662 526 – – Deferred tax 10 5 671 452 4 160 612 – – Prepayments – 243 080 – –

73 849 538 120 131 638 69 269 733 134 303 697current assetsInventories 12 115 320 701 161 568 369 – – Loans to group companies 8 3 189 165 3 070 751 – – Trade and other receivables 14 106 051 003 138 605 629 503 512 141 174Other financial assets 9 10 040 706 5 223 699 – – Current tax receivable 2 452 423 714 547 – – Construction contracts and receivables 13 7 745 402 14 424 065 – – Prepayments 243 080 729 241 - – Cash and cash equivalents 15 10 503 831 36 263 601 5 774 92

255 546 311 360 599 902 509 286 141 266total assets 329 395 849 480 731 540 69 779 019 134 444 963

equity and liabilitiesequityequity attributable to equity holders of parentShare capital 18 112 876 495 72 598 495 113 108 495 73 108 495Reserves 5 856 154 15 046 162 – – Accumulated loss (53 181 618) 38 248 501 (44 040 880) 60 680 705

65 551 031 125 893 158 69 067 615 133 789 200Non-controlling interest – (9 312 514) – –

65 551 031 116 580 644 69 067 615 133 789 200liabilitiesnon-current liabilitiesLoans from minority shareholders 23 – 2 282 490 – – Other financial liabilities 24 8 132 450 110 043 063 – – Operating lease liability 115 379 102 047 – – Deferred tax 10 756 672 3 922 702 – –

9 004 501 116 350 302 – –current liabilitiesTrade and other payables 25 138 213 782 198 982 414 272 479 216 838Other financial liabilities 24 113 247 162 48 343 998 – – Current tax payable 438 925 438 925 438 925 438 925Operating lease liability – 13 332 – – Bank overdraft 15 2 940 448 21 925 – –

254 840 317 247 800 594 711 404 655 763total liabilities 263 844 818 364 150 896 711 404 655 763total equity and liabilities 329 395 849 480 731 540 69 779 019 134 444 963

stateMent of financial position at 30 June 2011


group coMpany2011 2010 2011 2010

Note r R r Rcontinuing operationsRevenue 27 315 164 995 392 553 618 – –Cost of sales 28 (261 951 108) (309 924 692) – –gross profit 53 213 887 82 628 926 – –Other income 51 968 986 3 400 933 2 305 200 11 941 711Operating expenses (158 853 221) (129 999 197) (101 223 829) (12 000 884)operating loss 29 (53 670 348) (43 969 338) (98 918 629) (59 173)Investment revenue 31 2 260 732 2 222 801 – 3 516 717Finance costs 32 (17 571 333) (17 681 795) (5 802 956) –(loss)/profit before tax (68 980 949) (59 428 332) (104 721 585) 3 457 544Income tax expense 33 2 037 681 6 233 039 – (972 872)(loss)/profit froM continuing operations (66 943 268) (53 195 293) (104 721 585) 2 484 672

discontinued operationsLoss from discontinued operations 16 (58 463 543) (15 969 160) – –(loss)/profit for the year (125 406 811) (69 164 453) (104 721 585) 2 484 672

other coMprehensive incoMe:Exchange differences on translating foreign operations 1 523 421 1 415 323 – –Gains and losses on property revaluation (2 177 399) 15 029 576 – –Realisation of revaluation reserve on disposal (13 520 723) – – –Taxation related to components of other comprehensive income 625 231 (4 841 203) – –other coMprehensive (loss)/incoMe for the year net of taxation 35 (13 549 470) 11 603 696 – –total coMprehensive (loss)/incoMe (138 956 281) (57 560 757) (104 721 585) 2 484 672net (loss)/profit attributable to:owners of the parent:(Loss)/profit for the year from continuing operations (66 943 268) (53 195 293) (104 721 585) 2 484 672Loss for the year from discontinued operations (24 486 851) (4 874 943) – –(loss)/profit for the year attributable to owners of the parent (91 430 119) (58 070 236) (104 721 585) 2 484 672non-controlling interest:Loss for the year from discontinued operations (33 976 692) (11 094 217) – –total coMprehensive loss attributable to:Owners of the parent (100 620 127) (49 732 876) (104 721 585) 2 484 672Non-controlling interest (38 336 154) (7 827 881) – –

(138 956 281) (57 560 757) (104 721 585) 2 484 672earnings per sharefroM continuing and discontinued operationsBasic loss per share (c) (87,83) (65,43) – –Diluted loss per share (c) (87,83) (65,43) – –

froM continuing operationsBasic loss per share (c) (64,31) (59,94) – –Diluted loss per share (c) (64,31) (59,94) – –

stateMent of coMprehensive incoMe for the year ended 30 June 2011


stateMent of changes in equity for the year ended 30 June 2011

Share capital

Share premium

Total share capital

Foreign currency

translation reserve

Revaluationreserve

Total reserves

Accumulatedloss

Total attributable

to equity holders of the

group/companyNon-controlling

interest Total equityR R R R R R R R R R

groupbalance at 1 July 2009 884 950 71 713 545 72 598 495 54 049 6 654 753 6 708 802 96 318 737 175 626 034 772 612 176 398 646Changes in equityTotal comprehensive loss for the year – – – 286 700 8 050 660 8 337 360 (58 070 236) (49 732 876) (10 085 126) (59 818 002)Total changes – – – 286 700 8 050 660 8 337 360 (58 070 236) (49 732 876) (10 085 126) (59 818 002)balance at 1 July 2010 884 950 71 713 545 72 598 495 340 749 14 705 413 15 046 162 38 248 501 125 893 158 (9 312 514) 116 580 644Changes in equityTotal comprehensive loss for the year – – – (340 749) (8 849 259) (9 190 008) (91 430 119) (100 620 127) (38 336 154) (138 956 281)Issue of shares 2 000 000 38 000 000 40 000 000 – – – – 40 000 000 – 40 000 000Sale of treasury shares 1 390 276 610 278 000 – – – – 278 000 – 278 000Changes in ownership interest – Angola – – – – – – – – 47 648 668 47 648 668Total changes 2 001 390 38 276 610 40 278 000 (340 749) (8 849 259) (9 190 008) (91 430 119) (60 342 127) 9 312 514 (51 029 613)balance at 30 June 2011 2 886 340 109 990 155 112 876 495 – 5 856 154 5 856 154 (53 181 618) 65 551 031 – 65 551 031

coMpanybalance at 1 July 2009 887 500 72 220 995 73 108 495 – – – 58 196 033 131 304 528 – 131 304 528Changes in equityTotal comprehensive income for the year – – – – – – 2 484 672 2 484 672 – 2 484 672Total changes – – – – – – 2 484 672 2 484 672 – 2 484 672balance at 1 July 2010 887 500 72 220 995 73 108 495 – – – 60 680 705 133 789 200 – 133 789 200Changes in equityTotal comprehensive loss for the year – – – – – – (104 721 585) (104 721 585) – (104 721 585)Issue of shares 2 000 000 38 000 000 40 000 000 – – – – 40 000 000 – 40 000 000Total changes 2 000 000 38 000 000 40 000 000 – – (104 721 585) (64 721 585) – (64 721 585)balance at 30 June 2011 2 887 500 110 220 995 113 108 495 – – (44 040 880) 69 067 615 – 69 067 615Note 18 18 18 20, 35 21, 35 35


Share capital

Share premium

Total share capital

Foreign currency

translation reserve

Revaluationreserve

Total reserves

Accumulatedloss

Total attributable

to equity holders of the

group/companyNon-controlling

interest Total equityR R R R R R R R R R

groupbalance at 1 July 2009 884 950 71 713 545 72 598 495 54 049 6 654 753 6 708 802 96 318 737 175 626 034 772 612 176 398 646Changes in equityTotal comprehensive loss for the year – – – 286 700 8 050 660 8 337 360 (58 070 236) (49 732 876) (10 085 126) (59 818 002)Total changes – – – 286 700 8 050 660 8 337 360 (58 070 236) (49 732 876) (10 085 126) (59 818 002)balance at 1 July 2010 884 950 71 713 545 72 598 495 340 749 14 705 413 15 046 162 38 248 501 125 893 158 (9 312 514) 116 580 644Changes in equityTotal comprehensive loss for the year – – – (340 749) (8 849 259) (9 190 008) (91 430 119) (100 620 127) (38 336 154) (138 956 281)Issue of shares 2 000 000 38 000 000 40 000 000 – – – – 40 000 000 – 40 000 000Sale of treasury shares 1 390 276 610 278 000 – – – – 278 000 – 278 000Changes in ownership interest – Angola – – – – – – – – 47 648 668 47 648 668Total changes 2 001 390 38 276 610 40 278 000 (340 749) (8 849 259) (9 190 008) (91 430 119) (60 342 127) 9 312 514 (51 029 613)balance at 30 June 2011 2 886 340 109 990 155 112 876 495 – 5 856 154 5 856 154 (53 181 618) 65 551 031 – 65 551 031

coMpanybalance at 1 July 2009 887 500 72 220 995 73 108 495 – – – 58 196 033 131 304 528 – 131 304 528Changes in equityTotal comprehensive income for the year – – – – – – 2 484 672 2 484 672 – 2 484 672Total changes – – – – – – 2 484 672 2 484 672 – 2 484 672balance at 1 July 2010 887 500 72 220 995 73 108 495 – – – 60 680 705 133 789 200 – 133 789 200Changes in equityTotal comprehensive loss for the year – – – – – – (104 721 585) (104 721 585) – (104 721 585)Issue of shares 2 000 000 38 000 000 40 000 000 – – – – 40 000 000 – 40 000 000Total changes 2 000 000 38 000 000 40 000 000 – – (104 721 585) (64 721 585) – (64 721 585)balance at 30 June 2011 2 887 500 110 220 995 113 108 495 – – (44 040 880) 69 067 615 – 69 067 615Note 18 18 18 20, 35 21, 35 35


stateMent of cash flows for the year ended 30 June 2011

group coMpany2011 2010 2011 2010

Note r R r Rcash generated froM/(used in) operations 36 (14 432 430) 28 732 465 (1 202 351) (1 627 554)Interest income 300 183 2 181 140 – 3 516 717Dividends received – 41 661 – –Finance costs (15 796 626) (18 793 334) (2 263) –Tax received/(paid) 37 1 748 542 (4 605 052) – (718 296)net cash from operating activities (28 180 331) 7 556 880 (1 204 614) 1 170 867

cash flows froM investing activitiesPurchase of property, plant and equipment 3 (3 641 170) (2 813 406) – –Sale of property, plant and equipment 3 294 842 201 582 – –Purchase of other intangible assets 5 (4 547 468) (1 292 272) – –Loans advanced to group companies (20 148 130) (23 630 685) (43 326 915) (39 025 488)Loans to group companies repaid 905 980 – 4 537 210 37 840 231Sale of financial assets 8 384 847 1 802 902 – –Purchase of other financial assets (12 985 472) (108 951) – –net cash from investing activities (31 736 571) (25 840 830) (38 789 705) (1 185 257)

cash flows froM financing activitiesProceeds on share issue 18 40 000 000 – 40 000 000 –Proceeds from other financial liabilities 3 495 853 – – –Repayment of other financial liabilities (4 408 811) (6 385 135) – –Proceeds from loans from minority shareholders – 348 741 – –net cash from financing activities 39 087 042 (6 036 395) 40 000 000 –

total cash MoveMent for the year (20 829 860) (24 320 345) 5 681 (14 390)Cash at the beginning of the year 28 393 243 52 713 588 92 14 482total cash at the end of the year 15 7 563 383 28 393 243 5 773 92


accounting policies for the year ended 30 June 2011

1. presentation of financial stateMents The financial statements have been prepared in accordance with International Financial Reporting Standards

and the Companies Act (No 71 of 2008) of South Africa. The financial statements have been prepared on the historical cost basis, except for the measurement of land and buildings at revalued amounts and certain financial instruments at fair value, and incorporate the principal accounting policies set out below. They are presented in South African rands.

These accounting policies are consistent with the previous period, except for the changes set out in note 2: Changes in accounting policy.

1.1 consolidation business combinations The group accounts for business combinations using the acquisition method of accounting. The cost of the

business combination is measured as the aggregate of the fair values of assets given, liabilities incurred or assumed and equity instruments issued. Costs directly attributable to a business combination formed part of the cost of the business combination.

Contingent consideration is included in the cost of the combination at fair value as at the date of acquisition. Subsequent changes within 12 months of the acquisition date to the assets, liabilities or equity which arise as a result of the contingent consideration recognised as part of a business combination were affected against goodwill.

The acquiree’s identifiable assets, liabilities and contingent liabilities which meet the recognition conditions of IFRS 3 Business Combinations are recognised at their fair values at acquisition date, except for non-current assets (or disposal group) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held For Sale and Discontinued Operations, which are recognised at fair value less costs to sell.

Contingent liabilities are only included in the identifiable assets and liabilities of the acquiree where there is a present obligation at acquisition date.

On acquisition, the group assesses the classification of the acquiree’s assets and liabilities and reclassifies them where the classification is inappropriate for group purposes. This excludes lease agreements and insurance contracts, whose classification remains as per their inception date.

Non-controlling interest arising from a business combination is measured at their share of the fair value of the assets and liabilities of the acquiree.

In cases where the group held a non-controlling shareholding in the acquiree each transaction was treated separately by the acquirer, using the cost of the transaction and fair value information at the date of each exchange transaction to determine the amount of any goodwill associated with the transaction. The cost of the individual investments was compared with the acquirer’s interest in the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities.

Goodwill recognised in a business combination are measured at its cost, being the excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.

Goodwill is not amortised but is tested on an annual basis for impairment. If goodwill is assessed to be impaired, that impairment is not subsequently reversed.


1.2 significant JudgeMents and sources of estiMation uncertainty In preparing the financial statements, management is required to make estimates and assumptions that affect

the amounts represented in the financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the financial statements. Significant judgements include:

trade receivables The group assesses its trade receivables for impairment at the end of each reporting period. In determining

whether an impairment loss should be recorded in profit or loss, the group makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

allowance for slow moving, damaged and obsolete stock An allowance for stock to write stock down to the lower of cost or net realisable value. Management have

made estimates of the selling price and direct cost to sell on certain inventory items. The writedown is included in the operating profit note.

impairment testing The recoverable amounts of cash-generating units and individual assets have been determined based on

the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that the assumption may change which may then impact our estimations and may then require a material adjustment to the carrying value of goodwill and tangible assets.

The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time. They are significantly affected by a number of factors including supply demand, together with economic factors such as exchange rates, inflation rate and interest rate. Management uses value in use to determine the recoverable amount of goodwill, intangible assets with an indefinite life and identifying assets that may have been impaired. Additional disclosure of these estimates are included in note 4 – Goodwill.

valuation of land and buildings At each reporting date the group assesses whether there is any objective evidence that the carrying value

of land and buildings has increased/decreased.

Valuations are performed and management determine a carrying value for land and buildings based on the valuations available. Additional disclosure of these valuations of land and buildings is included in note 3.

tax The group recognises the net future tax benefit related to deferred income tax assets to the extent that

there is convincing evidence that the group will have taxable income against which the assessed losses can be utilised. Assessing the recoverability of deferred income 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.

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

appropriate. The actual useful lives of assets and residual values are assessed annually.

Residual value assessments consider issues such as future market conditions, remaining useful life and projected disposal values.

accounting policies for the year ended 30 June 2011(continued)


1.3 property, plant and equipMent The cost of an item of property, plant and equipment is recognised as an asset when: • itisprobablethatfutureeconomic benefits associated with the item will flow to the entity; and • thecostoftheitemcanbemeasuredreliably.

revaluation model – land and buildings Items of land and buildings are initially recognised at cost. Subsequent to initial recognition, land and

buildings are carried at revalued amounts, being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are made with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.

Any increase in an asset’s carrying amount, as a result of a revaluation, is credited directly to equity in the revaluation reserve. 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 revaluation, 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.

cost model – all other items of property, plant and equipment except for land and buildings Property, plant and equipment is initially measured at cost.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. 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 is carried at cost less accumulated depreciation and any impairment losses except for land and buildings, which is carried at revalued amount being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Property, plant and equipment is depreciated on the straight-line basis over the expected useful lives to the estimated residual value.

The useful lives of items of property, plant and equipment have been assessed as follows:

item average useful life Land Indefinite Buildings 50 years Leasehold property Lease term Plant and machinery 5 – 20 years Furniture and fixtures 5 – 6 years Office equipment 5 years Computer equipment 3 years Motor vehicles 5 – 6 years Leasehold improvements 3 years Workshop equipment 3 – 6 years Tools 2 years

The residual value, useful life and depreciation method of each asset is reviewed at the end of each reporting period. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.


1.4 intangible assets An intangible asset is recognised when: • itisprobablethattheexpectedfutureeconomicbenefitsthatareattributabletotheassetwillflowto

the entity; and • thecostoftheassetcanbemeasuredreliably.

Intangible assets are initially recognised at cost.

Research costs is recognised in profit or loss when they are incurred.

