gp0508 seardel ar13 page 1 proof 11 20:13 · 2016-07-08 · profile and organisational overview ......

INTEGRATED ANNUAL REPORT 20:13

PROPERTIES

TEXTILES

INDUSTRIALS

CLOTHING

BRANDED PRODUCT

DISTRIBUTION

GP0508_Seardel_AR13__Proof 11_18 September 2013_Celeste Pienaar_021 461 2084_082 774 [email protected]

CONTENTS

About this report

Our grOuP

Profile and organisational overview

Financial and performance highlights

Ten-year financial review

Directors’ profile

CEO’s report

Operational overviews

Sustainability

Our gOvernance

Corporate governance overview

Social and ethics committee report

Risk committee report

Remuneration committee report

Our numbers

Audit committee report

Directors’ responsibility statement and

certificate of company secretary

Independent auditor’s report

Directors’ report

Financial statements

Our sharehOlders

Shareholder spread and

Directors’ interest in shares

Shareholders’ interest in shares and

Analysis of Shareholders

annual general meeting

Notice of annual general meeting

Form of proxy

Our cOntact details

Corporate administration

PROPERTIES

SEARDEL GROUP PROPERTIES

BRANDED PRODUCT DISTRIBUTION

PRIMA TOYSPRIMA INTERACTIVEThE EMPIRE GROUP

SEARTECBRAND ID

TEXTILES

ROMATExBERG RIVER TExTILES

hExTExFIRST FACTORY ShOPS

FRAME KNITTING MANUFACTURERS

INDUSTRIALS

GOLD REEF SPECIALITY ChEMICALSINTEGRATED POLYPROPYLENE PRODUCTS

BRITS AUTOMOTIVE SYSTEMS

CLOTHING

EASYWEARSEARDEL APPAREL

GP0508_Seardel_AR13__Proof 11_18 September 2013_Celeste Pienaar_021 461 2084_082 774 [email protected]

Seardel Investment Corporation Limited (“Seardel” or “the Group”) is pleased to present its 2013 Integrated Annual Report to stakeholders in accordance with the King Code of Governance Principles (King III). As a JSE-listed company the Group subscribes to the principles of integrated reporting which strive to provide insight into the business practices and which have a material influence on the future sustainability of the Group.

The Integrated Report aims to provide a greater understanding of the Group’s business model, its social and environmental impact and insight into how the Group’s businesses are managed. We see this report as an evolving process and undertake to provide further enhanced reporting each year, where deemed appropriate.

scOPe and bOundary Of the rePOrtThe 2013 Integrated Report covers the activities and performances of the Group for the financial year 1 April 2012 to 31 March 2013. The Group operates principally in South Africa and its neighbouring countries, but generates the majority of its revenue from its South African operations. The Integrated Report and the Financial Statements have been prepared according to International Financial Reporting Standards (IFRS), the requirements of the Companies Act (71 of 2008, as

amended) and the Listings Requirements of the JSE. The

Group has implemented the recommendations of King III,

except where noted to the contrary, and management

has also considered the guidelines published by the

Integrated Reporting Committee of South Africa.

We have further applied the principles of materiality

in determining the content and levels of disclosure

throughout the Integrated Annual Report.

enhanced disclOsureThe 2013 report builds on the enhanced disclosure of

the prior year and aims to assist stakeholders in their

assessments of the Group’s ability to create and sustain

value. The sustainability report provides additional insight

into the progress the Group has made to minimise the

impact of our operations on the environment. We

reaffirm our commitment to provide over time, the end-

users of our products the ability to determine the carbon

footprint of each product to allow the user to judge for

themselves whether we have succeeded in our objective

to care for the environment.

Our 2013 Integrated Report is published in two media:

our Integrated Report is printed and distributed to

shareholders by post, whilst the web version of the report

is available on our website: www.seardel.co.za

ABOUT THIS REPORT

1

GP0508_Seardel_AR13_Page 1_Proof 11_18 September 2013_Celeste Pienaar_021 461 2084_082 774 [email protected]

PrOfile

Seardel is a diverse investment group, operating primarily in South Africa and is listed on the JSE

under the Consumer Goods – Personal and Household Goods Sector.

The Group’s various businesses are clustered into the following segments:

branded PrOduct distributiOn – sourcing and distribution of branded products. The businesses operating in this segment include Prima Toys, Prima Interactive, the Empire Group, Seartec and Brand ID. These enterprises supply an extensive selection of prestigious brands to the South African consumer, such as 466/64, Microsoft X-Box, Butterfly stationery, Sharp consumer electronics, Speedo and a large variety of well-known toys.

textiles – manufacturers of quality fabric and household textiles. The Group’s textile investments include Romatex, Frame Knitting Manufacturers, Berg River Textiles, Hextex and First Factory Shops.

industrials – manufacturers of specialised industrial products for the building, automotive, paint and bedding industries. The businesses operating in this segment are Gold Reef Speciality Chemicals, Brits Automotive Systems, Brits Non-Woven and Integrated Polypropylene Products.

clOthing – manufacturers of apparel products for the local and export markets. This segment comprises Seardel Apparel whose products are available at all major clothing retailers and Easywear factory fashion shops.

PrOPerties – managing the Group’s extensive industrial property portfolio.

SEARDEL INTEGRATED ANNUAL REPORT 20132


Ian Morris

Tim Atkinson

Wayne Bebb

Piet van Wyk

Mike McGeever

Jerry Govender

Gary Milne

Desmond Beemiah

Werner Peter

Cliff van Niekerk

Ian Stein

David Rafferty

Keith Robson

executive directOrs

stuart Queen

(Chief Executive Officer)

gys Wege

(Financial Director)

dave duncan

(Chief Operating Officer)

amon ntuli

(Human Resources)

SEGMENT ASSETS

41%

SEGMENT ASSETS

18%

SEGMENT ASSETS

19%

SEGMENT ASSETS

8%

SEGMENT ASSETS

14%

REVENUE

2%

REVENUE

31%

REVENUE

26%

REVENUE

13%

REVENUE

28%

3


FINANCIAL HigHligHTs

Rand thousands, unless otherwise indicated 2013 2012

Revenue 2 513 486 2 506 794

Profit before taxation 39 734 145 142

Capital and reserves 1 460 586 1 411 645

Total tangible assets (excluding cash) 2 467 279 2 383 917

Return on total tangible assets (%) 3,2 7,5

Return on shareholders’ interest (%) 2,8 9,7

Ratio of borrowings to capital and reserves (%) 34,0 34,0

statistics Per shareIn cents, where applicable 2013 2012

Headline earnings 2,9 20,9

Earnings 6,0 19,5

Operating cash flow 30 6

Net asset value 214 201

Market price – End of period

– Ordinary 120 119

– N ordinary 120 111

High price range – Ordinary 154 120


Low price range – Ordinary 86 71


revenue, total tangible assets (excluding cash and deferred tax) and return on total tangible assets

segment

revenue total tangible assetsreturn on totaltangible assets

2013 2012* 2013 2012* 2013 2012*

rm % Rm % rm % Rm % % %

Properties 47 2 25 1 997 41 824 35 6 5

Branded Product Distribution 793 31 662 27 451 18 426 18 3 8

Textiles 650 26 671 27 474 19 457 19 7 6

Industrials 328 13 338 13 206 8 205 9 8 5

Clothing 695 28 811 32 334 14 431 18 (10) (24)

Head office – – – – 5 – 41 1 (275) 403

2 513 100 2 507 100 2 467 100 2 384 100 3 8

2012 2 507 2 384 8

2011 2 359 2 058 6

2010 2 166 2 110 3

2009 2 170 2 557 (6)

* Restated. See note 32.



revenue (Rm)

2 359

2011

2 507

2012

2 513

2013

caPital and reserves (Rm)

1 254

2011

1 412

2012

1 461

2013

OPerating PrOfit (Rm)

122

2011

179

2012

80

2013

free cash flOW (Rm)

-57

2011

39

2012

203

2013

PrOfit attributable tO sharehOlders (Rm)

9

2011

137

201241

2013

tangible assets (Rm)

2 058

2011

2 384

2012

2 467

2013

5


Ten-yeAr REVIEW

Rand thousands 2013 2012 2011 20102009

9 months 2008 2007 2006 2005 2004

OPeratiOnsRevenue 2 513 486 2 506 794 2 358 986 2 165 727 2 169 584 3 867 565 3 793 357 3 583 702 3 745 145 3 793 586

Operating profit/(loss) before finance costs 79 858 179 015 121 658 66 907 (117 312) (165 455) 111 668 152 276 129 210 214 811

Net finance costs 40 124 33 873 27 726 22 268 38 253 81 645 57 078 46 572 56 030 83 033

Share of losses from joint venture – – – – 2 503 9 181 2 973 446 – –

Profit/(loss) before taxation 39 734 145 142 93 932 44 639 (158 068) (256 281) 51 617 105 258 73 180 131 778

Taxation (income)/expense (1 117) (13 131) (10 084) 1 740 (27 470) (72 212) 855 18 841 23 10 045

Profit/(loss) for the period 40 851 158 273 104 016 42 899 (130 598) (184 069) 50 762 86 417 73 157 121 733

Profit/(loss) attributable to shareholders 40 851 136 944 8 567 (203 593) (279 344) (178 842) 50 770 85 471 73 255 121 733

cash flOWNet cash flow 50 843 175 954 105 594 62 788 (195 652) (86 619) 98 185 159 902 98 899 218 076

Cash generated from/(utilised by) operations – nominal 202 584 39 386 (57 281) 149 628 (162 040) 6 023 (161 019) 128 246 102 863 243 284

Net cash inflow/(outflow) from investing activities (210 751) (170 076) 22 786 6 521 (56 616) (78 608) (4 629) 4 560 (34 756) (78 830)

Operating cash flow per share (cents) 30 6 (8) 21 (37) 19 (150) 134 99 195

financial POsitiOnCapital and reserves 1 460 586 1 411 645 1 253 982 1 291 348 1 408 949 1 390 233 1 541 093 1 373 205 1 394 782 1 217 068

Net borrowings 503 502 474 564 338 810 304 315 460 464 542 157 466 364 296 571 319 368 341 118

Other debt (excluding deferred liabilities) 460 481 452 509 424 319 456 360 574 399 753 410 625 349 588 023 500 047 627 305

Working capital 168 291 354 458 365 204 407 359 634 868 527 054 886 730 817 179 850 251 916 568

Total tangible assets (excluding cash and deferred tax) 2 467 279 2 383 917 2 058 119 2 110 160 2 556 781 2 831 028 2 853 994 2 473 202 2 435 313 2 328 400

share Price (cents)

160

140

120

100

80

60

40

20

Mar 2013Mar 2012Mar 2011Mar 2010Mar 2009



Rand thousands 2013 2012 2011 20102009

9 months 2008 2007 2006 2005 2004

OPeratiOnsRevenue 2 513 486 2 506 794 2 358 986 2 165 727 2 169 584 3 867 565 3 793 357 3 583 702 3 745 145 3 793 586

Operating profit/(loss) before finance costs 79 858 179 015 121 658 66 907 (117 312) (165 455) 111 668 152 276 129 210 214 811

Net finance costs 40 124 33 873 27 726 22 268 38 253 81 645 57 078 46 572 56 030 83 033

Share of losses from joint venture – – – – 2 503 9 181 2 973 446 – –

Profit/(loss) before taxation 39 734 145 142 93 932 44 639 (158 068) (256 281) 51 617 105 258 73 180 131 778

Taxation (income)/expense (1 117) (13 131) (10 084) 1 740 (27 470) (72 212) 855 18 841 23 10 045

Profit/(loss) for the period 40 851 158 273 104 016 42 899 (130 598) (184 069) 50 762 86 417 73 157 121 733

Profit/(loss) attributable to shareholders 40 851 136 944 8 567 (203 593) (279 344) (178 842) 50 770 85 471 73 255 121 733

cash flOWNet cash flow 50 843 175 954 105 594 62 788 (195 652) (86 619) 98 185 159 902 98 899 218 076

Cash generated from/(utilised by) operations – nominal 202 584 39 386 (57 281) 149 628 (162 040) 6 023 (161 019) 128 246 102 863 243 284

Net cash inflow/(outflow) from investing activities (210 751) (170 076) 22 786 6 521 (56 616) (78 608) (4 629) 4 560 (34 756) (78 830)

Operating cash flow per share (cents) 30 6 (8) 21 (37) 19 (150) 134 99 195

financial POsitiOnCapital and reserves 1 460 586 1 411 645 1 253 982 1 291 348 1 408 949 1 390 233 1 541 093 1 373 205 1 394 782 1 217 068

Net borrowings 503 502 474 564 338 810 304 315 460 464 542 157 466 364 296 571 319 368 341 118

Other debt (excluding deferred liabilities) 460 481 452 509 424 319 456 360 574 399 753 410 625 349 588 023 500 047 627 305

Working capital 168 291 354 458 365 204 407 359 634 868 527 054 886 730 817 179 850 251 916 568

Total tangible assets (excluding cash and deferred tax) 2 467 279 2 383 917 2 058 119 2 110 160 2 556 781 2 831 028 2 853 994 2 473 202 2 435 313 2 328 400

2009 2010 2011 2012 2013

2 170 2 1662 359 2 507

2 513

Properties

branded Product distribution

textiles

industrials

clothing

segment revenue (rm)

7


Ten-yeAr REVIEW(continued)

Rand thousands 2013 2012 2011 20102009

9 months 2008 2007 2006 2005 2004

ratiOsProfitability

Operating profit/(loss) as percentage of revenue (%) 3,2 7,1 5,2 3,1 (5,4) (4,3) 2,9 4,2 3,5 4,7

Profit/(loss) for the period as percentage of revenue (%) 1,6 6,3 4,4 2,0 (6,0) (4,8) 1,3 2,4 2,0 3,2

Return on total tangible assets (%) 3,2 7,5 5,9 3,2 (6,2) (6,2) 3,8 6,1 5,3 7,7

Return on investments (%) 1,7 5,7 0,4 (9,6) (14,6) (6,3) 1,8 3,5 3,0 3,7

Return on shareholders’ interest (%) 2,8 9,7 0,7 (15,8) (26,4) (12,9) 3,3 6,2 5,2 7,4

leverage

Ratio of borrowings to capital and reserves (%) 34 34 27 24 33 39 31 22 23 28

Ratio of debt to capital and reserves (%) 66 66 61 59 73 93 71 64 58 80

liquidity

Current ratio (times) 1,2 1,4 1,5 1,5 1,7 1,4 1,9 2,0 2,2 2,2

Solvency ratio (%) 5,2 18,9 13,6 7,5 (23,9) (6,4) 7,9 15,1 7,2 19,1

Finance charges cover (times) 2,0 5,3 4,4 3,0 (3,1) (2,0) 2,0 3,3 2,3 2,6

Productivity

Total assets turn 1,0 1,1 1,1 1,0 1,1 1,4 1,3 1,4 1,5 1,6

Number of employees 6 475 7 887 9 541 11 771 13 221 14 847 15 343 15 170 15 280 16 925

Revenue per employee (Rand) 388 183 317 839 247 247 183 988 218 802 260 495 247 237 236 236 245 101 224 141

Operating profit/(loss) per employee (Rand) 12 333 22 697 12 751 5 684 (11 831) (11 144) 7 278 10 038 8 456 12 692

Assets per employee (Rand) 381 047 302 259 215 713 179 268 193 388 190 680 186 013 163 032 159 379 137 572

Cash value added factor (%) 51 54 55 85 39 61 55 69 65 62

share statistics (Refer to page for analysis of shareholders)

Weighted average number of shares issued (000) 685 310 703 398 702 946 702 946 443 253 90 048 91 015 105 224 122 362 128 215

Headline earnings/(loss) per share (cents) 2,9 20,9 (3,5) (22,2) (45,6) (111,0) 22,7 73,0 58,6 66,0

Earnings/(loss) per share (cents) 6,0 19,5 1,2 (29,0) (63,0) (198,6) 55,8 81,2 58,3 94,9

Proposed dividend – – – – – – 12,0 27,0 11,0 14,0

Headline earnings/(loss) yield at period-end (%) 2,4 17,6 (4,2) (62,5) (157,3) (33,1) 3,0 10,6 16,4 30,7

Dividend yield at period-end (%) – – – – – – 1,6 4,0 3,0 6,5

Proposed dividend cover (times) – – – – – – 1,9 2,7 5,3 4,7

Net asset value per share – excluding intangible assets (cents) 212 199 177 183 197 1 514 1 703 1 502 1 212 949

Total number of shares traded (000) 19 711 23 732 57 982 8 957 9 870 6 962 7 136 36 715 31 137 11 309

Total value of shares traded (R000) 24 513 19 260 28 979 3 491 5 372 41 609 49 384 173 247 86 883 27 448

Percentage of issued shares traded (%) 2,8 3,4 8,2 1,3 1,9 7,6 7,8 39,3 25,4 8,8

Market price – highest – ordinary (cents) 154 120 100 50 350 1 000 810 700 430 335

– N ordinary (cents) 145 115 90 60 330 785 825 700 425 330

– lowest – ordinary (cents) 86 71 32 33 33 340 651 365 205 185

– N ordinary (cents) 96 72 31 30 32 220 600 350 181 200

– period-end – ordinary (cents) 120 119 85 36 38 350 750 700 360 215

– N ordinary (cents) 120 111 83 31 42 330 750 670 370 215

* Years prior to 2009 have not been restated for discontinued operations.



Rand thousands 2013 2012 2011 20102009

9 months 2008 2007 2006 2005 2004

ratiOsProfitability

Operating profit/(loss) as percentage of revenue (%) 3,2 7,1 5,2 3,1 (5,4) (4,3) 2,9 4,2 3,5 4,7

Profit/(loss) for the period as percentage of revenue (%) 1,6 6,3 4,4 2,0 (6,0) (4,8) 1,3 2,4 2,0 3,2

Return on total tangible assets (%) 3,2 7,5 5,9 3,2 (6,2) (6,2) 3,8 6,1 5,3 7,7

Return on investments (%) 1,7 5,7 0,4 (9,6) (14,6) (6,3) 1,8 3,5 3,0 3,7

Return on shareholders’ interest (%) 2,8 9,7 0,7 (15,8) (26,4) (12,9) 3,3 6,2 5,2 7,4

leverage

Ratio of borrowings to capital and reserves (%) 34 34 27 24 33 39 31 22 23 28

Ratio of debt to capital and reserves (%) 66 66 61 59 73 93 71 64 58 80

liquidity

Current ratio (times) 1,2 1,4 1,5 1,5 1,7 1,4 1,9 2,0 2,2 2,2

Solvency ratio (%) 5,2 18,9 13,6 7,5 (23,9) (6,4) 7,9 15,1 7,2 19,1

Finance charges cover (times) 2,0 5,3 4,4 3,0 (3,1) (2,0) 2,0 3,3 2,3 2,6

Productivity

Total assets turn 1,0 1,1 1,1 1,0 1,1 1,4 1,3 1,4 1,5 1,6

Number of employees 6 475 7 887 9 541 11 771 13 221 14 847 15 343 15 170 15 280 16 925

Revenue per employee (Rand) 388 183 317 839 247 247 183 988 218 802 260 495 247 237 236 236 245 101 224 141

Operating profit/(loss) per employee (Rand) 12 333 22 697 12 751 5 684 (11 831) (11 144) 7 278 10 038 8 456 12 692

Assets per employee (Rand) 381 047 302 259 215 713 179 268 193 388 190 680 186 013 163 032 159 379 137 572

Cash value added factor (%) 51 54 55 85 39 61 55 69 65 62

share statistics (Refer to page for analysis of shareholders)

Weighted average number of shares issued (000) 685 310 703 398 702 946 702 946 443 253 90 048 91 015 105 224 122 362 128 215

Headline earnings/(loss) per share (cents) 2,9 20,9 (3,5) (22,2) (45,6) (111,0) 22,7 73,0 58,6 66,0

Earnings/(loss) per share (cents) 6,0 19,5 1,2 (29,0) (63,0) (198,6) 55,8 81,2 58,3 94,9

Proposed dividend – – – – – – 12,0 27,0 11,0 14,0

Headline earnings/(loss) yield at period-end (%) 2,4 17,6 (4,2) (62,5) (157,3) (33,1) 3,0 10,6 16,4 30,7

Dividend yield at period-end (%) – – – – – – 1,6 4,0 3,0 6,5

Proposed dividend cover (times) – – – – – – 1,9 2,7 5,3 4,7

Net asset value per share – excluding intangible assets (cents) 212 199 177 183 197 1 514 1 703 1 502 1 212 949

Total number of shares traded (000) 19 711 23 732 57 982 8 957 9 870 6 962 7 136 36 715 31 137 11 309

Total value of shares traded (R000) 24 513 19 260 28 979 3 491 5 372 41 609 49 384 173 247 86 883 27 448

Percentage of issued shares traded (%) 2,8 3,4 8,2 1,3 1,9 7,6 7,8 39,3 25,4 8,8

Market price – highest – ordinary (cents) 154 120 100 50 350 1 000 810 700 430 335

– N ordinary (cents) 145 115 90 60 330 785 825 700 425 330

– lowest – ordinary (cents) 86 71 32 33 33 340 651 365 205 185

– N ordinary (cents) 96 72 31 30 32 220 600 350 181 200

– period-end – ordinary (cents) 120 119 85 36 38 350 750 700 360 215

– N ordinary (cents) 120 111 83 31 42 330 750 670 370 215

* Years prior to 2009 have not been restated for discontinued operations.

9



DireCTOrs’ PROFILE

1 JOhn cOPelyn (63) BA Hons (Wits), BProc (UNISA)

Non-executive chairperson: Mr Copelyn joined Hosken Consolidated Investments Limited as chief executive officer in 1997. He was general secretary of various unions in the clothing and textiles industries from 1974 before becoming a member of parliament in 1994. He holds various directorships including the Industrial Development Corporation Limited and is a non-executive chairman of e.tv, Tsogo Sun Holdings Limited and Niveus Investments Limited. He was appointed to the board in May 2005.

2 neil nOrman lazarus sc (55) BA LLB (Wits)

Lead independent, non-executive: Mr Lazarus was admitted as an advocate in 1984 and was appointed as senior counsel in 1998. He also serves as an acting judge. As an advocate he specialises in corporate restructures, mergers and acquisitions and was involved in some major corporate reorganisations both locally and internationally. He is a member of the remuneration committee, risk committee and audit committee and was appointed to the board in October 2001. Subsequent to year-end, Mr Lazarus resigned from the board.

3 mOhamed ahmed (48) BCompt

Independent, non-executive: Mr Ahmed is a businessman who previously held directorships in Hosken Consolidated Investments Limited, MTN Group Limited, Real Africa Holdings Limited and numerous entities within the clothing and textile industry. He is the chairman of the audit and risk committee and was appointed to the board in October 2008.

4 dave duncan (british) (58) BCompt

Executive: Mr Duncan has been with the Seardel Group for more than 30 years in the industrial manufacturing sector. Mr Duncan was appointed to the board on 16 May 2013 as the chief operating officer, taking full responsibility for the Group’s manufacturing concerns. He is a member of the executive committee.

5 Kevin gOvender (42) BCompt (Hons)

Non-executive: Mr Govender joined the Hosken Consolidated Investment Group in 1997 and was appointed as chief financial officer of HCI in 2001, with responsibility for the HCI Group’s full finance function. He was appointed to the board in October 2008.

1 5 8 9 2


11

6 amOn ntuli (54)

Executive: Mr Ntuli was the president of the Southern African Clothing and Textile Workers Union from 1985 to 2003. Mr Ntuli joined the Seardel Group in 1978 and was appointed as an executive in 2006. He is a director of SACTWU Investment Group and various trade union investment companies. He is chairman of the social and ethics committee and was appointed to the board in October 2008.

7 stuart Queen (41) BCompt (Hons), CA (SA)

Executive director: Mr Queen was appointed as Group chief executive officer in December 2009. Prior to joining the board, he was financial director of Johnnic Holdings Limited and held directorships within various subsidiaries of both Hosken Consolidated Investments Limited and Johnnic Holdings Limited. He is a member of the executive and risk committees and was appointed to the board in October 2008.

8 yunis shaiK (55) BProc (Unisa)

Independent, non-executive: Mr Shaik is an attorney of the High Court and presently in private practice. He is a former deputy-general secretary of the Southern African Clothing and Textile Workers Union and has served as the senior commissioner to the CCMA in KwaZulu-Natal. He is a non-executive director of Hosken Consolidated Investments Limited and Niveus Investments Limited. He is a member of the audit committee and was appointed to the board in October 2008.

9 rachel WatsOn (54)

Independent, non-executive: Ms Watson has more than 30 years operational experience within the clothing industry. During her last 14 years within the industry Ms Watson served as a trade union representative in various organisational positions. She currently holds an executive position at a regional broadcaster. She is a member of the social and ethics committee. Ms Watson was appointed to the board in August 2009.

10 gys Wege (39) BCompt (Hons), CA (SA)

Executive director: Mr Wege joined the Group in April 2009 and was appointed as financial director in August 2009. Prior to joining the board he served in various senior financial roles within the automotive logistics industry. Mr Wege is a member of the executive committee, risk committee and the social and ethics committee.

10 7 4 6


The Group reports income attributable

to ordinary shareholders of R41 million

(2012: R137 million) and total comprehensive

income of R59 million (2012: R164 million)

for the year ended 31 March 2013.

The results are not comparable with the

prior year, which contained R192 million of

once-off income relating to the settlement

of the various litigation proceedings with

former directors and officers of the Group as

announced on SENS on 16 March 2012.

Group turnover was flat year on year, but significantly turnover from our manufacturing entities was down 10% whilst turnover from our non-manufacturing entities climbed by 22%. This turnover shift has resulted in the Branded Product Distribution segment now being the largest individual segment by turnover. The shift in turnover to higher margin areas and improved margins in our Clothing segment drove overall margin improvement up 240 basis points to 21,7%. The improved margins were reinforced by strict cost controls, which saw all major cost lines coming in below the previous year’s levels.

branded PrOduct distributiOn segmentThe performance of this segment is key to the revitalisation of the Group’s overall performance and remains an area of strategic focus. The businesses within this segment recorded revenue growth of 20% to R795 million, which has resulted in this segment now being the largest by turnover.

The operating results were negatively affected by a R7 million foreign exchange loss in the current period whilst the prior year’s figures contained a R13 million foreign exchange gain. Excluding the currency fluctuations, the underlying operating profit was up 12% year on year.

CHief eXeCUTiVe OffiCer’sREPORT



We continue to invest in marketing and building our distribution platforms in this segment with much of this investment being ahead of expected future revenue growth. This segment includes the results from our start-up Brand ID business which is still in an investment phase and we remain at least 12 months away from a breakeven position within this business.

textiles segmentTough trading conditions, particularly in the first half of the financial year, saw turnover down 4% to R689 million. Operating profit as reflected is up 13% to R32 million but the current year’s operating profit includes impairment reversals of R23 million due to previous loss-making businesses returning to profitability. Excluding this impairment reversal the underlying operating profit is R9 million, a R19 million reduction from the R28 million recorded in the prior period.

The current year’s results were affected by a number of extenuating circumstances most notably the liquidation of an external steam supplier which cost the Group some R9 million in increased energy costs. A coal-powered boiler was commissioned in the last quarter of 2012 and since then energy costs have returned to normal levels.

The second half of the financial year saw a much stronger performance from this segment with an operating profit, excluding the impairment reversal, of R16 million being recorded.

industrial segmentRevenue in this segment was down 2% to R335 million, reflecting the tough trading environment for the local manufacturing segment. Despite the reduction in turnover the improved gross margins realised saw operating profit climb 61% to R17 million.

clOthing segmentTurnover within the segment was down 19% to R695 million. This reduction was anticipated and was in line with the restructuring completed in the prior financial year. The reduced capacity allowed us to eliminate lower margin product, thereby raising overall gross margins. In

addition, the streamlined overhead structures resulted in improved efficiencies.

The above actions saw operating losses reduce by R67 million from a prior year loss of R101 million to a R34 million loss in the current period. Although the improvement is substantial, we recognise that continued losses in any business is unsustainable. We are considering a number of strategies to further improve the situation and we anticipate that the next year will remain challenging as these strategies are implemented.

PrOPerty segmentRevenue increased 40% to R93 million due to the various phases of the property development being completed and let. Of significance is that revenue from external tenants increased by 93% to R47 million and now represents more than 50% of the total revenue.

Operating profit before finance costs increased by 43% to R64 million, up from R45 million in the prior period.

The property developments are progressing well. The New Germany Industrial Park has been completed, it is 157 731 m2 in extent and is 88% let. The Mobeni Industrial Park is on track to be completed by mid-2013, it is 73 087 m2 in extent and fully let. R224 million has been spent on the developments to date, with some R25 million remaining to be spent.

aPPreciatiOnWe would like to take this opportunity to thank all our employees for their concerted efforts during the past financial year. The improvements reflected in this report are as a direct result of the commitment shown by our management teams and all the staff that support them.

stuart Queen Chief Executive Officer

16 September 2013

13


The Group’s property portfolio comprises a diversified range of mainly industrial properties located in KwaZulu-Natal, Western Cape and Gauteng.

The performance of commercial properties in South Africa is highly dependent on the quality of tenants. Based on our own temperature check, the Group’s portfolio performance is in a healthy state, underpinned by a quality and diversified tenant base from all spheres of the economic spectrum.

industrial ParKsThe highly successful and award-winning development of two industrial parks in New Germany and Mobeni have, subsequent to the year under review been completed:

1. The development of the New Germany Industrial Park, which began in mid-2010, was completed at an overall cost of R174 million and its full extent is 158 000m2. It has attracted a mix of manufacturing, warehousing and logistics tenants and at year-end was 88% let. The development was awarded the KZN Master Builders’ Association award for construction excellence.

2. Mobeni Industrial Park, which is some 73 000m2 in extent, was completed mid-2013 and is fully let. External tenants comprise international blue chip logistics companies, no doubt attracted to its location near Durban’s southern basin. We believe that the property’s proximity to the proposed new Durban port will have a material influence on its intrinsic value.

rental incOmeYear on year, rental income has grown in excess of 40% due to the various phases of the property developments being completed and let. Particularly pleasing is that rental income from external tenants now contributes more than 50% of the rental book.

PROPERTIES

15


The Branded Product Distribution segment consists of a cluster of vibrant and dynamic businesses operating in the toy, stationery, office automation, clothing lifestyle, sport and electronic gaming sectors of the economy. These businesses source quality products from around the planet to provide families in Southern Africa with the latest inventions and technology that the world has on offer.