Development costs are capitalised only when they meet the criteria for capitalising development expenditure, i.e: • Itistechnicallyfeasibletocompletetheassetsothatitwillbeavailableforuseorsale. • Thereisanintentiontocompleteanduseorsellit. • Thereisanabilitytouseorsellit. • Itwillgenerateprobablefutureeconomicbenefits. • Thereareavailabletechnical,financialandotherresourcestocompletethedevelopmentandtouseorsell

the asset. • Theexpenditureattributabletotheassetduringitsdevelopmentcanbemeasuredreliably.

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

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight-line basis over their useful life.

The amortisation period and the amortisation method for intangible assets are reviewed every period-end.

Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

item useful life Trademarks 10 years Licences 25 years Computer software 2 – 5 years CABGOC MRO development costs Period of contracts

1.5 investMent in subsidiary group financial statements The consolidated financial statements incorporate the assets, liabilities, income, expenses and cash flows of

the company and its subsidiaries as if they are a single economic entity.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statements of comprehensive income from the date of acquisition or up to the date of disposal.

On acquisition the group recognises the subsidiary’s identifiable assets, liabilities and contingent liabilities at fair value, except for assets classified as held for sale, which are recognised at fair value less costs to sell.

Inter-company transactions and balances between group entities are eliminated on consolidation.

company financial statements In the company’s separate financial statements, the investment in the subsidiary is carried at cost less any

accumulated impairment.



1.5 investMent in subsidiary (continued) The cost of an investment in a subsidiary is the aggregate of: • thefairvalue,atthedateofexchange,ofassetsgiven,liabilitiesincurredorassumed,andequity

instruments issued by the company; plus • anycostsdirectlyattributabletothepurchaseofthesubsidiary.

An adjustment to the cost of a business combination contingent on future events is included in the cost of the combination if the adjustment is probable and can be measured reliably.

1.6 investMents in associates group financial statements An investment in an associate is accounted for using the equity method, except when the asset is classified

as held for sale. Under the equity method, the investment is initially recognised at cost and the carrying amount is increased or decreased to recognise the group’s share of the profits or losses of the investee after acquisition date. The use of the equity method is discounted from the date the group ceases to have significant influence over an associate.

Any impairment losses are deducted from the carrying amount of the investment in associate.

Dividends received from the associate reduce the carrying amount of the investment.

Profit and losses resulting from transactions with associates are recognised only to the extent of unrelated investors’ interest in the associate.

The excess of the group’s share of the net fair value of an associate’s identifiable assets, liabilities and contingent liabilities over the cost is excluded from the carrying amount of the investment and is included as income in the period in which the investment is acquired.

Any excess of the cost of acquisition over the group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that investment. Any excess of the group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.

company’s financial statements In the company’s separate financial statements, an investment in an associate is carried at cost less any

accumulated impairment.

1.7 financial instruMents classification The group and company classifies financial assets and financial liabilities into the following categories: • Financialassetsatfairvaluethroughprofitorloss–heldfortrading • Financialassetsatfairvaluethroughprofitorloss–designated • Held-to-maturityinvestments • Loansandreceivables • Available-for-salefinancialassets • Financialliabilitiesatfairvaluethroughprofitorloss–heldfortrading • Financialliabilitiesatfairvaluethroughprofitorloss–designated • Financialliabilitiesmeasuredatamortisedcost

Classification depends on the purpose for which the financial instruments were obtained/incurred and takes place at initial recognition. Classification is reassessed on an annual basis, except for derivatives and financial assets designated as at fair value through profit or loss, which shall not be classified out of the fair value through profit or loss category.

A financial asset classified as available for sale that would have met the definition of loans and receivables may be reclassified to loans and receivables if the entity has the intention and ability to hold the asset for the foreseeable future or until maturity.


1.7 financial instruMents (continued) initial recognition and measurement Financial instruments are recognised initially when the group becomes a party to the contractual provisions

of the instruments.

The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial instruments are measured initially at fair value, except for equity investments for which a fair value is not determinable, which are measured at cost and are classified as available-for-sale financial assets.

For financial instruments which are not at fair value through profit or loss, transaction costs are included in the initial measurement of the instrument.

Financial instruments are initially measured on transaction date at fair value plus transaction costs when the related contractual rights or obligations exist. Transaction costs in respect of financial instruments classified as fair value through profit or loss are expensed.

Regular way purchases of financial assets are accounted for at settlement date.

subsequent measurement Financial instruments at fair value through profit or loss are subsequently measured at fair value, with gains

and losses arising from changes in fair value being included in profit or loss for the period.

Net gains or losses on the financial instruments at fair value through profit or loss exclude dividends and interest.

Dividend income is recognised in profit or loss as part of other income when the group’s right to receive payment is established.

Loans and receivables are subsequently measured at amortised cost, using the effective-interest method, less accumulated impairment losses.

Held-to-maturity investments are subsequently measured at amortised cost, using the effective-interest method, less accumulated impairment losses.

Available-for-sale financial assets are subsequently measured at fair value. This excludes equity investments for which a fair value is not determinable, which are measured at cost less accumulated impairment losses.

Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in equity until the asset is disposed of or determined to be impaired. Interest on available-for-sale financial assets calculated using the effective-interest method is recognised in profit or loss as part of other income. Dividends received on available-for-sale equity instruments are recognised in profit or loss as part of other income when the group’s right to receive payment is established.

Changes in fair value of available-for-sale financial assets denominated in a foreign currency are analysed between translation differences resulting from changes in amortised cost and other changes in the carrying amount. Translation differences on monetary items are recognised in profit or loss, while translation differences on non-monetary items are recognised in other comprehensive income and accumulated in equity.

Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective-interest method.

derecognition Financial assets are derecognised when the rights to receive cash flows from the investments have expired or

have been transferred and the group has transferred substantially all risks and rewards of ownership.



1.7 financial instruMents (continued) fair value determination The fair values of quoted investments are based on current bid prices. If the market for a financial asset is

not active (and for unlisted securities), the group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs.

impairment of financial assets At each reporting date the group assesses all financial assets, other than those at fair value through profit or

loss, to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired.

For amounts due to the group, significant financial difficulties of the counterparty, probability that the counterparty will enter bankruptcy and default of payments are all considered indicators of impairment.

In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator of impairment. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity as a reclassification adjustment to other comprehensive income and recognised in profit or loss.

Impairment losses are recognised in profit or loss.

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

Reversals of impairment losses are recognised in profit or loss except for equity investments classified as available-for-sale. Impairment losses are also not subsequently reversed for available-for-sale equity investments which are held at cost because fair value was not determinable.

loans to group companies These include loans to the subsidiary and associates and are recognised initially at fair value plus direct

transaction costs.

Loans to group companies are classified as available-for-sale financial assets and are measured at fair value.

loans from minority shareholders Loans from minority shareholders are classified as other financial liabilities and are measured at amortised cost.

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

cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss.

Trade receivables are classified as loans and receivables.

Other receivables are classified as available-for-sale financial assets and are measured at fair value.


1.7 financial instruMents (continued) trade and other payables Trade and other payables are initially measured at fair value, and are subsequently measured at amortised

cost, using the effective-interest method.

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

investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.

bank overdraft and borrowings Bank overdrafts and borrowings are initially measured at fair value, and are subsequently measured at

amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the group’s accounting policy for borrowing costs.

1.8 tax current tax assets and liabilities Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount

already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities and assets for the current and prior periods are measured at the amount expected to be 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 tax assets and liabilities A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the

deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit or loss nor taxable profit/(tax loss).

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit/(tax loss).

A deferred tax asset is recognised for the carry forward of unused tax losses and unused STC credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused STC credits can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

tax expenses Current and deferred taxes are recognised as income or an expense and included in profit or loss for the

period, except to the extent that the tax arises from: • atransactionoreventwhichisrecognised,inthesameoradifferentperiod,toothercomprehensive

income; or • atransactionoreventwhichisrecognised,inthesameoradifferentperioddirectlyinequity;or • abusinesscombination.

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

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



1.9 leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to

ownership. All other leases are classified as operating leases.

operating leases – lessee Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The

difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease liability. This liability is not discounted.

1.10 inventory Inventories are measured at the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

The cost of inventories is assigned using the weighted average cost formula. The same cost formula is used for all inventories having a similar nature and use to the entity.

When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any writedown of inventories to net realisable value and all losses of inventories is recognised as an expense in the period the writedown or loss occurs. The amount of any reversal of any writedown of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

1.11 construction contracts and receivables Where the outcome of a construction contract can be estimated reliably, contract revenue and costs are

recognised by reference to the stage of completion of the contract activity at the end of the reporting period, as measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs.

Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent that contract costs incurred are recoverable. Contract costs are recognised as an expense in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Where contract costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is shown as amounts due from customers for contract work. For contracts where progress billings exceed contract costs incurred to date plus recognised profit less recognised losses, the surplus is shown as the amounts due to customers for contract work. Amounts received before the related work is performed are included in the statement of financial position as a liability, as advance received. Amounts billed for work performed but not yet paid by the customer are included in the statement of financial position under construction contract receivable.


1.12 iMpairMent of assets The group assesses at the end of each reporting period whether there is any indication that an asset may be

impaired. If any such indication exists, the group estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the group also: • Testsintangibleassetswithanindefiniteusefullifeorintangibleassetsnotyetavailableforusefor

impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period.

• Testsgoodwillacquiredinabusinesscombinationforimpairmentannually.

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

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

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

Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination.

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

• first,toreducethecarryingamountofanygoodwillallocatedtothecash-generatingunit;and • then,totheotherassetsoftheunit,prorataonthebasisofthecarryingamountofeachassetintheunit.

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

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

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

1.13 share capital and equity An equity instrument is any contract that evidences a residual interest in the assets of an entity after

deducting all of its liabilities.

If the group reacquires its own equity instruments, those treasury shares are deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the group’s own equity instruments. Consideration paid or received shall be recognised directly in equity.

1.14 share-based payMents Goods or services received or acquired in a share-based payment transaction are recognised when the goods

or as the services are received. A corresponding increase in equity is recognised if the goods or services were received in an equity-settled share-based payment transaction or a liability if the goods or services were acquired in a cash-settled share-based payment transaction.



1.14 share-based payMents (continued) When the goods or services received or acquired in a share-based payment transaction do not qualify for

recognition as assets, they are recognised as expenses.

For equity-settled share-based payment transactions the goods or services received and the corresponding increase in equity are measured, directly, at the fair value of the goods or services received provided that the fair value cannot be estimated reliably.

If the fair value of the goods or services received cannot be estimated reliably, their value and the corresponding increase in equity, indirectly, are measured by reference to the fair value of the equity instruments granted.

For cash-settled share-based payment transactions, the goods or services acquired and the liability incurred are measured at the fair value of the liability. Until the liability is settled, the fair value of the liability is remeasured at each reporting date and at the date of settlement, with any changes in fair value recognised in profit or loss for the period.

If the share-based payments granted do not vest until the counterparty completes a specified period of service, group accounts for those services as they are rendered by the counterparty during the vesting period, (or on a straight-line basis over the vesting period).

If the share-based payments vest immediately the services received are recognised in full.

For share-based payment transactions in which the terms of the arrangement provide either the entity or the counterparty with the choice of whether the entity settles the transaction in cash (or other assets) or by issuing equity instruments, the components of that transaction are recorded as a cash-settled share-based payment transaction if, and to the extent that, a liability is settled in cash or other assets have been incurred, or as an equity-settled share-based payment transaction if, and to the extent that, no such liability has been incurred.

1.15 eMployee benefits short-term employee benefits The cost of short-term employee benefits, (those payable within 12 months after the service is rendered,

such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are 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 profitsharing 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 as they fall due.

Payments made to industry-managed (or state plans) retirement benefit schemes are dealt with as defined-contribution plans where the group’s obligation under the schemes is equivalent to those arising in a defined-contribution retirement benefit plan.

1.16 provisions and contingencies Provisions are recognised when: • thegrouphasapresentobligationasaresultofapastevent; • itisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettlethe

obligation; and • areliableestimatecanbemadeoftheobligation.

The amount of a provision is the present value of the expenditure expected to be required to settle the obligation.


1.16 provisions and contingencies (continued) Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another

party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision.

Provisions are not recognised for future operating losses.

If an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 41.

1.17 revenue Revenue from the sale of goods is recognised when all the following conditions have been satisfied: • thegrouphastransferredtothebuyerthesignificantrisksandrewardsofownershipofthegoods; • thegroupretainsneithercontinuingmanagerialinvolvementtothedegreeusuallyassociatedwith

ownership nor effective control over the goods sold; • theamountofrevenuecanbemeasuredreliably; • itisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtothegroup;and • thecostsincurredortobeincurredinrespectofthetransactioncanbemeasuredreliably.

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

• theamountofrevenuecanbemeasuredreliably; • itisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtothegroup; • thestageofcompletionofthetransactionattheendofthereportingperiodcanbemeasuredreliably;and • thecostsincurredforthetransactionandthecoststocompletethetransactioncanbemeasuredreliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable.

Service revenue is recognised by reference to the stage of completion of the transaction at the end of the reporting period. Stage of completion is determined by the proportion that costs incurred to date bear to the total estimated cost of the transaction.

Contract revenue comprises: • theinitialamountofrevenueagreedinthecontract;and • variationsincontractwork,claimsandincentivepayments: – to the extent that it is probable that they will result in revenue; and – they are capable of being reliably measured.

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

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

1.18 cost of sales When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period

in which the related revenue is recognised. The amount of any writedown of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the writedown or loss occurs. The amount of any reversal of any writedown of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

The related cost of providing services recognised as revenue in the current period is included in cost of sales.



1.18 cost of sales (continued) Contract costs comprise: • coststhatrelatedirectlytothespecificcontract; • coststhatareattributabletocontractactivityingeneralandcanbeallocatedtothecontract;and • suchothercostsasarespecificallychargeabletothecustomerunderthetermsofthecontract.

1.19 borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying

asset are capitalised as part of the cost of that asset until such time as the asset is ready for its intended use. The amount of borrowing costs eligible for capitalisation is determined as follows:

• Actualborrowingcostsonfundsspecificallyborrowedforthepurposeofobtainingaqualifyingassetlessany temporary investment of those borrowings.

• Weightedaverageoftheborrowingcostsapplicabletotheentityonfundsgenerallyborrowedforthepurpose of obtaining a qualifying asset. The borrowing costs capitalised do not exceed the total borrowing costs incurred.

The capitalisation of borrowing costs commences when: • expendituresfortheassethaveoccurred; • borrowingcostshavebeenincurred;and • activitiesthatarenecessarytopreparetheassetforitsintendeduseorsaleareinprogress.

Capitalisation is suspended during extended periods in which active development is interrupted.

Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

1.20 translation of foreign currencies foreign currency transactions A foreign currency transaction is recorded, on initial recognition in the functional currency, by applying to the

foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

At the end of the reporting period: • foreigncurrencymonetaryitemsaretranslatedusingtheclosingrate; • non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyaretranslatedusing

the exchange rate at the date of the transaction; and • non-monetaryitemsthataremeasuredatfairvalueinaforeigncurrencyaretranslatedusingtheexchange

rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognised in profit or loss in the period in which they arise.

When a gain or loss on a non-monetary item is recognised to other comprehensive income and accumulated in equity, any exchange component of that gain or loss is recognised to other comprehensive income and accumulated in equity. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is recognised in profit or loss.

Cash flows arising from transactions in a foreign currency are recorded in the functional currency by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the cash flow.


1.20 translation of foreign currencies (continued) investments in subsidiaries, joint ventures and associates The results and financial position of a foreign operation are translated into the functional currency using the

following procedures: • assetsandliabilitiesforeachstatementoffinancialpositionpresentedaretranslatedattheclosingrate

at the date of that statement of financial position; • incomeandexpensesforeachitemofprofitorlossaretranslatedatexchangeratesatthedatesofthe

transactions; and • allresultingexchangedifferencesarerecognisedtoothercomprehensiveincomeandaccumulatedas

a separate component of equity.

Exchange differences arising on a monetary item that forms part of a net investment in a foreign operation are recognised initially to other comprehensive income and accumulated in the translation reserve. They are recognised in profit or loss as a reclassification adjustment through to other comprehensive income on disposal of net investment.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation are treated as assets and liabilities of the foreign operation.

The cash flows of a foreign subsidiary are translated at the exchange rates between the functional currency and the foreign currency at the dates of the cash flows.

1.21 segMent reporting An operating segment is a component of the group that engages in business activities from which it may

earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the group’s other components.

All operating segments’ operating results are reviewed regularly by the group’s chief executive officer to make decisions about the resources to be allocated to the segment and assess its performance and for which discrete information is available.



2. changes in accounting policy The financial statements have been prepared in accordance with International Financial Reporting Standards

on a basis consistent with the prior year except for the adoption of the following new or revised standards: • May2008AnnualImprovementstoIFRSs:AmendmentstoIFRS5Non-currentAssetsHeldforSaleand

Discontinued Operations • 2009AnnualImprovementsProject:AmendmentstoIAS1PresentationofFinancialStatements • 2009AnnualImprovementsProject:AmendmentstoIAS7StatementofCashFlows • 2009AnnualImprovementsProject:AmendmentstoIAS36ImpairmentofAssets • 2009AnnualImprovementsProject:AmendmentstoIAS38IntangibleAssets

2009 annual iMproveMents proJect: aMendMents to ifrs 5 non-current assets held for sale and discontinued operations

The amendment specifies that disclosures of other standards do not apply to non-current assets (or disposal groups) held for sale or discontinued operations, unless specifically required by other standards or for measurement disclosures of assets and liabilities in a disposal group which are outside the measurement requirements of IFRS 5 (AC 142) Non-current Assets Held for Sale and Discontinued Operations.

The effective date of the amendment is for years beginning on or after 1 January 2010. The group has adopted the amendment for the first time in the 2011 financial statements. The impact of the amendment is not material.

2009 annual iMproveMents proJect: aMendMents to ias 1 presentation of financial stateMents

The amendment clarifies that a liability which could, at the option of the counterparty, result in its settlement by the issue equity instruments, does not affect its classification as current or non-current.

The effective date of the amendment is for years beginning on or after 1 January 2010.

The group has adopted the amendment for the first time in the 2011 financial statements.

The impact of the amendment is not material.

2009 annual iMproveMents proJect: aMendMents to ias 7 stateMent of cash flows The amendment provides that expenditure may only be classified as ‘cash flows from investing activities’

if it resulted in the recognition of an asset on the statement of financial position.


The group has adopted the amendment for the first time in the 2011 financial statements.

The impact of the amendment is not material.

2009 annual iMproveMents proJect: aMendMents to ias 36 iMpairMent of assets The amendment now requires that, for the purpose of goodwill testing, each group of units to which goodwill

is allocated shall not be larger than an operating segment as defined in paragraph 5 of IFRS 8 (AC 145) Operating Segments. Thus the determination is now required to be made before operating segments are aggregated.


The group has adopted the amendment for the first time in the 2011 financial statements. The impact of the amendment is not material.

notes to the financial stateMents for the year ended 30 June 2011


3. property, plant and equipMent2011 2010

cost/valuation

accumulated depreciation

and impairment

carrying value

Cost/Valuation

Accumulated depreciation

and impairment

Carrying value

groupLand and buildings 32 800 000 – 32 800 000 62 212 408 – 62 212 408Leasehold property 650 000 – 650 000 650 000 – 650 000Plant and machinery 26 429 530 (5 488 729) 20 940 801 27 669 703 (7 573 219) 20 096 484Furniture and fixtures 1 372 365 (548 187) 824 178 4 085 573 (1 035 676) 3 049 897Motor vehicles 6 793 383 (2 371 760) 4 421 623 12 692 629 (6 174 292) 6 518 337Office equipment 493 942 (363 694) 130 248 579 739 (319 062) 260 677Computer equipment 2 451 490 (2 115 389) 336 101 4 309 418 (2 828 453) 1 480 965Leasehold improvements 279 568 (179 168) 100 400 1 881 349 (847 105) 1 034 244Workshop equipment – – – 1 270 678 (964 439) 306 239Tools 1 227 626 (987 441) 240 185 2 853 519 (2 236 176) 617 343Total 72 497 904 (12 054 368) 60 443 536 118 205 016 (21 978 422) 96 226 594

reconciliation of property, plant and equipMent – group – 2011

openingbalance additions

reclassi-fication

disposalsand

scrappingdisposal ofsubsidiary

re-valuations

de-preciation total

Land and buildings 62 212 408 88 150 – – (27 323 155) (2 177 403) – 32 800 000Leasehold property 650 000 – – – – – – 650 000Plant and machinery 20 096 484 3 100 993 306 239 – – – (2 562 915) 20 940 801Furniture and fixtures 3 049 897 41 394 – – (1 873 517) – (393 594) 824 178Motor vehicles 6 518 337 282 674 2 702 (394 804) (297 857) – (1 689 429) 4 421 623Computer equipment 1 480 965 82 823 (774 061) – – – (453 626) 336 101Office equipment 260 677 100 510 771 359 – (848 256) – (154 042) 130 248Leasehold improvements 1 034 244 – – – (640 892) – (292 950) 100 400Workshop equipment 306 239 – (306 239) – – – – –Tools 617 343 173 421 – – – – (550 579) 240 185

96 226 594 3 869 965 – (394 804) (30 983 683) 2 177 403 (6 097 135) 60 443 536

reconciliation of property, plant and equipMent – group – 2010

Opening balance Additions

Disposals and

scrappingRe-

valuationsDe-

preciation TotalLand and buildings 45 950 750 1 539 183 – 14 722 475 – 62 212 408Leasehold property 490 000 – – 160 000 – 650 000Plant and machinery 22 011 134 812 055 – – (2 726 705) 20 096 484Furniture and fixtures 2 555 177 907 385 – – (412 665) 3 049 897Motor vehicles 6 807 987 2 150 510 – – (2 440 160) 6 518 337Computer equipment 1 694 164 487 500 – – (700 699) 1 480 965Office equipment 316 910 22 145 – – (78 378) 260 677Leasehold improvements 1 033 240 418 884 – – (417 880) 1 034 244Workshop equipment 659 391 56 172 (86 059) – (323 265) 306 239Tools 898 292 519 021 – – (799 970) 617 343

82 417 045 6 912 855 (86 059) 14 882 475 (7 899 722) 96 226 594

notes to the financial stateMents for the year ended 30 June 2011(continued)


group coMpany2011 2010 2011 2010

r R r R3. property, plant and equipMent

(continued) encuMbered as securityCarrying value of property, plant and equipment encumbered as security:

Land and buildings 32 800 000 33 311 082 – –Encumbered as security for mortgage bonds as further detailed in note 24 as well as a third mortgage bond in favour of Mayfair Speculators (Proprietary) Limited.

Motor vehicles 3 827 136 5 649 790 – –Encumbered as security for instalment sale agreements as further detailed in note 24.

Plant and machinery 12 403 520 12 138 079 – –Encumbered as security for instalment sale agreements as further detailed in note 24.

Computer equipment – 21 632 – –Encumbered as security for instalment sale agreements as further detailed in note 24.

Workshop equipment – 153 232 – –Encumbered as security for instalment sale agreements as further detailed in note 24.

details of propertiesleasehold propertyBeing Erf No 1088 situated in the municipality of Evander Ext 2, held under Title Deed No T95553/2002– At cost 144 005 144 005 – –– Accumulated revaluation 505 995 505 995 – –

650 000 650 000 – –angola propertiesBeing property held under File No 09.109_328 situated in Bengo, Angola.

The valuation was performed by an independent valuator, Dr Angelo Nautiseo of Proprime, Consultora e Avaliacao Imobilario, not connected to the group, based on the open market value of the land as at 30 June 2011. Management does not deem the value on 30 June 2011 to differ significantly from the value at the date of disposal of the majority share in RARE Group Angola Energy SA, being 29 March 2011.– At cost 2 165 634 2 165 634 – –– Additions since purchase 1 471 126 1 471 126 – –– Accumulated revaluation 12 518 052 13 411 344 – –– Disposal of subsidiary (16 154 812) – – –

– 17 048 104 – –


group coMpany2011 2010 2011 2010

r R r R3. property, plant and equipMent

(continued) Being property held under File No 09.109_203 situated in Huambo, Angola.

The valuation was performed by an independent valuator, Dr Angelo Nautiseo of Proprime, Consultora e Avaliacao Imobilario, not connected to the group, based on the open market value of the land as at 30 June 2011. Management does not deem the value on 30 June 2011 to differ significantly from the value at the date of disposal of the majority share in RARE Group Angola Energy SA, being 29 March 2011.– At cost 2 298 546 2 298 546 – –– Accumulated revaluation 8 869 797 9 554 676 – –– Disposal of subsidiary (11 168 343) – – –

– 11 853 222 – –kliprivier Being the remainder of portion 22 of the farm Waterfal 150IR situated in the municipality of Midvaal held under the Title Deed No T168191/2007.– At cost 12 000 000 12 000 000 – –– Accumulated revaluation 6 656 074 7 255 306 – –– Capitalised expenditure 14 143 926 14 055 776 – –

32 800 000 33 311 082 – – The effective date of the valuation was 30 June 2011. The valuation was performed by the directors. The valuation was based on the capitalised earnings method by determining the property’s maintainable earnings and using a capitalisation rate of 12,00% per annum (2010: 10,26%). The following significant assumptions were used.

1. A vacancy provision of 2,00%2. Expenses have been prepared based on the

principles of a triple net lease.3. Market-related rental of R65,30 (2010: R62,30)

per square metre.

Had the group’s land and buildings been measured on a historical cost basis, their carrying amount would have been as follows:Land 12 144 005 20 899 878 – –Buildings 14 143 926 11 235 209 – –

26 287 931 32 135 087 – –



2011 2010

costaccumulated impairment

carrying value Cost

Accumulated impairment

Carrying value

4. goodwillgroup Goodwill 35 230 635 (34 774 119) 456 516 35 578 446 (29 489 889) 6 088 557

opening balance

disposal of subsidiary

impairment loss total

reconciliation of goodwill – group – 2011Goodwill 6 088 557 (347 811) (5 284 230) 456 516

Opening balance

Impairment loss Total

reconciliation of goodwill – group – 2010Goodwill 35 578 446 (29 489 889) 6 088 557

For the purpose of the impairment testing, goodwill is allocated to the group’s operating divisions, which represent the lowest level within the group at which goodwill is monitored for internal management purposes and which is not higher than the group’s operating segments as reported in the consolidated financial statements.

group coMpany2011 2010 2011 2010

r R r Rthe aggregate carrying amounts of goodwill allocated to each unit are as follows:Angola division – 347 811 – –Water Utilities division 456 516 456 516 – –Energy division – 5 284 230 – –

456 516 6 088 557 – –

During the year under review the majority stake in the Angola division was sold.

The recoverable amount of these cash-generating units are determined based on a value-in-use calculation which was determined by discounting the future pre-tax cash flows generated from the continued use of the unit and based on the following key assumptions:

• Cashflowprojectionsarebasedonfinancialbudgetsapprovedbythedirectorscoveringafive-yearperiodand are determined using past experience and actual operating results;

• Cashflowsbeyondthefive-yearperiodhasnotbeentakenintoaccount; • Thebudgetedturnoverfortheensuingfinancialyearwasescalatedbyagrowthrateof10,00%perannum,

while maintaining similar gross and net margins in line with previous years; • Workingcapitalwasmaintainedattheaverageoperatinglevelsforthelastthreeyears;and • Apre-taxdiscountrateof21,87%(2010:17,80%)wasused.

The recoverable amount of the Water Utilities division was determined to be higher than the carrying amount, hence no impairment was recognised.

The directors believe that any reasonable possible change in the key assumptions on which the recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.

The recoverable amount of the Energy division was determined to be lower than the carrying amount, hence a further impairment of R5 284 230 (2010: R29 489 889) was recognised.


2011 2010

cost

accumulated amortisation

and impairment

carrying value Cost

Accumulated amortisation

and impairment

Carrying value

5. intangible assetgroupTrademarks 937 622 (198 014) 739 608 1 980 145 (1 042 523) 937 622Licences 581 455 (47 485) 533 970 581 455 (24 227) 557 228Computer software 5 579 066 (759 739) 4 819 327 1 719 680 (609 911) 1 109 769CABGOC MRO development costs – – – 12 758 888 (3 513 287) 9 245 601total 7 098 143 (1 005 238) 6 092 905 17 040 168 (5 189 948) 11 850 220

opening balance additions

disposal of subsidiary amortisation

impairment loss total

reconciliation of intangible assets – group – 2011Trademarks 937 622 – – (198 014) – 739 608Licences 557 228 – – (23 258) – 533 970Computer software 1 109 769 4 547 468 (47 542) (790 368) – 4 819 327CABGOC MRO development cost 9 245 601 – – (1 827 157) (7 418 444) –

11 850 220 4 547 468 (47 542) (2 838 797) (7 418 444) 6 092 905

Opening balance Additions Amortisation Total

reconciliation of intangible assets– group – 2010Trademarks 1 742 528 - (804 906) 937 622Licences – 581 455 (24 227) 557 228Computer software 349 538 995 603 (235 372) 1 109 769CABGOC MRO development cost 8 468 278 3 011 684 (2 234 361) 9 245 601

10 560 344 4 588 742 (3 298 866) 11 850 220

impairment of the cabgoc Mro contract The recoverable amount of the intangible asset was determined based on the value-in-use calculation.

Due to a large decline in sales activity, recurring losses and a suspension of the CABGOC MRO contract, the recoverable amount of the asset was determined to be lower than the carrying amount. An impairment of R7 418 444 (2010: Rnil) was recognised.

Name of companyListed/

unlisted% holding

2011% holding

2010fair value

2011Fair value

20106. investMent in subsidiary

The RARE Group (Proprietary) Limited Unlisted 100,00 100,00 109 538 417 89 538 417Impairment of investment in subsidiary (98 920 133) –

10 618 284 89 538 417

The carrying amount of the subsidiary is shown net of any impairment losses. An impairment loss of R98 920 133 (2010: Rnil) was recognised during the year under review.



Name of companyListed/

unlisted% holding

2011% holding

2010fair value

2011Fair value

20107. investMents in associates

Zeta Training Solutions (Proprietary) Limited Unlisted 49,00 49,00 49 49Tasonline Software (Proprietary) Limited Unlisted 25,10 25,10 900 000 900 000

900 049 900 049

The carrying amounts of associates are shown net of any impairment losses. No impairment losses have been recognised.

2011r

2010R

summary of the financial information of the associatesTotal assets 2 030 037 2 721 158Total liabilities (4 982 492) (3 616 704)Revenue 5 132 913 6 348 247Loss for the year (1 397 676) (283 579)

group coMpany

2011 2010 2011 2010r R r R

8. loans to group coMpaniessubsidiaryThe RARE Group (Proprietary) Limited – – 58 651 449 44 765 280 This unsecured loan does not bear interest at year end (2010: interest bearing at the prime overdraft lending rate, being 10,00%). The loan is not subject to any fixed terms of repayment and it is not expected to be repaid within the ensuing 12 months.

associatesZeta Training Solutions (Proprietary) Limited 1 389 400 1 244 693 – –

Tasonline Software (Proprietary) Limited 2 638 942 1 826 058 – –

These unsecured loans bear interest at the prime overdraft lending rate being 9,00% (2010: 10,00%) and are not subject to any fixed terms of repayment. The loans are expected to be repaid within the ensuing 12 months. The loan to Tasonline Software (Proprietary) Limited is secured by personal sureties in favour of a subsidiary.

4 028 342 3 070 751 – – Impairment of loans to associates (839 177) – –

3 189 165 3 070 751 – –Non-current assets – – 58 651 449 44 765 280Current assets 3 189 165 3 070 751 – –

3 189 165 3 070 751 58 651 449 44 765 280


8. loans to group coMpanies (continued) credit quality of loans to group companies The credit quality of loans to group companies that are neither past due nor impaired can be assessed by

reference to the financial position of the relevant companies, past experience and other factors.

During the reporting period, there has been a significant change in the financial position of the companies. The financial position of the companies was determined by assessing the companies’ solvency, liquidity and profitability of related sureties held as security.

These loans are denominated in rand.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of loan above. Certain loans to associates are secured by personal sureties in favour of a subsidiary.

fair value of loans to group companies The carrying amount of the loans to group companies approximate the fair value.

loan to group company impaired As of 30 June 2011, the loan to the associate of R839 177 (2010: Rnil) was impaired and provided for as

follows:

group coMpany2011 2010 2011 2010

r R r RZeta Training Solutions (Proprietary) Limited 839 177 – – –reconciliation of loan to group company impairedImpairment losses recognised 839 177 – – –



group coMpany2011 2010 2011 2010

r R r R9. other financial assets

at fair value through profit or lossSanlam Collective Investments Limited 10 040 706 5 223 699 – –

These funds were invested in Sanlam Alternative Income Fund and have been encumbered as security for Sanlam Capital Limited in terms of the debtors securitisation agreement as further detailed in note 15.

available-for-saleInvestment: RARE Group Angola SARL 64 435 – – – The investment comprises 10,00% of the unlisted shares in RARE Group Angola SARL, a company incorporated in Angola. During the year under review the majority shareholding in the company was disposed of.

Other loan receivable 285 080 – – –This loan is unsecured, interest free and is not subject to any fixed terms of repayment.

RARE Petrochemical Angola Energy SARL 11 262 117 – – – This unsecured loan bears interest at the prime overdraft lending rate per annum being 9,00% at year end and is not subject to any fixed terms of repayment. In 2010 the entity was an indirectly held subsidiary of the group and therefore eliminated at consolidation level.