Prima tOysPrima Toys is the number one distributor of games, activities and ancillary products. Prima Toys acts as the exclusive distributor for a number of leading international licensors for a variety of international brands and products. This allows access to multi-million Dollar research and development programmes which ensure that Prima’s product ranges remain at the forefront of the market whilst ensuring compliance with the strictest international labour and safety standards.

Prima interactivePrima Interactive is a distributor of, inter alia, Disney Interactive Studios games and Microsoft’s Xbox range of consoles and games.

the emPire grOuPEmpire specialises in the distributing of children’s reading and activity books and generic and branded stationery under its own Butterfly brand.

seartecSeartec is a distributor of the highly acclaimed Sharp range of technologically advanced office automation products in southern Africa. Seartec specialises in providing companies and individuals with a cost-effective, office and printing solution for the user who believes in quality and reliability, knowing that these products were developed by those who care for our planet and its environment.

brand idBrand ID is a brand development house focused on the sales, marketing and distribution of clothing lifestyle and sport brands. The current portfolio of fourteen brands operates across multiple sectors including apparel and sport technical equipment. Brand ID is currently in the planning phase of introducing our SA brands into the global markets, both on the broader African continent and within the European, South American and USA markets.

BRANDED PRODUCT DISTRIBUTION

17


During the last few years the overall economic environment has placed the Group’s textile operations under intense pressure. Recognising that we cannot simply wait for the market conditions to improve, we embarked on a programme to reduce the breakeven points in all the businesses whilst at the same time recognising that we needed to take some hard decisions to discontinue businesses without any real prospect of long-term sustainability. This programme has manifested itself in a number of restructures, downsizing, relocations, retrenchments, disposals and strategic shifts. Our textile businesses are now niche suppliers of quality textile products to a market which now appreciates their contribution of locally manufactured products.

Our proudly South African textile businesses consist of the following entities:

hextexSituated in the picturesque town of Worcester, Hextex manufactures wool and cotton woven fabric from local and imported yarn. Continual investment in machinery and technology has provided Hextex with world-class fabric production facilities to service its local and regional customers.

berg river textilesBerg River Textiles is a quality supplier of a wide range of cotton and polycotton woven fabrics, in dyed and printed form. The operation houses a comprehensive design studio and design library combined with the ability to produce a wide range of specialised fabric finishes and product types.

frame Knitting manufacturersFrame Knitting Manufacturers produces a wide range of knitted apparel fabrics at its plant in Mobeni. Its production facilities include a dyeing and finishing plant, making this operation an essential partner in the local fashion industry’s speed-to-market value chain.

rOmatex hOme textilesRomatex Home Textiles is one of the largest household textile manufacturers in South Africa. Its highly mechanised manufacturing facilities in Cape Town and Durban specialise in the manufacturing of bed linen and bathroom products. Romatex sources its raw materials both locally and internationally, ensuring its products are of the highest standards. Integral to its successes is its in-house design centre which offers innovative and fashionable product designs.

first factOry shOPsWith over half a century of marketing fabric directly from affiliated factories and mills, First Factory Shops prides itself as the country’s best and most affordable fabric supplier to domestic consumers, SMMEs and bulk buyers.

TEXTILES

19


INDUSTRIALS

The Group’s industrial segment consists of those manufacturing businesses supplying products to the construction, automotive, mining, bedding and chemical industries.

The businesses operating in this segment are:

gOld reef sPeciality chemicals The Gold Reef chemical plant is situated in Durban, with its main area of focus being the polymerisation of acrylic and vinyl acetate co-polymers and homo-polymers. The manufacturing operation further caters for the toll manufacture of specialist polymers for international partners, supplying coatings to the paper industries.

Gold Reef has developed a wide range of environmentally friendly products and supplies the paint, adhesive, textile, carpet, water treatment and detergent industries. It is a leading supplier to the local market. Progress has also been made in expanding its sphere of influence into other markets on the African continent, Australia, Malaysia and the Middle East.

integrated POlyPrOPylene PrOductsIntegrated Polypropylene Products produces a wide range of extruded polypropylene tapes and a wide range of woven polypropylene fabrics. The extrusion, weaving and extrusion coating plant is located in New Germany Industrial Park, Durban. Its technically superior products are used in various civil engineering, mining, agricultural and geotechnical applications.

brits autOmOtive systems, incOrPOrating brits nOn-WOvenBrits manufactures non-woven materials that are synergistic with the worldwide drive towards safer, more fuel-efficient and ecologically friendly motor vehicles. The business manufactures single polymer or composite and natural fibre mats and roll goods suitable for compression, as well as resin transfer moulding into auto components.

The business is not only a non-woven materials manufacturer, but also a convertor of these into semi-finished or complete automotive components. Its products include headliners, boot liners, door panels, parcel trays, seat/trim inter-layers, wheel arch liners, dash insulators, anti-squeak and anti-vibration felts and trough trunk sound insulators.

Brits Non-Wovens is a manufacturer of non-woven materials that have application in the construction, bedding and flooring industries.

21


The clothing segment comprises Seardel Apparel and Easywear factory fashion shops:

Seardel apparelSeardel Apparel is a manufacturer of apparel products with operations situated in the Western Cape, KwaZulu-Natal and Lesotho.

Its integrated manufacturing facilities cater for complex, quick response, short run fashion garments as well as high volume, long run, simpler design replenishment lines.

Seardel Apparel operates in an industry sector which is plagued with various economic, statutory and labour challenges (refer to the Sustainability Report on pages to ). Many of its competitors typically do not adhere to the legislated minimum wage framework and operate within an informal parallel economy.

In an attempt to survive these industry challenges, Seardel Apparel continued its restructuring by consolidating its manufacturing resources into centralised regional operations.

As a participant in the Department of Trade and Industry’s Production Incentive scheme, Seardel Apparel upgraded its cutting and sewing equipment. This investment allowed its production plants to increase efficiency, reduce waste and ensure its factories are given its best chance to remain a supplier of quality garments within this competitive industry.

eaSywearEasywear factory fashion shops is a chain of dynamic factory outlets offering quality products to customers at bargain prizes.

CLOTHING

23


sUsTAinABiliTyREPORT

This report aims to provide insight to its stakeholders into those factors which may have a material impact on the future sustainability of the Group. It also contains the Group’s response to its key sustainability objectives, better defined as those factors which will have a material influence on its ability to operate as a responsible and sustainable corporate citizen. The table below summarises the Group’s sustainability objectives:

sustainability objective stakeholder(s)sustainability indicator

Developing value-enhancing business streams outside of the traditional clothing and textile industries

Shareholders Employees

Economic

The preservation of the Group’s economically viable clothing and textile manufacturing concerns

CustomersEmployees Shareholders

Economic

Minimising the impact of our operations on the environment ShareholdersCustomers Employees Suppliers

Environmental

Continuation of the development and transformation of the Group’s human capital to sustain a skilled and motivated workforce

Employees Shareholders

Economic Social

The manufacture and distribution of high-quality products in a responsible and ethical manner

Customers Economic Environmental

25


develOPing value-enhancing business streams Outside Of the traditiOnal clOthing and textile industriesIn the prior year report we informed our stakeholders that the Group has:

• formedaseparateandindependentpropertydivision;

• establishedabrandmanagementbusiness,BrandID;and

• allocated increased resources to the businessesoperating in the industrial and branded product segments.

This sustainability objective was set within a context of a Group which had derived approximately 90% of its revenue from clothing and textile operations five years ago.

For the year ended 31 March 2013 revenue outside of the traditional clothing and textile businesses exceeded R1,2 billion, just shy of representing 50% of the Group’s annual turnover. These revenue streams stem from a diversified portfolio, including:

• distributionofwell-knownbrands;

• manufacturing of products for the automotive,mining,beddingandconstructionmarkets;

• officeautomation;and

• rental income fromanextensive industrialpropertyportfolio.

In the ensuing years, each of these businesses will look to expand their operations by:

• growing their existing product range organicallywithinexistingmarkets;

• addingnewproductstotheirexistingproductrange,utilisingskillswithinitscorecompetencies;and

• carefullyandselectivelyventuringintonewmarkets.

The branded product distribution and industrial manufacturing segments are earmarked as areas of continued growth and the Group will continue to explore expansion opportunities.

In addition to the work that has been done within the branded product distribution and industrial manufacturing segments, we are also looking to diversify the traditional clothing and textile manufacturers away from the retail apparel sector where margin pressure is at its greatest. We have had success within some of the textile businesses where benefit has been derived from government procurement policies. We will continue to look to move these businesses in this direction in an

attempt to create long-term sustainability.

the PreservatiOn Of an ecOnOmically viable clOthing and textile manufacturing cOncernPreviously the Group reported that the South African clothing and textile industry is plagued by the following macroeconomic challenges:

• anonslaughtfromcheapimports;

• rawmaterialpricevolatility,exacerbatedbycurrencyfluctuations;

• illegalimports,includingunder-declarationofvaluestoreduceimportduties;and

• increased industry-wide non-compliance tobargaining council agreements.

Unfortunately, whilst recognising that the South African Revenue Service has had some early success in its efforts to curb illegal imports, we have to report that in the main the challenges listed above remain largely unchanged and continue to hamper the Group’s efforts to obtain acceptable returns from its clothing and textile businesses. In particular, our labour-intensive clothing businesses were severely affected, the consequence of which can clearly be seen in the following statistics for the last three years:

R’000

Revenue Staff employed

2013 R694 611 3 860

2012 R860 950 5 314

2011 R1 150 248 6 943

Our clothing and textiles businesses continued to actively participate in the Department of Trade and Industry’s Customised Sector Programme for the clothing, textile, footwear and leather goods industries. This programme provides these businesses with the ability to modernise and upgrade their facilities. The Group acknowledges the importance of this programme in our journey to create sustainable clothing and textile concerns and no doubt these programmes have had success in sustaining jobs which otherwise would have been lost.

On the positive side, the textile businesses have creatively tackled these challenges and accepted them as part and parcel of the industry in which they operate. Government procurement policies which see a greater emphasis on buying locally manufactured products have also contributed to helping these businesses become sustainable.

sUsTAinABiliTy rePOrT (continued)



minimising the imPact Of Our OPeratiOns On the envirOnment

The reporting period constitute the third GHG emissions inventory (“carbon footprint”) and climate change risk analysis undertaken by the Group and was performed by independent environmental specialists, CoZero.

The environmental assessments are based on the published GHG protocols and our disclosure includes both direct emissions (emissions as a result of business activities under our control) and indirect (emissions of carbon by utilisation by service providers external to the Group). As per the GHG protocols, the reporting of both direct emissions and indirect emissions resulting from purchased electricity, are compulsory. All other indirect emissions are reported on voluntary basis.

emissions are classified as follows:scope description emission from activities

Scope 1 Direct GHG emissions

Direct emissions occur from sources that are owned or controlled by the Group.

Owned or controlled machinery and vehicles that consumed petrol, diesel, coal, heavy fuel oil, light fuel oil and liquefied petroleum gas.

Scope 2 Electricity indirect emissions

Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by the company. Scope 2 emissions physically occur at the facility where electricity is generated.

Purchased electricity

Scope 3 Other indirect emissions

Scope 3 emissions are a consequence of the activities of the Group, but occur from sources not owned or controlled by the Group.

Emission from air travel, rental car travel and the indirect emission from the purchase of petrol, diesel, heavy fuel oil, light fuel oil, coal and liquefied petroleum gas.

carbon footprint results from emissions

The direct risks associated with climate change are often not the most pressing, at least for the short to medium term. However, it is the secondary risks arising from these anticipated direct risks that are most pressing for now and which are considered by the Group. All these secondary risks are a result of social, political and economic responses designed to either mitigate or adapt to the potential direct risks.

The Group has identified the following secondary risks that could have an influence on operation in the short to medium term:

• legalandregulatory;

• tradeandmarketaccess;and

• reputational.

Based on a high-level review of proposed future environmental legislation such as carbon taxes, it appears these regulations will have an impact on the Group’s margins. Current direct carbon tax proposals of R120 ton of carbon would mean an additional R1,5 million in taxation. This calculation excludes the

2012 2013

4 0553 691

77 823 74 945

13 788 12 169 scope 1: Direct GHG emissions

scope 2: Electricity indirect emissions

scope 3: Other indirect emissions

27



effect of the proposed tax on external service suppliers,

such as increases in the cost of electricity and other

sources of energy. The Group’s environmental views

are less influenced by future tax legislation, but rather

influenced by an acknowledgement that our operations

and businesses need to be operated in an environmentally

responsible way.

gold reef speciality chemicals Proprietary limitedOne of the fundamental key values of Gold Reef Speciality Chemicals is environmental sustainability. Its concern for the environment has motivated the business to develop a range of emulsions that are environmentally friendly and APEO-free.

What does aPeO-free mean?Alkylphenol Ethoxylates (APEOs) are non-ionic surfactants with an emulsifying and dispersing action, which makes them suitable for a very large variety of applications. APEOs are considered toxic for aquatic life and in most developed countries these emulsifiers/surfactants have been prohibited. APEOs are often contained in the formulations of detergents and other auxiliaries (e.g. dispersing agents, emulsifiers and lubricants).

When added to aquatic environments, APEOs are endocrine disruptors and cause feminisation of male fish, with potential catastrophic consequence to fish populations.

cOntinuatiOn Of the develOPment and transfOrmatiOn Of the grOuP’s human caPital tO sustain a sKilled and mOtivated WOrKfOrceTransformation is imperative to the sustainability of the

business and the Group’s transformation efforts are

aligned with the principles and objectives of broad-based

black economic empowerment as envisaged by the DTI.

Transformation is monitored and managed within a

governance framework which includes the social and

ethics committee, an internal transformation committee,

in which the chief executive participates, and the

business unit transformation forums.

The Group’s transformation objectives are set out as follows:

• development of human capital to sustain a skilled

andmotivatedworkforce;

• monitoring the Group’s adherence to and

performanceundertheB-BBEECodes;

• monitoring the Group’s compliance with the

requirements of the South African Department of

Labourinrespectofemploymentequity;and

• maintaining our overall Level Two accreditation

whilst attaining ongoing improvements in individual

elements of the scorecard.

transformation ratingOur formal B-BBEE verification audit returned excellent

results, with the Group either maintaining the maximum

points or exceeding the previous year’s points in each

element, other than management control.

The Group has maintained its level 2 B-BBEE status for

the current period, achieving an overall B-BBEE score of

86,01 points – a 125% recognition level.

B-BBEE element Max 2013 2012

Ownership 20,00 23,00 23,00

Management control 10,00 6,00 9,19

Employment equity 15,00 10,34 8,67

Skills development 15,00 8,07 6,34

Preferential procurement 20,00 18,60 18,06

Enterprise development 15,00 15,00 15,00

Socio-economic development 5,00 5,00 5,00

Total % 100,00 86,01 85,26

level 2 Level 2

Ownership and management controlSeardel’s majority shareholder is Hosken Consolidated

Investments Limited (“HCI”), which is a black-owned

and controlled company with 34,62% exercisable voting

rights owned by women.

The Group’s ownership control elements remained

exemplary and it should be noted that the Group again

achieved a further three bonus points in the ownership

category.

employment equityPromoting diversity within the workforce remains an

important pillar of the Group’s human resource principles.

The Group is committed to provide equal opportunities

to all potential and existing employees and achieving

a diversified workforce through the advancement of

previously disadvantaged people and empowerment

of women.

The Group’s employment equity plan focuses on

increasing the representation of designated groups,

mainly in the senior management and professionally



qualified areas. Strategies have been developed to achieve internal employment equity targets. These strategies include, amongst other things, the implementation of in-house learning and development plans. The Group has also implemented a management trainee programme whereby graduates are employed and given the opportunity to work within various of the Group’s businesses. They will gain exposure across various business functions and hopefully will emerge from the programme equipped to take a permanent role in the management structures.

skills developmentThe Group is dedicated to ongoing training and development of employees to continually improve the skills base. During the period under review, there were 3 426 training incidents with some 2 240 employees attending training during the period.

Seardel College, our Department of Higher Education and Training registered workplace Further Education and Training institution, continued to play its role in the training of our employees. This year the Group has qualified in excess of 130 employees in the clothing and textiles learnership programme. The Group also remained driven to improve its employee’s literacy with the initiative to provide adult basic education and training (“ABET”) continuing through the period at the college.

In addition to the learnerships and ABET programmes the Group has also offered the following courses internally and externally:

• engineeringapprenticeships;

• South African Dyers and Finishers Association(“SADFA”)studies;

• Education, Training and Development (“ETD”)programmes;

• statutorytraining(first-aid,hysterdrivers,operatorsoflifting equipment, health and safety representatives, fire-fighting);and

• pattern-making programmes, quality assuranceaccreditation programmes, work-study programmes, quality programmes and computer-related courses.

Employees have also participated in various team leader and production management programmes provided via the Fibre Processing and Manufacturing Sector Education and Training Authority (“FP&M SETA”). The Group, with support from the SETA, have assisted a number of people on tertiary education programmes, ranging from MBAs to degrees, diplomas, short courses and work-focused

courses.

The Seardel Mentoring Programme continued during the year and has been running for the past two years. Some 50 executives and senior management give of their time and expertise to mentor undergraduate students on the Group Bursary Programme. The mentorship programme was implemented as an initiative to improve the success/pass rate of students on the Group Bursary Programme. Mentors meet with their mentees on a regular basis, providing them with guidance and support. The results of the programme have been particularly pleasing with the overall success/pass rate of students being in excess of 90% for the second year in a row.

The Group has continued to participate in the Clothing and Textile Cluster Programmes which focuses on productivity, quality, waste reduction, improved efficiencies, reduced machine downtime, visual performance management (“VPM”), as well as on-time-in-full delivery. These initiatives support the manufacturing processes and the principle of continuous improvement.

Preferential procurementThe Group has achieved excellent points for this element during the current year which reaffirms its commitment to source merchandise and services from empowered local suppliers.

All goods and services procured by the Group, other than any portion specifically excluded, are measurable in calculating the total measure procurement spend (”TMPS“).

During the year under review the Group spent R871 million in total with B-BBEE enterprises constituting 72,06% of TMPS. Of this total, R311 million was spent on qualifying small enterprises (“QSE”) and emerging micro enterprises (“EMEs”) and R45 million with black women-owned businesses (greater than 30% black women-owned).

The above reflects our continued focus on improving on this element.

enterprise developmentEnterprise development presents an opportunity to stimulate sustainable economic growth by assisting the development and sustainability of black-owned small and medium businesses in South Africa. Financial assistance is given to multiple CMT suppliers, the vast majority of which are black-owned. The support is mainly in the form of favourable payment terms to support cash flow of these operations.

29



socio-economic developmentThe Seardel Group’s commitment to Social Investment

in the communities in which our divisions operate

continued during the year under review.

The focus continues to be on education, youth and

health-related issues, which supports the philosophy that

our future depends on the education and development

of our youth. Our CSI programme is supported and

supplemented by the involvement of the HCI Foundation.

The Group continued to support a number of needy

organisations which had benefited from Seardel’s CSI

projects in the previous year. These projects include the

provision of specialised, safe playground equipment,

which is wheelchair friendly and enables children at the

school to benefit from and enjoy the equipment to the

Cerebral Palsy Association of KwaZulu-Natal. Gold Reef

Speciality Chemicals adopted and supported the

Cerebral Palsy Association and was involved in numerous

activities at the school during the year. On 18 July 2013,

Nelson Mandela International Day, management and

staff provided a special meal for pupils at the school.

St. Monica’s Children’s Home, with the support of our

Textile businesses, continued with their upgrade of

facilities in the residences of the abandoned/orphaned

children at St Monica’s.

Seardel Apparel continued to support the Lavender Hill

Development Trust Project. The “Youth Empowerment

through School” (Y.E.S.) Project has given many pupils at

Lavender Hill High School renewed hope of an education

and a future.

Hillcrest Aids Centre Trust and the Woza Moya Project

continue to make a difference in the lives of many who

are affected and infected by the HIV/AIDS pandemic.

Seardel’s involvement and support enabled the Hillcrest

Aids Trust to build a veranda, thereby improving

conditions for those involved in the Woza Moya Project.

A visit to the Hillcrest Aids Trust is a most rewarding/

uplifting experience and shows what can be done with

limited resources.

The KwaZulu-Natal clothing operation support for the Ladysmith (Natal) branch of Child Welfare South Africa continued during the year. Support includes the provision of training and education of staff, upgrading of facilities and improved administration services. Six crèches in the Ladysmith area benefited from the support given to this project.

New projects and organisations supported during the year included the following:

save the rhino ProjectThe above is supported by the Prima Group. In line with saving our environment for future generations, we believe it is important to preserve these fascinating prehistoric creatures for future generations to enjoy.

KWa care (Kwadabeka)This organisation is supported by Brits Automotive Systems. KWA Care focuses on providing orphaned and vulnerable children with the opportunity for an education, as well as nourishment and other basic provisions. KWA Care provides a valuable service for the community of KwaDabeka.

cOmPass (community Provision and social services)This organisation is supported by Seartec by way of sponsorship of nourishment to sustain two baby sisters for a year. This support provides COMPASS with the means to keep the two sisters together and to ensure they are not separated.

saartjie baartman centre for Women and childrenThis organisation is supported by the Group’s Western Cape clothing operation. The Saartjie Baartman Centre is situated in Manenberg on the Cape Flats and focuses on women and children, to provide them with skills and confidence to empower them to become financially independent.

We are proud that, through these projects and with the support and dedication of many management and staff, we are able, in some small way, to make a difference in the lives of those communities in which we operate.



employment equity statistics

31 march 2013

designated non-designated

south africa total

lesotho total

group total

male female male foreign national

Occupational levels a c i a c i W W male female

Top management 1 – 1 – – – 2 21 – – 25 – 25

Senior management – 2 7 2 2 4 5 18 3 3 40 6 46

Professionally qualified, experienced specialists and mid-management 4 10 12 5 14 9 33 40 3 10 127 13 140

Skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents 86 150 121 103 353 131 84 91 30 73 1 119 103 1 222

Semi-skilled and discretionary decision-making 324 233 80 1 005 854 81 41 55 109 561 2 673 670 3 343

Unskilled and defined decision-making 247 141 15 234 417 16 4 9 3 55 1 083 58 1 141

total permanent 662 536 236 1 349 1 640 241 169 234 148 702 5 067 850 5 917

Non-permanent employees 67 82 7 71 176 5 16 17 28 89 441 117 558

grand total 729 618 243 1 420 1 816 246 185 251 176 791 5 508 967 6 475

31 march 2012

designated non-designated

south africa total

lesotho total

group total

male female male foreign national

Occupational levels a c i a c i W W male female

Top management 1 – 1 – – – 2 18 2 – 22 2 24

Senior management – 3 8 2 2 6 11 40 – 2 72 2 74

Professionally qualified, experienced specialists and mid-management 4 31 23 8 19 12 36 41 4 3 174 7 181

Skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents 90 182 117 105 473 135 104 68 20 57 1 274 77 1 351

Semi-skilled and discretionary decision-making 481 343 91 1 198 1 674 98 44 58 78 555 3 987 633 4 620

Unskilled and defined decision-making 141 74 5 166 301 4 – 4 11 90 695 101 796

total permanent 717 633 245 1 479 2 469 255 197 229 115 707 6 224 822 7 046

Non-permanent employees 78 82 5 289 250 14 10 8 25 77 736 102 838

grand total 795 715 250 1 768 2 719 269 207 237 140 784 6 960 924 7 884

31


CAsH VAlUe ADDeD STATEMENT

2013r000’s

2012R000’s

2011R000’s

2010R000’s

2009R000’s

Cash derived from revenue 2 564 619 2 514 194 2 489 813 2 586 923 2 969 218

Paid to suppliers for materials and services 1 703 613 1 616 967 1 610 024 1 580 839 2 136 114

Cash value added 861 006 897 227 879 789 1 006 084 833 104

Interest received 2 971 4 594 7 925 22 563 18 859

total wealth created 863 977 901 821 887 714 1 028 647 851 963

Distributed as follows:

employees

Administration 180 009 168 638 233 758 207 692 197 062

Production 267 710 379 291 396 680 468 763 443 899

Sales 142 444 147 554 120 798 136 759 95 841

590 163 695 483 751 236 813 214 736 802

Providers of capital

Interest paid on borrowings 43 095 38 467 35 651 58 438 86 494

Dividend to shareholders – – – – –

43 095 38 467 35 651 58 438 86 494

monetary exchanges with government

Taxation (including customs and excise duty) 46 579 46 899 22 983 40 770 39 343

PAYE 64 968 84 499 94 956 111 404 86 393

VAT 12 560 35 797 77 833 131 266 83 111

Incentives (95 972) (38 710) (37 664) (14 851) (18 140)

28 135 128 485 158 108 268 589 190 707

retained to develop future growth/(utilised in operations) 202 584 39 386 (57 281) (111 594) (162 040)

total wealth distributed 863 977 901 821 887 714 1 028 647 851 963

Value added is a measure of the wealth that the Group has created in its letting, manufacturing and distribution operations by adding value to the cost of its raw materials and services purchased.

The statement above shows how that wealth was created, and also how it was shared between employees and the providers of funds to the Group.

The statement takes into account the amounts retained and reinvested in the Group for the replacement of assets and the development of future operations.

distribution of wealth 2013 2012 2011 2010 2009

Employees (%) 68,3 77,1 84,6 79,1 86,5

Government (%) 3,3 14,2 17,8 26,1 22,4

Retained/(utilised) (%) 23,4 4,4 (6,4) (10,9) (19,0)

Lenders (%) 5,0 4,3 4,0 5,7 10,1

Shareholders (%) – – – – –

(%) 100,0 100,0 100,0 100,0 100,0

33


COrPOrATeGOVERNANCE

This report provides our stakeholders with insight as

to how the board and its underlying committees are

overseeing and guiding the Group’s performance and

strategy. It further outlines our corporate structure which

is responsible to ensure compliance with internal policies

and external regulation.

The Seardel Group’s directors, officers and senior

management remain committed to the highest level

of corporate governance and endorse the Code of

Corporate Practices and Conduct as enshrined in the

Third King Report on Corporate Governance. Sound

corporate governance structures are viewed as pivotal to

delivering on the Group’s sustainability objectives.

aPPlicatiOn Of King iiiThe JSE Limited Listings Requirements made adherence

to selected King III requirements compulsory. The

directors assessed the Group’s compliance to the

recommendations of King III and confirmed that, except

where indicated, the Group complied with all material

aspects of these corporate governance principles. With

reference to the remainder of the King III requirements,

where the directors’ assessment has indicated that

certain practices are not in the best interest of Seardel,

we explain the reasons for our alternative approach

as follows:

Principle 2.16 recommends that the board should

elect a chairman who is an independent non-executive

director. The board has appointed a non-executive

chairman and in terms of the definition provided, he

is not regarded as independent. The board is of the

opinion that the experience and specialist knowledge

of the environment in which Seardel operates, makes

it appropriate for him to hold this position. The board

has appointed Mr N Lazarus as lead independent non-

executive director.

Principle 2.26 recommends that the remuneration

of each individual director and the three most highly

paid employees who are not directors in the company

be disclosed. The remuneration report discloses the

remuneration of the three most highly paid employees,

however the names of the employees who are not

directors have not been disclosed as the board is of the

opinion that such information is private to the individuals

concerned and adds no value to stakeholders.

Principle 4.6 recommends that frameworks and

methodologies are implemented to increase the

probability of anticipating unpredictable risks. It is the

view of the risk committee that the existing governance

principles and levels of risk tolerance embedded within the

Group provide sufficient coverage of the risks associated

with the probability of anticipated unpredictable risks.

Principle 4.9 and 9.3 recommends that the effectiveness

of the risk management process and sustainable reporting

and disclosure should be independently assured. The

Group’s external auditors have assured the financial

statements and accredited specialist agencies have

verified the disclosure on broad-based black economic

empowerment, property valuations and carbon

emissions. The Group has implemented a combined

assurance framework which considers the assurance

provided by all independent assurance providers. The

extent of the independent assurance received is deemed

to be sufficient.

Detailed disclosure of the Group’s adherence to

the King III principles is published on our website,

www.seardel.co.za

bOard Of directOrsSeardel has a unitary board which is tasked with both

leading and controlling the Group’s strategy and

operations. The collective experience and diversity of

the directors bring a broad perspective and invaluable

wealth of insight. Their knowledge comes from a diverse

array of backgrounds and specialist skills across a range

of sectors including law, accounting, manufacturing,

logistics and industrial relations.

board compositionThe board of directors comprises nine members, six

non-executive directors and three executive directors.

Four of the six non-executive directors are independent.

The composition of the board is a reflection of the

demographics of the Group’s diversified investments

and attempts to ensure a representative voice of all

relevant stakeholders.

The composition of the board is regularly reviewed

to ensure a balance of power and authority, negate

individual dominance in the decision-making processes

and promote objectivity.



The board has appointed a non-executive director as chairman. The roles of chairman and chief executive officer are separate with a clear division of responsibilities.

There were no changes to the board composition during the year and three members, Messrs Queen, Watson and Wege, were re-elected as directors at the annual general meeting (“AGM”) held on 29 October 2012.

The company’s ultimate controlling shareholder is Hosken Consolidated Investments Limited (“HCI”). Messrs Copelyn, Govender and Shaik also serve on the HCI board.

board appointment The appointment to the board of directors is governed by a formal board-approved mandate regulating the terms of reference and incorporates the provisions of the Companies Act of 2008, as amended, the mandatory provisions as stipulated in paragraph 3.84 of the JSE Listings Requirements, recommendations of the King Code and the memorandum of incorporation of the company.

There is a distinctive division of responsibilities at board level so that not one individual has unfettered powers of decision-making. The board as a whole, within its powers and in a formal and transparent manner, is responsible for the selection and appointment of directors.

Directors do not have a fixed term of appointment and there is no mandatory retirement age for non-executive directors.

According to the company’s memorandum of incorporation as adopted, non-executive directors retire every three years, with at least one-third of non-executive directors to retire every three years at the AGM. Executive directors are to retire every five years. A retiring director shall be eligible for re-election, and if re-elected, shall be deemed not to have vacated office. The directors retiring at the forthcoming AGM of the company are Messrs Shaik and Ahmed. Their reappointment is subject to shareholders’ approval.

Subsequent to year-end, Mr D Duncan was appointed to the board and Mr N Lazarus tendered his resignation. As required in terms of the Company’s Memorandum of Incorporation, at the forthcoming annual general meeting, Mr Duncan’s appointment is subject to shareholders approval.