RARE Group Angola SARL 48 461 461 – – – This unsecured loan bears interest at the prime overdraft lending rate per annum being 9.00% at year end and is not subject to any fixed terms of repayment. In 2010 the entity was a subsidiary of the group and therefore eliminated at consolidation level.

Liberty Excelsior 300 Investments – 662 526 – –These unlisted investments were carried at fair value and were sold during the year under review.

60 073 093 662 526 – – Available-for-sale (impairments) (59 788 013) – –

285 080 662 526 – – total other financial assets 10 325 786 5 886 225 – –non-current assetsAvailable for sale 285 080 662 526 – –current assetsAt fair value through profit or loss 10 040 706 5 223 699 – –

10 325 786 5 886 225 – –


9. other financial assets (continued) currencies The maximum exposure to credit risk at the reporting date is the fair value of each class of loan/asset

mentioned above. The group does not hold any collateral as security.

All financial assets are denominated in South African rand.

credit quality of other financial assets The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to

the financial position of the relevant companies, past experience and other factors.

During the reporting period under review, except for the companies mentioned below, there has not been a significant change in the financial position of the companies. The financial position of the companies was determined by assessing the companies’ solvency, liquidity and profitability.

fair value of available-for-sale financial assets The fair value of available-for-sale financial assets is the carrying amount as these loans bear interest at

market-related interest rates, being the prime overdraft lending rate.

fair value of financial assets at fair value through profit or loss The fair value of these financial assets is determined based on the quoted market price.

other financial assets impaired As of 30 June 2011 other financial assets of R59 788 012 (2010: Rnil) were impaired and provided for

as follows:

group coMpany2011 2010 2011 2010

r R r RInvestment RARE Group Angola SARL 64 435 – – –Loan: RARE Group Angola SARL 48 461 462 – – –Loan: RARE Petrochemical Angola Energy SARL 11 262 116 – – –

59 788 013 – – –Reconciliation of other financial assets impaired – – – –Impairment losses realised 59 788 013 - – –

59 788 013 – – –

10. deferred taxdeferred tax asset Unrecognised portion of tax losses available for set off against future taxable income (10 030 474) – – –Tax losses available for set off against future taxable income 15 741 212 4 796 706 – –Accelerated capital allowances for tax purposes (2 116 905) (2 025 109) –Temporary difference on revaluation of land and buildings (1 305 915) (4 849 496) –Provisions and accruals for bonuses, leave pay, credit notes and doubtful debts 2 072 817 1 737 931 – –Prepayments (3 641) (370) – –Lease liability 32 306 32 306 – –Income received in advance 525 380 38 890 – –Foreign tax losses available for set off against future taxable income – 507 052 – –

4 914 780 237 910 – –



group coMpany2011 2010 2011 2010

r R r R10. deferred tax (continued)

reconciliation of deferred tax asset/(liability)At beginning of the year 237 910 (1 950 969) – –Originating temporary difference on prepayments (3 272) (370) –Increase in tax losses available for set off against future taxable income 10 944 507 4 193 929 – –(Originating)/reversing temporary difference on property, plant and equipment (91 796) 556 151 –Reversing foreign tax losses available for set off against future taxable income (507 052) (1 779 960) – –Originating temporary difference on operating lease liability – 58 455 –Originating temporary difference on income received in advance 486 490 38 890 – –Originating temporary difference on tax losses not recognised (10 030 474) – –Originating temporary difference on provisions and accruals for bonuses, leave pay, credit notes and doubtful debts 334 886 749 654 –Reversing/(originating) temporary difference on revaluation of land and buildings 3 543 581 (1 627 870) – –

4 914 780 237 910 – –Deferred tax asset 5 671 452 4 160 612 – –Deferred tax liability (756 672) (3 922 702) – –

4 914 780 237 910 – –

use and sales rate The deferred tax rate applied to the revaluation adjustments of land and buildings is determined by the

expected manner of recovery. Where the expected recovery of the land and buildings is through sale the capital gains tax rate of 14,00% (2010: 14,00%) is used. If the expected manner of recovery is through indefinite use the normal tax rate of 28,00% (2010: 28,00%) is applied.

As the manner of recovery of the building is through indefinite use, the normal tax rate is used as deferred

tax rate. The expected manner of recovery of the land is through sale, hence the capital gains tax rate is used.

11. retireMent benefits defined contribution plan It is the policy of the group to provide retirement benefits to all its employees. A number of defined-

contribution provident funds, all of which are subject to the Pension Funds Act of 1956, exist for this purpose.

The group is under no obligation to cover any unfunded benefits.

group coMpany2011 2010 2011 2010

r R r RThe total group contribution to such schemes 5 847 063 4 841 975 – 484 764


group coMpany2011 2010 2011 2010

r R r R12. inventories

Raw materials 16 024 493 11 196 432 – –Work in progress 778 577 9 879 862 – –Finished goods and merchandise 107 298 512 140 492 075 – –

124 101 582 161 568 369 – –Writedowns (8 780 881) – – –

115 320 701 161 568 369 – –Certain inventory has been written down to net realisable value. The adjustment amounted to R8 780 881 (2010: Rnil)

inventory encumbered as security Inventory was encumbered as security for a general notarial bond of R42 000 000 (2010: R30 000 000).

Inventory to the amount of R61 275 615 (2010: R64 434 532) has been encumbered as security to China Construction Bank for trade finance.

13. construction contracts and receivablescontracts in progress at the end of the reporting periodAmounts due from customers under construction contracts 7 745 402 14 424 065 – – At 30 June 2011 no contract debtors are due for settlement after more than 12 months (2010: Rnil) and no contract debtors were encumbered as security for overdraft facilities.

construction contracts and receivables with reference to contracts in progress at the reporting dateConstruction costs incurred plus recognised profits less recognised losses to date 7 745 402 26 266 668 – –

Less: Progress billings – (11 842 603) – –7 745 402 14 424 065 – –

14. trade and other receivablesTrade receivables 98 025 264 129 512 615 435 598Prepayments 13 005 865 410 – –Deposits 1 414 652 2 629 523 – –Value added taxation 67 914 141 694 67 914 141 174Other receivables 6 530 168 5 456 387 – –

106 051 003 138 605 629 503 512 141 174

trade and other receivables encumbered as security Trade receivables securitisation On 28 October 2008 RARE Holdings Limited and it subsidiaries collectively entered into a three-year trade

receivables securitisation funding programme, which terminated in October 2011. The facility was successfully refinanced on 17 October 2011.



14. trade and other receivables (continued) Mechanics of the structure An independently owned special purpose entity, RARE Capital (Proprietary) Limited (“SPE”) was

incorporated and the group entered into the sale of existing and future trade receivables, and other agreements with the SPE. The group maintains the right to manage and administer the collections process.

credit quality of trade receivables The average credit period granted to customers is 30 days from statement, except for certain of the

government and municipal trade receivables, which is 30 days from certification date. The remainder of the government and municipal customers have open account certification agreements with the company. One specific government and municipal debtor has 120 day terms. No interest is charged on the non-parastatal customers for the first 60 days from the date of the invoice. Thereafter, interest is charged at the prime overdraft lending rate on the outstanding balance. No interest is charged on the government and municipal customers. The company assesses whether or not to pursue legal collection for debtors exceeding 120 days from date of statement.

Of the trade balance at the end of the year, R22 115 517 (2010: R63 589 693) is due from individual debtors who represent more than 20,00% of the total balance of trade receivables.

group coMpany2011 2010 2011 2010

r R r Rtrade receivablesthe ageing of total trade debtors is as follows:Current to 60 days 61 267 498 87 200 333 – –60+ – 90 days 5 269 318 12 586 497 – –90+ – 120 days 2 360 829 3 410 845 – –120+ days 29 127 619 26 314 940 435 598 –

98 025 264 129 512 615 435 598 –the ageing of government and municipal counterparties is as follows:Current to 60 days 32 314 355 3 646 271 – –60+ – 90 days 1 612 784 665 256 – –90+ – 120 days 1 580 016 496 913 – –120+ days 7 884 088 2 324 362 – –

43 391 243 7 132 802 – –trade receivables that are neither past due nor impaired The credit quality of trade receivables that are neither past due nor impaired can be assessed by reference to historical information about counterparty default rates and external ratings:

Counterparties with credit guarantee insurance 37 132 906 51 964 203 – –Counterparties without credit guarantee insurance 4 576 750 31 589 858 – –Government and municipal counterparties 22 883 942 3 646 271 – –

64 593 598 87 200 332 – –fair value of trade and other receivablesThe carrying amount of trade and other receivables approximates the fair value.

trade receivables past due but not impaired At 30 June 2011, R33 431 666 (2010: R42 312 283) were past due but not impaired. These relate to customers from whom there has not been a significant change in credit quality and the amounts are still considered recoverable.


group coMpany2011 2010 2011 2010

r R r R14. trade and other receivables

(continued)The ageing of amounts past due but not impaired is as follows:60+ – 90 days 4 555 912 7 733 959 – –90+ – 120 days 939 136 5 862 859 – –120+ days 27 936 618 28 715 465 435 598 –

33 431 666 42 312 283 435 598 –trade receivables impaired An impairment provision of R6 398 154 (2010: R4 629 859) was recognised against trade receivables. The ageing of these impaired trade receivables is as follows:120+ days 6 398 154 4 629 859 – –currenciesThe carrying amount of trade and other receivables is denominated in the following currencies:Rand 89 886 806 97 072 298 503 512 141 174US dollar 16 164 197 41 533 331 – –

106 051 003 138 605 629 503 512 141 174reconciliation of provision for impairment of trade receivablesOpening balance 4 629 859 1 527 013 – –Impairment losses recognised 2 528 482 3 102 846 –Amounts written off as uncollectable (760 187) – –

6 398 154 4 629 859 – – The maximum exposure to credit risk at the reporting date is the carrying value of each class of trade and other receivables mentioned above. The group does not hold any collateral as security.

15. cash and cash equivalentsCash and cash equivalents consist of:Cash on hand 82 496 192 915 – –Bank balances 10 421 335 36 070 686 5 774 92Bank overdraft (2 940 448) (21 925) – –

7 563 383 36 241 676 5 774 92Current assets 10 503 831 36 263 601 5 774 92Current liabilities (2 940 448) (21 925) – –

7 563 383 36 241 676 5 774 92The banking facilities of the company are secured as follows: A general notarial bond of R40 000 000 (2010: R30 000 000) over the movable assets of the company in favour of Mayfair Speculators (Proprietary) Limited.

An unlimited cession and pledge of book debts of the RARE Group (Proprietary) Limited further detailed in note 14. Unlimited cross suretyship by RARE Holdings Limited.

Bank balances amounting to R7 411 442 (2010: R9 947 525) have been encumbered as security for Sanlam Capital Limited in terms of the debtors securitisation agreement as further detailed in note 9.



group coMpany2011 2010 2011 2010

r R r R16. discontinued operations or

disposal groups The group has disposed of it’s majority shareholding in the Angolan operations due to a lack of return on these investments.

The result of total Angolan operations is reflected below.

Profit and lossRevenue 50 284 291 126 855 025 – –Cost of sales (66 290 743) (104 584 148) – –Gross profit (16 006 452) 22 270 877 – –Other income 5 525 152 110 823 – –Operating expenses (46 405 045) (35 549 659) – –Finance cost (1 577 198) (2 340 779) – –Loss before taxation (58 463 543) (15 508 738) – –Taxation – (460 419) – –Loss for the year (58 463 543) (15 969 157) – –Cash flows fromOperating activities 2 489 835 (5 001 215) – –Investing activities (40 374 026) (22 934 397) – –Financing activities 37 573 158 18 522 098 – –

(311 033) (9 413 514) – –

loans and receivables

fair value through profit or

loss – designated

available-for-sale total

17. financial assets by categorygroup – 2011Loans to group companies – – 3 189 165 3 189 165Other financial assets – 10 040 706 285 080 10 325 786Construction contracts 7 745 402 – – 7 745 402Trade and other receivables 98 025 264 – 7 944 820 105 970 084Cash and cash equivalents 10 421 335 – – 10 421 335

116 192 001 10 040 706 11 419 065 137 651 772group – 2010

Loans to group companies – – 3 070 751 3 070 751Other financial assets – 5 223 699 662 526 5 886 225Trade and other receivables 129 512 615 – 8 085 910 137 598 525Construction contracts 14 424 065 – – 14 424 065Cash and cash equivalents – – 36 070 686 36 070 686

143 936 680 5 223 699 47 889 873 197 050 252


loans and receivables

available-for-sale total

17. financial assets by category (continued)company – 2011

Loans to group companies – 58 651 449 58 651 449Trade and other receivables 435 598 – 435 598Cash and cash equivalents – 5 774 5 774

435 598 58 657 223 59 092 821company – 2010

Loans to group companies 44 765 280 44 765 280Cash and cash equivalents 92 92

44 765 372 44 765 372

group coMpany2011 2010 2011 2010

r R r R18. share capital

authorised300 000 000 ordinary shares of R0,01 3 000 000 3 000 000 3 000 000 3 000 000100 000 000 preference shares of R0,01 each 1 000 000 1 000 000 1 000 000 1 000 000

4 000 000 4 000 000 4 000 000 4 000 000issued288 750 000 ordinary shares (2010: 88 750 000) of R0,01 each 2 887 500 887 500 2 887 500 887 500Share premium 112 714 716 74 438 156 112 945 556 74 945 556Share issue costs written off against share premium (2 724 561) (2 724 561) (2 724 561) (2 724 561)Treasury shares (1 160) (2 600) – –

112 876 495 72 598 495 113 108 495 73 108 495reconciliation of number of shares issuedOpening balance 88 750 000 88 750 000 – –Issue of shares – ordinary shares 200 000 000 – – –Treasury shares (116 000) (260 000) – –

288 634 000 88 490 000 – –

19. capital disclosuresThe group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders. The group’s overall strategy remains unchanged from 2010. The capital structure of the group consists of debt, cash and cash equivalents and equity, comprising issued capital and retained earnings.

20. foreign currency translation reserveThe translation reserve comprised exchange differences on consolidation of foreign subsidiaries.

RARE Group Angola SA – 456 444 – –RARE Petrochemical Angola Energy SA – (115 695) – –

– 340 749 – –



group coMpany2011 2010 2011 2010

r R r R21. revaluation reserve

The revaluation reserve arises on the revaluation of land and buildings. During the year under review the majority stake in the Angolan operations were disposed of, resulting in a transfer of revaluation reserve relating to Angolan properties to other comprehensive income.

Balance at the beginning of the year 14 705 413 6 405 637 – –(Decrease)/Increase on revaluation of properties (2 177 403) 15 181 813 – –Deferred tax liability arising on revaluation 625 235 (4 744 324) – –Non-controlling shareholders’ portion of revaluation 400 065 (2 137 713) – –Realisation of revaluation reserve on disposal (7 697 156) – – –

5 856 154 14 705 413 – –

22. non-controlling interest During the year under review losses of R33 976 692 (2010: R11 094 217) were allocated to the non-controlling shareholders due to subordinated loans and suretyships issued by the non-controlling shareholders in favour of all banking facilities of the Angolan subsidiaries without countersurety by the RARE Group (Proprietary) Limited, the majority shareholder.

During the year under review the majority stake in the Angolan operations was disposed of as further detailed in note 39.

23. loans froM Minority shareholders in subsidiaryRARE Group Angola SA: Outside shareholders – (2 282 490)

These loans bore no interest. The shareholders’ loans were denominated in US dollar.

During the year under review the majority stake in the Angolan operations were disposed of.

– (2 282 490)

24. other financial liabilitiesheld at amortised costRevolving inventory facility 710 785 1 690 098 – – This secured loan bears interest at the prime overdraft rate plus 1,00% per annum, being 10,00% (2010: 11,00%) at year end. Repayable over 8 (2010: 20) monthly instalments of R91 964 (2010: R92 033). This facility is secured by a general notarial bond of R42 000 000 (2010: R30 000 000) over the movable assets of the company.


group coMpany2011 2010 2011 2010

r R r R24. other financial liabilities

(continued)Instalment sale agreements 13 236 281 15 092 939 – –

Instalment sale agreements repayable over 4 to 54 months (2010: 16 to 42 months) at effective interest rates ranging from the prime overdraft interest rate less 1,50% to the prime overdraft interest rate plus 1,25%, prime overdraft interest rate being 9,00% at year-end (2010: prime less 1,50% to prime plus 1,25%). These loans are secured by assets with a carrying amount of R16 230 656 (2010: R17 962 733) and are repayable in monthly instalments of R570 414 (2010: R421 368).

Angola credit facility – 29 111 021 – –

The loan was US dollar denominated and was owed via RARE Petrochemical Angola Energy SA. During the year the group disposed of its majority holding in the Angolan entities. The loan bore interest at the Libor rate plus 0,31% being 1,20% per annum and was a dedicated credit line facility subject to annual review.

Loans secured by first mortgage bond: Absa Bank Limited 7 200 646 7 233 307 – –

First mortgage bond over property as detailed in note 3. Interest is payable at the prime overdraft lending rate less 1,00% per annum, being 8,00% (2010: 9,00%) at year end.