The name and brief curriculum vitae of each director appear on page of this report.

independence of directorsSeardel’s non-executive directors acknowledge the need for their independence, while recognising the importance of good communication and close co-operation with executive management. The directors are entitled to seek independent professional advice at the company’s expense concerning the company’s affairs and have access to any information they may require in discharging their duties as directors.

King III requires the board to review the independence of long-serving non-executive directors. Mr N Lazarus was appointed to the board in October 2001. The board has assessed his independence and concluded that his independence of character and judgement is not in any way affected or impaired by the length of services. However, Mr N Lazarus has resigned subsequent to year-end.

Seardel’s lead independent director is responsible for verifying on an annual basis the continuing independence and objectivity of the independent non-executive directors. This is done by assessing any circumstance or relationships that could affect such independence.

board attendanceThe board meets at least four times a year and additional meetings can be convened to consider specific business issues which may arise between scheduled meetings. No additional meetings were required during the year. Directors are provided with substantive board papers to enable them to consider the issues on which they are requested to make decisions. The table below details each director’s board meeting attendance during the year under review:

35


COrPOrATe gOVernAnCe (continued)

cOmPany secretaryHCI Managerial Services (Pty) Ltd is the appointed

company secretary of the Group. The company secretary

provides support and guidance to the board in matters

relating to governance, ethical conduct and their

fiduciary duties. Where required, representatives of

the company secretary facilitate induction and training

for directors and co-ordinate the annual board and

committee evaluation process.

Directors have unrestricted access to the advice and

services of the company secretary. Neither the company

secretary, nor any representatives of the company

secretary, is a director of any of the Group’s operations

and accordingly maintains an arm’s length relationship

with the board and its directors.

The company secretary is responsible for the functions

as set out in section 88 of the Companies Act of 2008

(as amended). All board, committee and shareholders’

meetings are properly recorded as per the requirements

of the Act.

dealings in the cOmPany’s securitiesSeardel complies with the continuing obligations of

the Listings Requirements of the JSE. The company’s

directors, executives and senior employees are prohibited

from dealing in Seardel securities during certain

prescribed restricted periods. The company secretary

regularly disseminates written notices to inform them of

the insider trading legislation and advise them of closed

periods. All directors and senior executives are required

to obtain clearance from the company secretary prior

to dealings in the company securities. All dealings in

the company’s securities are disclosed in terms of the

applicable Listings Requirements.

gOvernance Of itThe board of directors are responsible for information technology (IT) governance. The board tasks the Group head of IT to ensure IT governance compliance within the Seardel Group.

The Group head of IT further provides oversight and direction on business level IT strategy, IT investment and the efficiency and effectiveness of IT. IT risk management is aligned with the Group risk management structure and is channelled by way of the risk management committee. The committee receives feedback on critical risk issues and the solutions proposed including progress reports.

A high-level review of the alignment of the Group’s IT governance structures and processes to the principles of King III has been conducted.

bOard cOmmitteesSeardel’s board committees play a pivotal role in guiding and overseeing strategy, enhancing high standards of governance and achieving increased effectiveness within the Group. The committees comprise members of the board and executive officers of the Group.

Board committees are free to take independent, outside professional advice within the scope of their terms of reference and as deemed necessary to carry out their duties. The Group’s chief executive officer and other members of the executive management whose presence is required for such committees’ effective performance of their responsibilities are invited to be in attendance at committee meetings.

16 May 2012 5 September 2012 13 November 2012 18 March 2013

J A Copelyn ü ü ü üN N Lazarus û ü û üM H Ahmed ü ü ü üT G Govender ü ü û üA M Ntuli ü ü ü üS A Queen ü ü ü üY Shaik ü ü ü üR Watson ü ü ü üG Wege ü ü ü ü



The board has established five committees to assist in discharging its responsibilities:

executive committeeChairman: Mr S Queen

Role: The executive committee is responsible for the day-to-day operational activities of the Group, development and implementation of strategy and board directives.

The Seardel executive committee comprises Messrs S Queen (Chairman, Group chief executive officer), G Wege (Group financial director), D Duncan (chief executive officer Industrial and Textiles), K Robson (chief executive officer Properties, Corporate and Legal Services), I Stein (chief executive officer Clothing) and Mr I Morris (chief executive officer Prima Group).

The executive committee meets formally once a week and executive committee members attend the monthly operational meetings of each operating entity within the Group. Such formal weekly and monthly meetings include the review of strategic, operational and financial results.

The board is apprised of progress through reporting at board meetings and regular communication with management.

audit committeeChairman: Mr M Ahmed

Role: The audit committee performs an important function by overseeing the Group’s financial statements

and reporting processes, including the system of internal financial controls.

The committee’s report is presented on page .

risk committeeGroup risk officer: Mr D Levine

Role: The risk committee is primarily responsible for the governance of risk, in accordance with the framework of the Group’s risk management policy.


remuneration committeeChairman: Mr N Lazarus

Role: The remuneration committee ensures that the Group’s directors and senior management are fairly rewarded for their individual contribution to overall performance and aligned with the Group’s strategy and performance goals.


social and ethics committeeChairman: Mr A Ntuli

Role: The social and ethics committee monitors activities relating to ethics, stakeholder engagement and the social impact of the company on communities within which it operates. The committee also monitors progress across all areas of strategic empowerment as well as compliance with transformation codes.


37


COrPOrATe gOVernAnCe (continued)CHECKLIST

number PrincipleEThICAL LEADERShIP AND CORPORATE CITIZENShIP1.1 Effective leadership based on an ethical foundation ü1.2 Responsible corporate citizen ü1.3 Effective management of Group’s ethics üBOARDS AND DIRECTORS2.1 The board is the focal point for and custodian of corporate governance ü2.2 Strategy, risk, performance and sustainability are inseparable ü2.3 The board should provide effective leadership based on an ethical foundation ü2.4 The board should ensure that the Group is and is seen to be a responsible corporate citizen2.5 The board should ensure that the Group’s ethics are managed effectively ü2.6 The board should ensure that the Group has an effective and independent audit committee ü2.7 The board should be responsible for the governance of risk ü2.8 The board should be responsible for information technology (IT) governance ü2.9 The board should ensure that the Group complies with applicable laws and considers adherence to

non-binding rules, codes and standards ü2.10 The board should ensure that there is an effective risk-based internal audit ü2.11 The board should appreciate that stakeholders’ perceptions affect the Group’s reputation ü2.12 The board should ensure the integrity of the Group’s integrated report ü2.13 The board should report on the effectiveness of the Group’s system of internal controls ü2.14 The board and its directors should act in the best interests of the company ü2.15 The board should consider business rescue proceedings or other turnaround mechanisms as soon as

the Group is financially distressed as defined in the Act ü2.16 The board should elect a chairman of the board who is an independent non-executive director. The

CEO of the company should not also fulfil the role of chairman of the board û2.17 The board should appoint the chief executive officer and establish a framework for the delegation

of authority ü2.18 The board should comprise a balance of power, with a majority of non-executive directors. The

majority of non-executive directors should be independent ü2.19 Directors should be appointed through a formal process ü2.20 The induction of and ongoing training and development of directors should be conducted through

formal process ü2.21 The board should be assisted by a competent, suitably qualified and experienced company secretary ü2.22 The evaluation of the board, its committees and the individual directors should be performed every year ü2.23 The board should delegate certain functions to well-structured committees but without abdicating its

own responsibilities ü2.24 A governance framework should be agreed between the Group and its subsidiary boards ü2.25 Companies should remunerate directors and executives fairly and responsibly ü2.26 Companies should disclose the remuneration of each individual director and certain senior executives #2.27 Shareholders should approve the company’s remuneration policy üAUDIT COMMITTEE3.1 Effective and independent ü3.2 Suitably skilled and experienced independent non-executive directors ü3.3 Chaired by an independent non-executive director ü3.4 Oversees integrated reporting ü3.5 A combined assurance model is applied to improve efficiency in assurance activities ü3.6 Satisfies itself of the expertise, resources and experience of the Group’s finance function, chief financial

officer and company secretary ü3.7 Oversees internal audit ü3.8 Integral to the risk management process ü3.9 Oversees the external audit process ü3.10 Reports to the board and shareholders on how it has discharged its duties ü



number PrincipleThE GOVERNANCE OF RISK4.1/4.2 The board is responsible for the governance of risk and setting levels of risk tolerance ü4.3 The audit committee assists the board in carrying out its risk responsibilities ü4.4 The board delegates the risk management plan to management ü4.5 The board ensures that risk assessments and monitoring are performed on a continual basis ü4.6 Frameworks and methodologies are implemented to increase the probability of anticipating

unpredictable risks û4.7 Management implements appropriate risk responses ü4.8 The board ensures continual risk monitoring by management4.9 The board receives assurance of the effectiveness of the risk management process û4.10 Sufficient risk disclosure to stakeholders üThE GOVERNANCE OF INFORMATION TEChNOLOGY5.1 The board is responsible for information technology (IT) governance ü5.2 IT is aligned with the performance and sustainability objectives of the Group ü5.3 Management is responsible for the implementation of an IT governance framework ü5.4 The board monitors and evaluates significant IT investments and expenditure ü5.5 IT is an integral part of the Group’s risk management ü5.6 IT assets are managed effectively ü5.7 The audit committee assists the board in carrying out its IT responsibilities üCOMPLIANCE WITh LAWS, CODES, RULES AND STANDARDS6.1 The board ensures that the Group complies with relevant laws ü6.2 The board has a working understanding of the relevance and implications of non-compliance ü6.3 Compliance risk forms an integral part of the Group’s risk management process ü6.4 The board has delegated to management the implementation of an effective framework and processes üINTERNAL AUDIT7.1 Effective risk-based internal audit ü7.2 Follow risk-based approach to its plan7.3 Written assessment of the effectiveness of the Group’s system of internal controls and risk management ü7.4 Be responsible for overseeing internal audit ü7.5 Internal audit is strategically positioned to achieve its objectives üGOVERNING STAKEhOLDER RELATIONShIPS8.1 Appreciation that stakeholders’ perceptions affect the Group’s reputation ü8.2 Management proactively deals with stakeholder relationships ü8.3 There is an appropriate balance amongst the Group’s various stakeholder groupings ü8.4 Equitable treatment of stakeholders ü8.5 Transparent and effective communication to stakeholders ü8.6 Disputes are resolved effectively and timeously üINTEGRATED REPORTING AND DISCLOSURE9.1 Ensures the integrity of the Group’s integrated report ü9.2 Sustainability reporting and disclosure is integrated with the Group’s financial reporting ü9.3 Sustainability reporting and disclosure is independently assured û

KEYü Compliant# Partially compliantû Not compliant

The Group’s detailed response to the areas of partial or non-compliance is contained in the Corporate Governance Report on page .

39


COrPOrATe gOVernAnCe (continued)SOCIAL AND ETHICS COMMITTEE REPORT

rOleMonitor activities relating to ethics, stakeholder

engagement and the social impact of the company on

communities within which it operates. Monitor progress

across all areas of strategic empowerment as well as

compliance with transformation codes.

membersThe members of the committee consist of Mr A Ntuli

(Chairman, executive director), Mrs R Watson

(independent non-executive director), Mr S Rubidge

(Group IR executive) and Mr G Wege (executive director).

meetingsThe committee holds a minimum of two meetings per

annum. Additional meetings are convened on request of

any of the members.

The table below records the attendance of committee

members at these meetings:

15/8/2012 19/10/2012 28/3/2013

Amon Ntuli * * *

Stephen Rubidge * * *

Rachel Watson * * *

Gys Wege * * *

functiOnsThe committee fulfilled the following functions:

• Monitored theGroup’s standingon social activities

relating to

– social and economic development including the

principles of the United Nations Global Compact,

broad-based black economic empowerment,

employment equity and the Organisation for

Economic Cooperation and Development (OECD)

recommendationsoncorruption;

• MonitoredadherencetotheGroup’scodeofethics;

• Monitored the Company’s practices pertaining togood corporate citizenship which includes promotion of equality, prevention of unfair discrimination, corporate social responsibility, ethical behaviour and managingenvironmentalimpacts;

• MonitoredtheGroup’sactivitiesinrelationto

– consumer relations

– labour and employment including skills development;and

– health & safety and environmental issues.

• Drawmatterswithinitsmandatetotheattentionofthe Board.

During the year under review the committee reviewed the social and ethics activities of the Group and more specifically can confirm that the Group:

• supportsandrespectstheprotectionofinternationallyproclaimed human rights and to the best of its knowledgeisnotcomplicitinanyhumanrightsabuses;

• upheldfreedomofassociationandtheeffectiverightofcollectivebargainingwithrecognisedtradeunions;

• has no formof forced, compulsory or child labourand does not discriminate on the grounds of gender, race, sexual or religious preference, disability or age inrespectofemploymentandoccupation;

• remainscommittedtotheprinciplesofbroad-basedblackeconomicempowerment;

• continuedtorecordandreviewitscarbonfootprintand promoted greater environmental responsibility through the management of energy consumption andwastecontrol;

• continued to monitor compliance to legislation,specificallyhealthandsafety;and

• vigilantlyenforced its zero-tolerancepolicy towardsfraud and corruption.



COrPOrATe gOVernAnCe (continued)RISK COMMITTEE REPORT

The Group strives to maintain an appropriate balance between risk and reward, recognising that certain risks need to be taken to achieve sustainable growth and returns while at the same time protecting the Group and its stakeholders against avoidable risks.

resPOnsibilityThe board is responsible for the governance of risk and has appointed a risk committee to review the risk management progress of the company, the effectiveness of risk management activities, the key risks facing the company and the responses to the risk. This process is managed in accordance with the Group’s risk management charter.

members Of the risK cOmmitteeThe risk committee formally convenes twice a year and consists of the members of the audit committee, the Chief Executive Officer, Chief Financial Officer and the Group Risk Officer. The Head of Internal Audit is invited to attend meetings. The composition of the committee ensures a good balance of executive and independent input.

Members: Mr A Ahmed (Chairman), Mr N Lazarus, Mr Y Shaik, Mr S Queen, Mr G Wege and Mr D Levin (Group Risk Officer).

Subsequent to year-end Mr N Lazarus resigned from the board of directors and consequently no longer serves as a member of the risk committee.

meeting attendanceMember 15 May 2012 12 Nov 2012M A Ahmed ü üMr N Lazarus û ü Mr Y Shaik ü üMr S Queen ü üMr G Wege ü üMr D Levin ü ü

risK management PrOcessThe risk committee is accountable to the board for designing, implementing and monitoring the system and process of risk management and integrating it into the day-to-day activities of the company. The committee implemented and adhered to appropriate risk management measures to counter significant risks which could undermine the achievement of its business objectives. Enterprise-wide risk assessments are undertaken on an annual basis to identify material risk changes and the impact thereof. Each risk is assigned an impact and probability rating. Based on the

outcome of the assessments, the committee identified the material risks areas of the Group and has focused its risk management process accordingly. Risk tolerance levels have been set by the risk committee for each of the material risk areas.

In terms of the company’s internal risk control programme, all major sites are internally audited on an annual basis by the Group’s occupational health and safety officer both in respect of occupational health and safety and environmental compliance. In addition, the Group has commenced an engagement with an independent legal consultant to review the environmental impact of its manufacturing sites. The Group’s independent risk consultants monitor the insurance and risk control programme in terms of which selected sites are surveyed on a rotational basis.

The Group’s Internal Audit department investigates any fraud matters which are reported either directly by employees or third parties to the company or to an ethics hotline, administered by an external independent professional firm.

The IT governance framework of the Group is set out on page . The main focus from a risk perspective has been to ensure that each business has an appropriate infrastructure and effective disaster recovery process in place.

material risK disclOsureDuring the year the risk committee has formally adopted specific risk tolerance levels for each of the identified material risk exposures and has formalised a process to monitor adherence thereto. The committee has further commenced a process to consider the possible impact of unpredictable risks.

sustainability risksAs noted in the Sustainability Report, a continued onslaught from cheap imports, illegal imports and under-declaration of values to reduce import duties and industry-wide non-compliance to bargaining council agreements are specific sustainability risks in relation to the Group’s clothing and textile operations. The Group has continued its diversification strategy in terms of which increased capital has been allocated to the industrial, branded product and property segments.

treasury risksThrough its business activities the Group is exposed to a range of financial risks, including credit, liquidity and

41


COrPOrATe gOVernAnCe (continued)RISK COMMITTEE REPORT

market risks. The Group’s exposures to these risks are included in note 21 of the annual financial statements. Derivative financial instruments are used to hedge certain risk exposures, in particular the Group’s foreign exchange risk which is partly mitigated by entering into forward exchange contracts. Details of the Group’s forward exchange exposure are detailed in note 28 of the annual financial statements.

environmental risksThe Group has major hazardous installation sites, which, due to their inherent high risk, are required to be registered with the Chief Inspector in Pretoria. The Group continued to place specific emphasis to ensure each of the sites are managed in accordance with the statutory requirements, inclusive of site assessments and evacuation disaster plans.

material litigationAs detailed in the SENS announcements released on 16 March 2012 and 31 October 2012, the company and several of its subsidiary companies settled the various litigation proceedings and claims against former directors and officers of the company and entities controlled by them. At year-end one of the properties included in the settlement, namely remaining extent of Erf 27412, Observatory, Cape Town (the Observatory Property), with an estimated market value of R38,7 million, remained the subject of separate litigation by and against unrelated third parties.

Judgment was delivered in the Group’s favour in relation to this separate litigation and after year-end application to appeal the judgment was dismissed.

risK cultureThe Group continued to make good progress to inculcate a risk management culture into all levels of the Group’s decision-making processes.



COrPOrATe gOVernAnCe (continued)REMUNERATION REPORT

remuneratiOn POlicies and remuneratiOn PhilOsOPhy The Group’s remuneration policies strive to reward employees in a fair and responsible way which ensures a culture of high performance to deliver returns to shareholders through employees who are motivated, engaged and committed. The Group’s remuneration policies and philosophies are contained in this report and their intended consequences are to attract, retain and develop employees with scarce and critical skills who contribute to building sustainable businesses.

membersAt year-end, the members of the remuneration committee consisted of Mr N Lazarus SC (Chairman, independent, non-executive director) and Mr J Copelyn (non-executive director).

On request of the committee members, the chief executive officer attends the meetings, but recuses himself from the meetings before any decisions are made in which he is affected.

Subsequent to year-end, Mr N Lazarus resigned from the board of directors and consequently no longer serves as a member of the remuneration committee.

gOvernanceThe board delegates responsibility for the oversight of the Group’s remuneration practices to the remuneration committee. The committee ensures that the Group has a competitive remuneration structure which is aligned with the Group’s strategy and performance goals. The key duties of the committee include:

• ensuring the Group upholds its entrenchedremuneration philosophy that promotes the achievementofitsstrategicobjectives;

• determiningonanannualbasis:

– theremunerationofnon-executivedirectors;

– the total remuneration package of each executive director including, where appropriate, annual increases, short-term performance bonus and long-termincentives;and

– the remuneration package of senior management and employees who report directly to the chief executiveofficer;

• ensuringthecombinationoffixedandvariablepayisappropriatewhenbenchmarkingremunerationlevels;

• reviewing and recommending to the board allproposals for executive share-based incentives and othershort-andlong-termincentiveschemes;

• determiningtargetsforanyperformance-relatedpayschemes and requesting the board, when required, to seek shareholder approval for any share-based andotherlong-termincentiveschemes;and

• producing a report for inclusion in the company’sIntegrated Annual Report.

The committee meets at least annually and seeks advice and guidance from external experts, as deemed appropriate.

sharehOlder engagementEach year, at the annual general meeting, the remuneration committee tables its annual report for a non-binding advisory vote of shareholders. The report provides insight into the Group’s remuneration practices and encourages stakeholders to express their views on the remuneration practices adopted by the Group.

43


COrPOrATe gOVernAnCe (continued)REMUNERATION REPORT (continued)

executive directOrsThe remuneration packages of executive directors comprise:

• aguaranteedremunerationpackage(structuredona

cost-to-companybasis);

• access to retirement fundandmedical aidbenefits

fundedfromtheguaranteedremunerationpackage;

and

• short-termdiscretionarycash-basedincentivebonus

based on business and individual performance and/

or participation in the Seardel Long-Term Incentive

Scheme.

The remuneration structure of executive directors is linked

to the Group’s medium- to long-term business objectives

and is therefore aligned to shareholder interests.

The performance of the chief executive officer is evaluated

by the chairman, while the performance of the other

executive directors is evaluated by the chief executive

officer. The annual pay increases of the executive

directors is directly related to individual performance and

aligned to the annual increase parameters as determined

by the remuneration committee.

Executive directors participate in the annual short-term

cash-based incentive scheme. To qualify for the incentive,

minimum financial targets, based on the Group’s

return on equity (“ROE”), are set by the remuneration

committee. As the minimum financial targets to qualify

for the incentive were not achieved for the 2013

financial year, executive directors did not qualify for

short-term cash-based incentives. The bonuses reflected

in the remuneration of executive directors detailed

below were paid in the 2013 financial year but relate

to the performance of the Group for the 2012 financial

year when the ROE targets were met.

The sustainability of the Group’s business is critical in

determining remuneration and the board is satisfied that

the performance targets do not encourage excessive risk

taking by the executives.

cOmPOsitiOn Of remuneratiOnnon-executive directorsNon-executive directors receive fees for their services as directors and for serving on board committees. These fees reward the directors fairly for the time, service and expertise that they provide to the Group. Non-executive directors do not participate in the Group’s short-term or long-term incentive schemes.

The fees paid to non-executive directors for the year ended 31 March 2013 are tabled below in R’000 and are to be approved by shareholders at the annual general meeting:

Non-executive directorDirectors’

fees

Audit committee

fees

Remuneration committee

fees Total

M H Ahmed 90 36 126

J A Copelyn 90 36 126

T G Govender 90 90

N N Lazarus 90 36 36 163

Y Shaik 90 19 109

R Watson 90 90

Messrs Copelyn, Govender and Shaik are directors of Seardel’s ultimate holding company, Hosken Consolidated Investments Limited (“HCI”) and the following table reflects the remuneration received by these directors from HCI and its subsidiaries for the year ended 31 March 2013 in R’000:

Director Board fees SalaryOther

benefitsShare option

expense Bonus Total

J A Copelyn – 5 145 1 091 3 682 3 858 13 776

T G Govender – 1 832 417 1 149 1 190 4 588

Y Shaik 468 – – – – –



management and nOn-bargaining unit emPlOyeesSenior management receive an annual guaranteed

salary and participate in the short-term incentive bonus

scheme. Guaranteed remuneration for senior executives

is set at levels to retain and recruit management talent.

Each senior executive position is graded based on the

business turnover, number of employees, assets under

management, locations and the degree of complexity

involved in the business. The associated package is

benchmarked against an external market survey for a

similar job rating. As the Group’s philosophy is to reward

performance, the salary benchmark is set at the 50th

percentile median which allows a lower fixed cost, but

higher incentive structure.

The annual review of the performance of senior

management is undertaken by the chief executive officer

who provides a recommendation to the committee on any

adjustments or incentive payments. Key senior managers

participate in the Seardel Long-Term Incentive Scheme,

with selection based on their strategic contribution.

Under the guidance of the remuneration committee, the

Group has introduced a uniform appraisal and evaluation

process for all non-bargaining council employees. This

process has been applied to all employees of the Group

and is used as a guideline to determine remuneration

adjustments.

The average salary increase parameter set by the

remuneration committee for the year under review was

6% (2012: 6%) and the annual increase date is 1 July.

bargaining unit emPlOyeesCollective salary increases are negotiated each year with

the representatives of recognised trade unions.

incentive schemesdiscretionary short-term incentive schemeKey employees in each business unit participate in an

annual discretionary short-term incentive scheme, which

rewards the achievement of performance in excess of

predetermined performance targets.

The performance target is based on the business unit’s

core operating profit after interest, adjusted by an

imputed interest charge at a hurdle rate. The imputed

interest charge is calculated on the higher of net asset

value or the average working capital level utilised by each

business unit. In addition to the quantitative performance

targets, the scheme includes predetermined qualitative

performance targets.

long-term incentive schemeThe Seardel Long-Term Share Incentive Scheme was

approved by the shareholders on 29 October 2009. The

scheme was implemented to more closely align executive

directors and senior management’s objectives with those

of the shareholders so as to ensure that those employees

are encouraged and motivated to pursue sustainable

growth and profitability.

Participants shall become entitled to exercise options in

accordance with the following schedule:

• 10%fromthefirstanniversarydate;

• 20%fromthesecondanniversarydate;

• 30%fromthethirdanniversarydate;and

• 40%fromthefourthanniversarydate.

Each tranche is further subject to:

• theparticipant’scontinuedemploymentonthedate

ofwhichtheoptionisexercised;and

• achievingpredeterminedperformancetargets.

The Seardel Long-Term Incentive Scheme in which executive directors may participate consists of a share option scheme, the details of which are disclosed in this report.

Details of the executive directors’ remuneration for the year ended 31 March 2013 in R’000:

Name SalaryShort-term

bonus

Retirement and medical

contributions

Share option

expenseDirectors’

feesOther

benefits Total

S A Queen 3 149 1 186 – 2 252 – – 6 857

A M Ntuli 795 65 146 – – – 1 006

G D T Wege 1 446 603 217 547 – – 2 813

45


Performance targets are linked to the Group and individual business unit’s profitability. The aggregate number of shares which any participant may acquire in terms of the scheme may not exceed 12 700 000 ordinary shares. Further, based on the seniority of the employee’s role, the scheme contains a ceiling which sets the maximum capital base of options that can be allocated to any individual employee.

During the year under review 10 159 672 ordinary shares (2012: 8 893 266) were allotted to 22 participants in terms of the rules of the scheme.

Options in issue are as follows:

Option holder Grant dateOptions

issuedStrike price

(cents) Vesting conditions Life of option

S A Queen 31 March 2010 4 200 000 0 2 years profitability and continued employment

8 years

16 July 2010 693 000 42 2 years profitability and continued employment

8 years

4 July 2011 1 753 350 76 2 years profitability and continued employment

8 years

12 June 2012 2 173 335 110 2 years profitability and continued employment

8 years

Total for S A Queen 8 819 685

G D T Wege 31 March 2010 1 750 000 0 2 years profitability and continued employment

8 years


8 years


8 years

12 June 2012 753 655 110 2 years profitability and continued employment

8 years

Total for G D T Wege 3 522 968

Other, not being directors 31 March 2010 14 705 000 0 2 years profitability and continued employment

8 years


8 years


8 years

12 June 2012 7 232 682 110 2 years profitability and continued employment

8 years

Total other 31 477 329

Reconciliation of movements in options:

Number of options 2013 2012

Opening balance 41 594 266 34 547 250

Awarded during period 10 159 672 8 893 266

Exercised during the period (5 579 925) (765 000)

Lapsed/forfeited during the period (2 354 031) (1 081 250)

Closing balance 43 819 982 41 594 266

Further details pertaining to the share incentive scheme is disclosed in note 35 of the annual financial statements.

COrPOrATe gOVernAnCe (continued)REMUNERATION REPORT (continued)



emPlOyee benefitsretirement fundsThe majority of the Group’s subsidiaries have defined contribution pension and provident fund arrangements in place. The assets of such retirement funds are managed separately from the Group’s assets and are administered by independent trustees and administrators within an umbrella fund. In addition to the independent administrators, each fund has elected a management committee with 50% employee and 50% employer representation.

The funds are all defined contribution schemes and the Group carries no liability in relation to these funds.

medical aidMembership of approved medical aid funds is compulsory for all permanent employees. The Group carries a liability totalling R89.4 million for post-employment medical aid benefits. Certain employees who joined the company before 1 July 1996 are eligible for a 50% retirement subsidy of their total medical scheme contributions. Note 20 of the annual financial statements provide further detail of the post-employment medical aid benefits.

top three executive management earnersIn accordance with the recommendation of disclosure of King III, the top three earners in the Group, excluding executive directors, during the year under review were remunerated as follows:

NameSalaryR’000

BonusR’000

Retirement fund

contributionsR’000

Share options expense

R’000

Medical aid contributions

R’000Total

R’000

Exec 1 R1 533 R4 725 R48 R255 R86 R6 647

Exec 2 R1 562 R3 520 R101 R478 R72 R5 733

Exec 3 R1 007 R2 350 R89 – R60 R3 506

The names of the three most highly paid employees who are not directors have not been disclosed. The committee is of the opinion that such information is private to the individuals concerned and adds no value to stakeholders.

47


49


The Annual Financial Statements of Seardel Investment Corporation Limited have been audited in terms of Section 30 of the Companies Act and were prepared under the supervision of the Group financial director, Mr G Wege CA (SA).

CONTENTS

Audit committee report

Directors’ responsibility statement and certificate of company secretary

Independent auditors’ report

Directors’ report

Statements of comprehensive income

Statements of financial position

Statements of changes in equity

Statements of cash flow

Notes to the financial statements

AnnUAl finAnCiAl sTATeMenTs



AUDiT COMMiTTee REPORT

The Seardel Group audit committee is a formal committee of the board and functions within its documented terms of reference. This report is presented to shareholders and constitutes the report of the audit committee in respect of the past financial year of the Group as required by section 94 of the Companies Act 2008 (“the Companies Act”).

Primary rOle and resPOnsibility Of the cOmmitteeThe audit committee fulfils an independent oversight role regarding the Group’s financial statements and the reporting process, including the system of internal financial control, with accountability to both the board and to shareholders. The committee’s responsibilities include the statutory duties prescribed by the Companies Act, recommendations by King III and additional responsibilities assigned by the board.

cOmPOsitiOn Of the audit cOmmitteeThe committee comprises three independent, non-executive directors.

The members of the audit committee are Messrs M Ahmed (chairman), N Lazarus and Y Shaik. Mr Lazarus has resigned subsequent to year-end. The remaining independent non-executive directors will be proposed for election to the committee by shareholders at the forthcoming annual general meeting. By invitation the chief executive officer, the chief financial officer, KPMG Inc., external auditors of the Group and the Group’s head of internal audit have attended all the committee meetings.

The committee meets twice annually, with special meetings called as required. The committee held two meetings during the financial year under review and attendance was as follows:

15/5/2012 11/11/2012

Mohamed Ahmed (BCompt) ü üNeil Lazarus SC (BA LLB) ü üYunis Shaik (BProc) ü ü

Key: ü = in attendance

Fees paid to the committee members are disclosed in the remuneration report.

Audit committee agendas provide for confidential meetings between the committee members, internal auditors and the external auditors, without members of executive management being present.

The effectiveness of the committee is assessed as part of the annual board and committee self-evaluation process and the chairman of the committee attends all statutory shareholder meetings to answer any questions on the committee’s activities.

functiOns and resPOnsibilities Of the audit cOmmitteeThe audit committee has discharged the functions in terms of its charter and ascribed to it in terms of the Act as follows:

Reporting• Reviewed the interim report, preliminary results

announcement, annual financial statements and Integrated Report, culminating in a recommendation to the board to adopt them

• Reviewedandapprovedtheappropriatenessoftheaccounting policies and practices

• Ensured compliance with International FinancialReporting Standards, including consistent application to all periods as presented in the consolidated financial statements

• Evaluatedanddeterminedtheeffectivenessof theGroup’s internal control systems

• Reviewedlegalmattersthatcouldhaveasignificantimpact on the Group’s consolidated financial statements

• ReviewedtherequirementsofKingIIIandinstanceswhere the King III requirements have not been applied have been explained in the Corporate Governance Report

External audit• Reviewedtheexternalaudit reportsontheannual

consolidated financial statements

• Nominatedtheexternalauditorforappointmentbythe shareholders

• Monitored and reported on the independence ofthe external auditor

• Approvedthebudgetedauditfees,auditplanandengagement terms of the external auditor

• Determined the nature and extent of allowablenon-audit services and approved the contract terms for the provision of non-audit services by the external auditor

• Determined that the audit firm and designatedauditor is accredited as such on the JSE list of auditors and advisers

Finance function• Considered the expertise and resources of the

finance function, as well as the experience of the senior members of management responsible for the financial function

• Considered the expertise and experience of thechief financial officer

Internal audit• Oversaw the functioning of the internal audit

department and performance assessment of the head of internal audit

• Approved the annual internal audit plan andmonitored the progress thereof

51


external auditThe audit committee reviewed a representation by the external auditor and, after conducting its own review, confirmed the expertise and objectivity of KPMG Inc. as the external auditor and noted the appointment of Mr Pierre Conradie as the designated auditor. The external auditor has unrestricted access to the Group’s records and management and furnishes a written report to the committee on significant findings arising from the annual audit. The committee is satisfied that the external auditor is independent of the Group.

internal audit and internal cOntrOlThe internal audit function is an independent and objective assurance and consulting function that adds value and improves the operations of the Group. It helps to accomplish Group objectives by evaluating and improving the adequacy and effectiveness of risk management, internal control and governance processes. The internal audit function reports functionally to the chairman of the audit committee, but administratively to the financial director.

A risk-based approach has been applied to develop the annual internal audit plan. The internal audit plan:

• isformallyapprovedbytheauditcommittee;

• is formulated by considering key risk factors asidentified through ongoing risk assessments, but also incorporating any additional matters identified bymanagementandtheauditcommittee;

• considers the evaluation of governance processes,operational and financial processes and associated controls in accordance with the combined assurance model;

• assessestheGroup’sinternalfinancialcontrols;and

• iscontinuallyreviewedtoconsidernewriskareasasthe business evolves.

Any material or significant control weaknesses are brought to the attention of management and the audit committee.

exPertise and financial exPerience Of financial directOr and finance functiOnThe audit committee is satisfied that the expertise and experience of the financial director is appropriate to meet the responsibilities of the position. This is based on the qualifications, continuing professional education and the committee’s assessment of the financial knowledge and levels of experience of the chief financial officer.

The committee has reviewed the resources of the finance function, the experience of the senior members of management responsible for the financial function and has concluded that the function is performing adequately in terms of the requirements of the audit committee.

aPPrOval Of the audit cOmmittee rePOrtThe committee confirms that it has functioned in accordance with its terms of reference for the 2013 financial year and complied with all statutory and regulatory responsibilities.

m ahmedChairman

16 September 2013



DireCTOrs’ resPOnsiBiliTy STATEMENT

CERTIFICATE OF COMPAny seCreTAry

We certify that Seardel Investment Corporation Limited has lodged with the Registrar of Companies, for the financial year ended 31 March 2013, all such returns as are required by a public company in terms of the Companies Act of South Africa and that such returns appear to be true, correct and up to date.

hci managerial services Proprietary limitedCompany Secretary

16 September 2013

The directors are responsible for the preparation and fair presentation of the Group and separate annual financial statements of Seardel Investment Corporation Limited, comprising the statements of financial position at 31 March 2013 and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards, SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Listings Requirements of the JSE and the requirements of the Companies Act, 2008 and Companies Regulations, 2011. In addition, the directors are also responsible for preparing the Directors’ Report.

The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error and for maintaining adequate accounting records and an effective system of risk management as well as the preparation of the supplementary schedules included in these financial statements.

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

The auditors are responsible for reporting on whether the annual financial statements are fairly presented in accordance with the applicable financial reporting framework.

aPPrOval Of annual financial statementsThe Group and separate annual financial statements of Seardel Investment Corporation Limited, as identified in the first paragraph, were approved by the board of directors on 14 August 2013 and signed on its behalf by:

stuart Queen gys WegeChief Executive Officer Financial Director

16 September 2013

53


inDePenDenT AUDiTOr’s REPORTTo the shareholders of Seardel Investment Corporation Limited

rePOrt On the financial statementsWe have audited the Group financial statements and the financial statements of Seardel Investment Corporation Limited, which comprise the statements of financial position at 31 March 2013, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes as set out on pages to .

directOrs’ resPOnsibility fOr the financial statementsThe company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

auditOr’s 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 auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

OPiniOnIn our opinion, these financial statements present fairly, in all material respects, the consolidated and separate financial position of Seardel Investment Corporation Limited at 31 March 2013 and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of South Africa.

Other matterThe supplementary schedules set out on pages to do not form part of the annual financial statements and are presented as additional information. We have not audited these schedules and accordingly we do not express an opinion on them.

Other rePOrts reQuired by the cOmPanies actAs part of our audit of the financial statements for the year ended 31 March 2013, we have read the Directors’ Report, the Audit Committee’s Report and the Company Secretary’s Certificate for the purpose of identifying whether there are material inconsistencies between these reports and the audited financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

KPmg inc.Registered Auditor

Per P J conradieChartered Accountant (SA)Registered AuditorDirector16 September 2013

MSC House1 Mediterranean StreetForeshoreCape Town8001



DireCTOrs’ REPORT

nature Of businessSeardel Investment Corporation Limited is a diverse investment holding company which is listed on the JSE Limited under the Consumer Goods – Personal and Household Goods Sector.

general revieW Of OPeratiOnsThe results of the Group and company and the state of its affairs are set out in the Integrated Report and annual financial statements of which this report forms part.

share caPital The company’s authorised share capital consists of:• 700000000ordinarysharesof25cents;and• 200000000Nordinarysharesof0,25centseach.

During the year the company issued 5 579 925 ordinary shares as part of the share incentive scheme. 7 732 934 N ordinary share were cancelled.

At year-end the issued share capital consisted of:• 642486801ordinarysharesof25centseach;and• 61233077Nordinaryshareof25centseach.

hOlding cOmPanyThe company’s ultimate holding company is Hosken Consolidated Investments Limited.

dividendsThe directors have resolved not to declare a dividend for the year ended 31 March 2013 (2012: R Nil).

cOntingenciesAs detailed in the SENS announcements released on 16 March 2012 and 31 October 2012, the company and several of its subsidiary companies settled the various litigation proceedings and claims against former directors and officers of the company and entities controlled by them. One of the properties included in the settlement, namely remaining extent of Erf 27412, Observatory, Cape Town (“the Observatory Property”), with an estimated market value of R38,7 million, remained the subject of separate litigation by and against unrelated third parties. Judgment was delivered in the company’s favour in relation to separate litigation (30 October 2012), and a subsequent application to appeal the judgment was dismissed. The third parties thereafter petitioned the Supreme Court of Appeal to grant leave to appeal.

Due to the ongoing and unresolved litigation proceedings pertaining to the matter at year-end, the property has not been accounted for in the current year’s results.

subseQuent eventsSubsequent to year-end, the litigation referred to in note was resolved in the company’s favour further to the Supreme Court of Appeal dismissing the third parties’ application for leave to appeal. As a result thereof, the transfer of the Observatory Property to the company, with a current estimated market value of R38,7 million is in the process of being effected. (See SENS announcement dated 10 May 2013.)

As set out in the announcement released on SENS on 17 May 2013, Seardel has entered into an agreement with HCI whereby Seardel will acquire from HCI a 70% interest in HCI Invest 3 Holdco (Pty) Ltd (“SPV”), which following a HCI restructure, will hold a 63,9% interest in Sabido Investments (Pty) Ltd (“Sabido”). Sabido is the investment vehicle that houses HCI’s investments in e.tv, eSAT tv, Yfm and Sasani Studios.

Shareholders approved this transaction on 8 August 2013 at the general meeting of the company.

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

directOrateThe directors of the company appear on pages and . There were no changes to the directorate during the year.

Mr Dave Duncan has been appointed as an executive director of the company with effect from 16 May 2013.

directOrs’ emOlumentsDirectors’ emoluments incurred by the company for the year ended 31 March 2013 are set out in the Remuneration Report on page and in note of the annual financial statements.

secretary and administrative detailsThe secretary of the company is HCI Managerial Services Proprietary Limited. There was no change in the office of the company secretary. The administrative and contact detail of the company is published on page .

material changeThere has been no material change in the financial or trading position of the company since the publication of its provisional results for the year ended 31 March 2013.

sPecial resOlutiOnsThe following special resolutions were passed by subsidiaries of Seardel Investment Corporation Limited since the date of the previous Directors’ Report:

Special resolutions were passed in order to amend the following subsidiary companyies’ memoranda of incorporation in accordance with the Companies Act 71 of 2008:

Berg River Textiles (Pty) LtdBrits Automotive Systems (Pty) LtdGold Reef Speciality Chemicals (Pty) LtdPrima Toy & Leisure Group (Pty) LtdSeardel Brand ID (Pty) LtdSeartec (Pty) LtdSeartec Trading (Pty) LtdSeartec Industries (Pty) LtdPrima Toy & Leisure Trading (Pty) Ltd

55


STATEMENTS OF COMPreHensiVe inCOMefor the year ended 31 March

grOuP cOmPany

Notes2013

r000’s2012

R000’s2013

r000’s2012

R000’s

revenue 2 513 486 2 506 794 3 268 721 739

Cost of revenue (1 967 075) (2 022 948) – –

gross profit 546 411 483 846 3 268 721 739

Other income 91 768 338 052 – –

Selling and distribution costs (321 712) (323 936) – –

Administrative and other expenses (256 249) (293 206) – –

Operating profit before impairments and restructuring and retrenchment costs 2 60 218 204 756 3 268 721 739

Net impairment reversal/(impairment) of assets 4 21 885 (1 250) – 300 327

Restructuring and retrenchment costs (2 245) (24 491) – –

Operating profit before finance costs 79 858 179 015 3 268 1 022 066

Finance income 5 2 971 4 594 – –

Finance expenses 5 (43 095) (38 467) – –

Profit before taxation 39 734 145 142 3 268 1 022 066

Income tax income/(expense) 6 1 117 13 131 – (155)

Profit for the year from continuing operations 40 851 158 273 3 268 1 021 911

Loss for the year from discontinued operations 7 – (21 442) – –

Profit for the year 40 851 136 831 3 268 1 021 911

Other comprehensive income/(expense) net of related tax effects:

Revaluation of land and buildings 23 489 30 731 – –

Post-employment medical benefit – actuarial loss (5 733) (4 170) – –

Other comprehensive income for the year 17 756 26 561 – –

total comprehensive income for the year 58 607 163 392 3 268 1 021 911

Profit attributable to:

Equity holders of the parent 40 851 136 944 3 268 1 021 911

Non-controlling interests – (113) – –

40 851 136 831 3 268 1 021 911

total comprehensive income attributable to:

Equity holders of the parent 58 607 163 505 3 268 1 021 911

Non-controlling interests – (113) – –

58 607 163 392 3 268 1 021 911

Basic profit per share – cents 8 5,96 19,47

Diluted profit per share – cents 8 5,75 18,84

Basic loss per share from discontinuing operations – cents – (3,05)

Diluted loss per share from discontinuing operations – cents – (2,94)

Basic profit per share from continuing operations – cents 5,96 22,52

Diluted profit per share from continuing operations – cents 5,75 21,78



STATEMENTS OF finAnCiAl POsiTiOnas at 31 March

grOuP cOmPany

Notes2013

r000’s2012

R000’s2013

r000’s2012

R000’s

assetsnon-current assets 1 385 957 1 142 413 1 727 832 1 723 122

Property, plant and equipment 9 754 481 695 048 – –

Plant and equipment 335 876 310 779 – –

Owner-occupied property 418 605 384 269 – –

Investment property 10 525 229 357 801 – –

Intangible assets 11 13 030 10 563 – –

Interest in subsidiary companies 12 – – 1 698 538 1 701 699

Other investments 13 3 580 3 329 3 580 3 329

Long-term receivables 14 47 544 43 402 25 714 18 094

Deferred tax assets 6 42 093 32 270 – –

current assets 1 138 682 1 286 386 – 14

Non-current assets held for sale 15 2 295 12 906 – –

Inventories 16 627 768 581 816 – –

Trade and other receivables 17 504 788 688 644 – 14

Current tax assets 1 594 971 – –

Cash and cash equivalents 2 237 2 049 – –

total assets 2 524 639 2 428 799 1 727 832 1 723 136

eQuity and liabilitiesequity 1 460 586 1 411 645 1 727 087 1 719 456

Share capital and share premium 18 312 156 304 620 312 156 304 620

Treasury shares 19 (17 794) (14 610) – –

Reserves 1 166 224 1 121 635 1 414 931 1 414 836

Equity attributable to equity holders 1 460 586 1 411 645 1 727 087 1 719 456

non-current liabilities 93 662 85 226 621 621

Deferred tax liabilities 6 8 400 8 725 621 621

Post-employment medical aid benefits 20 84 388 74 645 – –

Interest-bearing liabilities 21 756 715 – –

Operating lease accruals 118 1 141 – –

current liabilities 970 391 931 928 124 3 059

Post-employment medical aid benefits 20 5 045 4 662 – –

Interest-bearing liabilities 21 298 25 427 – –

Trade and other payables 22 460 008 437 830 124 3 059

Provisions 24 355 13 538 – –

Bank overdrafts 504 685 450 471 – –

total liabilities 1 064 053 1 017 154 745 3 680

total equity and liabilities 2 524 639 2 428 799 1 727 832 1 723 136

net asset value 1 460 586 1 411 645

net asset value per share after treasury shares (cents) 214 201

net asset value (excluding intangible assets) 1 447 556 1 401 082

net asset value (excluding intangible assets) per share after treasury shares (cents) 212 199

57


STATEMENTS OF CHAnges in eqUiTyfor the year ended 31 March

Attributable to owners of the parent Attributable to owners of the parent Non- controlling

interestR000’s

TotalR000’s

SharecapitalR000’s

Sharepremium

R000’s

TreasurysharesR000’s

Otherreserves

R000’s

RetainedincomeR000’s

TotalR000’s

grOuPbalance 31 march 2011 159 207 144 762 (14 610) 264 064 700 559 1 253 982 610 1 254 592 total comprehensive income – – – 30 731 132 774 163 505 (113) 163 392 Profit/(loss) for the year – – – – 136 944 136 944 (113) 136 831 Other comprehensive income – – – 30 731 (4 170) 26 561 – 26 561 Revaluation of land and buildings – – – 30 731 – 30 731 – 30 731 Post-employment medical benefit – actuarial loss – – – – (4 170) (4 170) – (4 170)

transfers to other reservesChange in capital gains tax rate – – – (9 328) – (9 328) – (9 328)Reclassification of revaluation surplus – – – (676) 831 155 – 155 transactions with owners recognised directly in equityDisposal of subsidiary – – – – (525) (525) (497) (1 022)Share incentive scheme – – – – 3 205 3 205 – 3 205 Share issue 192 459 – – – 651 – 651 balance 31 march 2012 159 399 145 221 (14 610) 284 791 836 844 1 411 645 – 1 411 645 total comprehensive income 23 489 35 118 58 607 – 58 607 Profit for the year – – – – 40 851 40 851 – 40 851 Other comprehensive income – – – 23 489 (5 733) 17 756 – 17 756 Revaluation of land and buildings – – – 23 489 – 23 489 – 23 489 Post-employment medical benefit – actuarial loss – – – – (5 733) (5 733) – (5 733)

transfers to other reservesReclassification of revaluation surplus – – – (9 611) 9 611 – – – transactions with owners recognised directly in equityOwn shares acquired – – (20 790) – – (20 790) – (20 790)Shares cancelled (19) – 17 606 – (17 587) – – – Share incentive scheme – – – – 3 569 3 569 – 3 569 Share issue 1 395 6 160 – – – 7 555 – 7 555 balance 31 march 2013 160 775 151 381 (17 794) 298 669 867 555 1 460 586 – 1 460 586

cOmPanybalance 31 march 2011 159 207 144 762 – 27 605 361 464 693 038 – 693 038 total comprehensive income – – – – 1 021 911 1 021 911 – 1 021 911 Profit for the year – – – – 1 021 911 1 021 911 – 1 021 911

transactions with owners recognised directly in equityShare incentive scheme – – – – 3 856 3 856 – 3 856 Share issue 192 459 – – – 651 – 651 balance 31 march 2012 159 399 145 221 – 27 605 1 387 231 1 719 456 – 1 719 456 total comprehensive income – – – – 3 268 3 268 – 3 268 Profit for the year – – – – 3 268 3 268 – 3 268

transactions with owners recognised directly in equityShares cancelled (19) – – – (9 648) (9 667) – (9 667)Share incentive scheme – – – – 6 475 6 475 – 6 475 Share issue 1 395 6 160 – – – 7 555 – 7 555 balance 31 march 2013 160 775 151 381 – 27 605 1 387 326 1 727 087 – 1 727 087

grOuP cOmPany

2013

r000’s2012

R000’s2013

r000’s2012

R000’scomposition of other reservesRevaluation of investments 2 861 2 861 2 861 2 861 Capital redemption reserve fund 440 440 440 440 Surplus on disposal of subsidiary and associated companies 7 923 7 923 24 304 24 304 Surplus on revaluation of land and buildings 287 445 273 567 – – 298 669 284 791 27 605 27 605



Attributable to owners of the parent Attributable to owners of the parent Non- controlling

interestR000’s

TotalR000’s

SharecapitalR000’s

Sharepremium

R000’s

TreasurysharesR000’s

Otherreserves

R000’s

RetainedincomeR000’s

TotalR000’s

grOuPbalance 31 march 2011 159 207 144 762 (14 610) 264 064 700 559 1 253 982 610 1 254 592 total comprehensive income – – – 30 731 132 774 163 505 (113) 163 392 Profit/(loss) for the year – – – – 136 944 136 944 (113) 136 831 Other comprehensive income – – – 30 731 (4 170) 26 561 – 26 561 Revaluation of land and buildings – – – 30 731 – 30 731 – 30 731 Post-employment medical benefit – actuarial loss – – – – (4 170) (4 170) – (4 170)

transfers to other reservesChange in capital gains tax rate – – – (9 328) – (9 328) – (9 328)Reclassification of revaluation surplus – – – (676) 831 155 – 155 transactions with owners recognised directly in equityDisposal of subsidiary – – – – (525) (525) (497) (1 022)Share incentive scheme – – – – 3 205 3 205 – 3 205 Share issue 192 459 – – – 651 – 651 balance 31 march 2012 159 399 145 221 (14 610) 284 791 836 844 1 411 645 – 1 411 645 total comprehensive income 23 489 35 118 58 607 – 58 607 Profit for the year – – – – 40 851 40 851 – 40 851 Other comprehensive income – – – 23 489 (5 733) 17 756 – 17 756 Revaluation of land and buildings – – – 23 489 – 23 489 – 23 489 Post-employment medical benefit – actuarial loss – – – – (5 733) (5 733) – (5 733)

transfers to other reservesReclassification of revaluation surplus – – – (9 611) 9 611 – – – transactions with owners recognised directly in equityOwn shares acquired – – (20 790) – – (20 790) – (20 790)Shares cancelled (19) – 17 606 – (17 587) – – – Share incentive scheme – – – – 3 569 3 569 – 3 569 Share issue 1 395 6 160 – – – 7 555 – 7 555 balance 31 march 2013 160 775 151 381 (17 794) 298 669 867 555 1 460 586 – 1 460 586

cOmPanybalance 31 march 2011 159 207 144 762 – 27 605 361 464 693 038 – 693 038 total comprehensive income – – – – 1 021 911 1 021 911 – 1 021 911 Profit for the year – – – – 1 021 911 1 021 911 – 1 021 911

transactions with owners recognised directly in equityShare incentive scheme – – – – 3 856 3 856 – 3 856 Share issue 192 459 – – – 651 – 651 balance 31 march 2012 159 399 145 221 – 27 605 1 387 231 1 719 456 – 1 719 456 total comprehensive income – – – – 3 268 3 268 – 3 268 Profit for the year – – – – 3 268 3 268 – 3 268

transactions with owners recognised directly in equityShares cancelled (19) – – – (9 648) (9 667) – (9 667)Share incentive scheme – – – – 6 475 6 475 – 6 475 Share issue 1 395 6 160 – – – 7 555 – 7 555 balance 31 march 2013 160 775 151 381 – 27 605 1 387 326 1 727 087 – 1 727 087

grOuP cOmPany

2013

r000’s2012

R000’s2013

r000’s2012

R000’scomposition of other reservesRevaluation of investments 2 861 2 861 2 861 2 861 Capital redemption reserve fund 440 440 440 440 Surplus on disposal of subsidiary and associated companies 7 923 7 923 24 304 24 304 Surplus on revaluation of land and buildings 287 445 273 567 – – 298 669 284 791 27 605 27 605

In terms of the undertakings to the Group’s bankers, no dividends may be declared without their prior written consent.

Surpluses arising on the disposal of subsidiary and associated companies are classified as other reserves until such time as management determines that they be included in distributable reserves at which time they are reclassified as retained income. Reserves are created to prevent the distribution of unrealised profits arising through the revaluation of certain assets. Upon realisation reserves are maintained at management’s discretion.

59


STATEMENTS OF CAsH flOwsfor the year ended 31 March

grOuP cOmPany2013

r000’s2012

R000’s2013

r000’s2012

R000’snet cash flow from operating activities 202 584 39 386 (894) 1 021 974 Income for the year 40 851 136 831 3 268 1 021 911 Adjustments for:Depreciation 36 245 40 802 – – Amortisation of intangible asset 4 503 3 499 – – Revaluation of investment property 2 161 8 372 – – Foreign exchange gains – unrealised (4 693) (3 291) – – Foreign exchange losses – unrealised 8 629 2 890 – – (Surplus)/loss on disposal of property, plant and equipment (1 087) 420 – – Net reversal/(impairment) of property, plant and equipment (21 885) 1 250 – – Investment income (96) (78) (96) (78)Post-employment medical benefit 2 164 2 282 – – Share incentive scheme 6 865 3 856 6 475 – Inventory write-down 20 341 34 149 – – Net finance costs 40 124 36 167 – – Tax income/(expense) (1 117) (13 131) – 155

133 005 254 018 9 647 1 021 988 Changes in:Inventories (66 293) (58 390) – – Trade and other receivables 188 549 (137 048) 14 (14)Trade and other payables 13 549 26 696 (2 935) – Non-current receivables (4 142) (8 146) (7 620) – Lease accrual (1 023) (1 672) – – Provisions (13 183) 11 335 – – cash generated from/(utilised by) operating activities 250 462 86 793 (894) 1 021 974 Net finance costs (40 124) (36 167)Taxation paid (7 754) (11 240) – – net cash flow from investing activities (210 751) (170 076) 3 005 (1 022 625)Additions to property, plant and equipment (104 705) (49 699) – –

Additions to plant and equipment (39 225) (47 272) – – Additions to owner-occupied properties (65 480) (2 427) – –

Proceeds on disposal of property, plant and equipment 14 178 10 013 – – Book value of assets disposed 13 091 10 433 – – Surplus/(loss) on disposal 1 087 (420) – –

Additions to investment property (104 496) (119 262) – – Interest capitalised to investment property (8 603) (5 956) – – Additions to investments (251) – (251) – Additions to intangible assets (6 970) (5 250) – – Investment income 96 78 96 78 Decrease/(increase) in interest in subsidiary companies – – 3 160 (1 022 703)net cash flow from financing activities (45 859) (105 376) (2 111) 651 Change in borrowings (25 088) (105 376) – – Repurchase of own shares (20 771) – (9 666) – Share issue – – 7 555 651 net change in cash and cash equivalents (54 026) (236 066) – – Cash and cash equivalents at the beginning of the year (448 422) (207 242) – – Cash in subsidiary disposed of – (5 114) – – cash and cash equivalents at the end of the year (502 448) (448 422) – –

cash and cash equivalents comprise the followingCash and cash equivalents 2 237 2 049 – –

Bank balances 1 196 541 – – Cash floats and petty cash 1 041 1 508 – –

Bank overdrafts (504 685) (450 471) – – (502 448) (448 422) – –



nOTes TO THE FINANCIAL STATEMENTSfor the year ended 31 March

1 accOunting POliciesSeardel Investment Corporation Ltd (the Company) is a company domiciled in South Africa. The consolidated financial statements of the company for the year ended 31 March 2013 and comparative figures for the year ended 31 March 2012 comprise the company and its subsidiaries (together referred to as the Group). Where reference is made to the Group in the accounting policies it should be interpreted as referring to the company where the context requires, and unless otherwise noted.

The financial statements were authorised for issue by the directors on 14 August 2013.

statement of complianceThe consolidated and company financial statements have been prepared in accordance with the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings Requirements and the requirements of the Companies Act, 2008.

basis of preparationThe financial statements are presented in South African Rand, which is the company’s functional currency, rounded to the nearest thousand.

They have been prepared on the going concern and historical cost bases under IFRS, except for those assets and liabilities which are stated at fair value as disclosed in the notes to the financial statements.

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The assumptions and estimates are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In particular, information about significant areas of estimation, uncertainty and critical judgements is given in the following notes:

– Revaluations (refer: notes 9 and 10)

– Utilisation of tax losses (refer: note 6)

– Measurement of post-employment medical benefits (refer: note 20)

– Valuation of intangible asset (refer: note 11)

– Provisions (refer: note 24)

– Contingencies (refer: note 31)

– Leases (refer: note 25)

– Impairment of property, plant and equipment (refer: note 9)

– Assessment of useful lives and residual values (refer: notes 9 and 11)

– Impairment allowances for inventories and trade receivables (refer: notes 16, 17 and 21)

– Share incentive scheme (refer: note 35)

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements and have been applied consistently by Group entities.

basis of consolidationSubsidiariesSubsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

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nOTes TO THE FINANCIAL STATEMENTSfor the year ended 31 March (continued)

The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Business combinationsBusiness combinations are accounted for using the acquisition method as at the acquisition date – i.e. when control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.

The Group measures goodwill at the acquisition date as:

• thefairvalueoftheconsiderationtransferred;plus

• therecognisedamountofanynon-controllinginterestsintheacquiree;plus,ifthebusinesscombinationisachievedinstages,thefairvalueoftheexistingequityinterestintheacquiree;less

• thenetrecognisedamount(generallyfairvalue)oftheidentifiableassetsacquiredandliabilitiesassumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Transactions costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

If share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree’s awards and the extent to which the replacement awards relate to past and/or future services.

Company financial statementsIn the Company financial statements investments and investments in subsidiaries are carried at cost less impairment.

Loss of controlUpon the loss of control the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary.

Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

Transactions eliminated on consolidationIntra-group balances and transactions and any unrealised income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Accounting for acquisitions of non-controlling interestsThe Group applies IAS 27: Consolidated and Separate Financial Statements (2008) in accounting for acquisitions of non-controlling interests.

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary.



Goodwill and negative goodwillGoodwill that arises on the acquisition of subsidiaries is presented with intangible assets. Goodwill is subsequently measured at cost less accumulated impairment losses.

Property, plant and equipmentOwned assetsRecognition and measurementLand and buildings are revalued to approximate fair value. When an item of property, plant and equipment is revalued any accumulated depreciation at the date of the revaluation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount of the asset.

Other items of property, plant and equipment are measured at historical cost less accumulated depreciation and accumulated impairment losses. The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefit embodied within the part will flow to the Group and its cost can be measured reliably.

Where an item of property, plant and equipment is comprised of major components with different useful lives, the components are accounted for as separate items of property, plant and equipment.

DepreciationLand is not depreciated while buildings are depreciated on a straight-line basis over their estimated useful lives. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets. Estimates of useful lives, residual values and methods of depreciation are reviewed annually. Any changes are accounted for prospectively as a change in accounting estimate. If the expected residual value of an asset is equal to or greater than its carrying value, depreciation on that asset is ceased. Depreciation is resumed when the expected residual value falls below the asset’s carrying value.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of the property, plant and equipment, and is recognised net within other income/other expenses in profit or loss. When revalued assets are sold any related amount included in the revaluation reserve is transferred to retained earnings.

Reclassification to investment propertyWhen the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified as investment property. Property that is being constructed for future use as investment property is accounted for at fair value. Any gain arising on remeasurement is recognised in profit or loss to the extent that the gain reverses a previous impairment loss on the specific property, with any remaining gain recognised in other comprehensive income and presented in the revaluation reserve in equity. Any loss is recognised in other comprehensive income and presented in the revaluation reserve in equity to the extent that an amount had previously been included in the revaluation reserve relating to the specific property, with any remaining loss recognised immediately in profit or loss.

Investment propertyInvestment property is property held either to earn rental income or for capital appreciation or for both, but not for resale in the ordinary course of business, use in the production or supply of goods or services, or administrative purposes. Investment property is measured at fair value with any change therein recognised in profit or loss.

When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting. Operating leases for property are not treated as investment properties.

Costs include expenditure that is directly attributable to the acquisition of the investment property. The cost of self- constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs.

Any gain or loss on the disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss. When an investment property that was previously classified as property, plant and equipment is sold any related amount included in the revaluation reserve is transferred to retained earnings.

63



Discontinued operationsA discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation the comparative statement of comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative period.