Loans secured by second mortgage bond: Riodor 85 (Proprietary) Limited – 4 749 796 – –

Second mortgage bond over property as detailed in note 3. The bond bore interest at the prime overdraft lending rate plus 2,00%, being 11,00% (2010: 12,00%) at year-end, and was repaid during the current year under review. Final release procedures of the bond are still in progress at the date of this report.

Employee funds in share incentive scheme trust 231 900 509 900 – –

These unsecured funds do not bear interest and are not subject to any fixed terms of repayment.



group coMpany2011 2010 2011 2010

r R r R24. other financial liabilities

(continued)Class A debentures 100 000 000 100 000 000 – –

RARE Capital (Proprietary) Limited has funded the purchase price paid to the RARE Group (Proprietary) Limited for the securitisation transaction, by issuing 100 Class A 36-month secured non-amortising rated debentures of R1 000 000 each.

The Class A debentures have been awarded a zaAA credit rating by Global Credit Ratings Co. and have been issued to Sanlam Capital Markets.

The Class A debentures bear interest at the 3-month Jibar rate plus 2,10%, with Jibar rate being 5,58% (2010: 6,62%) at year-end.

The debentures were settled on 17 October 2011.

non-current liabilitiesAt amortised cost 8 132 450 110 043 063 – –current liabilitiesAt amortised cost 113 247 162 48 343 998 – –

121 379 612 158 387 061 – –

25. trade and other payablesTrade payables 56 027 260 109 926 888 266 547Amounts received in advance 8 840 000 6 849 387 – –Value added taxation 2 625 898 2 723 642 – –China Construction Bank Trade Finance Facility 61 275 615 64 434 532 – –Accrued leave pay 1 524 047 1 442 882 – –Accrued bonus 775 335 1 271 273 – –Accrued expenses 7 037 476 5 863 498 5 932 216 838Other payables 108 151 6 470 312 – –

138 213 782 198 982 414 272 479 216 838currenciesThe carrying amounts of trade and other payables are denominated in the following currencies:Rand 130 880 393 125 402 721 272 479 216 838US dollar 2 871 871 71 858 875 – –Euro 4 356 413 1 307 390 – –Pound sterling 105 106 413 428 – –

138 213 783 198 982 414 272 479 216 838



25. trade and other payables (continued) The following facilities are available to RARE Group (Proprietary) Limited and its subsidiaries: China Bank Construction: $12 500 000 (R85 000 000) (2010: $12 500 000 (R95 103 750)) HSBC – trade finance facility: $nil (2010: $7 500 000 (R57 062 250)) HSBC – foreign exchange facility: $nil (2010: $5 000 000 (R38 041 500))

The terms of the China Construction Bank facility is 180 days; interest is charged at the LIBOR rate plus 2,50%. The facility will be reviewed on 30 November 2011.

The specific inventory items purchased under this agreement act as security for the outstanding balances as further detailed in note 12.

The total amount of undrawn facilities available for future operating activities and commitments is R23 724 385 (2010: R23 244 875).

26. financial liabilities by category The accounting policies for financial instruments have been applied to the line items below:

financial liabilities at

amortised cost total

group – 2011Other financial liabilities 121 379 612 121 379 612Trade and other payables 126 747 886 126 747 886Bank overdraft 2 940 448 2 940 448

251 067 946 251 067 946group – 2010Loans from minority shareholders 2 282 490 2 282 490Other financial liabilities 158 387 061 158 387 061Trade and other payables 184 558 351 184 558 351Bank overdraft 21 925 21 925

345 249 827 345 249 827company – 2011Trade and other payables 272 479 272 479company – 2010Trade and other payables 216 838 216 838

group coMpany2011 2010 2011 2010

r R r R27. revenue

Sale of goods 237 125 272 371 258 153 – –Rendering of services 29 420 716 10 840 940 – – Construction contracts 51 310 315 14 424 065 – – Discount allowed (2 691 308) (3 969 540) – –

315 164 995 392 553 618 – –

28. cost of salessale of goodsCost of goods sold 199 175 758 285 456 735 – – Services rendered 62 775 350 24 467 957 – –

261 951 108 309 924 692 – –


group coMpany2011 2010 2011 2010

r R r R29. operating loss

Operating loss for the year is stated after accounting for the following:

income from subsidiariesDividends – (306 372) – –Interest – 190 078 – 3 516 023Management fees – – 2 305 200 11 941 711

– (116 294) 2 305 200 15 457 734remuneration, other than to employees, for:Secretarial services 228 273 20 864 – –operating lease chargesPremises•Smoothedamounts 2 530 700 7 251 367 – –Equipment•Smoothedamounts 2 154 627 2 452 501 – –

4 685 327 9 703 868 – –Loss/(profit) on sale of property, plant and equipment 99 962 (115 522) – –Impairment of investment in subsidiaries – – 98 920 133 –Impairment of other financial assets 59 788 012 – – –Impairment of loan to associate 839 177 – – –Impairment on trade and other receivables 1 510 352 544 629 – –(Profit)/loss on exchange differences (809 369) 1 899 218 – –Amortisation on intangible assets 925 745 3 298 858 – –Administration fees – 2 719 040 – –Depreciation on property, plant and equipment 4 970 974 7 899 722 – –Employee costs 43 909 881 69 349 672 518 393 6 998 571Defined-contribution funds 5 580 228 4 841 975 – 484 764Consulting and professional fees 1 545 517 2 387 224 – 1 842 460Research and development 27 796 87 091 27 796 –Legal fees 1 755 617 993 100 – 12 750Impairment of goodwill 5 284 230 29 489 889 – –Writedown of stock 8 780 881 – – –Movement in provision for doubtful debt 1 702 025 – – –Profit on sale of subsidiary 49 815 107 – – –

30. share based payMents On 28 November 2008 the company established the RARE Holdings Limited Share Plan (The Plan). The Plan

was established for executive directors and selected employees of RARE and its subsidiaries and associates (the group), who receive awards based on the share price of RARE and on the value of their allocations of Share Appreciation Rights or awards of Performance Units as detailed below. The scheme is a cash-settled share option scheme.

share appreciation rights (sars) method For the SARs, the eligible employees will receive the value of the difference between the exercise price

and the allocated price. Vesting of each allocation of SARs will occur in equal tranches on the third, fourth and fifth anniversary of each allocation. Individuals may elect to defer exercise of their units until the sixth anniversary whereafter, if not exercised, the SARs will lapse and be cancelled.

For the SARs, upon termination of employment the unvested portion of the value appreciated will be settled at the date of termination of employment, unless employment is terminated for misconduct, poor performance, death by suicide or resignation by the participant.


30. share based payMents (continued) performance units (pus) method For the PUs, the eligible employees will receive annual conditional awards to the extent that the following

performance conditions have been satisfied.

For 50,00% of any award, the earnings per share of RARE will be assessed in relation to a targeted growth above inflation and GDP, and for the other 50,00% of any award, the share price performed against a selected competitor group or groups. These conditional awards will vest in three years, and to the extent that the performance conditions have been satisfied.

For PUs upon termination of employment, the unvested portion will be pro rated until termination date as if the target performance condition has been met at the date of termination and then settled, unless employment is terminated for misconduct, poor performance, death by suicide or resignation by the participant.

units granted Due to the performance of the company no units were granted during the current year under review

(2010: Nil).

group coMpany2011 2010 2011 2010

r R r R31. investMent incoMe

dividend revenueSubsidiaries – Local – (306 372) – –Other financial asset 245 144 348 033 –

245 144 41 661 – –interest revenueSubsidiaryAssociates 320 030 252 080 – 3 516 023Other interest 1 600 986 1 301 609 – –Bank 4 777 626 758 – 694SARS 89 775 – – –

2 015 588 2 180 447 – 3 516 7172 260 732 2 222 108 – 3 516 717

investment income per financial asset categoryAvailable-for-sale financial assets 2 170 957 2 222 108 – 3 516 717

32. finance costsSubsidiary – – 5 800 693 –Trade and other payables 1 694 665 2 361 714 – –Bank 4 554 911 4 474 995 – –Current borrowings 8 270 335 9 774 770 – –Instalment sales agreements 1 265 905 1 845 796 – –Other financial liabilities 933458 – – –Late payment of tax 118 313 – – –Other interest paid 733 747 1 524 604 2 263 –

17 571 333 19 981 879 5 802 956 –finance costs per financial instrument categoryAmortised cost financial liabilities 16 792 647 19 981 879 5 802 956 –



group coMpany2011 2010 2011 2010

r R r R33. taxation

Major components of the tax (income)/expensecurrentLocal income tax – current period 10 666 580 872 – 580 872deferredOriginating and reversing temporary differences (2 048 347) (3 862 434) – 392 000Deferred tax – foreign subsidiaries – (2 951 477) – –

(2 048 347) (6 813 911) – 392 000 (2 037 681) (6 233 039) – 972 872

% % % %reconciliation of the tax expenseReconciliation between statutory tax rate and average effective tax rate.

Statutory tax rate 28,00 28,00 28,00 28,00Exempt income 18,82 0,17 – –Assessed loss not recognised (14,69) – – –Land and buildings – (2,12) – –Disallowable expenditure (29,18) (14,42) (28,00) 0,14Other – (1,14) – –

2,95 10,49 – 28,14

Tax loss available for set-off against future taxable income R35 823 123 (2010: Rnil).

34. auditors’ reMunerationFees 1 365 372 1 279 441 376 103 368 395

gross tax

net before non-

controlling interest

non- controlling

interest net35. other coMprehensive

incoMe components of other comprehensive income group – 2011exchange differences on translating foreign operationsExchange differences arising during the year 6 469 204 – 6 469 204 (3 042 234) 3 426 970Realisation of foreign currency realisation reserve on disposal (4 945 783) – (4 945 783) 1 178 064 (3 767 719)

1 523 421 – 1 523 421 (1 864 170) (340 749)Movements on revaluationLoss on property valuation (2 177 399) 625 231 (1 552 168) 400 065 (1 152 103) Realisation of revaluation reserve on disposal (13 520 723) – (13 520 723) 5 823 567 (7 697 156)

(15 698 122) 625 231 (15 072 891) 6 223 632 (8 849 259)total (14 174 701) 625 231 (13 549 470) 4 359 462 (9 190 008)


Gross Tax

Net before non-

controlling interest

Non- controlling

interest Net35. other coMprehensive

incoMe (continued) components of other comprehensive income group – 2010

exchange differences on translating foreign operationsExchange differences arising during the year 1 415 323 – 1 415 323 (1 128 623) 286 700Movements on revaluationGains on property revaluation 15 029 576 (4 841 203) 10 188 373 (2 137 713) 8 050 660total 16 444 899 (4 841 203) 11 603 696 (3 266 336) 8 337 360

group coMpany2011 2010 2011 2010

r R r R36. cash (used in)/generated froM

operations(Loss)/profit before taxation (68 980 949) (59 428 329) (104 721 585) 3 457 544adjustments for:(Profit)/loss on sale of assets 99 962 (115 522) – – Movement in provision – (144 785) – – Dividends received – (41 661) – – Interest received (2 216 159) (2 181 140) – (3 516 717) Finance costs 17 571 333 17 679 364 5 802 956 – Impairment loss on investment – – 98 920 133 – Movements in operating lease assets and accruals – (80 060) – –Profit on disposal of subsidiary (49 815 078) – – – Unrealised forex (profit)/loss 5 744 755 (4 696 868) –Impairment of loans and investments 60 562 754 29 489 580 – – Impairment loss on trade receivables: bad debts 3 251 519 3 102 846 – – Writedown of inventory 8 780 881 – – – Depreciation and amortisation 5 896 719 7 137 919 – –Provision for credit notes 304 922 – –Elimination of intergroup transactions with discontinued operations 1 082 829 6 134 393 – –Other non-cash items 1 604 521 197 732 (897 156) –Impairment of goodwill 5 284 230 – – – changes in working capital:Inventories 12 964 477 941 454 – – Trade and other receivables 2 764 954 6 403 155 (435 335) (141 174) Prepayments 852 404 806 584 – –Construction contracts and receivables 6 708 664 (3 294 655) – – Trade and other payables (26 895 168) 26 822 458 128 636 (1 427 207)

(14 432 430) 28 732 465 (1 202 351) (1 627 554)



group coMpany2011 2010 2011 2010

r R r R37. tax paid

Balance at beginning of the year 275 622 (3 748 558) (438 925) (576 349) Current tax for the year recognised in profit or loss (10 666) (580 872) – (580 872)Balance at end of the year (2 013 498) (275 622) 438 925 438 925

(1 748 542) (4 605 052) – (718 296)

38. non-cash transaction Included in cash flow statement are additions to property, plant and equipment of R3 016 210 (2010: R353 809) which were funded by instalment sale agreements as further detailed in note 24.

39. sale of businesses39.1 sale of non-equity-accounted businesses

carrying value of assets soldProperty, plant and equipment 30 984 837 – – –Intangible assets 47 542 – – –Investment in subsidiary 88 358 – – –Inventories 29 008 997 – – –Trade and other receivables 4 216 750 – – –Cash and cash equivalents 807 806 – – –Share capital (285 824) – – –Foreign currency translation reserve (4 945 783) – – –Revaluation reserve (13 520 723) – – –Loans from minority shareholders (1 346 189) – – –Deferred tax (3 074 510) – – –Other financial liabilities (107 347 490) – – –Trade and other payables (27 619 186) – – –Current tax payable (118 964) – – –Accumulated loss attributable to minoritiesTotal net assets sold 43 289 272 – – –Net assets sold (49 815 107) – – –

(49 815 107) – – –Profit on disposal (49 815 107) – – –consideration receivedNet cash outflow on disposal 807 806 – – –

40. coMMitMentsoperating leases – as lessee (expense) Minimum lease payments due– within one year 776 874 724 933 – –– in second to fifth year inclusive 52 793 681 952 – –

829 667 1 406 885 – – Operating lease payments represent rentals payable by the group for certain of its office properties. Leases are negotiated for an average term of seven years and rentals are fixed for an average of three years. No contingent rent is payable.


group coMpany2011 2010 2011 2010

r R r R41. contingencies

tax consequences of undistributed reservesSTC on remaining reserves – 3 477 136 – 5 516 428

contingent liabilities The group is involved in legal action relating to customer and suppliers’ claims for alleged irregularities. If the actions are successful, the possible loss and legal cost is estimated at R1 350 000. Based on legal advice and the opinion of management, it is unlikely that the outcome of the action will have a material effect on the company’s financial position.

contingent asset The company has taken legal action against customers for alleged outstanding amounts. If the action is successful, the possible recovery is estimated at R1 400 000. Based on legal advice and the opinion of management, the likelihood of the action being successful is good.

guarantees issued by banks in favour of third partiesShort-term contingent 8 000 000 8 000 000 – –Long-term direct 789 697 2 190 729 – –Short-term presettlement 1 000 000 7 000 000 – –

9 789 697 17 190 729 – –

42. related parties Relationships Subsidiaries Refer to note 6 Partnership RARE Congo Associates Refer to note 7 Directors MT Lategan P du Plessis H Odendaal T Siyolo SJDT Potgieter DE Scheepers PJ Willemse D Ncube (resigned) MG Meehan (resigned) S Masinga (resigned) A Dlamini (resigned) Members of key management H Roets W van Coller L Archer de Carvalho (until disposal of Angolan subsidiary) AP Balutto (resigned) ED Moller (resigned) MW Welman (jr) (resigned) MW Welman (sr) (resigned)



42. related parties (continued) subsidiaries During the year in the ordinary course of business certain companies within the group entered into arm’s

length transactions. These intragroup transactions have been eliminated on consolidation.

directors Details relating to executive and non-executive directors’ remuneration are disclosed in note 42. No loans

have been made to directors.

No directors had a material interest in any contract of significance with any group company during the year under review.

key management Key management personnel are those having authority and responsibility for planning, directing and

controlling activities, directly or indirectly, including any director of that entity. No key management personnel had a material interest in any contract of significance with any group company during the year under review.