Non-current assets held for saleNon-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale the assets (or components of a disposal group) are remeasured in accordance with the Group’s accounting policies. Thereafter generally the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell. Any impairment loss on a disposal group is first allocated to goodwill and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets and employee benefit assets, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss. Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortised or depreciated.

ImpairmentNon-derivative financial assetsA financial asset not classified as at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset and that loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets are impaired includes default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

Financial assets measured at amortised costThe Group considers evidence of impairment for financial assets measured at amortised cost (loans and receivables and held-to-maturity investment securities) at both a specific asset and collective level. All individually significant assets are assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics.

In assessing collective impairment the Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and receivables or held-to-maturity investment securities. Interest on the impaired asset continues to be recognised. When an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Available-for-sale financial assetsImpairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in profit or loss. Changes in cumulative impairment losses attributable to



application of the effective interest method are reflected as a component of interest income. If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive income.

Non-financial assetsThe carrying amounts of the Group’s non-financial assets, investment property, inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. Goodwill and indefinite-live intangible assets are tested annually for impairment. An impairment loss is recognised if the carrying amount of an asset or cash-generating unit (CGU) exceeds its recoverable amount.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Subject to an operating segment ceiling test, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs) and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Finance income and expensesFinance income comprises interest income on funds invested (including available-for-sale financial assets), gains on the disposal of available-for-sale financial assets and changes in the fair value of financial assets at fair value through profit or loss that are recognised in profit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, dividends on preference shares classified as liabilities, changes in the fair value of financial assets at fair value through profit or loss and impairment losses recognised on financial assets that are recognised in profit or loss. All borrowing costs not capitalised in terms of IAS 23 are recognised in profit or loss, using the effective interest method.

Income taxIncome tax comprises current and deferred tax. Income tax expense is recognised in profit or loss, except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets

65



and liabilities are off-set if there is a legally enforceable right to off-set current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Dividends withholding tax is a tax on shareholders receiving dividends and is applicable to all dividends declared on or after 1 April 2012. The company withholds dividends tax on behalf of its shareholders at a rate of 15% on dividends declared. Amounts withheld are not recognised as part of the company’s tax charge, but rather as part of the dividend paid recognised directly in equity.

Where withholding tax is withheld on dividends received, the dividend is recognised at the gross amount with the related withholdings tax recognised as part of tax expense unless it is otherwise reimbursable, in which case it is recognised as an asset.

InventoryRaw materials and consumables, work-in-progress and finished goods are stated 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 selling expenses. Cost is determined on the first-in, first-out principle and includes direct material costs together with appropriate allocations of labour and overheads, based on normal operating capacity.

ProvisionsProvisions are recognised when the Group has a present legal or constructive obligation as a result of past events, for which it is probable that an outflow of economic benefits will occur and where a reliable estimate can be made of the amount of the obligation. Where the effect of discounting is material, provisions are determined by discounting the expected future cost. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Provisions are reviewed at each reporting date and adjusted to reflect the current or best estimate.

financial instrumentsInitial recognitionThe Group initially recognises loans and receivables on the date that they are originated. All other financial assets (including assets designated as at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instruments.

MeasurementFinancial instruments are initially measured at fair value, which includes transaction costs, except for instruments measured at fair value through profit or loss. Subsequent to initial recognition these instruments are measured as follows:

DerecognitionThe Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the right to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

InvestmentsListed investments classified as available-for-sale financial assets are carried at market value, which is calculated by reference to stock exchange quoted selling prices at the close of business at the reporting date. Unlisted investments are shown at fair value unless their fair value cannot be reliably determined, in which case they are shown at cost less accumulated impairment losses. Gains and losses are recognised directly in equity in a revaluation reserve, except for impairment losses which are expensed in profit or loss.

Investments that meet the criteria for classification as held-to-maturity financial assets are carried at amortised cost.

Trade, long-term and other receivablesTrade and other receivables originated by the Group are stated at amortised cost less impairment losses, using the effective interest rate method (see accounting policy on impairment).



Cash and cash equivalentsCash and cash equivalents comprise cash balances and call deposits and are measured at amortised cost. Bank overdrafts that are payable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the statement of cash flows.

Financial liabilities, trade and other payablesNon-derivative financial liabilities are recognised at amortised cost using the effective interest rate method comprising original debt less principal payments and amortisations.

Derivative instrumentsDerivative instruments are measured at fair value. Changes in the fair value are recognised in comprehensive income.

OffsetIn the instance that the Group has a legal right to apply an amount due from a third party against the amount due to a creditor, provided that there is an agreement among the three parties that clearly establishes the contractual right to set off, and the Group intends either to settle on a net basis or to realise the asset and settle the liability simultaneously, the related amounts are off-set and the net amounts reported in the statement of financial position.

revenueSale of goodsRevenue from the sale of goods in the course of ordinary activities are measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.

The timing of the transfer of risks and rewards varies depending on the individual terms of the sales agreement.

Rental incomeRental income from investment property is recognised as revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an internal part of the total rental income over the term of the lease.

Lease incomeRevenues from finance leases are recognised using the effective yield method. Revenues from operating leases are recognised on a straight-line basis over the lease term.

Dividend incomeDividend income from investments is recognised when the right to receive payment is established.

earnings per shareBasic earnings per share is based on earnings attributable to shareholders and is calculated on the weighted average number of shares in issue during the financial year. Headline earnings per share is based on profit attributable to shareholders, excluding any non-trading capital items and the tax effect thereon, and is calculated as above. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

These potentially dilutive shares relate to the options issued in terms of the share incentive scheme.

foreign currency transactionsTransactions in foreign currencies are translated at the foreign exchange rate ruling at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated into South African Rand at rates of exchange ruling at the reporting date. Translation gains and losses, whether realised or unrealised, are taken to profit or loss.

The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest rate and payments during the year, and amortised cost in foreign currency translated at the exchange rate at the end of the year.

67



leasesFinance leasesLeases that transfer substantially all the risks and rewards of ownership of the underlying asset to the Group are classified as finance leases.

Assets acquired in terms of finance leases are capitalised at the lower of fair value and the present value of the minimum lease payments at inception of the lease and depreciated over the estimated useful life of the asset. The capital element of future obligations under the leases is included as a liability in the statement of financial position. Lease payments are allocated using the effective interest rate method to determine the lease finance cost, which is charged against income over the lease period and the capital repayment, which reduces the liability to the lessor.

The Group as lessorAmounts due from lessees under finance leases are recorded as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.

The Group enters into finance leasing arrangements for its copiers, faxes and point-of-sale equipment. All leases are denominated in South African Rands. The average term of finance leases entered into is four to five years.

Operating leasesLeases where the lessor retains the risks and rewards of ownership of the underlying asset are classified as operating leases. Payments made under operating leases are recognised in profit or loss on a straight-line basis over the period of the lease. The leased assets are not recognised in the Group’s statement of financial position.

employee benefitsDefined contribution plansA defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which related services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan that are due more than 12 months after the end of the period in which the employees render the service are discounted to their present value.

Defined benefit plansA defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of futurebenefitthatemployeeshaveearnedinreturnfortheirserviceinthecurrentandpriorperiods;thatbenefitisdiscounted to determine its present value. Any unrecognised past service costs and the fair value of any plan assets are deducted. The discount rate is the yield at the reporting date on government bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the currency in which the benefits are expected to be paid.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group the recognised asset is limited to the total of any unrecognised past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits consideration is given to any minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realisable during the life of the plan, or on settlement of the plan liabilities. When the benefits of a plan are improved, the portion of the increased benefit related to past service by employees is recognised in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss.

The Group recognises all actuarial gains and losses arising from defined benefit plans immediately in other comprehensive income and all expenses related to defined benefit plans in personnel expenses in profit or loss.

The Group recognises gains and losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gain or loss on curtailment or settlement comprises any resulting change in the fair value of



plan assets, any change in the present value of the defined benefit obligation, any related actuarial gains and losses and past service cost that had not previously been recognised.

Medical aidWhere the Group has an obligation to provide post-retirement medical aid benefits to employees, it recognises the costs of these benefits in the year in which the employees render the service.

Actuarial gains or losses in respect of the defined benefit medical plan are recognised directly in other comprehensive income in the year in which they arise. Past service costs are recognised as an expense on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits are already vested, past service costs are recognised immediately.

Other long-term employee benefitsThe Group’s net obligation in respect of long-term employee benefits other than pension plans is the amount of future benefitthatemployeeshaveearnedinreturnfortheirserviceinthecurrentandpriorperiods;thatbenefitisdiscountedto determine its present value and the fair value of any related assets is deducted. The discount rate is the yield at the reporting date on government bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the currency in which the benefits are expected to be paid. The calculation is performed using the projected unit credit method. Any actuarial gains and losses are recognised in profit or loss in the period in which they arise.

Termination benefitsTermination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting date then they are discounted to their present value.

Short-term employee benefitsShort-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Retirement fundThe Group contributes to several defined contribution plans. Contributions to defined contribution funds are charged against profit or loss as incurred.

share-based payment transactionsThe grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity over the period that the employees become unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The fair value of the amount payable to employees in respect of share appreciation rights which are settled in cash, is recognised as an expense with a corresponding increase in liabilities over the period that the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognised as personnel expenses in profit or loss.

Equity compensation benefits – granted after 7 November 2002The Group granted share options to certain employees under an employee share plan.

The fair value of the employee share options are measured using an actuarial binomial model. Measurement inputs include the share price on the measurement date, the exercise price of the instrument, expected volatility (based on

69



an evaluation of the company’s historic volatility, particularly over the historic period commensurate with the expected term), expected term of the instruments (based on historical experience and general option holder behaviour), expected dividends and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value.

The scheme is administered through a trust which acts as an agent of the sponsor, the sponsor being Seardel Investment Corporation Limited.

Consequently the assets and liabilities of the trust are accounted for as assets and liabilities of the sponsor on the basis that the trust is acting as an agent of the sponsor.

dividends to shareholdersDividends are accounted for in the period in which the dividends are declared.

treasury sharesShares in the company held by Group entities are classified as treasury shares. These shares are treated as a deduction from the weighted average number of shares and the cost price of the shares is deducted from equity in the statement of changes in equity. Dividends received on treasury shares are eliminated on consolidation.

segmental reportingThe Group follows the management approach to segmental reporting with segment financial information being disclosed as it is being used internally by the entity’s chief operating decision-maker (CODM) in order to assess performance and allocate resources.

Segments are determined on the basis of products and services offered.

Inter-segment pricing is determined on an arm’s length basis.

The segment report has been presented on page .

intangiblesIntangible assetsIntangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

The gain or loss arising from the derecognition of an intangible asset shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset. It shall be recognised in profit or loss when the asset is derecognised.

AmortisationAmortisation is recognised in profit or loss on a straight-line basis.

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

government grantsGovernment grants are recognised as other income when there is a reasonable assurance that the Group will comply with the relevant conditions attached to them and that the grant will be received.

export incentivesDuty credit certificates used to procure foreign goods serve to adjust the total cost of imported goods. Where these are not required for own import, they are sold and the resulting income is recognised as other income.

borrowing costsBorrowing costs attributable to the acquisition, construction or production of a qualifying asset are capitalised.



2 OPerating PrOfit befOre imPairments and restructuring and retrenchment cOstsThe following items have been taken into account in determining operating profit for continuing and discontinuing operations before impairments and restructuring and retrenchment costs.

grOuP cOmPany

2013r000’s

2012R000’s

2013r000’s

2012R000’s

income

Compensation for property, plant and equipment that were impaired, lost or given up – 247 – –

Dividends – unlisted investments 96 78 96 78

– subsidiary companies – – – 721 661

Export incentives 3 471 8 716 – –

Government grants 67 260 66 704 – –

Finance lease income 10 890 10 056 – –

Foreign exchange gains – realised 6 572 15 966 – –

– unrealised 4 693 3 291 – –

Litigation settlement* – 191 773 – –

Rental income from investment property 47 280 24 518 – –

Fair value adjustments to investment property (2 161) (8 372) – –

Surplus on disposal of property, plant and equipment 2 099 1 114 – –

expenditure

Amortisation 4 503 3 499 – –

Bad debts – net of recoveries and reversals of allowance account 3 161 1 099 – –

Bank charges 4 865 5 637 – –

Depreciation – buildings 2 712 2 171 – –

– plant and machinery 21 672 25 616 – –

– equipment and fittings 9 964 10 887 – –

– motor vehicles 1 679 2 012 – –

Total owned assets 36 027 40 686 – –

Total leased assets 218 116 – –

total depreciation 36 245 40 802 – –

Employment costs** 645 077 739 940 – –

Loss on disposal of property, plant and equipment 1 012 1 534 – –

Foreign exchange losses – realised 2 726 5 207 – –

– unrealised 8 629 2 890 – –

Operating lease charges – property 17 169 31 242 – –

– equipment and vehicles 5 049 6 048 – –

Technical and consulting fees 12 715 24 864 – –

Write-down of inventory to net realisable value 26 355 34 212 – –

Reversal of write-down of inventory to net realisable value (6 014) (63) – –

* Income as a result of settlement of various litigation proceedings and claims against former directors and officers of the company and entities controlled by them.

** Includes contributions of R54,8 million (2012: R59,2 million) to medical, pension, provident and benefit funds.

These contributions are after a R7 million charge (2012: R6,8 million) in respect of post-employment medical benefits relating to a defined benefit obligation and an IFRS 2 charge in respect of the share option scheme of R6,5 million (2012: R3,9 million).

71



3 segment rePOrtThe Group’s reportable segments have been identified on the basis of products and services offered.

The clothing, textile and industrial segments derive their revenue from manufacturing activities. The branded product distribution segment derives its revenue from the distribution of branded toys, electronics, stationery and clothing. The property segment derives its revenue from property rental.

The prior year’s segmental report has been restated due to the Group’s decision to change the composition of the reporting due to the decision to change the composition of its reportable segments.

The de-composition reflects the underlying changes within the Group and provides improved reporting to stakeholders. The restatement has no effect on the financial information other than to the segmental report.

Operating segmentsProperties

r000’s

branded Product

distri-butionr000’s

textilesr000’s

indus-trials

r000’sclothing

r000’s

head officer000’s

totalr000’s

2013segment revenueGross revenue 93 225 795 416 689 207 334 988 694 611 – 2 607 447 Inter-segment revenue (45 944) (2 460) (39 207) (6 350) – – (93 961)Consolidated revenue 47 281 792 956 650 000 328 638 694 611 – 2 513 486 segment interestInterest revenue – – – – – 2 971 2 971 Interest expense – – – – – (43 095) (43 095) – – – – – (40 124) (40 124)segment resultsCombined operating profit/(loss) before finance costs 63 554 15 474 31 362 17 046 (33 845) (13 733) 79 858 The following items are included in the segment results above:

Depreciation (2 714) (4 495) (8 616) (8 407) (11 696) (317) (36 245)Amortisation – (2 000) – – (1 363) (1 140) (4 503)Write-down of inventory – (8 713) (912) (3) (16 727) – (26 355)Reversal of write-down of inventory – 1 463 – – 4 551 – 6 014 Impairments – (937) – – – – (937)Reversal of impairments – – 22 822 – – – 22 822 Restructuring costs – – – – (1 063) – (1 063)Revaluation of investment properties (2 161) – – – – – (2 161)Gain on disposal of property, plant and equipment 904 59 93 43 1 000 – 2 099 Loss on disposal of property, plant and equipment (214) – (789) (9) – – (1 012)Income tax (expense)/income – (6 360) – (1 251) – 8 728 1 117

segment assets 997 217 456 915 473 773 217 030 341 150 38 554 2 524 639 capital expenditure 169 975 7 056 22 229 9 957 6 660 294 216 171 segment liabilities 33 673 114 169 258 459 60 374 77 376 520 002 1 064 053 Post-employment medical aid benefits – – 89 433 – – – 89 433 trade and other payables – including provisions 33 674 106 389 169 026 60 374 77 376 13 642 460 481 geographical segments based on customer locationrevenue from external customersSouth Africa 47 281 780 464 647 783 309 267 694 611 – 2 479 406 Direct exports – 12 492 2 217 19 371 – – 34 080 47 281 792 956 650 000 328 638 694 611 – 2 513 486 holdings of property, plant and equipment and intangible assetsWithin South Africa 943 834 16 969 159 704 97 375 61 125 4 366 1 283 373 Outside South Africa – – – – 9 367 – 9 367 943 834 16 969 159 704 97 375 70 492 4 366 1 292 740



major customersRevenues for the Group to single customers in excess of 10% related to one customer. Revenues to this customer accounted for R447 million (2012: R451 million). Sales to this customer were made by the textiles and clothing segments.

Operating segments*Properties

R000’s

Branded Product

Distri-butionR000’s

TextilesR000’s

Indus-trials

R000’sClothing

R000’s

Head office

R000’sTotal

R000’s2012segment revenueGross revenue 66 577 662 558 714 540 342 692 860 950 – 2 647 317 Revenue reclassified as discontinued operations – – 3 – (49 900) – (49 897)Inter-segment sales (42 059) (729) (43 391) (4 447) – – (90 626)Consolidated revenue 24 518 661 829 671 152 338 245 811 050 – 2 506 794 segment interestInterest revenue – – – – – 4 594 4 594 Interest expense – – – – – (38 467) (38 467) – – – – – (33 873) (33 873)segment resultsCombined operating profit/(loss) before finance costs 44 554 32 275 29 175 10 597 (122 144) 165 410 159 867 Loss disclosed as discontinued operations (excluding finance charges and taxation) – – (1 505) – 20 653 – 19 148 Operating profit/(loss) before finance costs from continuing operations 44 554 32 275 27 670 10 597 (101 491) 165 410 179 015 The following items are included in the segment results above:

Depreciation (2 180) (3 797) (9 862) (10 095) (14 588) (280) (40 802)Amortisation – (1 454) – – (987) (1 058) (3 499)Write-down of inventory – (6 474) (560) (369) (26 809) – (34 212)Reversal of write-down of inventory – – – – 63 – 63 Impairments – – (7 018) (1 246) (853) – (9 117)Reversal of impairments – – 7 030 – 837 – 7 867 Restructuring costs – – – (188) (12 966) – (13 154)Revaluation of investment properties (8 372) – – – – (8 372)Gain on disposal of property, plant and equipment 169 16 779 71 73 6 1 114 Loss on disposal of property, plant and equipment – (29) (576) – (914) (15) (1 534)Discontinued operations – – 1 506 – (22 948) – (21 442)Litigation settlements – – – – 191 773 191 773 Income tax (expense)/income – (12 294) – (1 648) – 27 073 13 131

segment assets 823 637 427 891 457 065 217 040 436 634 66 532 2 428 799 capital expenditure 121 689 9 458 10 720 11 424 15 604 66 168 961 segment liabilities 15 597 113 477 227 480 59 660 100 691 500 249 1 017 154 Post-employment medical aid benefits – – 79 307 – – – 79 307 trade and other payables – including provisions 15 597 105 410 148 174 59 622 100 691 23 015 452 509 geographical segments based on customer locationrevenue from external customersSouth Africa 24 518 657 410 670 146 316 588 811 050 – 2 479 712 Direct exports – 4 419 1 006 21 657 – – 27 082 24 518 661 829 671 152 338 245 811 050 – 2 506 794 holdings of property, plant and equipment and intangible assetsWithin South Africa 742 110 17 596 122 129 97 314 68 753 5 539 1 053 441 Outside South Africa – – – – 9 972 – 9 972 742 110 17 596 122 129 97 314 78 725 5 539 1 063 413

73



4 net imPairment reversal/(imPairment) Of assetsgrOuP cOmPany

2013r000’s

2012R000’s

2013r000’s

2012R000’s

The following impairments were recognised during the year:category of assetProperty, plant and equipment 937 9 117 – – total 937 9 117 – – Included in discontinued operations – – – – Impairments from continuing operations 937 9 117 – –

The following impairments were reversed during the year:category of assetProperty, plant and equipment 22 822 7 867 – – Interest in subsidiary companies – – – 300 327 total 22 822 7 867 – 300 327 Included in discontinued operations – – – – Impairments reversed from continuing operations 22 822 7 867 – 300 327 21 885 (1 250) – 300 327

segmental reconciliation of impairmentsTextiles – 8 264 – –

Property, plant and equipment – 8 264 – – Clothing – 853 – –

Property, plant and equipment – 853 – – Branded products 937 – – –

Property, plant and equipment 937 – – – total 937 9 117 – –

segmental reconciliation of reversal of impairmentsTextiles 22 822 7 030 – –

Property, plant and equipment 22 822 7 030 – – Clothing – 837 – –

Property, plant and equipment – 837 – – Head office and consolidation entries – – – 300 327

Interest in subsidiary companies – – – 300 327 total 22 822 7 867 – 300 327

impairment testingThe recoverable amount of a cash-generating unit (CGU) is determined based on a fair value less cost to sell, or value-in-use calculation as appropriate.

Value-in-use calculation use cash flow projections approved by management. These cash flow forecasts cover four years;thecashflowsaftertheforecastperiodareextrapolatedintothefutureovertheusefullifeoftheCGUusing a steady growth rate that is consistent with that of the industry and country.

In determining value in use, projected cash flows are discounted using the entity’s weighted average cost (WACC)of capital adjusted for any risk that are not reflected in the underlying cash flows. WACC was calculated as 9,05% for the current period (2012: 8,92%).

Expected future cash flows are inherently uncertain and could materially change over time. They are significantly affected by a number of factors including production estimates and economic factors such as commodity prices, discount rates, currency exchange rates and estimates of costs to produce. Management believes that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the carrying amounts to exceed their recoverable amount.

Fair value has been determined by independent external valuers who have taken into account the current market conditions for the nature, age and condition of the assets involved.

None of the CGUs contain goodwill.



the events and circumstances that led to the recognition of the impairment losses are as follows:Poor results and/or budgeted future results triggered an assessment of realisable value.

events and circumstances that led to the reversal of impairments are as follows:Internal restructuring as well as changes in the dynamics of the market in which certain businesses within the clothing and textile segments operate, resulted in better than expected performances. Impairment testing of these plants resulted in the impairment losses recorded in previous reporting periods to be reversed.

These impairments are recognised in the following line items:

grOuP cOmPany

2013r000’s

2012R000’s

2013r000’s

2012R000’s

Cost of revenue – 7 602 – –

Other income – – – –

Distribution costs – – – –

Administrative and other expenses 937 1 515 – –

937 9 117 – –

These reversals are recognised in the following line items:

Cost of revenue 22 822 7 867 – –

Other income – – – 300 327

Distribution costs – – – –

Administrative and other expenses – – – –

22 822 7 867 – 300 327

5 finance cOstsgrOuP cOmPany

2013r000’s

2012R000’s

2013r000’s

2012R000’s

recognised in profit or loss

finance income

Interest received from financial institutions 2 741 2 370 – –

Other interest received 230 2 225 – –

Included in discontinued operations – (1) – –

2 971 4 594 – –

finance expenses

Interest paid on finance leases and instalment sale agreements 94 48 – –

Interest paid to financial institutions 40 155 31 303 – –

Interest paid to connected persons 1 744 1 807 – –

Other interest paid 1 102 7 604 – –

Included in discontinued operations – (2 295) – –

43 095 38 467 – –

The finance expenses relate to financial liabilities which are categorised as being measured at amortised cost.

75



6 taxatiOn and deferred taxatiOn grOuP cOmPany

2013r000’s

2012R000’s

2013r000’s

2012R000’s

income tax

South African normal taxation

– current (6 750) (11 111) – –

– prior year (381) 249 – –

Deferred taxation 8 248 23 993 – (155)

1 117 13 131 – (155)

reconciliation between actual and normal taxation rates % % % %

Taxation as a percentage of loss before taxation (2,8) (10,6) – –

Rate change – 8,2 – –

Prior period (1,0) 0,2 – –

Specific tax deductible and non-deductible items and tax inclusions 2,5 (0,5) – –

Exempt income 43,8 25,4 28,0 28,0

Capital gains tax on asset disposals (4,7) (0,3) – –

Restricted recognition of tax loss (9,8) 5,7 – –

Other – (0,1) – –

Normal taxation rate 28,0 28,0 28,0 28,0

deferred taxation r000’s R000’s r000’s R000’s

Balance at the beginning of the year 23 545 22 023 (621) (467)

– Asset 32 270 30 022 – –

– Liability (8 725) (7 999) (621) (467)

Current movements recognised in comprehensive income 8 248 23 993 – (154)

– Rate changes – (572) – (154)

– Capital allowances (8 111) (4 761) – –

– Provision for post-employment medical benefits 606 639 – –

– Tax losses recognised during the period 22 220 29 879 – –

– Capital allowances on intangible asset (243) (377) – –

– Shares and investments (2 274) (115) – –

– Revaluations 403 1 561 – –

– Share incentive scheme 1 324 1 075 – –

– Working capital differences (5 677) (3 336) – –

Current movements recognised in equity 1 900 (22 471) – –

– Rate changes – (9 328) – –

– Tax losses derecognised during the period – (9) – –

– Provision for post-employment medical benefits 2 229 1 622 – –

– Share incentive scheme 4 240 – – –

– Revaluations (4 569) (14 756) – –

Balance at the end of the year 33 693 23 545 (621) (621)

– Asset 42 093 32 270 – –

– Liability (8 400) (8 725) (621) (621)



grOuP cOmPany

2013r000’s

2012R000’s

2013r000’s

2012R000’s

Deferred tax assets and liabilities are attributable to the following:

– Provision for post-employment medical benefits 25 041 22 206 – –

– Working capital allowances 10 728 7 904 – –

– Shares and investments (620) 1 654 (621) (621)

– Share incentive scheme 7 200 1 636 – –

– Tax losses 134 244 112 024 – –

– Capital allowances (66 607) (58 496) – –

– Capital allowances on intangible asset (853) (610) – –

– Revaluations (75 440) (62 773) – –

Net deferred tax at the end of the year 33 693 23 545 (621) (621)

There are estimated tax losses in respect of four subsidiary companies. The directors have considered the future profitability of these entities and on the basis that they are projected to produce taxable income in the foreseeable future, these deferred tax assets are considered fully recoverable. Tax losses have been recognised in Seardel Group Trading Proprietary Limited and Brits Automotive Systems Proprietary Limited to the extent considered recoverable.

unrecognised tax losses, reflected at 28% of the underlying tax loss, exist in the following entity:

Seardel Group Trading Proprietary Limited 136 689 140 965

7 discOntinued OPeratiOnsgrOuP

2013r000’s

2012R000’s

revenue – 49 897

Cost of revenue – (53 306)

gross loss – (3 409)

Other income – 2 525

Distribution costs – (3 793)

Administrative and other expenses – (12 241)

Operating loss before impairments and restructuring and retrenchment costs – (16 918)

Restructuring and retrenchment costs – (2 230)

Operating loss before finance costs – (19 148)

Finance income – 1

Finance expenses – (2 295)

loss before taxation – (21 442)

Income tax expense – –

loss for the period from discontinued operations – (21 442)

cash flows from/(used in) discontinued operations

Net cash used in operating activities – (12 153)

Net cash from investing activities – 7 454

Net cash from financing activities – (10 084)

net cash used in discontinued operations – (14 783)

The loss from discontinued operations in the prior year is attributable entirely to equity holders of the parent.

77



8 PrOfit lOss Per share

gross

r000’snet

r000’s

number of shares

000’sPer share

cents

2013

net number of shares in issue 682 892

Number of shares in issue – 31 March 2013 703 720

Number of treasury shares in issue – 31 March 2013 (20 828)

Issued shares as at 1 April 2012 705 873

Effect of own shares held (2 162)

Effect of share options exercised 2 867

Effect of shares repurchased (21 268)

Weighted average number of shares at 31 March 2013 685 310

Diluted weighted average number of shares 710 913

Weighted average number of shares 685 310

Dilution effect of share options granted 25 603

basic profit

Profit attributable to equity holders of the parent 40 851 685 310 5,96

diluted profit


headline earnings

reconciliation between profit and headline earnings

Profit attributable to equity holders of the parent 40 851

Impairment of assets 937 937

Reversal of impairment of assets (22 822) (22 822)

Remeasurements of investment property 2 161 2 161

Surplus on disposal of property, plant and equipment (2 099) (2 099)

Loss on disposal of property, plant and equipment 1 012 1 012

headline earnings 20 040 685 310 2,92

diluted headline earnings 20 040 710 913 2,82

issue and repurchase of shares14 513 649 ordinary shares and 11 885 606 N ordinary shares were repurchased from the market in accordance with the settlement agreement as communicated in the circular to shareholders dated 30 April 2012. 7 732 934 N ordinary shares were cancelled subsequent to the repurchase. During the period 5 579 925 ordinary shares were issued in terms of the Group’s share incentive scheme.

diluted weighted average number of sharesThe difference between the weighted average number of shares and the diluted weighted average number of shares are due to the impact of the unexercised options under the Group’s share incentive scheme.



Gross

R000’sNet

R000’s

Number of shares

000’sPer share

cents

2012

net number of shares in issue 703 711

Number of shares in issue – 31 March 2012 705 873

Number of treasury shares in issue – 31 March 2012 (2 162)


Diluted weighted average number of shares 727 060


Dilution effect of share options granted 23 662

basic profit


diluted profit


headline loss

reconciliation between profit and headline loss

Profit attributable to equity holders of the parent 136 944

Impairment of assets 9 117 9 117

Reversal of impairment of assets (7 867) (7 867)

Insurance claim for capital asset (247) (247)

Remeasurements of investment property 8 372 8 372

Surplus on disposal of property, plant and equipment (1 114) (1 109)

Loss on disposal of property, plant and equipment 1 534 1 526

headline earnings 146 736 703 398 20,86

diluted headline earnings 146 736 727 060 20,18

headline earnings – continuing operations 168 888 703 398 24,01

diluted headline earnings – continuing operations 168 888 727 060 23,23

headline loss – discontinuing operations (22 152) 703 398 (3,14)

diluted headline loss – discontinuing operations (22 152) 727 060 (3,05)

headline earnings adjusted for legal settlement

headline loss (45 037) 703 398 (6,40)

diluted headline loss (45 037) 727 060 (6,19)

headline loss – continuing operations (22 885) 703 398 (3,25)

diluted headline loss – continuing operations (22 885) 727 060 (3,15)

headline loss – discontinued operations (22 152) 703 398 (3,15)

diluted headline loss – discontinued operations (22 152) 727 060 (3,05)

79



9 PrOPerty, Plant and eQuiPmentgrOuP

land and buildings

at valuation

r000’s

Plant and machinery

at costr000’s

equipment and

fittingsat costr000’s

motor vehicles

at costr000’s

totalr000’s

2013cost/valuation at 31 march 2013 418 605 617 514 153 783 21 330 1 211 232 Opening balance 384 269 610 155 146 192 22 428 1 163 044 Additions 65 480 28 067 9 792 1 366 104 705 Revaluations 25 432 – – – 25 432 Reclassification to investment property (56 576) – – – (56 576)Disposals and assets reclassified as held for sale – (20 708) (2 201) (2 464) (25 373)accumulated depreciation and impairment at 31 march 2013 – 327 377 114 968 14 406 456 751 Opening balance – 347 809 105 875 14 312 467 996 Current period depreciation 2 712 21 691 9 964 1 878 36 245 Revaluations (2 626) – – – (2 626)Impairment – – 937 – 937 Reversal of impairment – (22 822) – – (22 822)Reclassification to investment property (86) – – – (86)Disposals and assets reclassified as held for sale – (19 301) (1 808) (1 784) (22 893)

carrying value at 31 march 2013 418 605 290 137 38 815 6 924 754 481

Rate of (straight-line) depreciation 0 – 2% 4 – 7% 10 – 20% 20%Residual values 40 – 65% 0% 0% 20%

2012cost/valuation at 31 march 2012 384 269 610 155 146 192 22 428 1 163 044 Opening balance 357 114 649 445 168 002 24 150 1 198 711 Additions 2 427 26 163 19 943 1 166 49 699 Revaluations 43 471 – – – 43 471 Disposals and assets reclassified as held for sale (18 743) (65 453) (41 753) (2 888) (128 837)accumulated depreciation and impairment at 31 march 2012 – 347 809 105 875 14 312 467 996 Opening balance – 381 001 136 770 15 213 532 984 Current year depreciation 2 171 25 629 10 888 2 114 40 802 Revaluations (2 171) – – – (2 171)Impairment – 8 872 245 – 9 117 Reversal of impairment – (7 660) (136) (71) (7 867)Disposals and assets reclassified as held for sale – (60 033) (41 892) (2 944) (104 869)

carrying value at 31 march 2012 384 269 262 346 40 317 8 116 695 048

The cost less accumulated depreciation of the owner-occupied properties is provided below. The allowed alternative method as described in IAS 16 is the revaluation model, which has been adopted by the group.

grOuP2013

r000’s2012

R000’sCost 198 884 176 246 Accumulated depreciation 2 017 2 017 carrying value 196 867 174 229

Reconciliation of cost of land and buildings:Opening cost at the beginning of the year 176 246 173 857 Additions 65 480 2 427 Disposals, transfers to investment property and assets reclassified as held for sale (42 842) (38)closing cost at the end of the year 198 884 176 246



Capitalised leased assets included in the above are:

grOuP

Plant and machinery

r000’s

equipment and fittings

r000’s

motor vehicles

r000’stotal

r000’s

2013

Cost 131 8 993 1 337 10 461

Accumulated depreciation 50 8 993 328 9 371

carrying value at 31 march 2013 81 – 1 009 1 090

2012

Cost 222 8 993 869 10 084

Accumulated depreciation 123 8 993 129 9 245

carrying value at 31 march 2012 99 – 740 839

impairment testing – plant and equipmentThe recoverable amount of a cash-generating unit (CGU) is determined based on a fair value less cost to sell, or value-in-use calculation as appropriate.

Value-in-use calculation use cash flow projections approved by management. These cash flow forecasts cover four years;thecashflowsaftertheforecastperiodareextrapolatedintothefutureovertheusefullifeoftheCGUusingsteady growth rate that is consistent with that of the industry and country.

In determining value in use, projected cash flows are discounted using the entity’s weighted average cost of capital (WACC) adjusted for any risk that are not reflected in the underlying cash flows. WACC was calculated as 9,05% for the current period (2012: 8,92%).

Expected future cash flows are inherently uncertain and could materially change over time. They are significantly affected by a number of factors including production estimates and economic factors such as commodity prices, discount rates, currency exchange rates and estimates of costs to produce. Management believes that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the carrying amounts to exceed their recoverable amount.

Fair value has been determined by independent external valuers who have taken into account the current market conditions for the nature, age and condition of the assets involved.

fair value for financial reporting purposes – land and buildingsThe fair value of owner-occupied property has been determined on a capitalisation of income basis as at 31 March 2013 by independent valuers, David Newham Property Management Co. (Pty) Ltd. In applying this method the professional associated valuer has given consideration to the rental-producing capacity of the properties taking into account their location, structure and the rental-producing capacity of similar buildings in similar locations.

sensitivity analysisThe capitalisation rates for the fair value of the properties were between 9% – 15%. The table below presents the sensitivity of the valuation on the carrying value of the owner-occupied property to changes in the capitalisation rate.

carrying value2013

r’000

Increase of 1% in the capitalisation rate 385 888

Decrease of 1% in the capitalisation rate 457 558

securitisation of assetsRefer to note 33 which relates to the securitisation pool for the benefit of the Group lenders.

81



10 investment PrOPerties

grOuP

2013r000’s

2012R000’s

Opening carrying value 357 801 224 001

Additions – transfer from owner-occupied property 56 490 16 954

– subsequent expenditure 104 496 119 262

Capitalised borrowing costs 8 603 5 956

Fair value adjustments (2 161) (8 372)

closing carrying value 525 229 357 801

included in profit and loss are the following items:

Rental income from investment property 47 280 24 518

Direct operating expenses (including repairs and maintenance) relating to rental-generating properties 4 606 2 474

Direct operating expenses (including repairs and maintenance) relating to property which did not generate income 333 104

reconciliation of investment property

Cumulative cost 252 783 196 293

Cumulative subsequent expenditure 246 536 142 040

Cumulative borrowing cost capitalised 14 868 6 265

Cumulative fair value adjustments 11 042 13 203

Closing carrying value 525 229 357 801

Investment property comprises a number of commercial properties that are leased to third parties. Each of the leases contains an initial non-cancellable period of between one to five years. Five properties were transferred from property, plant and equipment (see note 9) to investment property, since the building was no longer used by the Group and as such it was decided that the building would be leased to third parties.

There are commitments to further develop our investment properties by R20,27 million.

The capitalisation rate used to capitalise borrowing costs during the year was the prime rate.

fair value for financial reporting purposesThe fair value of investment property has been determined on a capitalisation of income basis as at 31 March 2013 by independent valuers, David Newham Property Management Co. (Pty) Ltd. In applying this method the professional associated valuer has given consideration to the rental-producing capacity of the properties taking into account their location, structure and the rental-producing capacity of similar buildings in similar locations.

sensitivity analysisThe capitalisation rate for the fair value of the properties were between 9% – 15% depending on the property. The table below presents the sensitivity of the valuation on the carrying value of the investment property to changes in the capitalisation rate.

carrying value2013

r000’s

Increase of 1% in the capitalisation rate 483 487

Decrease of 1% in the capitalisation rate 575 481




11 intangible assets

softwarer000’s

licencesr000’s

under develop-

ment*r000’s

totalr000’s

cost at 31 march 2013 14 046 7 000 – 21 046

Opening balance 11 576 2 500 – 14 076

Assets acquired separately 2 470 4 500 – 6 970

accumulated amortisation and impairment at 31 march 2013 4 563 3 453 – 8 016

Opening balance 2 059 1 454 – 3 513

Current period amortisation 2 504 1 999 – 4 503

carrying value at 31 march 2013 9 483 3 547 – 13 030

Nature of useful lives finite finite finite

Amortisation method straight line

straight line

n/a

Rate of amortisation 20% Period of licence

0%

Residual values 0% 0% 0%

the amortisation of intangible assets is included in the following line items in the statement of comprehensive income:

Cost of revenue –

Distribution costs 2 000

Administrative and other expenses 2 503

4 503

cost at 31 march 2012 11 576 2 500 – 14 076

Opening balance 4 181 – 4 645 8 826

Assets acquired separately 2 750 2 500 – 5 250

Transfer between categories 4 645 – (4 645) –

accumulated amortisation and impairment at 31 march 2012 2 059 1 454 – 3 513

Opening balance 14 – – 14

Current period amortisation 2 045 1 454 – 3 499

carrying value at 31 march 2012 9 517 1 046 – 10 563

the amortisation of intangible assets is included in the following line items in the statement of comprehensive income:

Cost of revenue

Distribution costs 1 454

Administrative and other expenses 2 045

3 499

* Relates to software.

83



12 interest in subsidiariescOmPany

2013r000’s

2012R000’s

Shares at cost, less impairment 1 150 005 1 151 151

Loans from subsidiary companies (359 718) (361 215)

Loans to subsidiary companies 908 251 911 763

1 698 538 1 701 699

In the main these loans are subordinated, interest free and there are no fixed terms of repayment.

There is no management intention to recall these loans in the forseeable future.


13 Other investmentsgrOuP cOmPany

2013r000’s

2012R000’s

2013r000’s

2012R000’s

Business Partners Limited (unlisted) 3 329 3 329 3 329 3 329

Old Mutual (listed) 251 – 251 –

3 580 3 329 3 580 3 329

Investments are classified as available for sale and are reconciled as follows:

Opening balance 3 329 3 329 3 329 3 329

Acquisition 251 – 251 –

Closing balance 3 580 3 329 3 580 3 329

securitisation of assetsRefer to note 33 which relates to the securitisation pool for the benefit of the group lenders.



14 lOng-term receivablesgrOuP

2013r000’s

2012R000’s

Net investment in finance leases 47 544 43 402

47 544 43 402

Net investment in finance leases is reconciled with the gross investment in leases as follows:

gross investment

in leasesr000’s

unearned finance incomer000’s

net investment

in leasesr000’s

2013

Lease payments receivable

– Not later than one year 30 663 7 091 23 572*

– Later than one year but not later than five years 54 524 6 980 47 544

85 187 14 071 71 116

2012

Lease payments receivable

– Not later than one year 30 690 7 492 23 198*

– Later than one year but not later than five years 50 938 7 536 43 402

81 628 15 028 66 600

* Included in trade and other receivables.

Interest is charged at rates varying between 14% and 25%.

There were no contingent rents recognised as income during the year.

The Group enters into finance leasing arrangements for its copiers, faxes and point-of-sale equipment. All leases are denominated in South African Rands. The average term of finance leases entered into is four to five years.

cOmPany

2013r000’s

2012R000’s

Share incentive scheme recharge receivable 25 714 18 094

Only when shares are issued in terms of the share scheme is the beneficiary’s employer obliged to refund the purchase price of these shares.

85



15 assets held fOr saleFollowing the commitment of management to dispose of certain properties, these assets have been reflected as non-current assets held for sale.

The categories of property, plant and equipment are as follows:

grOuP

2013r000’s

2012R000’s

Land and buildings 2 295 12 906

2 295 12 906

The segmental classification of the non-current assets held for sale is as follows:

Propertiesr000’s

totalr000’s

2013


2 295 2 295

2012


12 906 12 906

facts and circumstances of the sale and expected sale of assets held for sale:The properties classified as assets held for sale relates to residential houses owned by the Group. During the year nineteen properties were sold, five properties are still held for sale at year-end. The remaining properties are expected to be sold in the coming year.

Curtailment of certain operations has rendered these assets surplus to requirements and they will be realised to best advantage. To this end land and buildings valued at R3,5 million is currently in the process of being sold.


16 inventOriesgrOuP

2013r000’s

2012R000’s

Raw materials and consumables 190 015 182 639

Work in progress 74 958 78 293

Finished goods 362 795 320 884

627 768 581 816

Inventories stated at net realisable value 122 192 160 714

Carrying amount of inventory pledged as security for liabilities 521 498 497 234

Write-down of inventory to net realisable value during the year 26 355 34 212

Reversals of previous write-down of inventory to net realisable value during the year* (6 014) (63)

* This inventory was realised during the year and the earlier write-down reversed.




17 trade and Other receivablesgrOuP cOmPany

2013r000’s

2012R000’s

2013r000’s

2012R000’s

Trade receivables 408 955 460 088 – –

Lease receivables 23 572 23 198 – –

Other receivables 57 808 194 646 – 14

Fair value of outstanding foreign exchange contracts 186 3 055 – –

Prepayments 14 267 7 657 – –

504 788 688 644 – 14


18 share caPital and PremiumgrOuP and cOmPany

2013r000’s

2012R000’s

share capital(a) authorised

700 000 000 (2012: 700 000 000) ordinary shares of 25 cents each 175 000 175 000 Each ordinary share has the right to 100 votes at general meetings.200 000 000 (2012: 200 000 000) N ordinary shares of 0.25 cent each 500 500 Each N ordinary share has the right to one vote at general meetings.

(b) reserved under options – see note 35 43 820 41 594

(c) issued642 486 801 (2012: 636 906 876) ordinary shares of 25 cents each 160 622 159 227 Balance at the beginning of the year: 636 906 876 (2012: 636 141 876) 159 227 159 035 Issued during the year: 5 579 925 (2012: 765 000) 1 395 192 61 233 077 (2012: 68 966 011) N ordinary shares of 0.25 cent each 153 172 Balance at the beginning of the year: 68 966 011 (2012: 68 966 011) 172 172 Cancellation of shares during the year: 7 732 934 (2012: 0) (19) –

160 775 159 399

share premiumBalance at the beginning of the year 145 221 144 762 Shares issued 6 160 459 balance at the end of the year 151 381 145 221

312 156 304 620

63 500 000 ordinary shares of 25 cents each have been placed under the control of the directors, who are authorised to allot and issue all or any or such shares in accordance with the terms and conditions of The Seardel Long-Term Incentive Plan and any amendments thereto.

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

issue and repurchase of shares14 513 649 ordinary shares and 11 885 606 N ordinary shares were repurchased from the market in accordance with the settlement agreement as communicated in the circular to shareholders dated 30 April 2012. 7 732 934 N ordinary shares were cancelled following the repurchased.

During the period 5 579 925 ordinary shares were issued in terms of the Group’s share incentive scheme.

87



19 treasury sharesSeardel Investment Corporation Limited shares are held by:

grOuPnumber of shares

2013r000’s

2012R000’s

2013000’s

2012000’s

seardel group trading (Pty) limitedOrdinary sharesBalance at the beginning of the year 1 384 1 384 191 191 Share repurchases 11 756 – 14 514 – Balance at the end of the year 13 140 1 384 14 705 191

n ordinary sharesBalance at the beginning of the year 13 226 13 226 1 971 1 971 Share repurchases 9 034 – 11 885 – Cancellation of shares (17 606) – (7 733) – Balance at the end of the year 4 654 13 226 6 123 1 971 total at the end of the year 17 794 14 610 20 828 2 162

20 POst-emPlOyment medical aid benefitsgeneral description of planThe post-employment subsidy policy is summarised below:

• Qualifyingmedical schemememberswho joined the companybefore1 July1996areeligible for a50%retirement subsidy of their total medical scheme contributions.

• Dependants of eligible continuation members receive a subsidy before and after the death of theprincipal member.

• Ifamembereligible fora retirementsubsidydies inservice, theirdependantsareeligible forasubsidyofmedical scheme contributions as described above.

2013000’s

2012000’s

amounts recognised in the statement of comprehensive income:Current service cost 482 483 Interest on the obligation 6 523 6 365 Total included in staff costs 7 005 6 848

Reconciliations in the net liability recognised in the statement of financial position are as follows:Liability at the beginning of the year 79 307 71 233 Net expense in the statement of comprehensive income 7 005 6 848 Contributions (4 841) (4 566)Actuarial losses/(gains) recognised 7 962 5 792 Liability in the statement of financial position 89 433 79 307

Represented by:Liability due within 12 months 5 045 4 662 Liability due after 12 months 84 388 74 645

89 433 79 307

Present value of unfunded obligations 89 433 79 307 Fair value of plan assets – –Recognised liability for defined benefit obligations 89 433 79 307

No reconciliation of the opening and closing balances of the plan assets is provided as there are no plan assets.

The net cumulative actuarial loss recognised in other comprehensive income is R2,3 million.



Forecast reconciliation of the plan to 31 March 2014 is as follows: 2014R000’s

Liability at 31 March 2013 89 433

Net expense in the statement of comprehensive income 7 384

Contributions (5 224)

Forecast liability at 31 March 2014 91 593

trend information

2009R000’s

2010R000’s

2011R000’s

2012R000’s

2013r000’s

Present value of obligations 85 177 69 725 71 233 79 307 89 433

2013 2012

the principal actuarial assumptions at the reporting date:

Discount rate (%) 7,90 8,50

Medical inflation (%) 8,00 8,00

sensitivity of results

A 1% increase in medical aid inflation would result in:

An increase in the accrued liability of (R000’s) 11 430 9 959

(%) 12,80 12,60

An increase in the service and interest cost of (R000’s) 1 030 962

(%) 13,90 13,70

A 1% decrease in medical aid inflation would result in:

A decrease in the accrued liability of (R000’s) (9 527) (8 310)

(%) (10,70) (10,50)

A decrease in the service and interest cost of (R000’s) (852) (796)

(%) (11,50) (11,40)

A 1% decrease in the discount rate would result in:

An increase in the accrued liability of (R000’s) 11 749 10 177

(%) 13,10 12,80

A 1% increase in the discount rate would result in:

A decrease in the accrued liability of (R000’s) 9 604 8 338

(%) (10,70) (10,50)

89



21 financial instrumentsfinancial risk managementOverviewThe Group has exposure to the following risks from its use of financial instruments:• creditrisk;• liquidityrisk;and• marketrisk.

Thisnotepresents informationabout theGroup’sexposure toeachof theaboverisks; theGroup’sobjectives,policies and processes for measuring and managing risk; and the Group’s management of capital. Furtherquantitative disclosures are included throughout these consolidated financial statements.

risk management frameworkThe board of directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The board has established a risk committee, which is responsible for developing and monitoring the Group’s risk management policies. The committee reports regularly to the board of directors on its activities.

The Group’s risk management policies are established to identify and analyse the risks faced by it, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group audit committee oversees how management monitors compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

interest-bearing liabilities

Final repayment

dates

Average rate of

interest p.a.

grOuP cOmPany

2013r000’s

2012R000’s

2013r000’s

2012R000’s

(a) secured

Instalment sale and finance lease agreements 2018 Prime 1 054 957 – –

1 054 957 – –

(b) unsecured

Hosken Treasury Proprietary Limited Prime – 25 185 – –

– 25 185 – –

1 054 26 142 – –

Less current portion of interest-bearing liabilities (298) (25 427) – –

756 715 – –



Instalment sales and finance lease agreements are payable as follows:

Principal

r000’s interest

r000’s

gross instalments

r000’s

2013

Less than one year 331 15 346

Between one and five years 723 124 847

1 054 139 1 193

2012

Less than one year 242 45 287

Between one and five years 715 151 866

957 196 1 153

Under the terms of the lease agreements, no contingent rentals are payable. Finance leases are repayable in monthly instalments.

financial risk managementForeign currency management: Operating subsidiaries undertake transactions denominated in foreign currencies and hence exposures to exchange rate fluctuations arise. Material exchange rate exposure on imported raw materials, trade debtors/creditors, foreign currency assets and liabilities and capital equipment is hedged through the use of forward exchange contracts. Trade exports are hedged using forward exchange contracts and customer foreign currency accounts. Forward exchange contracts are not used for speculative purposes.

Interest rate management: The Group is exposed to interest rate risk as it borrows and places funds on the money market. This risk is managed by maintaining an appropriate mix of fixed and daily call placements with reputable financial institutions.

Credit risk management: Financial assets, which potentially subject the Group to concentrations of credit risk, consist principally of cash and cash equivalents, investments and receivables. A significant amount of the Group’s trade debt is in respect of sales to subsidiaries of the major listed clothing retailers, in particular Woolworths Holdings Limited (R60,5 million) and Edcon Limited (R42,1 million). The risk on cash and cash equivalents is managed through dealing with established financial institutions with high credit standing.

The vast majority of trade debtors relate to sales made in the local market, with R406 million (99,2%) being denominated in South African Rands.

Trade receivables denominated in USD accounted for 0,4% and those in AUD accounted for 0,2%.

Receivables are presented net of impairment provisions. The risk arising on trade receivables is managed through a Group policy on the granting of credit limits, continual review and monitoring of these limits and insurance of trade receivables through an independent party. The company is jointly and severally liable in respect of third-party liabilities incurred by subsidiary companies.

Capital management: The board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence, and to sustain future development of the business. The capital base of the business is viewed as being the shareholder equity and non-current liabilities amounting to R1 554 million (2012: R1 497 million).

collateralFinance lease receivable balances are secured over the electronic and office automation equipment leased. The Group does not hold any significant collateral other than electronic and office automation equipment securing finance lease receivable balances. The Group is not permitted to sell or repledge the collateral in the absence of default by the lessee.

During the period the Group did not obtain any assets by taking possession of any collateral held as security.

Repossessed electronic and office automation equipment is taken into stock and becomes available for lease or sale.

91



21 financial instruments (continued)

grOuP

2013r000’s

2012R000’s

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

Opening balance 4 708 5 815

Written off as irrecoverable (1 755) (1 377)

Disposal of subsidiary – (116)

Increase in allowance for impairment 4 492 1 315

Decrease in allowance for impairment (2 214) (929)

Closing balance 5 231 4 708

Past due or not impaired financial assetsThe following analysis reflects the aging of trade receivables as at year-end which have exceeded their credit terms, but have not been impaired.

30+ days – 410

60+ days 439 618

90+ days 6 207 8 447

120+ days 4 951 4 056

11 597 13 531

The following analysis reflects the aging and remaining value of trade receivables as at year-end which are considered to have been impaired and against which an impairment for non-recovery has already been made.

30+ days – –

60+ days 47 –

90+ days 231 –

120+ days 3 027 5 171

3 305 5 171

In determining the impairments the Group considered, inter alia, disputes with customers, untraceable and slow payers, long overdue accounts and customers placed under liquidation. The Group holds no collateral as security against non-payment of any of the above-mentioned trade receivables, but does have credit guarantee insurance to protect against default. There has been no renegotiation of terms.

cash flow and funding risk managementThis risk is managed through cash flow forecasts and ensures that adequate borrowing facilities are maintained. In terms of the memorandum of incorporation the Group’s borrowing powers are unlimited, but in terms of the securitisation agreement cannot raise further funds without permission.

Refer to note 26 for borrowing facilities.

categories of financial assetsThe carrying amount of financial assets, which also represent the maximum credit exposure and reasonably approximate their fair values, are as follows:

Loans and receivables 522 438 612 599

Fair value through profit or loss (FECs) 186 3 055

Available for sale 3 580 3 329

526 204 618 983



Reconciliation with line items presented in the statement of financial position:

loans and receivables

r000’s

fair value through

profit or lossr000’s

available for sale

r000’s

non-financial

assetsr000’s

totalr000’s

2013

Investments – – 3 580 – 3 580

Long-term receivables 47 544 – – – 47 544

Trade and other receivables 472 657 186 – 31 945 504 788

Cash and cash equivalents 2 237 – – – 2 237

522 438 186 3 580 31 945 558 149

2012

Investments – – 3 329 – 3 329

Long-term receivables 43 402 – – – 43 402

Trade and other receivables 567 148 3 055 – 118 441 688 644

Cash and cash equivalents 2 049 – – – 2 049

612 599 3 055 3 329 118 441 737 424

grOuP

2013r000’s

2012R000’s

categories of financial liabilities

The carrying amount of financial liabilities, which also reasonably approximate their fair values, are as follows:

Measured at amortised cost 964 203 909 673

964 203 909 673

Reconciliation with line items presented in the statement of financial position:

measured at amortised

costr000’s

non-financial liability

r000’s total

r000’s

2013

Interest-bearing liabilities – non-current 756 – 756

– current 298 – 298

Trade and other payables 458 464 1 544 460 008

Bank overdrafts 504 685 – 504 685

964 203 1 544 965 747

2012

Interest-bearing liabilities – non-current 715 – 715

– current 25 427 – 25 427

Trade and other payables 433 060 4 770 437 830

Bank overdrafts 450 471 – 450 471

909 673 4 770 914 443

93



21 financial instruments (continued)maturity profile of financial instrumentsMaturity profile of financial assets and liabilities at 31 March 2013 is summarised as follows:

r000’s0 – 12

months1 – 3

years3 – 5

yearsOver

5 years total2013assetsInvestments – 3 580 – – 3 580 Long-term receivables – 54 524 – – 54 524 Trade and other receivables 472 843 – – – 472 843 Cash and cash equivalents 2 237 – – – 2 237 total financial assets 475 080 58 104 – – 533 184 liabilitiesInterest-bearing borrowings 298 756 – – 1 054 Trade and other payables 457 821 – – – 457 821 Bank overdrafts 504 685 – – – 504 685 total financial liabilities – non-derivatives 962 804 756 – – 963 560 Trade and other payables 643 – – – 643 total financial liabilities – derivatives 643 – – – 643 net financial (liabilities)/assets (488 367) 57 348 – – (431 019)

2012assetsInvestments – 3 329 – – 3 329 Long-term receivables – 43 402 – – 43 402 Trade and other receivables 570 203 – – – 570 203 Cash and cash equivalents 2 049 – – – 2 049 total financial assets 572 252 46 731 – – 618 983 liabilitiesInterest-bearing borrowings 25 427 715 – – 26 142 Trade and other payables 430 638 – – – 430 638 Bank overdrafts 450 471 – – – 450 471 total financial liabilities – non-derivatives 906 536 715 – – 907 251 Trade and other payables 2 422 – – – 2 422 total financial liabilities – derivatives 2 422 – – – 2 422 net financial (liabilities)/assets (336 706) 46 016 – – (290 690)

fair value of financial instrumentsThe fair value of short-term financial assets and liabilities approximate their carrying values as disclosed in the statement of financial position.

Fair value hierarchyThe table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level1:quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly(i.e.asprices)orindirectly(i.e.derivedfromprices);and

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

level 1r000’s

level 2r000’s

level 3r000’s

totalr000’s

Available-for-sale financial assets 251 3 329 – 3 580 251 3 329 – 3 580



Reclassification of financial assetsNo financial assets were reclassified from fair value to cost or amortised cost or vice versa during the year.

Pledges of financial assetsFinancial assets pledged as collateral for liabilities or contingent liabilities, together with their carrying values are as follows:

grOuP

2013r000’s

2012R000’s

The call account in a foreign subsidiary has been pledged as security when they exceed their facility of 1 500 000 Malutis. 166 170

Determination of fair value for financial assets and liabilitiesReceivables are impaired based on the estimated credit losses on a debtor-by-debtor basis. Receivables and liabilities denominated in foreign currencies are restated based on the year-end exchange rate. Publicly traded investments are revalued to their market values on an annual basis.

Included in the Group’s trade receivable balance are debtors which are past due at the reporting date for which the Group has not impaired as there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group does not hold any collateral over these balances.

These “past due, but not impaired debtors” amount to: 11 597 13 531

Derecognition of financial assetsThere has been no transfer by the Group of financial assets to any outside party where such financial assets do not qualify for derecognition.

Defaults and breaches on loansThere were no breaches or defaults on the repayment of any loans payable during the current or prior period.

Market riskMarket risk is the risk that changes in the market prices such as foreign exchange rates and equity prices will affect the Group’s income or the value of its holding of financial instruments. The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign currency risk, including:• forward foreign exchange contracts to hedge the exchange rate risk arising on the import of electronic

equipment,toys,finishedgoodsandrawmaterials;and• interestratecapstomitigatetheriskofrisinginterestrates.

The fair value of the derivatives at year-end, determined by marking-to-market of contracts, amounted to: (456) 632

Liquidity riskLiquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Adequate liquidity is managed through the use of cash flow forecasts and by the maintenance of adequate borrowing facilities.

The Group is exposed to a number of risks including market risk (including currency risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Group seeks to minimise the effects of these risks by using derivative financial instruments to hedge these risk exposures. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

95



21 financial instruments (continued)

Sensitivity analysisEquity price sensitivity analysisThe Group faces a minor equity risk in that it holds Business Partner shares as disclosed under the investments note. Net profit/loss for the period would be unaffected by equity price volatility as revaluations to the equity investment are taken directly to equity.

Foreign currency sensitivity analysisThe Group is exposed to foreign currency risk in the form of trade receivables and trade payables denominated in foreign currencies as well as related forward exchange contracts and customer foreign currency accounts. Details of the Group’s exposure in this regard is contained in note 28 of these financial statements.

Interest rate sensitivity analysisAt year-end the Group’s net interest-bearing borrowings amounted to R504 million (2012: R475 million). In the main the interest rates applicable to these loans are variable. Consequently, in the event of a 10% change in interest rates (i.e. an increase of 0,85%), there will be an additional interest charge of R4,28 million before tax.

22 trade and Other PayablesgrOuP cOmPany

2013r000’s

2012R000’s

2013r000’s

2012R000’s

Trade payables 286 298 244 278 – –

Fair value of outstanding foreign exchange contracts 643 2 422 – –

Accruals and other current liabilities 173 067 190 771 124 2 700

Shareholders for dividend – 359 – 359

460 008 437 830 124 3 059

The operating lease accrual is payable as follows:

Less than one year (included under trade and other payables) 1 181 1 714 – –

Between one and five years (shown separately as operating lease accruals on the balance sheet) 118 1 141 – –

1 299 2 855 – –

23 gOvernment grantsgrOuP

2013r000’s

2012R000’s

Receivable balance for government grants brought forward 67 256 38 295

Total income from government grants, included in other income, recognised during the year amounted to 67 260 66 704

Total cash received during the year from government grants amounted to (95 060) (37 743)

Amount outstanding as at year-end 39 456 67 256

The government grants received related to the Production Incentive Scheme established by the Department of Trade and Industry.

There are no unfulfilled conditions or contingencies relating to the government assistance recognised.



24 PrOvisiOnsgrOuP

2013r000’s

2012R000’s

restructuring and retrenchment costs

Carrying amount at the beginning of the year 13 538 2 337

Additional provisions made in the year, including increases to existing provisions 354 13 312

Unused amounts reversed during the year (340) (737)

Amounts utilised during the year (13 197) (1 374)

Carrying amount at the end of the year 355 13 538

These provisions relate to management’s restructuring plans already implemented and/or communicated before 31 March 2013.

It is anticipated that the costs associated with restructuring and retrenchments will occur within the next 12 months. The uncertainties surrounding the provisions relate to the exact costs of restructuring and which employees will be retrenched and which will be reassigned.

There are no expected reimbursements and no related assets have been recognised.