No key management personnel had a material interest in any contract of significance with any group company. In the prior year AP Ballutto had an indirect interest in an associate, Zeta Training Solutions (Proprietary) Limited (refer note 7).

group coMpany2011 2010 2011 2010

r R r Rrelated party balancesloan accounts – owing (to)/by related partiesSubsidiaries – – 58 651 449 44 765 280Associates 3 189 164 3 070 751 – –Minority shareholders – (2 282 490) – –

3 189 164 788 261 58 651 449 44 765 280related party transactionsinterest paid to/(received from) related partiesAssociates (320 050) (252 080) – –Subsidiary – – 5 800 693 (3 516 023)

(320 050) (252 080) 5 800 693 (3 516 023)Management fees paid to/(received from) related partiesSubsidiary – – (2 305 200) (11 941 711)sales to related partiesRARE Congo 6 519 448 – – –impairment of loans to associatesAssociates 839 177 – – –compensation to directors and other key managementDirectors (as detailed in note 43) 3 622 503 4 526 923 – 4 526 923Key management (as detailed in note 43) 404 167 6 970 378 – –

4 026 670 11 497 301 – 4 526 923


emolumentsother

benefits* totalr r r

43. directors’ and prescribed officers’ eMoluMentsexecutive2011

PJ Willemse 1 195 540 129 460 1 325 000DE Scheepers 1 622 087 319 353 1 941 440

2 817 627 448 813 3 266 4402010PJ Willemse 1 312 500 – 1 312 500DE Scheepers 1 733 510 221 348 1 954 858

3 046 010 221 348 3 267 358* Other benefits comprise travel allowance, provident fund and medical benefits.

securities issuedNo shares were issued to directors during the current year under review.

service contracts Executive directors are subject to written employment agreements. The employment agreements regulate duties, remuneration, allowances, restraints, leave and notice periods of these executives.

directors’fees total

non-executive2011DMJ Ncube 75 188 75 188MG Meehan 65 625 65 625S Masinga 65 625 65 625AZ Dlamini 65 625 65 625P du Plessis 84 000 84 000

356 063 356 0632010

DMJ Ncube 426 300 426 300MG Meehan 359 245 359 245S Masinga 174 000 174 000AZ Dlamini 300 020 300 020

1 259 565 1 259 565securities issuedNo shares were issued to directors during the current year under review.



emolumentsr

totalr

43. directors’ and prescribed officers’ eMoluMents (continued)prescribed officers2011L Archer de Carvalho 1 471 846 1 471 846W van Coller 104 167 104 167H Roets 300 000 300 000

1 876 013 1 876 013

Emoluments Other

benefits Total2010MW Welman Jr 1 295 173 115 566 1 410 739AP Balutto 1 214 255 142 342 1 356 597ED Moller 1 008 332 144 274 1 152 606MW Welman Sr 1 325 409 172 787 1 498 196L Archer de Carvalho 1 542 240 – 1 542 240

6 385 409 574 969 6 960 378* Other benefits comprise travel allowance, provident fund and medical benefits.

securities issued No shares were issued to individuals holding a prescribed officer or individuals related to them in the year

under review.

service contracts Members of key management are subject to written employment agreements. The employment agreements

regulate duties, remuneration, allowances, restraints, leave and notice periods of these executives.

44. restateMent of coMparative figures In the prior financial year intercompany debtors and creditors were not eliminated. The non-elimination of

these balances did not have an effect on the reported losses, related earnings per share nor the group’s net asset value. The net effect of the restatement is as follows:

group coMpany2011 2010 2011 2010

r R r R statement of financial position

Trade and other payables – 14 632 209 – –Trade and other receivables – (14 632 209) – –

Furthermore, during the current year the group disposed of its majority shareholding in its Angolan operations. In compliance with the disclosure requirements of IFRS 5, the prior year statement of comprehensive income was restated in order to provide meaningful comparative figures relating to discontinued operations. Refer to note 16 for the related disclosure.

45. risk ManageMent liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the

availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, group treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group manages liquidity risk through an ongoing review of future commitments and credit facilities and as further detailed in note 2 of the directors’ report.


45. risk ManageMent (continued) The group’s exposure to liquidity risk is a result of the funds available to cover future commitments.

The group manages liquidity risk through an ongoing review of future commitments and credit facilities.

Cash flow forecasts are prepared and adequately utilised borrowing facilities are monitored.

The table below analyses the group’s financial liabilities and net-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

less than 6 months

between 6 months and 1 year

between1 and 2 years

between 2 and

3 yearsover

3 years totalgroupat 30 June 2011

Trade and other payables 126 747 886 – – – – 126 747 886Other financial liabilities 111 546 857 3 180 927 4 603 812 2 280 661 1 740 346 123 352 603Bank overdraft 2 940 488 – – – – 2 940 488at 30 June 2010Other financial liabilities 45 874 883 3 808 160 106 500 705 3 412 799 575 873 160 172 420Trade and other payables 184 558 351 – – – – 184 558 351Loans from shareholders 2 282 490 – – – – 2 282 490Bank overdraft 21 925 – – – – 21 925companyat 30 June 2011Trade and other payables 272 477 – – – – 272 477at 30 June 2010Trade and other payables 216 838 – – – – 216 838

interest rate risk The group’s interest rate risk at statement of financial position date arises from borrowings, cash and cash

equivalents and loan receivables. Borrowings issued at variable rates expose the group to cash flow interest rate risk.

sensitivity analysis The sensitivity analysis below presents the interest rate risks in accordance with IFRS 7. It has been

determined based on the exposure to interest rates for financial instruments at the statement of financial position date and shows the effects of changes in market interest rates on interest payments, interest income and expenses and, if appropriate, shareholders’ equity. For variable rate liabilities, the analysis is prepared assuming the average liability was outstanding for the whole year. A 100 basis point increase or decrease represents management’s assessment of the reasonable possible change in interest rate.

group During the year ending 30 June 2011, if interest rates on rand-denominated borrowings had increased/

decreased with 100 basis points, with all other variables held constant, net profit for the year would have increased/decreased by R1 244 460 (2010: R1 281 564) only as a result of higher/lower interest expenses on variable borrowings, cash and cash equivalents, loans receivable and trade and other payables.

company During the year ending 30 June 2011, if interest rates on rand-denominated borrowings had been 100 basis

points higher/lower with all other variables held constant, other equity reserves would have increased/decreased by Rnil (2010: R253 204), mainly as a result of the higher/lower interest expense on variable rate loan receivables and cash and cash equivalents.



45. risk ManageMent (continued) cash flow interest rate risk group

Current interest

rate %

Due in lessthan a year

R

Due in 1 to 2 years

R

Due in 2 to 3 years

R

Due in more than

3 yearsR

Instalments sale agreements 9,00 (5 814 616) (4 966 218) (1 656 867) (798 580)China Construction Bank 9,00 (61 275 615) – – –Overdraft facilities used 9,00 (2 940 448) – – –Sanlam facility 9,00 (100 000) – – –Loans to associates 9,00 3 189 165 – – –Revolving inventory facility 10,00 – (710 785) – –Mortgage bond 8,00 (7 200 646) – – –Other financial assets 9,00 10 040 707 – – –Cash in current banking institutions 9,00 10 503 531 – – –

credit risk Credit risk consists mainly of cash deposits, cash equivalents, loan receivables and trade debtors.

The company only deposits cash with major banks with high-quality credit standing and limits exposure to any one counterparty.

Trade receivables comprise a widespread customer base. Management evaluates credit risk relating to customers, on an ongoing basis.

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the company. The company has adopted a policy of only dealing with creditworthy counterparties.

Management evaluated credit risk relating to counterparties on an ongoing basis. All new counterparties are subject to credit verification with the Credit Guarantee Insurance Corporation of Africa Limited (CGIC) where allowable. Otherwise, if there is no credit verification rating, management assesses the credit quality of the counterparty, taking into account its financial position, past experience and other factors. Credit exposure is controlled by counterparty limits that are reviewed and approved by management with reference to limits imposed by CGIC.

Ongoing credit evaluation is performed on the financial position of counterparties, and credit guarantee insurance is purchased where possible in the majority of instances, excluding government organisations and municipalities.

At year-end there is a concentration of credit risk as a single counterparty or group of counterparties having similar characteristics, exceeded 20,00% of gross monetary assets at year-end.

foreign exchange risk The group operates internationally and is exposed to foreign exchange risk arising from various currency

exposures, primarily with respect to the US dollar, euro and the GB pound. Foreign exchange risk arises from future commercial transactions.

The group does not hedge exchange fluctuations for customer supply contracts.

The group had certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the group’s foreign operations is managed primarily through borrowings denominated in the relevant foreign currencies.


45. risk ManageMent (continued) sensitivity analysis For the purpose of the sensitivity analysis the movement in the value of the rand against major foreign

currencies was assessed on an individual basis. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for the deemed change in foreign currency rates.

group At 30 June 2011, if the rand had weakened/strengthened by 6,00% (2010: 10,00%) against the US dollar,

with all other variables held constant, post-tax profit for the year would have been increased/decreased by R574 229 (2010: R1 281 564) mainly as a result of foreign exchange gains or losses on translation of US dollar- denominated trade receivables, trade payables and loans payable.

At 30 June 2011, if the rand had weakened/strengthened by 9,00% (2010: 10,00%) against the Euro with all other variables held constant, post-tax profit for the year would have increased/decreased by R282 296 (2010: R94 132), mainly as a result of foreign exchange gains or losses on translation of euro-denominated trade payables.

At 30 June 2011, if the rand had weakened/strengthened by 13,00% (2010: 10,00%) against the GB pound, with all other variables held constant, post-tax profit for the year would have been increased/decreased by R9 838 (2010: R29 767) mainly as a result of foreign exchange gains or losses on translation of GB pound-denominated trade receivables and payables.

foreign currency exposure at the end of the reporting period The company does not hedge foreign exchange fluctuations. The following items were uncovered:

group coMpany2011 2010 2011 2010

r R r Rcurrent assetsTrade receivables USD2 377 088 (2010: USD5 431 592) 16 164 197 41 325 187 – –

non-current liabilitiesLoans from minority shareholders USDnil (2010: USD300 000) – (2 282 490) – –

Other financial liabilities USDnil (2010: USD3 830 398) – (29 111 021) – –

current liabilitiesTrade payables USD422 334 (2010: USD9 444 800) (2 871 871) (71 858 875) – –EUR443 175 (2010: EUR140 585) (4 356 416) (1 307 391) – –GBP9 634 (2010: GBP36 113) (105 106) (413 429) – –exchange rates used for conversion of foreign items were:US dollar (USD) 6,80 7,61Euro 9,83 9,30GB pound (GBP) 10,91 11,45



46. segMental inforMation The group changed the composition of its reportable segments due to internal restructuring during the

current year. The group currently has five reportable segments, as described below, which are the group’s strategic business units. The strategic business units offer different products and services and are reviewed by management. For each of the strategic business units, the group’s CEO reviews internal management reports on at least a quarterly basis. The following summary describes the operations of each of the group’s reportable segments for the year ended 30 June 2011:

• Tradingsegment–Supplyanddistributionofpipes,valves,fittingsandassociatedcommoditiesfromtheKliprivier, Durban and Polokwane trading branches

• WaterUtilityServicessegment–Manufacturingofpipefittings,couplingsandcivilengineeringwork • PipelineServicessegment–Manufacturingandinstallationofplasticengineeringprojectsandproject

work in sub-Saharan Africa • Angolasegment–Servicingthewater,oilandgassectorsinAngola • Investment–Providingservicestoothersegments

During the prior year, the group reported on the following segments : • Energy–Sourcing,supplyanddistributionofpipes,valves,fittingsandassociatedcommoditiesfromthe

Kliprivier and Durban branches. • Water–Manufacturingofpipefittings,couplingsandcivilengineeringworkaswellassalesoffittingsfor

use in water industry. • Chemical–Manufacturingandinstallationofplasticengineeringprojects • Angola–Servicingthewater,oilandgassectorsinAngola • Investment–Providingservicestotheothersegments

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, finance charges and unusual expenses as included in the internal management reports that are reviewed. Inter-segmental pricing is determined on an arm’s length basis.


46. segMental inforMation (continued)

primary segment reportenergy

rwater

rchemicals

rinvestment

rtotal

r

discontinued operation

angolar

2011presenting segments as in prior yearTotal revenue 223 520 173 31 166 144 61 561 507 4 060 600 320 308 424 50 284 291Inter-segmental revenue (1 082 829) – – (4 060 600) (5 143 429) –

External revenue 222 437 344 31 166 144 61 561 507 – 315 164 995 50 284 291Segment results (24 379 680) (3 256 560) (129 717) (1 027 168) (28 793 125) (56 886 345) Impairment of goodwill (5 284 230) –Profit on disposal of Angolan operations 49 815 078 –Impairment of loans to associates (839 177) –Impairments of financial assets (59 788 013) –Writedown of stock (8 780 881) –Finance cost (17 571 333) (1 577 198) Investment income 2 260 732 –Income tax expense 2 037 681 –Net loss for the year (66 943 268) (58 463 543)Total segment assets 158 816 998 40 600 601 79 833 326 33 001 178 312 252 104 64 258 126Inter-segmental assets (15 968 185) – – – (15 968 185) –Reportable segment operating assets 142 848 813 40 600 601 79 833 326 33 001 178 296 353 143 64 258 126Total segment liabilities 105 859 156 18 633 413 27 178 880 – 151 671 449 27 619 186Inter-segmental liabilities – – (15 968 185) – (15 968 185) –Reportable segment operating liabilities 105 859 156 18 633 413 11 210 695 – 135 703 264 27 619 186Capital expenditure 4 793 352 1 039 954 2 267 182 88 150 8 188 638 228 795Depreciation and amortisation 1 537 208 1 383 747 2 975 764 – 5 896 719 3 039 215Investment in associates 900 049 – – – 900 049 –

2011r

Geographic informationrevenue from external customerscontinuing operationsSouth Africa 285 209 531Zambia 29 955 464

315 164 995discontinued operationsAngola 50 284 291

Revenue from one customer amounted to R36 570 568, arising from sales by the Energy segment, and revenue from another customer amounted to R42 084 119, arising from sales by the Angola segment.

location of non-current assetscontinuing operationsSouth Africa 61 482 030Democratic Republic of Congo 3 281 076Zambia 2 229 850


–




primary segment reporttrading

r

waterutilities

r

pipelineservices

rinvestment

rtotal

r

discontinued operations

angolar

2011presenting restructured segmentsTotal revenue 238 358 512 16 327 805 61 561 507 4 060 600 320 308 424 50 284 291Inter-segmental revenue (1 082 829) – – (4 060 000) (5 143 429) –External revenue 237 275 683 16 327 805 61 561 507 – 315 164 995 50 284 291Segment results (23 381 714) (4 254 526) (129 717) (1 027 168) (28 793 125) (56 886 345)Impairment of goodwill – (5 284 230) –Profit on disposal of Angolan operations – 49 815 078 –Impairment of loans to associates – (839 177) –Impairment of financial assets – (59 788 013) –Writedown of stock – (8 780 881) –Finance cost – (17 571 333) (1 577 198)Investment income – 2 260 732 –Income tax expense – 2 037 681 –Net loss for the year – (66 943 268) (58 463 543)Total segment assets 169 416 973 30 000 627 79 833 326 33 001 178 312 252 104 64 258 126Inter-segmental assets (15 968 165) – – – (15 968 165) –Reportable segment operating assets 153 448 807 30 000 627 79 833 326 33 001 178 296 353 143 64 258 126Total segment liabilities 111 864 483 12 628 085 27 178 880 – 151 671 449 27 619 186Inter-segmental liabilities – – (15 968 185) – (15 968 185) –Reportable segment operating liabilities 111 864 483 12 628 085 11 210 695 – 135 703 264 27 619 186Capital expenditure 4 793 352 1 039 954 2 267 182 88 150 8 188 638 228 795Depreciation and amortisation 1 541 770 1 379 185 2 975 764 – 5 896 719 3 039 215Investment in associates 900 049 – – – – 900 049

2011r

Geographic informationrevenue from external customerscontinuing operationsSouth Africa 285 209 531Zambia 29 955 464


680 614 281 Revenue from one customer amounted to R36 570 568, arising from sales by the Trading segment, and revenue from another customer amounted to R42 084 119 arising from sales by the Angola segment.location of non-current assetscontinuing operationsSouth Africa 61 482 030Democratic Republic of Congo 3 281 076Zambia 2 229 850


165 018 294



primary segment reportenergy

rwater

rchemicals

rinvestment

r

totalcontinuingoperations

r

discontinued operations

angolar

2010Total revenue 300 055 851 89 234 357 52 635 078 3 608 000 445 533 236 126 855 025Inter-segmental revenue (45 096 691) (4 274 927) – (3 608 000) (52 979 618) –External revenue 254 959 160 84 959 430 52 635 078 – 392 553 618 126 855 025Segment results 2 716 495 (15 026 335) (1 344 812) (824 796) (14 479 448) (13 167 962)Impairment of goodwill – (29 489 890) –Finance cost – (17 681 795) (2 340 779)Investment income – 2 222 801 –Income tax expense – 6 233 039 (460 419)Net loss for the year – (53 195 293) (15 969 160)Total assets 244 127 574 79 746 467 95 476 477 215 090 434 634 440 952 107 358 605Inter-segmental assets (89 081 053) – – (158 740 656) (247 821 709) (2 774 710)Reportable segment operating assets 155 046 521 79 746 467 95 476 477 56 349 778 386 619 243 104 583 895Total liabilities 251 768 779 43 460 435 56 608 778 160 290 738 512 128 730 121 591 679Inter-segmental liabilities (120 677 534) (27 585 702) (10 477 419) (45 368 699) (204 109 354) (54 750 647)Reportable segment operating liabilities 131 091 245 15 874 733 46 131 359 114 922 039 308 019 376 66 841 032Capital expenditure 2 453 096 491 746 1 914 468 68 057 4 927 367 6 691 582Depreciation and amortisation 1 276 488 1 890 062 3 399 786 – 6 566 336 4 371 086Investment in associates 900 049 – – – 900 049 –

2010R

Geographic informationrevenue from external customersfrom continuing operations 392 553 618South Africa –from discontinued operationsDiscontinued operations 126 855 025

– Revenue from one customer amounted to R113 392 461, arising from sales by Energy segment, and revenue from another customer amounted to R108 877 183, arising from sales by the Angola segment.location of non-current assetscontinuing operationsSouth Africa 72 470 243discontinued operationsAngola 42 838 257

All divisions within the group operate in an established market and are therefore considered to be subject to similar risks and rewards.

segment revenue and expenses Revenue and expenses that are directly attributable to segments are allocated to those segments. Those that

are not directly attributable to segments are allocated on a reasonable basis.

segment assets and liabilities Segment assets and liabilities comprise those operating assets and liabilities that are directly attributable to

the segment or can be allocated to the segment on a reasonable basis. Segment assets exclude investments, tax assets, bank balances, deposits and cash. Segment liabilities exclude loans, borrowings, bank overdraft and tax liabilities.