25 leasesgrOuP

nominal amount

2013r000’s

2012R000’s

Non-cancellable operating lease rentals are payable as follows:

Less than one year 9 360 19 568

Between one and five years 16 011 18 658

25 371 38 226

Non-cancellable operating lease rentals are receivable as follows:

Less than one year 56 258 35 912

Between one and five years 191 988 128 539

More than five years 4 266 8 076

252 512 172 527

No future sublease payments are expected to be received under non-cancellable subleases.

No contingent rentals were recognised as income in the period.

The Group leases a number of premises as distribution warehouses, factory and retail facilities, as well as office equipment, motor vehicles and fork lifts under operating leases.

26 bOrrOWing facilitiesgrOuP

2013r000’s

2012R000’s

Available facility 750 000 700 000

Net utilised (609 157) (550 397)

Unutilised balance 140 843 149 603

These facilities have been secured in terms of note 33.

97



27 directOrs’ emOluments

Paid by a subsidiary companyName

salaryr000’s

bonusr000’s

retire-ment

and medical

contri-butions

r000’s

shareoption

expenser000’s

directors’fees

r000’s

Otherbenefits

r000’stotal

r000’s

2013

executive directors***

S A Queen* (Chief Executive Officer) 3 149 1 186 – 2 252 – – 6 587

A M Ntuli 795 65 146 – – – 1 006

G D T Wege 1 446 603 217 547 – – 2 813

5 390 1 854 363 2 799 – – 10 406

non-executive directors

J Copelyn** (Chairman) – – – – 126 – 126

N N Lazarus (Deputy Chairman) – – – – 163 – 163

M H Ahmed – – – – 126 – 126

T G Govender** – – – – 90 – 90

R Watson – – – – 90 – 90

Y Shaik – – – – 109 – 109

– – – – 704 – 704

11 110

2012

executive directors***

S A Queen* (Chief Executive Officer) 2 995 – – – – – 2 995

A M Ntuli 755 139 127 – – 6 1 027

G D T Wege 1 320 – 198 – – – 1 518

5 070 139 325 – – 6 5 540

non-executive directors

J Copelyn** (Chairman) – – – – 110 – 110

N N Lazarus (Deputy Chairman) – – – – 176 – 176

M H Ahmed – – – – 118 – 118

T G Govender** – – – – 85 – 85

N Teladia – – – – 58 – 58

R Watson – – – – 85 – 85

Y Shaik – – – – 85 – 85

– – – – 717 – 717

6 257



Additional disclosure in terms of the share options granted during the year:

Opening balance of share options

000’s

number of share options

awarded during

the year000’s

number of options exercised

000’s

closing balance of share options

000’s

strike price of

share options

awardedr

exercised price of options

exercisedr

executive directors

S A Queen (Chief Executive Officer) 8 744 2 173 (2 097) 8 820 1,10 1,40

A M Ntuli – – – – – –

G D T Wege 3 643 754 (874) 3 523 1,10 1,36

* The remuneration of S A Queen is included in the managerial services provided by HCI referred to in note 30 Related parties.

** Ceded to HCI.*** There is no distinction made in the remuneration packages of executive directors for services as directors and

services for carrying on the business of the Group and/or subsidiary companies.

For the interest of directors in the company’s share capital, please refer to the Analysis of Shareholders.

Directors’ interests in contracts are disclosed in note 30 Related parties.

Non-executive directors do not participate in the share scheme.

99



28 fOreign currency cOmmitments

Currencyuncovered

r000’scovered

r000’stotal

r000’s2013Foreign currency monetary items are as follows:Foreign receivables AUD – 858 858 EUR – 7 874 7 874 USD – 127 378 127 378 GBP – 1 877 1 877 – 137 987 137 987 Foreign payables AUD – 295 295

EUR 18 299 1 164 19 463 GBP 259 140 399 USD 162 206 30 491 192 697 180 764 32 090 212 854

Sensitivity analysis: A 10% strengthening of the Rand would result in the uncovered receivables to be collected being reduced by RNil while the uncovered payables balance would decrease by R18 076 400, resulting in a net gain of R18 076 400. A weakening of the Rand by 10% would have an equal, but opposite, effect.

CurrencyUncovered

R000’sCovered

R000’sTotal

R000’s2012Foreign currency monetary items are as follows:Foreign receivables AUD 1 046 – 1 046 EUR 87 – 87 USD 2 739 – 2 739 3 872 – 3 872 Foreign payables EUR 6 135 1 107 7 242 GBP 11 1 192 1 203 USD 26 249 34 674 60 923 32 395 36 973 69 368

Sensitivity analysis: A 10% strengthening of the Rand would result in the uncovered receivables to be collected being reduced by R387 200 while the uncovered payables balance would decrease by R3 239 500, resulting in a net gain of R2 852 300. A weakening of the Rand by 10% would have an equal, but opposite, effect.

Currency

Spot – 31 March 2013

R000’s

Spot – 31 March 2012

R000’s

Average forthe period

R000’sThe exchange rates were as follows: AUD 9,62264 7,98230 8,77210 EUR 11,81600 10,25150 10,95740 GBP 13,96750 12,28790 13,43410 USD 9,21500 7,68550 8,50210

29 cOmmitments2013

r000’s 2012

R000’s Investment property 20 265 8 112 Plant and equipment 117 19 850 Intangible assets 1 356 760

21 738 28 722



30 related PartiesgrOuPTransactions between Group companies: During the year, in the ordinary course of business, certain companies within the Group entered into transactions with one another. These intra-group transactions have been eliminated on consolidation.

transactions with directorsDuring the year the Group leased residential premises to Mr A Ntuli (director). The rental amount was R43 235 (2012: R42 180) and there were no outstanding amounts at year-end. The building was sold to Mr A Ntuli (director) during the year for an amount of R483 105.

transactions with hosken consolidated investments ltd (hci) (ultimate holding company) and entities in which hci has an interest Fees recognised as due to HCI for the provision of management services (including the salary of Mr S Queen) amounted to R4 341 988 (2012: R4 200 000). The outstanding balance at year-end was R8 691 988 (2012: R7 334 890). A fee was received from Formex Industries Proprietary Limited, a subsidiary of HCI, for managerial services R600 000 (2012: RNil). Bridging loans were advanced by HCI which bore interest at prime. At year-end the outstanding balance was RNil (2012: R25 184 932). The associated interest expense was R1 743 560 (2012: R1 135 927). Risk services provided by Seardel to HCI amounted to R141 988 (2012: RNil).

transactions with companies with common directorsSales amounting to RNil (2012: R542 462) were made to Zenzeleni Clothing (Pty) Ltd, a company of which J Copelyn, K Govender and A Ntuli are directors.

remuneration of key management personnelKey management personnel are directors and those executives having authority and responsibility for planning, directing and controlling the activities of the Group. The remuneration (all short-term benefits) paid by the Group to its key management personnel is as follows:

2013r000’s

2012R000’s

Basic 34 739 27 157 Provident fund 2 312 2 211 Medical aid 495 473

37 546 29 841

A share incentive scheme has been implemented for key management personnel. See note 35 for further details.

The percentage of shares held by directors of the company and their related entities at the reporting date are disclosed in the Analysis of Shareholders report on page .

cOmPanyThe company’s holding company is Fulela Trade and Invest 81 (Pty) Ltd and its ultimate holding company is Hosken Consolidated Investments Limited.

Related parties: All subsidiaries qualify as related parties. All subsidiaries are listed on page .

The company receives administrative, management and accounting services from Seardel Group Trading (Pty) Ltd, which is a 100%-held subsidiary. There are no charges for these services.

31 cOntingenciesAs detailed in the SENS announcements released on 16 March 2012 and 31 October 2012, the company and various of its subsidiary companies (collectively the Seardel Group) settled the various litigation proceedings and claims against former directors and officers of the company and entities controlled by them. One of the properties included in the settlement, namely remaining extent of Erf 27412, Observatory, Cape Town (the Observatory Property), with an estimated market value of R38,7 million, remained the subject of separate litigation by and against unrelated third parties.

Judgment was delivered in the Group’s favour in relation to separate litigation (30 October 2012) and a subsequent application to appeal the judgment was dismissed.

Due to the ongoing and unresolved litigation proceedings pertaining to the matter at year-end, the property has not been accounted for in the current year’s results.

Refer to note 34 for events after the reporting period.

101



32 change in cOmParativesThe prior year’s segmental report has been restated due to the Group’s decision to change the composition of its reportable segments.

The recomposition reflects the underlying changes within the Group and provides improved reporting to stakeholders. The restatement has no effect on the financial information other than to the segmental report.

33 securitisatiOn Of assetsThe security has been provided to a special purpose company (Seardel Security (Pty) Ltd), which has guaranteed the obligations of the Group companies in favour of the lenders and which in turn is indemnified by Group companies.

name of entity(security grantor)

security cession

bond(type, amount and subject-matter)

Nyenye Clothing Manufacturers (Pty) Ltd Yes None

Consolidated Textiles (Pty) Ltd Yes None

Val Hau et Cie (Pty) Ltd Yes None

Seartec Trading (Pty) Ltd Yes 1. General Notarial Bond, R60 million

Seartec Industries (Pty) Ltd Yes None

Seartec (Pty) Ltd Yes None

Seardel Number 16 (Pty) Ltd Yes None

Prima Toys & Leisure Group (Pty) Ltd Yes None

Gold Reef Speciality Chemicals (Pty) Ltd Yes 1. General Notarial Bond, R30 million

Seardel Group Trading (Pty) Ltd Yes 1. General Notarial Bond, R1 billion, movable assets of Seardel Group Trading

2. Special Notarial Bond, R300 million, movable assets of Seardel Group Trading

3. Mortgage Bonds, R600 million, all immovable property owned by Seardel Group Trading

Frame Industrials (Pty) Ltd Yes 1. General Notarial Bond, R5 million, movable assets of Frame Industrials

2. Special Notarial Bond, R15 million, movable assets of Frame Industrials

Prima Toys & Leisure Trading (Pty) Ltd Yes General Notarial Bond, R50 million, movable assets of Prima Trading

Seardel Investment Corporation Limited Yes None

noteSecurity cession means a security cession in terms of which the security grantor cedes to the security SPV in securitatem debiti all of such security grantor’s present and future rights and interest as security for the due, proper and timeous payment and performance in full of the security grantor’s obligations under the indemnity, on the terms of the written security cession signed on 21 November 2008 between the security SPV and the security grantor.

Indemnity means an irrevocable and unconditional indemnity given by the security grantor to the security SPV, indemnifying the security SPV in respect of any claim or liability of the security SPV arising under the guarantees which the security SPV has provided in respect of all monies and liabilities owing by the security grantor and other companies within the borrower group in connection with the banking facilities provided by the guaranteed parties to the borrower group and against any loss, damage, liability, costs or expenses of any nature which the security SPV may incur as a consequence of the occurrence of any event of default, on the terms of the written indemnity agreement signed on 21 November 2008 between the security SPV and the security grantor.



The impact of the above on the figures disclosed in the statement of financial position is as follows:

Per statement

of financial position

r000’ssecuritised

r000’s

un-securitised

r000’s

Property, plant and equipment 754 481 754 481 –

Investment property 525 229 525 229 –

Intangible assets 13 030 13 030 –

Other investments 3 580 3 580 –

Long-term receivables 47 544 47 544 –

Inventories 627 768 627 768 –

Trade and other receivables 504 788 504 788 –

Non-current assets held for sale 2 295 2 295 –

34 POst-year-end eventsSubsequent to the year-end the litigation referred to in note 31 was resolved in the Group’s favour further to the Supreme Court of Appeal dismissing the third parties’ application for leave to appeal. As a result thereof the transfer of the Observatory Property to the Group, with the current estimated market value of R38,7 milllion, is in the process of being effected. (See SENS announcement dated 10 May 2013).

Mr David Duncan has been appointed as an executive director of the Company with effect from 16 May 2013.

Mr Neil Lazarus has resigned as a director of the Company on 19 August 2013.

Subsequent to the year-end HCI and Seardel entered into an agreement whereby HCI will sell to Seardel its 70% interest in HCI Invest 3 Holdco Proprietary Limited (SPV) which, following an internal restructuring within the HCI group, will hold a 63,9% interest in Sabido Investments Proprietary Limited (Sabido). Sabido is the investment vehicle that houses HCI’s investments in e-tv, eSat tv, yfm and Sasani Studios.

This transaction was approved by the shareholders at the General Meeting of the Company, 8 August 2013.

The Company will increase its authorised share capital by creating 350 000 new N Shares of no par value for the Sabido acquisition.

See SENS announcement dated 10 July 2013 for the unaudited pro forma financial effects of the Sabido acquisition.

The Shareholders of the Company has approved the conversion of Ordinary Shares and N Shares having a par value into Ordinary Shares and N Shares having no par value at the General Meeting on 8 August 2013.

The Group proposed the restructure of its Clothing division that could affect over 800 employees. Consultation with unions are already underway. The restructuring is still subject to any viable alternatives and consultation, therefore the financial effect cannot be reliably estimated at this stage.

103



35 share incentive schemeThe Seardel Long-Term Incentive Trust was established on 17 February 2010. The Trustees of the Seardel Long-Term Incentive Trust executed the Seardel Long-Term Incentive Plan on 18 March 2010 to provide selected employees with the opportunity to acquire ordinary shares in Seardel Investment Corporation Limited thereby ensuring that such employees are encouraged and motivated to pursue continued growth and profitability of Group companies.

During the financial year 10 159 672 ordinary shares (2012: 8 893 266 shares) were allotted in terms of the Seardel Long-Term Incentive Plan to 22 employees.

The exercise of the options by the employees is subject to them meeting performance targets relating to the profitability of the relevant business unit or division or Group profitability, as well as the continued employment of the employee as at the date on which the option is exercised, in which case the employee may exercise:• upto10%oftheoptionsharesfromthefirstanniversaryoftheoptiondate• uptoafurther20%oftheoptionsharesfromthesecondanniversarydate• uptoafurther30%oftheoptionsharesfromthethirdanniversarydate;and• thebalance,namely40%oftheoptionshares,fromthefourthanniversarydate.

Options in issue are as follows:

Option holder grant dateOptions

issuedstrike price

(cents) vesting conditionslife of option

S A Queen 31 March 2010 4 200 000 0 2 years’ profitability and continued employment

8 years

16 July 2010 693 000 42 2 years’ profitability and continued employment

8 years

4 July 2011 1 753 350 76 2 years’ profitability and continued employment

8 years

12 June 2012 2 173 335 110 2 years’ profitability and continued employment

8 years

Total for S A Queen 8 819 685

G D T Wege 31 March 2010 1 750 000 0 2 years’ profitability and continued employment

8 years


8 years


8 years

12 June 2012 753 655 110 2 years’ profitability and continued employment

8 years

Total for G D T Wege 3 522 968

Other, not being directors

31 March 2010 14 705 000 0 2 years’ profitability and continued employment

8 years


8 years


8 years

12 June 2012 7 232 682 110 2 years’ profitability and continued employment

8 years

Total other 31 477 329

total options in issue 43 819 982



reconciliation of movements in options:

2013 2012

number of options

Opening balance 41 594 266 34 547 250

Awarded during the period 10 159 672 8 893 266

Exercised during the period (5 579 925) (765 000)

Lapsed/forfeited during the period (2 354 031) (1 081 250)

Closing balance 43 819 982 41 594 266

Number of options exercisable at year-end 6 031 875 4 831 725

Amount expensed during the year (included in employment costs) (Rand) 6 474 637 3 855 852

Number of options exercised during the year 5 579 925 765 000

Value of shares issued during the year (Rand) 7 555 319 650 250

Weighted average share price of share options exercised during the year (Rand) 1,35 0,85

The weighted average remaining contractual life of all potentially exercisable options amounts to 5,8 years.

In the event that all potentially exercisable options are exercised, an amount of R19 526 334 will be received by the Group.

valuation methodologyThe fair value of the options granted was determined as follows:

A stochastic model, based on the standard “binomial” options pricing model (which is mathematically consistent with the Black-Schöles-Merton model), but allows for the particular features of employee share options to be modelled realistically, was used.

The key principles of the Black-Schöles model are incorporated into this actuarial binomial model. They include:• risk-neutralvaluation;• theunderlyingsharepriceisassumedtofollowalog-normaldistributionofreturns;• stockreturnsareindependentlydistributed;• arisk-freereturncanbeearnedandisknowninadvance;• themarketisefficientandthusaninvestorcannotmakerisk-freeprofits;and• theunderlyingsharepricefollowsaMarkovprocess–i.e.wherethesharepricehasbeeninthepastdoesnot

have a bearing on where it will go in the future. All relevant information is contained in the share price at the grant date.

It follows that if the actuarial binomial model is being used to value a call option that:• canonlybeexercisedonasingledate;• hasnoperformanceconditionsorvestingperiod;• hasaconstantvolatilityanddividendyieldthroughoutitslife;and• maynotbeforfeited.

then the value produced by the actuarial binomial model will be exactly equal to that produced by the Black-Schöles formula.

The inability of the Black-Schöles formula to value American options was remedied by Cox, Ross and Rubinstein who devised a binomial lattice technique for valuing share options using the underlying financial economic principles of Black, Schöles and Merton.

The binomial model has proved over time to be the most flexible, intuitive and popular approach to option pricing. It is based on the simplification that over a single period (of possibly very short duration), the underlying asset can only move from its current price to two possible levels.

Using the concept of hedging to replicate the option value at each step (using a combination of a risky and risk-free asset), it is possible to calculate the value of the option by working recursively backwards from the expiry of the option.

The lattice provides a tremendously flexible framework for valuing employee share options. This is because the possible share price at each point over the option lifetime is considered. The framework also allows for the division of the option lifetime into distinct periods – e.g. vesting period, closed period and eligible exercise period.

105



35 share incentive scheme (continued)valuation assumptionsThe model used for valuing the employee share option arrangements requires a number of financial assumptions to be made.

The main assumptions together with a detailed description of the derivation of each of these assumptions have been set out below.

Share price The following closing share price at each option’s grant date, as available on I-Net Bridge, has been used:

grant date share price (cents)

31 March 2010 36

16 July 2010 47

4 July 2011 85

20 June 2012 145

Risk-free interest rateOur valuers have used the implied yield on a SA zero-coupon government bond (provided by BESA, the Bond Exchange of South Africa) issued for the appropriate expected lifetime of the option.

The average share price for the year was R1,35.

Expected option lifetimeOur valuers have estimated the expected option lifetime by considering separately each of the tranches available within the grant. The expected lifetime was rounded to the nearest complete year.

volatility of share price Volatility is a measure of the amount by which a share price is expected to fluctuate during the lifetime of the option. The estimate of the expected volatility over the term of the option is a significant assumption needed in determining the fair value of an employee share option. To be consistent with the definition of volatility used in option pricing models and the requirements of IFRS 2 (Appendix B paragraph B22), an annualised standard deviation of the continuously compounded rates of return of the share was used.

In terms of IFRS 2 some of the factors that need to be considered in estimating the expected volatility include:

• ParagraphB25(b)–“Thehistoricalvolatilityofthesharepriceoverthemostrecentperiodthatisgenerallycommensurate with the expected term of the option.”

• ParagraphB25(d)–“Thetendencyofvolatilitytoreverttoitsmean,i.e.itslong-termaveragelevel,andotherfactors indicating that expected future volatility might differ from past volatility.”

In order to estimate the share price volatility to be used in the valuation our valuers have considered the expected option lifetime of all the grants over the vesting period. As each grant is made up of four distinct tranches, being the staggered vesting periods, they have made use of the expected lifetime for each of these tranches.

Only share price data from 1 November 2008 has been considered due to the rights issue that occurred during October 2008.

dividend yieldIFRS 2 requires an expected dividend or dividend yield to be taken into account in the valuation of share options in those arrangements where employees are not entitled to the dividend declared during the vesting period or the period before exercise. The dividend yield used should be the best estimate of the forward-looking dividend yield over expected life of the option, determined at the grant date. A dividend yield assumption of 0,00% has been used.

employee turnoverThe main effect of allowing for employee turnover is that, in respect of the proportion of employees who are assumed to leave before the option (or part of the option) vests, the cost of that option (or part of the option) would be zero.

A forfeiture rate of 5% per annum compound during the vesting period has been assumed. Our valuers’ experience has been that employee turnover for staff included in share option schemes is generally between 5% and 15%, although acknowledging that this varies between industries and sectors.

Further, where an employee leaves during the exercise period, he is assumed to exercise immediately if the option is “in-the-money”. A withdrawal assumption of 5% per annum compound as above has again been used.



It should be noted that the assumption of employee turnover is a non-market condition and, therefore, in accordance with IFRS 2 is adjusted during the period over which the expense is recognised (i.e. the vesting period). Each year the employee turnover assumption should reflect the actual result of leavers in that year and to allow for the effect that actual experience would have on the future assumptions.

Ultimately at the end of the particular vesting period the actual number of options that eventually vest would need to have been expensed and the appropriate liability raised.

During the period over which the options vest, any differences in actual leavers to the assumption will be accounted for in the statement of comprehensive income at the end of the vesting period on a true-up basis.

exercise behaviourOption valuation theory implies that the optimal time to exercise the option (and maximise value) is generally towards the end of the allowable exercise period. However, individual behaviour often results in employees exercising their options relatively early (especially after a sudden share price rise), provided the options are “in-the-money”.

Our valuers have relied on a fairly general assumption for exercise behaviour based on internal investigations and a wide set of data provided by their international colleagues.

The following assumptions were used to reflect exercise behaviour in any given year:• one-thirdofschemeparticipantswillexercisetheiroptionswhentheyare20%“in-the-money”(i.e.theshare

priceisequalto120%oftheofferprice);• one-thirdofschemeparticipantswillexercisetheiroptionswhentheyare50%“in-the-money”(i.e.theshare

priceisequalto150%oftheofferprice);and• theremainingone-thirdofschemeparticipantswillexercisetheiroptionsatthetheoretically“optimal”time.

The table below summarises the principal assumptions used in the valuation:

Grant date Vesting dateShare price

(cents)

Expected option

lifetime (years)

Volatility (%)

Risk-free rate (%)

31 March 2010 31 March 2011 36 2 46,37 7,19

31 March 2012 36 3 46,37 7,59

31 March 2013 36 4 46,37 7,88

31 March 2014 36 5 46,37 7,84

16 July 2010 16 July 2011 47 2 52,84 6,93

16 July 2012 47 3 52,84 7,27

16 July 2013 47 4 52,84 7,53

16 July 2014 47 5 52,84 7,64

25 November 2010 25 November 2011 70 2 52,78 6,08

25 November 2012 70 3 51,72 6,55

25 November 2013 70 4 51,72 6,92

25 November 2014 70 5 51,72 7,34

4 July 2011 4 July 2012 85 2 48,09 7,41

4 July 2013 85 3 48,09 7,41

4 July 2014 85 4 48,09 7,87

4 July 2015 85 5 48,09 7,87

20 June 2012 20 June 2013 145 2 46,43 5,69

20 June 2014 145 3 46,43 6,52

20 June 2015 145 4 46,43 6,53

20 June 2016 145 5 46,43 6,53

107



35 share incentive scheme (continued)

valuation results

Cost per employee share option

Grant date Vesting date

Gross option price(cents)

Gross option price as a % of

share price(%)

Net option price

(cents)

Net option price as a

% of share price

(%)

31 March 2010 31 March 2011 36 100,00 36 100,00

31 March 2012 36 100,00 36 100,00

31 March 2013 36 100,00 34 95,00

31 March 2014 36 100,00 32 90,26

16 July 2010 16 July 2011 22 46,10 22 46,10

16 July 2012 25 52,48 24 51,70

16 July 2013 27 57,45 25 53,76

16 July 2014 28 60,28 25 53,60

25 November 2010 25 November 2011 33 46,67 33 46,67

25 November 2012 36 51,43 35 49,73

25 November 2013 40 56,67 36 52,06

25 November 2014 43 60,95 37 53,20

4 July 2011 4 July 2012 38 44,31 36 42,10

4 July 2013 42 49,80 38 44,95

4 July 2014 46 54,51 40 46,74

4 July 2015 50 58,43 40 47,59

20 June 2012 20 June 2013 69 47,59 66 45,21

20 June 2014 77 53,10 69 47,93

20 June 2015 83 57,01 71 48,88

20 June 2016 87 60,23 71 49,06



36 neW standardsAt the date of authorisation of the financial statements, the following standards and interpretations were in issue, but not yet effective:

standard/interpretation date issued by iasb (1) effective date

IAS 1 amendment Presentation of Financial Statements – Presentation of Items of Other Comprehensive Income

Wednesday, 1 June 2011 Sunday, 1 July 2012

IFRS 10 Consolidated Financial Statements

Sunday, 1 May 2011 Tuesday, 1 January 2013

IFRS 12 Disclosure of Interests in Other Entities


IFRS 13 Fair Value Measurement Sunday, 1 May 2011 Tuesday, 1 January 2013

IFRS 10, IFRS 11 and IFRS 12 amendment

Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities – Transition Guidance

Friday, 1 June 2012 Tuesday, 1 January 2013

IAS 19 amendments Employee Benefits: Defined Benefit Plans

Wednesday, 1 June 2011 Tuesday, 1 January 2013

IAS 27 Separate Financial Statements (2011)


IFRS 1 amendment Government Loans Thursday, 1 March 2012 Tuesday, 1 January 2013

IFRS 7 amendment Disclosures – Offsetting Financial Assets and Financial Liabilities

Thursday, 1 December 2011 Tuesday, 1 January 2013

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

Saturday, 1 October 2011 Tuesday, 1 January 2013

7 individual amendments to 5 standards

Improvements to International Financial Reporting Standards 2012

Tuesday, 1 May 2012 Tuesday, 1 January 2013

IAS 32 Offsetting Financial Assets and Financial Liabilities

Thursday, 1 December 2011 Wednesday, 1 January 2014

IFRS 10, IFRS 12 and IAS 27 amendment

Investment Entities Monday, 1 October 2012 Wednesday, 1 January 2014

IFRS 9 (2009) Financial Instruments Sunday, 1 November 2009 Thursday, 1 January 2015

IFRS 9 (2010) Financial Instruments Friday, 1 October 2010 Thursday, 1 January 2015

amendment to ias 1: Presentation of financial statementsThe company will present those items of other comprehensive income that may be reclassified to profit or loss in the future separately from those that would never be reclassified to profit or loss. This is a change in presentation and will have no impact on the recognition or measurement of items in the financial statements. The amendment will be applied retrospectively and the comparative information will be restated. The amendment is effective for periods beginning on or after 1 July 2012.

109



36 neW standards (continued)ias 27 (2011): separate financial statements IAS 27 (2011) supersedes IAS 27 (2008). IAS 27 (2011) carries forward the existing accounting and disclosure requirements for separate financial statements. The adoption of IAS 27 (2011) will not have a significant impact on the company’s separate financial statements. The standard is effective for annual periods beginning on or after 1 January 2013 with early adoption permitted.

ifrs 10: consolidated financial statements, ifrs 11: Joint arrangements, ifrs 12 (2011): disclosures of interests in Other entitiesIFRS 10 introduces a single control model to determine whether an investee should be consolidated.

IFRS 12 brings together in a single standard all the disclosure requirements about an entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. The Group is currently assessing the disclosure requirements for interests in subsidiaries, interests in joint arrangements and associates and unconsolidated structured entities in comparison with the existing disclosures. IFRS 12 requires the disclosure of information about the nature, risks and financial effects of these interests.

ifrs 13: fair value measurementIFRS 13 provides a single source of guidance on how fair value is measured and replaces the fair value measurement guidance that is currently dispersed throughout IFRS. Subject to limited exceptions, IFRS 13 is applied when fair value measurements or disclosures are required or permitted by other IFRS. IFRS 13 is effective for annual periods beginning on or after 1 January 2013 with early adoption permitted.

ias 19 (2011): employee benefitsIAS 19 (2011) changes the definition of short-term and long-term employee benefits to clarify the distinction between the two. For defined benefit plans the removal of the accounting policy choice for recognition of actuarial gains and losses is not expected to have any impact on the Group.



37 interest in subsidiary cOmPaniesname of subsidiary companies (Incorporated in the Republic of South Africa unless otherwise stated)

issued capital % interest shares at book value

direct holdings2013

r2012

R2013

%2012

%2013

r2012

R

Brits Automotive Systems Proprietary Limited 196 196 100 100 1 1

Consolidated Textiles Proprietary Limited* 120 000 120 000 100 100 238 248 672 238 248 672

Frame Industrials Proprietary Limited 100 100 100 100 100 100

Gold Reef Speciality Chemicals Proprietary Limited 100 100 100 100 100 100

Nyenye Clothing Manufacturers Proprietary Limited – Lesotho 1 000 1 000 100 100 1 000 1 000

Prima Toy & Leisure Group Proprietary Limited 823 290 823 290 100 100 34 636 997 34 636 997

Seardel Group Trading Proprietary Limited 2 500 050 2 500 050 100 100 728 076 850 728 076 850

Seardel Number 16 Proprietary Limited* 180 895 180 895 100 100 7 163 840 7 163 840

Seardel Number 17 Proprietary Limited* 100 100 100 100 – –

Seardel Brand ID Proprietary Limited 1 000 1 000 100 100 5 283 5 281

Seartec Proprietary Limited 669 106 669 106 100 100 85 358 581 85 358 581

Seartec Trading Proprietary Limited 1 000 1 000 100 100 1 000 1 000

Val Hau et Cie Proprietary Limited* 10 000 10 000 100 100 – –

Adjust for share incentive scheme – – – – (13 247 081) (12 101 867)

Ordinary shares at book value 1 080 245 343 1 081 390 555

Preference shares at book value 69 760 000 69 760 000

Shares at book value 1 150 005 343 1 151 150 555

Amounts owing (to)/by subsidiary companies 548 533 433 550 548 208

Seardel Group Trading Proprietary Limited 583 447 456 680 680 632

Seartec Industries Proprietary Limited (127 995 190) (127 995 190)

Brits Automotive Systems Proprietary Limited 100 246 006 5 027 605

Other (7 164 839) (7 164 839)

These loans are interest free and there are no fixed terms for repayment.

* Dormant.