Capital expenditure represents the local costs incurred during the period to acquire segment assets that are expected to be used during more than one period, namely, property, plant and equipment, and intangible assets other than goodwill.



group coMpany2011 2010 2011 2010

r R r R47. basic earnings per share

The calculation of basic earnings per share at 30 June 2011 was based on loss for the year attributable to ordinary shareholders of RARE Holdings Limited, divided by the weighted average number of ordinary shares issued.

Loss attributable to equity holders of RAREHoldings Limited from continuing operations (66 943 268) (53 195 325) – –Loss attributable to equity holders of RAREHoldings Limited from discontinued operations (24 486 851) (4 874 943) – –Weighted average number of ordinary shares in issue 104 091 306 (88 750 000) – –Earnings per ordinary share from continuing operations (cents) (64,31) (59,94) – –Earnings per ordinary share from discontinued operations (cents) (23,52) (5,49) – –

48. diluted earnings per share The calculation of diluted earnings per share at 30 June 2011 was based on loss for the year attributable to ordinary shareholders of RARE Holdings Limited, divided by the fully diluted weighted average number of ordinary shares issued.

Loss attributable to equity holders of RAREHoldings Limited from continuing operations (66 943 268) (53 195 325) – –Loss attributable to equity holders of RAREHoldings Limited from discontinued operations (24 486 851) (4 874 943) – –Fully diluted weighted average number of ordinary shares in issue 104 091 306 88 750 000 – –Diluted earnings per ordinary share fromcontinuing operations (cents) (64,31) (59,94) – –Diluted earnings per ordinary share fromdiscontinued operations (cents) (23,52) (5,49) – –


49. headline earnings per share The calculation of headline and diluted headline earnings per share is calculated on the basis of adjusted loss

attributable to ordinary shareholders divided by the weighted number of ordinary shares in issue during the year as follows:

group coMpanygross

rnet

rgross

rnet

rLoss attributable to ordinary shareholders of RARE Holdings Limited – (91 430 119) – (58 070 233)Impairment of loans receivable 59 723 577 59 723 577 – –Impairment of investments 64 435 64 435 – –Impairment of goodwill 5 284 230 5 284 230 29 608 412 29 573 066Profit on disposal of Angolan entities 49 815 107 (35 866 856) – –

Loss/(profit) on disposal of property, plant and equipment and impairment losses 99 970 71 978 – –Headline and diluted headline earnings attributable to ordinary shareholders – (62 152 755) – (28 497 227)Consisting of:Headline and diluted headline earnings attributable to ordinary shareholders from continuing operations – (37 665 904) – (23 622 284)Headline and diluted headline earnings attributable to ordinary shareholders from discontinued operations – (24 486 851) – (4 874 943)Weighted average number of ordinary shares in issue – 104 091 306 – 88 750 000Headline and diluted headline earnings per share from continuing operations (cents) – (36,19) – (26,62)Headline and diluted headline earnings per share from discontinued operations (cents) – (23,52) – (5,49)

50. new standards and interpretations50.1 standards and interpretations not yet effective The group has chosen not to early adopt the following standards and interpretations, which have been

published and are mandatory for the group’s accounting periods beginning on or after 1 July 2011 or later periods:

ifrs 9 financial instruments This new standard is the first phase of a three-phase project to replace IAS 39 Financial Instruments:

Recognition and Measurement. Phase one deals with the classification and measurement of financial assets. The following are changes from the classification and measurement rules of IAS 39:

• Financialassetswillbecategorisedasthosesubsequentlymeasuredatfairvalueoratamortisedcost. • Financialassetsatamortisedcostarethosefinancialassetswherethebusinessmodelformanagingthe

assets is to hold the assets to collect contractual cash flows (where the contractual cash flows represent payments of principal and interest only). All loss before taxation is to be subsequently measured at fair value.

• Undercertaincircumstances,financialassetsmaybedesignatedasatfairvalue. • Forhybridcontracts,wherethehostcontractiswithinthescopeofIFRS9,thewholeinstrument

is classified in accordance with IFRS 9, without separation of the embedded derivative. In other circumstances, the provisions of IAS 39 still apply.

• Voluntaryreclassificationoffinancialassetsisprohibited.Financialassetsshallbereclassifiediftheentitychanges its business model for the management of financial assets. In such circumstances, reclassification takes place prospectively from the beginning of the first reporting period after the date of change of the business model.

• Investmentsinequityinstrumentsmaybemeasuredatfairvaluethroughprofitorloss.Whensuchanelectionis made, it may not subsequently be revoked, and gains or losses accumulated in equity are not recycled to profit or loss on derecognition of the investment. The election may be made per individual investment.

• IFRS9doesnotallowforinvestmentsinequityinstrumentstobemeasuredatcostunderanycircumstances. The effective date of the standard is for years beginning on or after 1 January 2013.



The group expects to adopt the standard for the first time in the 2014 financial statements.

It is unlikely that the standard will have a material impact on the company’s financial statements.

ias 24 related party disclosures (revised) The revisions to IAS 24 include a clarification of the definition of a related party as well as providing a partial

exemption for related party disclosures between government-related entities.

In terms of the definition, the revision clarifies that joint ventures or associates of the same third party are related parties of each other. To this end, an associate includes its subsidiaries and a joint venture includes its subsidiaries.

The partial exemption applies to related party transactions and outstanding balances with a government which controls, jointly controls or significantly influences the reporting entity as well as to transactions or outstanding balances with another entity which is controlled, jointly controlled or significantly influenced by the same government. In such circumstances, the entity is exempt from the disclosure requirements of paragraph 18 of IAS 24 and is required only to disclose:

• Thenameofthegovernmentandnatureoftherelationship • Informationaboutthenatureandamountofeachindividuallysignificanttransactionandaquantitative

or qualitative indication of the extent of collectively significant transactions. Such information is required in sufficient detail to allow users to understand the effect.

The effective date of the Standard is for years beginning on or after 1 January 2011.

The group expects to adopt the Standard for the first time in the 2012 financial statements.

It is unlikely that the amendment will have a material impact on the company’s financial statements.

2010 annual improvements project: amendments to ias 34 interim financial reporting The amendment provides additional examples of events and transactions which would be considered

significant and therefore required to be disclosed in the interim financial report. In addition, the removes references to only reporting certain items when they are material. Therefore, the list of items to be presented in addition to significant transactions and events are required irrespective of whether they are material.


The group expects to adopt the amendment for the first time in the 2012 financial statements.


2010 annual improvements project: amendments to ifrs 7 financial instruments: disclosures Additional clarification is provided on the requirements for risk disclosures.




2010 annual improvements project: amendments to ias 1 presentation of financial statements The amendment now requires that an entity must present, either in the statement of changes in equity

or in the notes, an analysis of equity by item.





shareholders’ diary

reportsInterim half year to December Published March

Preliminary announcement of annual reports Published October

Annual financial statements Published November

annual general meeting 13 december 2011


notice of annual general Meeting

rare holdings liMited (Incorporated in the Republic of South Africa)Registration Number: 2002/025247/06Share code: RAR ISIN: ZAE000092714(“RARE” or “the company” or “the group”)

Notice is hereby given that an annual general meeting (AGM) of shareholders will be held at the company’s offices, 22 Old Vereeniging Road, Kliprivier, Midvaal on Tuesday, 13 December 2011, at 10:00, for the purposes of considering and if deemed fit, passing the ordinary and special resolutions with or without modification:

purposeThe purpose of the meeting is to transact the business set out in the agenda below. For the avoidance of doubt, the memorandum and articles of association of the company are referred to as the memorandum of incorporation in accordance with the terminology used in the new Companies Act 2008 (Act 71 of 2008), as amended (“the Companies Act”), which became effective on 1 May 2011.

agendaA. Consideration of the audited annual financial statements of the company as required by article 52 of the

company’s memorandum of incorporation, including the reports of the directors and the audit committee for the year ended 30 June 2011 as set out in the company’s annual report 2011 of which this notice forms part of.

B. In terms of articles 92 of the company’s memorandum of incorporation, directors of the company so elected shall retain office only until the next annual general meeting of the company at which their appointments shall be confirmed.

C. To consider and, if deemed fit; approve, with or without modification, the following ordinary and special resolutions:

Note: For any of the ordinary resolutions numbers 1 to 12 to be adopted, more than 50% of the voting rights exercised on each such ordinary resolution must be exercised in favour thereof.

1. approval of directors’ fees ordinary resolution nuMber 1 “resolved that the directors’ fees amounting to R356 063 paid for the year ended 30 June 2011 in terms of

article 73.2 of the company’s memorandum of incorporation is hereby approved.”

The reason for ordinary resolution number 1 is that article 73.2 of the company’s memorandum of Incorporation requires that directors’ fees be confirmed by the company at a general meeting.

2. re-appointMent of auditors ordinary resolution nuMber 2 “resolved that the appointment of Greenwoods, as independent auditors of the company with Chirag

Lakhani, being the individual registered auditor who has undertaken the audit of the company for the ensuing financial year, be confirmed on the recommendation of the company’s audit and risk committee.”

The reason for ordinary resolution number 2 is that the company, being a public listed company, must have its financial results audited and such auditor must be appointed or reappointed each year at the AGM of the company as required by section 90 of the Companies Act.

3. auditor’s reMuneration ordinary resolution nuMber 3 “resolved that the auditor’s remuneration for the year ended 30 June 2011, be confirmed on the

recommendation of the company’s audit and risk committee.”

The reason for ordinary resolution number 3 is that section 94(7) of the Companies Act requires that the company’s audit and risk committee determine the remuneration of the auditor. The board recommends that the auditor’s remuneration be considered and approved at the AGM.


notice of annual general Meeting (continued)

4. confirMation of director appointMents ordinary resolution nuMber 4 “resolved that Mr Pierre du Plessis’s appointment as a director of the company with effect from

11 November 2010 is hereby confirmed.”

An abbreviated curriculum vitae of Mr Pierre du Plessis may be viewed on page 4 of the integrated annual report of which this notice forms part.

The reason for ordinary resolution number 4 is that article 92 of the memorandum of incorporation of the company and, to the extent applicable, the Companies Act, requires that the appointment of new directors be confirmed at the next annual general meeting following their appointment.

ordinary resolution nuMber 5 “resolved that Mr Hein Odendaal’s appointment as a director of the Company with effect from

11 November 2010 is hereby confirmed.”

An abbreviated curriculum vitae of Mr Hein Odendaal may be viewed on page 4 of the integrated annual report of which this notice forms part.


ordinary resolution nuMber 6 “resolved that Dr Mathinus Theunis Lategan’s appointment as a director of the company with effect from

24 August 2011 is hereby confirmed”

An abbreviated curriculum vitae of Dr Mathinus Theunis Lategan may be viewed on page 4 of the integrated annual report of which this notice forms part.


ordinary resolution nuMber 7 “resolved that Mr Thembinkosi Siyolo’s appointment as a director of the company with effect from

24 August 2011 is hereby confirmed”

An abbreviated curriculum vitae of Mr Thembinkosi Siyolo may be viewed on page 4 of the integrated annual report of which this notice forms part.


ordinary resolution nuMber 8 “resolved that Mr Stefanus Johannes Du Toit Potgieter’s appointment as a director of the company with

effect from 24 August 2011 is hereby confirmed.”

An abbreviated curriculum vitae of Mr Stefanus Johannes Du Toit Potgieter may be viewed on page 4 of the integrated annual report of which this notice forms part.



5. election of the MeMbers to the audit and risk coMMittee ordinary resolution nuMber 9 “resolved that Mr Pierre du Plessis be elected a member of the audit and risk committee, with effect from

the conclusion of this AGM in terms of section 94(2) of the Companies Act.”

An abbreviated curriculum vitae of Mr Pierre du Plessis may be viewed on page 4 of the integrated annual report of which this notice forms part.

ordinary resolution nuMber 10 “resolved that Mr Hein Odendaal be elected a member of the audit and risk committee, with effect from

the conclusion of this AGM in terms of section 94(2) of the Companies Act.”

An abbreviated curriculum vitae in respect of Mr Hein Odendaal may be viewed on page 4 of the integrated annual report of which this notice forms part.

ordinary resolution nuMber 11 “resolved that Mr Stefanus Johannes Du Toit Potgieter be elected a member of the audit and risk committee,

with effect from the conclusion of this meeting in terms of section 94(2) of the Companies Act.”

An abbreviated curriculum vitae in respect of Mr Stefanus Johannes Du Toit Potgieter may be viewed on page 4 of the integrated annual report of which this notice forms part.

The reason for ordinary resolution numbers 9 to 11 is that the company, being a public listed company, must appoint an audit committee as prescribed by sections 66(2) and 94(2) of the Companies Act, which also requires that the members of such audit committee be appointed, or re-appointed, as the case may be, at each annual general meeting of a company.

6. authorised directors and/or the coMpany secretary ordinary resolution nuMber 12 “resolved that any one director of the company and/or the company secretary is hereby authorised to do

all such things and sign all such documents as deemed necessary to implement the ordinary and special resolutions as set out in this notice convening the AGM at which these resolutions will be considered.”

The reason for ordinary resolution number 12 is to ensure that the resolutions voted favourably upon is duly implemented through the delegation of powers provided for in terms of article 108 of the company’s memorandum of incorporation.

Note: For the special resolutions numbers 1 to 4 hereunder to be adopted, 75% of the shareholders present in person or by proxy and entitled to vote at the AGM must cast their vote in favour of this resolution.

7. reMuneration of non-executive directors to 30 June 2012 special resolution nuMber 1 “resolved that the remuneration of non-executive directors for the year ending 30 June 2012 be approved

on the following basis.” – Chairman of the board: R120 000 per annum, payable quarterly; – Non-executive directors fee: R105 000 per annum, payable quarterly;

reasons for and effect of special resolution nuMber 1 The reason for the proposed special resolution, is to comply with section 66(9) of the Companies Act, which

requires the approval of directors fees prior to the payment of such fees.

The effect of special resolution number 1 is that the company will be able to pay its non-executive directors for the services they render to the company as directors without requiring further shareholder approval until the next AGM.



In terms of the Companies Act, 75% of the votes cast by shareholders present or represented by proxy at this meeting must be cast in favour of this special resolution for it to be adopted.

8. authority to repurchase shares by the coMpany and its subsidiaries special resolution nuMber 2 “resolved that as a special resolution that the company be and is hereby authorised, as a general approval,

to repurchase any of the shares issued by the company, upon such terms and conditions and in such amounts as the directors may from time to time determine, but subject to the provisions of section 46 and 48 of the Companies Act, the memorandum of incorporation of the company, the Listings Requirements of the JSE and the requirements of any other stock exchange on which the shares of the Company may be quoted or listed, namely that:

– the general repurchase of the shares may only be implemented on the open market of the JSE and done without any prior understanding or arrangement between the company and the counterparty;

– this general authority shall only be valid until the next annual general meeting of the company, provided that it shall not extend beyond 15 months from the date of this resolution;

– an announcement must be published as soon as the company has acquired shares constituting, on a cumulative basis, 3% of the number of shares in issue prior to the acquisition, pursuant to which the aforesaid 3% threshold is reached, containing full details thereof, as well as for each 3% in aggregate of the initial number of shares acquired thereafter;

– the general authority to repurchase is limited to a maximum of 20% in the aggregate in any one financial year of the company’s issued share capital at the time the authority is granted;

– a resolution has been passed by the board of directors approving the purchase, that the company has satisfied the solvency and liquidity test as defined in the Companies Act and that since the solvency and liquidity test was applied there have been no material changes to the financial position of the group;

– the general repurchase is authorised by the company’s memorandum of incorporation; – repurchases must not be made at a price more than 10% above the weighted average of the market value of

the shares for five business days immediately preceding the date that the transaction is affected. The JSE should be consulted for a ruling if the applicants securities have not traded in such five business day period;

– the company may at any point in time only appoint one agent to effect any repurchase(s) on the company’s behalf;

– the company may not effect a repurchase during any prohibited period as defined in terms of the Listings Requirements of the JSE unless there is a repurchase programme in place as contemplated in terms of 5.72(g) of the Listings Requirements of the JSE; and

– the company must ensure that its sponsor provides the JSE with the required working capital letters before it commences the repurchase of any shares.”

reasons for and effect of special resolution nuMber 2 The reason for and effect of special resolution number 2 is to grant the directors a general authority in terms

of its memorandum of incorporation and the Listings Requirements of the JSE and for the acquisition by the company of shares issued by it on the basis reflected in the special resolution.

In terms of the Listings Requirements of the JSE any general repurchase by the company must, inter alia, be limited to a maximum of 20% of the company’s issued share capital in any one financial year of that class at the time the authority is granted.


special resolution nuMber 3 “resolved that as a special resolution that the company, insofar as it may be necessary to do so, hereby

approves, as a general approval, and authorises the acquisition by any subsidiary of the company (“the subsidiary” or “the acquiree”) of shares issued by such subsidiary and/or shares issued by the Company, upon such terms and conditions and in such amounts as the directors of any such subsidiary may from time to time determine, but subject to the provisions of section 46 and 48 of the Companies Act, the memorandum of incorporation of the company, the Listings Requirements of the JSE and the requirements of any other stock exchange on which the shares of the subsidiary may be quoted or listed, including, inter alia, that:

– the general repurchase of shares may only be implemented on the open market of the JSE and done without any prior understanding or arrangement between the acquiree and the other counterparty;


– this general authority shall only be valid until the next annual general meeting of the company, provided that it shall not extend beyond 15 months from the date of this resolution;

– an announcement must be published as soon as the acquiree has acquired shares constituting, on a cumulative basis, 3% of the number of shares of the acquiree Company in issue prior to the acquisition, pursuant to which the aforesaid 3% threshold is reached, containing full details thereof, as well as for each 3% in aggregate of the initial number of shares acquired thereafter;

– this general authority to repurchase is limited to a maximum of 20% in the aggregate in any one financial year of the acquiree’s issued share capital at the time the authority is granted, subject to a maximum of 10% in the aggregate in the event that it is the company’s share capital that is repurchased by a subsidiary;

– a resolution has been passed by the board of directors approving the purchase, that the company has satisfied the solvency and liquidity test as defined in the Companies Act and that since the solvency and liquidity test was applied there have been no material changes to the financial position of the group;

– the general purchase is authorised by the company’s memorandum of incorporation; – repurchases must not be made at a price more than 10% above the weighted average of the market value

of the shares for the five business days immediately preceding the date that the transaction is effected. The JSE should be consulted for a ruling if the securities have not traded in such five business day period;

– the company and/or subsidiary may at any point in time only appoint one agent to effect any repurchase(s) on the subsidiary company’s behalf;

– the subsidiary company may not effect a repurchase during any prohibited period as defined in terms of the Listings Requirements of the JSE unless there is a repurchase programme in place as contemplated in terms of 5.72(g) of the Listings Requirements of the JSE; and

– the company must ensure that its sponsor provides the JSE with the required working capital letters before it commences the repurchase of any shares.”

reasons for and effect of special resolution nuMber 3 The reason for and effect of special resolution number 3 is to grant the board of directors of any subsidiary

of the company a general authority in terms of the Listings Requirements of the JSE to acquire shares issued by such subsidiary and/or to acquire shares issued by the company on the basis reflected in the special resolution.

In terms of the Listings Requirements of the JSE, any general purchase by a subsidiary of shares must, inter alia, be limited to a maximum of 20% of the issued share capital of the acquiree company in any one financial year of that class at the time the authority is granted, subject to a maximum of 10% in the event that it is the Company’s share capital that is repurchased by a subsidiary.


9. financial assistance to subsidiaries and other inter-related entities special resolution nuMber 4 “resolved that, the company be and is hereby authorised to provide direct or indirect financial assistance

to any subsidiary or inter-related company (as defined in the Companies Act) of the company by way of a general authority in favour of that category of recipients as contemplated in section 45(3)(a)(ii) of the Companies Act, on terms and conditions and for amounts that the board of directors may determine from time to time.”

reasons for and effect of special resolution nuMber 4 The reason for, and effect of this special resolution is, in compliance with section 45(3)(a)(ii) of the

Companies Act, to permit the company to provide direct or indirect financial assistance to entities within the RARE group of companies.

In terms of the Companies Act, 75% of the votes cast by shareholders present or represented by proxy at this

meeting must be cast in favour of this special resolution for it to be adopted.

10. other business To transact such other business as may be transacted at an annual general meeting or raised by shareholders

with or without advance notice to the company.


inforMation relating to the special resolutions 1. The directors of the company or its subsidiaries will only utilise the general authority to purchase shares of

the company and/or the subsidiary as set out in special resolutions numbers 2 and 3 to the extent that the directors, after considering the maximum shares to be purchased, are of the opinion that the Company and its subsidiaries’ (“RARE group”) position would not be compromised as to the following:

• theRAREgroup’sabilityintheordinarycourseofbusinesstopayitsdebtsforaperiodof12monthsafter the date of this AGM and for a period of 12 months after the purchase;

• theconsolidatedassetsoftheRAREgroupwillatthetimeoftheAGMandatthetimeofmakingsuchdetermination be in excess of the consolidated liabilities of the RARE group. The assets and liabilities should be recognised and measured in accordance with the accounting policies used in the latest audited annual financial statements of the RARE group;

• theordinarycapitalandreservesoftheRAREgroupafterthepurchasewillremainadequateforthepurpose of the business of the RARE group for a period of 12 months after the AGM and after the date of the share purchase; and

• theworkingcapitalavailabletotheRAREgroupafterthepurchasewillbesufficientfortheRAREgroup’s requirements for a period of 12 months after the date of the notice of the annual general meeting

and the directors have passed a resolution authorising the repurchase, resolving that the company has satisfied the solvency and liquidity test as defined in the Companies Act and resolving that since the solvency and liquidity test had been applied, there have been no material changes to the financial position of the RARE group.

2. For the purposes of considering special resolution number 2 and special resolution 3, and in compliance with paragraph 11.26 of the Listings Requirements, the information listed below has been included in the annual report, in which this notice of AGM is included, at the places indicated:

• Directorsandmanagement(page4); • Majorshareholders(page17); • Directors’interestsinsecurities(page16); • Sharecapitalofthecompany(page54); • Contingentliabilities(page64); • Responsibilitystatement(page12); • Litigationstatement(page64);and • Materialchangeinthefinancial/tradingpositionornegativestatement(pages14and15).

3. For purposes of special resolution number 4, the board of directors of the company will only utilise the general authority bestowed upon them to provide direct or indirect financial assistance related to inter- related companies to the extent that the directors, after considering the amount of financial assistance to be granted, are of the opinion that:

• immediatelyafterprovidingthefinancialassistance,thecompanywouldsatisfythesolvencyandliquidity test (as defined in the Companies Act, 2008);

• thetermsunderwhichthefinancialassistanceisproposedtobegivenarefairandreasonabletothecompany; and

• allconditionsorrestrictionsregardingthegrantingoffinancialassistanceassetoutinthecompany’smemorandum of incorporation have been satisfied


and that the board of directors have passed a resolution authorising the grant of the said financial assistance (“the board resolution”) under their general authority so granted, the company which will then provide written notice of the board resolution to all shareholders:

• within10daysafteradoptionoftheboardresolution,ifthetotalvalueofallloans,debts,obligationsor assistance contemplated in that resolution, together with any previous such resolution(s) during the financial year, exceeds one-tenth of 1% of the company’s net worth at the time of the board resolution; or

• within30businessdaysaftertheendofthefinancialyear,inanyothercase.

4. The company is not involved in any legal or arbitration proceedings, nor are any proceedings pending or threatened of which the company is aware that may have or have had in the previous 12 months, a material effect on the company’s financial position.

5. The directors, whose names are reflected in this annual report of which this notice forms part, collectively and individually accept full responsibility for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts that have been made and that the notice contains all information required by the Listings Requirements of the JSE.

voting 1. The date on which shareholders must be recorded as such in the share register maintained by the transfer

secretaries of the company (“the share register”) for purposes of being entitled to receive this notice is Friday, 11 November 2011.

2. The date on which shareholders must be recorded in the share register for purposes of being entitled to attend and vote at this meeting is Friday, 9 December 2011, with the last day to trade being Friday, 2 December 2011.

3. Meeting participants will be required to provide proof of identification to the reasonable satisfaction of the chairman of the AGM and must accordingly bring a copy of their identity document, passport or drivers’ license. If in doubt as to whether any document will be regarded as satisfactory proof of identification, meeting participants should contact the transfer secretaries for guidance.

4. Shareholders entitled to attend and vote at the AGM may appoint one or more proxies to attend, speak and vote thereat in their stead. A proxy need not be a member of the company. A form of proxy, in which are set out the relevant instructions for its completion, is enclosed for the use of a certificated shareholder or own-name registered dematerialised shareholder who wishes to be represented at the AGM. Completion of a form of proxy will not preclude such shareholder from attending and voting (in preference to that shareholder’s proxy) at the AGM.

5. The instrument appointing a proxy and the letter of representation (if any) under which it is signed must reach the transfer secretaries of the company at the address given below by not later than 12:00 on Friday, 9 December 2011.



6. Dematerialised shareholders, other than own-name registered dematerialised shareholders, who wish to attend the AGM in person will need to request their Central Securities Depository Participant (“CSDP”) or broker to provide them with the necessary authority in terms of the custody agreement entered into between such shareholders and the CSDP or broker.

7. Dematerialised shareholders, other than own-name registered dematerialised shareholders, who are unable to attend the AGM and who wish to be represented thereat, must provide their CSDP or broker with their voting instructions in terms of the custody agreement entered into between themselves and the CSDP or broker in the manner and time stipulated therein.

8. Shareholders present in person, by proxy or by authorised representative shall, on a show of hands, have one vote each and, on a poll, will have one vote in respect of each share held.

By order of the board

r viljoen Company secretary 14 November 2011

Registered office 22 Old Vereeniging Road, Kliprivier, Midvaal, 1870

Transfer secretaries Computershare Investor Services (Pty) Limited Ground Floor 70 Marshall Street Johannesburg, 2001 (PO Box 61051, Marshalltown 2107)


rare holdings liMited(Incorporated in the Republic of South Africa)Registration Number: 2002/025247/06Share code: RAR ISIN: ZAE000092714(“RARE” or “the company” or “the group”)

To be completed by certificated shareholders and dematerialised shareholders with “own name” registration only.

I/We

of (address)

being a member/s of RARE Limited and entitled to votes, hereby appoint

of

or, failing him, of

or failing him the chairman of the meeting as my/our proxy to vote for me/us and on my/our behalf at the one hundred and first annual general meeting of the company to be held at the company’s offices, 22 Old Vereeniging Road, Kliprivier, Midvaal on Tuesday, 13 December at 10:00, and at any adjournment thereof, as follows:

Number of sharesIn favour of Against Abstain

1. To consider the presentation of the audited annual financial statements.

2. Ordinary resolution number 1: Approval of the directors’ fees3. Ordinary resolution number 2: Confirming reappointment

of the auditors4. Ordinary resolution number 3 :Confirming auditor’s remuneration5. Ordinary resolution number 4: Confirmation of appointment

of Mr Pierre du Plessis as director6. Ordinary resolution number 5: Confirmation of appointment

of Mr Hein Odendaal as director7. Ordinary resolution number 6: Confirmation of appointment

of Dr Theunis Lategan as director8. Ordinary resolution number 7: Confirmation of appointment

of Mr Thembinkosi Siyolo as director9. Ordinary resolution number 8: Confirmation of appointment

of Mr Stefanus Potgieter as director10. Ordinary resolution number 9: To elect Mr Pierre du Plessis

as member of the audit and risk committee11. Ordinary resolution number 10: To elect Mr Hein Odendaal

as member of the audit and risk committee12. Ordinary resolution number 11: To elect Mr Stefanus Potgieter

as member of the audit and risk committee13. Ordinary resolution number 12: Authority to implement resolutions14. Special resolution number 1: Approval of non-executive directors’

fees for 201215. Special resolution number 2: Authority to repurchase shares

by the company16. Special resolution number 3: Authority to repurchase shares

by the subsidiaries of the company17. Special resolution number 4: Approval of financial assistance

to subsidiaries and inter-related entities

Please indicate with an “X” in the appropriate space above how you wish your vote to be cast in respect of the above resolutions.

If you return this form duly signed, without any specific directions, the proxyholder will vote or abstain at his discretion.

Signed this day of 2011

Signature

Assisted by (where applicable) (state capacity and full name)

Each RARE shareholder is entitled to appoint one or more proxy(ies) (who need not be a shareholder(s) of the company) to attend, speak and vote in his stead at the annual general meeting.

proxy forM

notes1. This form or proxy should only be used by certificated shareholders or shareholders who have dematerialised

their shares with own name registration.2. A shareholder may insert the name of a proxy or the names of two alternative proxies of the shareholder’s

choice in the space/s provided, with or without deleting “the chairman of the meeting”, but any such deletion must be initialled by the shareholder. The person whose name stands first on the form of proxy and who is present at the meeting will be entitled to act as proxy to those whose names follow.

3. A shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that shareholder in the appropriate space provided. Failure to comply with the above will be deemed to authorise the proxy to vote or to abstain from voting at the meeting as he/she deemed fit in respect of all of the shareholder’s votes exercisable thereat. A shareholder or his/her proxy is not obliged to use all the votes exercisable by the shareholder or his/her proxy, but the total of the votes cast and in respect of which abstention is recorded may not exceed the total of the votes exercisable by the shareholder or by his/her proxy.

4. Dematerialised shareholders who wish to attend the meeting or to vote by way of proxy, must contact their CSDP or broker who will furnish them with the necessary authority to attend the meeting or to be represented thereat by proxy. This must be done in terms of the agreement between the member and his/her CSDP or broker.

5. Forms of proxy must be lodged at the company’s transfer secretaries, Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) so as to be received by not later than 10:00 on Friday, 9 December 2011.

6. The completion and lodging of this form of 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.

7. Documentary evidence establishing the authority of the person signing this form of proxy in a representative or other legal capacity must be attached to this form of proxy unless previously recorded by the Transfer Secretaries of the company or waived by the chairman of the meeting.

8. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies.9. The chairman shall be entitled to reject the authority of a person signing the form of proxy: 9.1 under a power of attorney, or 9.2 on behalf of a company unless that person’s power of attorney or authority is deposited at the registered office of the transfer

secretaries not less than 24 hours before the meeting.10. Where shares are held jointly, all joint holders are required to sign the form of proxy.11. A minor must be assisted by his/her parent or guardian unless the relevant documents establishing his/her

legal capacity are produced or have been registered by the transfer secretaries.12. On a show of hands, every shareholder present in person or represented by proxy shall have only one vote,

irrespective of the number of shares he/she holds or represents. 13. On a poll, every shareholder present in person or represented by proxy shall have one vote for every share held

by such shareholder. 14. A resolution put to the vote shall be decided by a show of hands, unless, before or on the declaration of the

results of the show of hands, a poll shall be demanded by any person entitled to vote at the annual general meeting.

By order of the board

r viljoenCompany secretary17 October 2011

Registered office22 Old Vereeniging Road, Kliprivier, Midvaal,1870

Transfer secretariesComputershare Investor Services (Pty) Limited Ground Floor 70 Marshall StreetJohannesburg, 2001 (PO Box 61051, Marshalltown 2107)

notes to the proxy forM

Group at a glance 1

Directorate 4

Chairman’s letter to stakeholders 5

Corporate governance 6

Annual financial statements 13

Shareholders’ diary 78

Notice of annual general meeting 79

Form of proxy Attached

Contents

RARE is a designer, distributor, manufacturer and service provider of piping and related products covering the entire fluid conveyance cycle, across all fluid sectors.

Our vision is to become a leading provider of complete fluid conveyance solutions.

general information

Country of incorporation and domicile South Africa

nature of business and principal activities The group’s principal activities are those of a fully integrated provider of complete fluid conveyance products and services to the energy, water and chemical industries

Directors MT Lategan P du Plessis H Odendaal T Siyolo SJDT Potgieter DE Scheepers PJ Willemse

registered office 22 Old Vereeniging Road Klipriver Midvaal 1871

Business address 22 Old Vereeniging Road Klipriver Midvaal 1871

Postal address PO Box 124186 Alrode Johannesburg 1451

auditors Greenwoods Registered Auditors

secretary R Viljoen

Company registration number 2002/025247/06

level of assurance These financial statements have been audited in compliance with the applicable requirements of the Companies Act (No 71 of 2008) of South Africa.

Preparer The financial statements were internally compiled by: R Viljoen under supervision of PJ Willemse CA(SA)

Published 4 November 2011

GREYMATTER & FINCH # 5754

www.rare.co.za

integrated annual report 2011

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integrated annual report 2011 - rare.co.za