111


AnAlysis OF SHAREHOLDERS

shareholder spreadPursuant to the Listing Requirements of the JSE and to the best knowledge of the directors, after reasonable enquiry, the spread of shareholders at the reporting date was as follows:

2013 2012number of share-holders %

number of shares %

Number of share-

holders %Number of

shares** %Ordinary sharesNon-public 14 1,6 530 791 780 82,6 9 1,0 502 138 705 78,8 – Directors of the company

and subsidiaries 5 0,6 4 463 221 0,7 1 0,1 7 096 – – Treasury shares 1 0,1 14 704 938 2,3 1 0,1 191 289 – – Shareholders with more than

10% holding* 2 0,2 509 734 821 79,3 2 0,2 501 175 320 78,7 – Non-director share scheme

participants 6 0,7 1 888 800 0,3 5 0,6 765 000 0,1 Public 872 98,4 111 695 021 17,4 920 99,0 134 768 171 21,2

886 100,0 642 486 801 100,0 929 100,0 636 906 876 100,0 N ordinary sharesNon-public 4 0,6 41 486 284 67,8 4 0,6 42 209 481 61,2 – Directors of the company

and subsidiaries – – – – – – – – – Treasury shares 1 0,2 6 123 306 10,0 1 0,2 1 970 634 2,9 – Shareholders with more than

10% holding* 3 0,4 35 362 978 57,8 3 0,4 40 238 847 58,3 Public 638 99,4 19 746 793 32,2 667 99,4 26 756 530 38,8

642 100,0 61 233 077 100,0 671 100,0 68 966 011 100,0

* Includes indirect holdings held by directors via Fulela Trade and Invest 81 (Pty) Ltd and Squirewood Investments 64 (Pty) Ltd.

** Prior period restated to broaden the definition of non-public shareholders as per the JSE Listings Requirements.

directors’ interest in sharesAt the year-end the directors (including their family interests) were directly or indirectly interested in the company’s issued shares as follows:

2013 2012

Ordinary % n ordinary % Ordinary % N ordinary %

Direct 873 750 0,1 – – – – – –

Indirect 25 683 711 4,0 535 691 0,9 22 240 860 3,5 513 742 0,7

There have been no material changes to the date of this report.

Details of directors’ beneficial direct and indirect interest in the ordinary and N ordinary shares are as follows:

direct indirect

2013 2012 2013 2012

Ordinary n ordinary Ordinary N ordinary Ordinary n ordinary Ordinary N ordinary

S Queen – – – – 2 389 582 6 486 30 892 550

G Wege 873 750 – – – – – – –

A M Ntuli – – – – 1 220 28 21 250 491

Y Shaik – – – – 72 391 1 645 69 404 1 604

T Govender – – – – 730 443 16 594 68 810 1 590

J Copelyn – – – – 22 490 075 510 938 22 050 504 509 507



shareholders’ interest in shares

The following are shareholders, other than directors, who own more than 5% of the company’s issued share capital per class of share:

2013 2012

Ordinary % n ordinary % Ordinary % N ordinary %

Fulela Trade and Invest 81 (Pty) Ltd* 497 603 811 77,4 – – 497 603 811 78,1 – –

Ceejay Trust 32 778 542 5,1 5 536 334 9,0 32 530 386 5,1 5 295 593 7,7

36One Hedge Fund 22 101 527 3,4 4 739 530 7,7 22 580 826 3,5 4 439 189 6,4

SAACM–- 36One Offshore Hedge Fund 3 198 714 0,5 5 595 791 9,1 1 731 985 0,3 5 726 520 8,3

Squirewood Investments 64 (Pty) Ltd* 12 131 010 1,9 11 580 352 18,9 3 571 509 0,6 11 580 352 16,8

The A Searll Descendants Trust – – – – 14 175 366 2,2 10 999 175 15,9

SA Clothing & Textile Workers Union – – 17 659 320 28,8 – – 17 659 320 25,6

Executives and staff members of the Group, other than directors, held 2 968 538 ordinary and 4 449 N ordinary shares at year-end.

Shareholders and members of the public are advised that the register of interest of directors, executives, senior management and other shareholders in the shares of the company is available upon request from the company secretary.

* Wholly-owned subsidiary of Hosken Consolidated Investments Limited.

analysis of shareholders

Seardel ordinary shares

number ofshareholders

% of totalshareholders number of shares % of total shares

2013 2012 2013 2012 2013 2012 2013 2012

1 – 1 000 529 536 60 58 118 320 121 899 – –

1 001 – 5 000 97 112 11 12 244 070 287 713 – –

5 001 – 50 000 136 154 15 17 2 965 171 3 405 022 – 1

50 001 – 100 000 38 48 4 5 3 084 575 3 910 443 – 1

Over 100 000 86 79 10 8 636 074 665 629 181 799 100 98

886 929 100 100 642 486 801 636 906 876 100 100

2013%

2012%

Banks, investment, finance and nominee companies and trusts 96 96

Directors and staff 1 0

Individuals 3 4

Insurance companies and pension funds 0 0

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AnAlysis OF SHAREHOLDERS(continued)

Seardel N ordinary shares

number ofshareholders

% of totalshareholders number of shares % of total shares

2013 2012 2013 2012 2013 2012 2013 2012

1 – 1 000 317 318 50 48 113 237 114 097 – –

1 001 – 5 000 168 176 26 26 411 855 431 859 1 1

5 001 – 50 000 117 133 18 20 1 993 747 2 354 516 3 3

50 001 – 100 000 19 21 3 3 1 350 800 1 532 716 2 2

Over 100 000 21 23 3 3 57 363 438 64 532 823 94 94

642 671 100 100 61 233 077 68 966 011 100 100

2013%

2012%

Banks, investment, finance and nominee companies and trusts 87 89

Directors and staff 0 0

Individuals 13 11

Insurance companies and pension funds 0 0

the Jse limited information – 31 march

2013 2012

Total number of shares traded (’000) Ordinary 18 705 21 141

N ordinary 1 006 2 591

Total value of shares traded (R’000) Ordinary 23 271 17 017

N ordinary 1 242 2 243

Weighted average number of shares in issue (’000) Ordinary 627 780 636 402

N ordinary 57 530 66 995

% of shares traded to weighted average number of issued shares Ordinary 3 3

N ordinary 2 4



nOTiCe OF ANNUAL GENERAL MEETING

(Incorporated in the Republic of South Africa) (Registration number 1968/011249/06)Ordinaryshares(sharecode:SER•ISIN:ZAE000029815)Nordinaryshares(sharecode:SRN•ISIN:ZAE000030144)(“Seardel” or “the company” or “the Group”)

nOtice is hereby given that the 44th annual general meeting of Seardel Investment Corporation Limited (“the company”) will be held at the offices of Hosken Consolidated Investments Limited, Block B, Longkloof Studios, Darters Road, Gardens, Cape Town, 8001 on 28 October 2013 at 10:00, at which the issues and resolutions set out in the agenda below will be considered and, if deemed fit, passed with or without modification.

general instructiOns and infOrmatiOnParticipants at the annual general meeting will be required to provide proof of identification to the reasonable satisfaction of the chairman of the annual general meeting and must accordingly provide a copy of their identity document, passport or driver’s licence at the annual general meeting for verification.

The board of directors of the company determined in accordance with section 59 of the Companies Act, 71 of 2008 (“the Companies Act”) that the record date for the purpose of determining which shareholders of the company were entitled to receive notice of the annual general meeting was 13 September 2013 and the record date for purposes of determining which shareholders of the company are entitled to participate in and vote at the annual general meeting is 18 October 2013. Accordingly, only shareholders who are registered in the register of shareholders of the company on 18 October 2013 will be entitled to participate in and vote at the annual general meeting.

All shareholders of ordinary and/or N ordinary shares in the company (“shares”) are entitled to attend, speak and vote at the annual general meeting. If you hold certificated shares (i.e. have not dematerialised your shares in the company) or are registered as an “own name” dematerialised shareholder (i.e. have specifically instructed your Central Securities Depository Participant (“CSDP”) to hold your shares in your own name on the company’s sub-register), then:

• youmayattendandvoteattheannualgeneralmeeting;alternatively

• youmayappointoneormoreproxies(whoneednotbeshareholdersofthecompany)torepresentyouattheannual general meeting by completing the attached form of proxy and returning it to the office of the transfer secretaries, to be received by no later than 24 (twenty-four) hours prior to the time appointed for the holding of the meeting.

Please note that the company intends to make provision for shareholders of the company, or their proxies, to participate in the annual general meeting by way of electronic communication. Should you wish to participate in the annual general meeting by way of electronic communication as aforesaid, you are required to give notice of such proposed participation to the company at its registered office or at the office of the transfer secretaries by no later than 12:00 on 25 October 2013.

In order for the notice to be valid, it must be accompanied by the following:

• iftheshareholderisanindividual,acertifiedcopyofhisidentitydocumentand/orpassport;

• iftheshareholderisnotanindividual,acertifiedcopyoftheresolutionadoptedbytherelevantentityauthorisingthe representative to represent the shareholder at the annual general meeting and a certified copy of the authorisedrepresentative’sidentitydocumentand/orpassport;

• avalide-mailaddressand/or facsimilenumberfor thepurposeof receivingnoticeof themanner inwhichtheelectronic participation will be conducted.

Upon receipt of the aforesaid notice and documents, the company shall notify you of the relevant details of the video-conference facilities available in Durban and/or Johannesburg at which you can participate in the annual general meeting by way of electronic communication.

Please note that if you own dematerialised shares (i.e. have replaced the paper share certificates representing the shares with electronic records of ownership under the JSE Limited’s (“JSE”) electronic settlement system held through a CSDP or broker (or their nominee)) and are not registered as an “own name” dematerialised shareholder, you are not

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nOTiCe OF ANNUAL GENERAL MEETING(continued)

a registered shareholder of the company. Accordingly, in these circumstances, subject to the mandate between yourself and your CSDP or broker, as the case may be:

• ifyouwishtoattendtheannualgeneralmeeting,youmustcontactyourCSDPorbroker,asthecasemaybe,andobtaintherelevantletterofrepresentationfromit;alternatively

• if youareunable toattend theannualgeneralmeetingbutwish tobe representedat themeeting, youmustcontact your CSDP or broker, as the case may be, and furnish it with your voting instructions in respect of the annual general meeting and/or request it to appoint a proxy. You must not complete the attached form of proxy. The instructions must be provided in accordance with the mandate between yourself and your CSDP or broker, as the case may be, within the time period required by your CSDP or broker, as the case may be. CSDPs, brokers or their nominees, as the case may be, recorded in the company’s sub-register as holders of dematerialised shares held on behalf of an investor/beneficial owner should, when authorised in terms of their mandate or instructed to do so by the person on behalf of whom they hold dematerialised shares, vote by either appointing a duly authorised representative to attend and vote at the annual general meeting or by completing the attached form of proxy in accordance with the instructions thereon and returning it to the office of the company’s transfer secretaries to be received by not less than 24 (twenty-four) hours prior to the time appointed for the holding of the meeting (excluding Saturdays, Sundays and public holidays).

On a poll the holders of ordinary shares of 25 cents each are entitled to 100 votes per ordinary share and the holders of N ordinary shares of 0,25 cent each are entitled to one vote per N ordinary share.

Unless otherwise specifically provided below, for any of the ordinary resolutions to be adopted, more than 50% of the voting rights exercised on each such ordinary resolution must be exercised in favour thereof. For any special resolutions to be adopted, more than 75% of the voting rights exercised on each special resolution must be exercised in favour thereof.

The annual report to which this notice of annual general meeting is attached provides details of:

• thedirectorsandmanagementofthecompany,includingbriefCVsofthedirectorsnominatedforre-election,onpages and ;

• themajorshareholdersofthecompanyonpage;

• thedirectors’interestsinsecuritiesonpage;and

• thesharecapitalofthecompanyinnote and an analysis of shareholders on pages to .

There are no material changes to the Group’s financial or trading position (other than as disclosed in the accompanying annual report), nor are there any legal or arbitration proceedings that may materially affect the financial position of the Group between 31 March 2013 and the reporting date. The directors wish to draw your attention to the agreement with HCI which was approved by shareholders on 8 August 2013 whereby Seardel agreed to acquire HCI’s 70% interest in HCI Invest 3 Holdco Proprietary Limited (“the SPV”), which holds a 63,9% interest in Sabido Investments Proprietary Limited as well as a litigation matter which was resolved in the Group’s favour, both of which are disclosed in the Directors’ Report on page .

The directors, namely John Copelyn, Stuart Queen, Mohamed Ahmed, Yunis Shaik, Amon Ntuli, Kevin Govender, Rachel Watson, Gys Wege and David Duncan, 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 have been made, and that the annual report and this notice provide all information required by law and the Listings Requirements of the JSE (“JSE Listings Requirements”).

PurPOseThe purpose of the annual general meeting is for the following business to be transacted and for the following special and ordinary resolutions to be proposed:

agenda1 to present the annual financial statements and reports

The consolidated audited annual financial statements of the company and its subsidiaries, including the external Auditors’, Audit Committee’s and Directors’ Reports for the year ended 31 March 2013, have been distributed as required in terms of the company’s Memorandum of Incorporation (“MOI”) and the Companies Act, 71 of 2008 (“the Companies Act”), and will be presented to shareholders at the annual general meeting.

The complete set of the consolidated audited annual financial statements are set out on pages to of the document to which this notice of annual general meeting is attached. The Director’s Report is set out on page ,



and the Audit Committee Report is set out on pages to , of the document to which this notice of annual general meeting is attached.

2 Ordinary resolutions

2.1 Re-election of Mr M Ahmed as a non-executive director – ordinary resolution number 1

“Resolved that Mr M Ahmed, who is required to retire in terms of the company’s MOI and who is eligible and has offered himself for re-election, be and is hereby elected as a director.”

In terms of the company’s MOI at least one-third of the non-executive directors must retire each year and are eligible for re-election. The directors who shall retire shall be the longest-serving directors since their last election. The board has evaluated the past performance of Mr M Ahmed and recommends his re-election. For CV details of Mr M Ahmed, please see page .

2.2 Re-election of Mr Y Shaik as a non-executive director – ordinary resolution number 2

“Resolved that Mr Y Shaik, who is required to retire in terms of the company’s MOI and who is eligible and has offered himself for re-election, be and is hereby elected as a director.”

In terms of the company’s MOI at least one-third of the non-executive directors must retire each year and are eligible for re-election. The directors who shall retire shall be the longest-serving directors since their last election. The board has evaluated the past performance of Mr Y Shaik and recommends his re-election. For CV details of Mr Y Shaik, please see page .

2.3 Election of Mr D Duncan as an executive director – ordinary resolution number 3

“Resolved that Mr D Duncan, who was appointed during the year by the board and is required to retire in terms of the company’s MOI, be and is hereby elected as a director.”

The board has evaluated the past performance of Mr D Duncan and recommends his re-election. For CV details of Mr Duncan, please see page .

2.4 Appointment of audit committee – ordinary resolutions numbers 4, 5 and 6

“To appoint the following directors as members of the audit committee of the company for the ensuing year:

2.4.1 MrMAhmed;

2.4.2 MrYShaik;and

2.4.3 Ms R Watson.”

The company, being a public listed company, must appoint an audit committee and the Companies Act requires that the members of such audit committee be appointed at each annual general meeting of a company. For CV details of the directors, please see page . The members of the audit committee have been nominated by the board of directors for appointment as members of the company’s audit committee in terms of section 94(2) of the Companies Act. The board of directors has reviewed the proposed composition of the audit committee against the requirements of the Companies Act and the Regulations under the Companies Act and has confirmed that if all the individuals referred to above are elected, the committee will comply with the relevant requirements and have the necessary knowledge, skills and experience to enable it to perform its duties in terms of the Companies Act.

2.5 Reappointment of auditors – ordinary resolution number 7

“To reappoint KPMG Inc. as independent external auditors of the company and to appoint Mr Pierre Conradie as the designated auditor for the ensuing year.”

The company’s audit committee has recommended that KPMG Inc. be reappointed as the auditors of the company for the ensuing year. The reason for ordinary resolution number 7 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 annual general meeting of the company as required by the Companies Act.

2.6 General authority over unissued shares – ordinary resolution number 8

“Resolved that all the unissued authorised shares in the company, be and are hereby placed under the control of the directors, subject to the provisions of the Companies Act and the JSE Listings Requirements, until the next annual general meeting.”

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In terms of the company’s MOI, read with the JSE Listings Requirements, the shareholders of the company may authorise the directors to, inter alia, issue any unissued ordinary shares and/or grant options over them, as the directors in their discretion think fit. The authority will be subject to the provisions of the Companies Act and the JSE Listings Requirements. The directors have decided to seek annual renewal of this authority in accordance with best practice.

2.7 Authorisation of directors – ordinary resolution number 9

“Resolved that each and every director of the company be and is hereby authorised to do all such things and sign all such documents as may be necessary or incidental to the implementation of the resolutions passed at this annual general meeting.”

3 non-binding resolution

3.1 To approve the Remuneration Report for the year ended 31 March 2013 – non-binding resolution number 1

“Resolved that the Remuneration Report is approved by way of a non-binding advisory vote.”

The directors table the Remuneration Report for the year ended 31 March 2013, as set out in the Integrated Report accompanying this notice of annual general meeting. The report is to be submitted for a non-binding advisory vote of shareholders in terms of the King Report on Corporate Governance in South Africa. The proposed vote enables shareholders to express their views on the remuneration practices adopted by the company.

As this is not a matter that is required to be resolved or approved by shareholders, no minimum voting threshold is required. Nevertheless, for record purposes, the minimum percentage of voting rights that is required for this resolution to be adopted as a non-binding advisory vote is 50% (fifty per cent) of the voting rights plus 1 (one) vote to be cast on the resolution.

4 special resolutions

4.1 General authority to issue shares for cash – special resolution number 1

“Resolved that the directors of the company be and are hereby authorised by way of a general authority to issue (which shall for the purposes of the JSE Listings Requirements include the sale of treasury shares) for cash (as contemplated in the JSE Listings Requirements) all or any of the authorised but unissued shares in the capital of the company, including options over such shares, as and when they in their discretion deem fit, subject to the Companies Act, the MOI of the company and the JSE Listings Requirements as presently constituted and which may be amended from time to time, and provided that such issues for cash may not, in the aggregate, in any 1 (one) financial year, exceed 15% (fifteen per cent) of the number of shares of the relevant class of shares issued prior to such issue.”

Additional requirements imposed by the JSE Listings Requirements

It is recorded that the company may only make an issue of shares for cash under the above general authority if the following JSE Listings Requirements are met:

• theshares,whicharethesubjectoftheissueforcash,mustbeofaclassalreadyinissue,orwherethisisnot the case, must be limited to such equity securities or rights that are convertible into a class already in issue;

• thegeneralauthorityshallonlybevaliduntilthecompany’snextannualgeneralmeetingorfor15(fifteen)monthsfromthedateofpassingofthisordinaryresolution,whicheverperiodisshorter;

• apaidpressannouncementwillbepublishedgivingfulldetails,includingthenumberofsharesissued,theaverage discount to the weighted average traded price of the shares over the 30 (thirty) days prior to the date that the price of the issue was agreed in writing between the company and party/ies subscribing for such shares and the expected effect on the net asset value per share, net tangible asset value per share, earnings per share and headline earnings per share at the time of any issue representing, on a cumulative basiswithin1(one)financialyear,5%(fivepercent)ofthenumberofsharesinissuepriortothatissue;

• thatissuesintheaggregateinany1(one)financialyearmaynotinrespectof:

– ordinary shares exceed 94 403 529 representing 15% (fifteen per cent) of the ordinary shares of the company, excluding treasury shares, taking into account the dilution effect of convertible equity securitiesandoptionsinaccordancewiththeJSEListingsRequirements;and

– N ordinary shares exceed 8 266 452 representing 15% (fifteen per cent) of the N ordinary shares of the company, excluding treasury shares, taking into account the dilution effect of convertible equity securitiesandoptionsinaccordancewiththeJSEListingsRequirements;




• indeterminingthepriceatwhichanissueofsharesmaybemadeintermsofthisgeneralauthority,themaximum discount permitted will be 10% (ten per cent) of the weighted average traded price on the JSE of those shares measured over the 30 (thirty) days prior to the date that the price of the issue is agreed to betweenthecompanyandtheparty/iessubscribingfortheshares;and

• anyissuewillonlybemadeto“publicshareholders”asdefinedbytheJSEListingsRequirementsandnotto related parties.

4.2 To approve the annual fees to be paid to non-executive directors as services as directors for the 12-month period from 1 October 2013 to 30 September 2014 – special resolution number 2

“Resolved that the following annual fees to be paid to the non-executive directors of the company for services as directors for the 12-month period from 1 October 2013 to 30 September 2014, are hereby approved.

Non-executive director

Directors’ fees

R

Audit committee fees

R

Remuneration committee fees

RJ A Copelyn 100 000 – 40 500Y Shaik 100 000 40 500 40 500M h Ahmed 100 000 40 500 –T G Govender 100 000 – –R Watson 100 000 40 500 –”

The reason for this special resolution is to obtain the approval of shareholders by way of special resolution for the payment of remuneration to its non-executive directors in accordance with the requirements of the Companies Act. The effect of this special resolution, if passed, is that the company will be able to pay its non-executive directors for the services that they render to the company as directors without requiring further shareholder approval until the next annual general meeting.

4.3 General authority to repurchase company shares – special resolution number 3

“Resolved that the company hereby approves, as a general approval contemplated in JSE Listings Requirement 5.72, the acquisition by the company or any of its subsidiaries from time to time of the issued shares of the company, upon such terms and conditions and in such amounts as the directors of the company may from time to time determine, but subject to the provisions of the Companies Act and the JSE Listings Requirements as presently constituted and which may be amended from time to time, and provided that:

• acquisitionsbythecompanyanditssubsidiariesofsharesinthecapitalofthecompanymaynot,inthe aggregate, exceed in any one financial year 20% (twenty per cent) (or 10% (ten per cent) where such acquisitions relate to the acquisition by a subsidiary) of the company’s issued share capital of the class of the repurchased shares from the date of the grant of this general authority;

• anysuchacquisitionofsharesshallbeeffectedthroughtheorderbookoperatedbytheJSEtradingsystem and done without any prior understanding or arrangement between the company and the counterparty (reported trades are prohibited);

• thecompany(oranysubsidiary)isauthorisedtodosointermsofitsMOI;

• thisgeneralauthorityshallonlybevaliduntilthecompany’snextannualgeneralmeeting,providedthat it shall not extend beyond 15 (fifteen) months from the date of passing of this special resolution;

• indeterminingthepriceatwhichthecompany’ssharesareacquiredbythecompanyoritssubsidiariesin terms of this general authority, the maximum premium at which such shares may be acquired may not be greater than 10% (ten per cent) above the weighted average of the market price at which such shares are traded on the JSE for the 5 (five) business days immediately preceding the date the repurchase transaction is effected;

• atanypointintime,thecompanymayonlyappointoneagenttoeffectanyrepurchase(s)onthecompany’s behalf;

• thecompanyoritssubsidiariesmaynotrepurchasesharesduringaprohibitedperiodasdefinedinparagraph 3.67 of the Listings Requirements of the JSE unless there is a repurchase programme in place and the dates and quantities of shares to be repurchased during the prohibited period are fixed and full details thereof have been disclosed in an announcement on SENS prior to commencement of the prohibited period;

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• inthecaseofaderivative(ascontemplatedintheJSEListingsRequirements)thepriceofthederivativeshall be subject to the limits set out in paragraph 5.84(a) of the JSE Listings Requirements; and

• apaidpressannouncementwillbepublishedassoonasthecompanyand/oritssubsidiarieshas/have acquired shares constituting, on a cumulative basis 3% (three per cent) of the number of shares of the class of shares repurchased in issue at the time of granting of this general authority, and each time the company acquires a further 3% (three per cent) of such shares thereafter, which announcement shall contain full details of such acquisitions.”

Statement by the board of directors of the company

Pursuant to and in terms of the JSE Listings Requirements, the board of directors of the company hereby state that:

a) it is their intention to utilise the general authority to acquire shares in the company if at some future date the cash resources of the company are in excess of its requirements or there are good grounds for doing so. In this regard the directors will take account of, inter alia, an appropriate capitalisation structure for thecompany,thelong-termcashneedsofthecompany,andtheinterestsofthecompany;

b) in determining the method by which the company intends to acquire its shares, the maximum number of shares to be acquired and the date on which such acquisition will take place, the directors of the company will only make the acquisition if at the time of the acquisition they are of the opinion that:

• thecompanyand its subsidiarieswould,after the repurchase,beable topay theirdebtsas theybecome due in the ordinary course of business for the next 12 (twelve) months after the date of this noticeoftheannualgeneralmeeting;

• the consolidated assets of the company and its subsidiaries, fairly valued in accordance withInternational Financial Reporting Standards and recognised and measured in accordance with the accounting policies used in the latest audited financial statements, would, after the repurchase, be in excess of the consolidated liabilities of the company and its subsidiaries for the next 12 (twelve) monthsafterthedateofapprovalofthisspecialresolution;

• theissuedsharecapitalandreservesofthecompanyanditssubsidiarieswould,aftertherepurchase,be adequate for the ordinary business purposes of the company or any acquiring subsidiary for the next12(twelve)monthsafterthedateofapprovalofthisspecialresolution;and

• theworkingcapitalavailabletothecompanyand itssubsidiarieswould,aftertherepurchase,beadequate for the ordinary business purposes for the next 12 (twelve) months after the date of approvalofthisspecialresolution;and

c) they will not make any repurchase until such time as the company’s sponsors have provided the JSE with a letter in relation to the working capital statement set out above (as required in terms of the JSE Listings Requirements).

Reason and effect of special resolution number 3

The reason for special resolution number 3 is to grant the company a general authority in terms of the JSE Listings Requirements for the acquisition by the company, or any of its subsidiaries, of shares issued by the company, which authority shall be valid until the earlier of the next annual general meeting of the company, and the date that is 15 (fifteen) months from the date of this annual general meeting. The passing of this special resolution will have the effect of authorising the company or any of its subsidiaries to acquire shares issued by the company.

4.4 General authority to provide financial assistance in terms of sections 44 and 45 of the Companies Act – special resolution number 4

“Resolved as a special resolution that, to the extent required by sections 44 and 45 of the Companies Act, the board of directors may, subject to compliance with the requirements of the company’s MOI and the Companies Act, each as presently constituted and amended from time to time, as a general approval, authorise the Company to provide any direct or indirect financial assistance by way of a loan, guarantee, the provision of security or otherwise to:

• thecompany’spresentorfuturesubsidiariesand/oranyothercompanyorcorporationthatisorbecomes related or interrelated to the company, or any person wishing to subscribe for any option, oranysecuritiesissuedortobeissuedbythecompany’spresentorfuturesubsidiariesand/oranyother company or corporation that is or becomes related or interrelated to the company, for the




purpose of, or in connection with, the subscription of any option, or any securities issued or to be issued by the company or a related or interrelated company, or for the purchase of any securities issued or to be issued by the company, or for the purchase of any securities of the company or interrelated company; or

• anyoneormorerelatedorinterrelatedcompaniesorcorporations,ortoamemberofanyrelatedorinterrelated company or corporation, or to a person related or interrelated to any such companies or corporations (related or interrelated will herein have the meaning attributed to such terms in section 2 of the Companies Act),

on the terms and conditions and for the amounts that the board of directors may determine, and that any of such financial assistance may be provided at any time during the period commencing on the date of the adoption of this resolution and ending two years after such date.”

Reason for and effect of special resolution number 4:

As part of the normal conduct of the business of the company and its subsidiaries from time to time, the company, where necessary, provides financial assistance to its related and interrelated companies and entities (as contemplated in the Companies Act) including the provisions of guarantees and other forms of security to third parties which provide funding to the company’s subsidiaries, whether by way of loans, subscribing for shares (including preference shares) or otherwise.

In the circumstances and in order to ensure that, among other things, the company and its subsidiaries and other related and interrelated companies and entities continue to have access to, and are able to appropriately structure their financing for purposes of funding their corporate and working capital requirements, it is necessary that the company obtains the approval of shareholders in terms of this special resolution number 4.

Sections 44 and 45 of the Companies Act provide that the financial assistance required can only be provided pursuant to a special resolution of the shareholders, adopted within the previous two years, which resolution must have approved such financial assistance either for the specific recipient, or generally for a category of potential recipients (and the specific recipient falls within that category), and the directors must be satisfied that:

• immediatelyafterprovidingthefinancialassistance,thecompanywillsatisfytheSolvencyandLiquidityTest,asdefinedinsection4oftheCompaniesAct;and

• thetermsunderwhichthefinancialassistanceisproposedtobegivenarefairandreasonabletothecompany.

The passing of this special resolution number 4 will have the effect of authorising the company to provide direct or indirect financial assistance in accordance with sections 44 and 45 of the Companies Act, for a period of two years after the adoption of this resolution.

This special resolution does not authorise the provision of financial assistance to a director or prescribed officer of the company.

4.5 Amendment to the Seardel Long Term Incentive Plan – special resolution number 5

“Resolved that the Seardel Long Term Incentive Plan (“the Plan”) adopted by the company at its annual general meeting on 29 October 2009 be and is hereby amended in accordance with the third deed of amendment tabled at the annual general meeting and initialled by the chairperson for purpose of identification.”

In terms of paragraph 14.2 of Schedule 14 of the Listings Requirements, read with the company’s MOI, the requisite percentage of voting rights for this resolution to be adopted is at least 75% of the voting rights exercised on this resolution. All votes attaching to shares which are owned or controlled by persons who are existing participants in the Plan, that have been acquired in terms of the Plan and which may be impacted by the amendments to the Plan, shall be excluded from voting on this resolution.

The third deed of amendment to the Plan document will be available for inspection by shareholders at the company’s registered office during normal business hours from 08:00 to 16:30. Shareholders can also request a copy of the third deed of amendment to be posted to them by contacting the Group company secretary, HCI Managerial Services Proprietary Limited, at Block B, Longkloof Studios, Darters Road, Gardens, Cape Town, 8001.

Reason for and effect of special resolution number 5

The Plan was established in terms of the Plan agreement entered into between, inter alia, the Seardel Long Term Incentive Trust (“the Trust”) and the company, and to which certain subsidiaries of the company have

121


and may in future bind themselves. The Plan was approved by shareholders at the annual general meeting on 29 October 2009 and has previously been amended on two occasions with the requisite consent of shareholders.

The reason for this special resolution number 5 is to amend the Plan as follows:

• ThePlancurrentlyenablesthecompany’sboardtograntselectedemployeesoftheGroupwithoptionsto acquire ordinary shares in the company. The Plan will be amended to allow the company’s board to grant options in respect of either (or both) ordinary shares or N ordinary shares, and not only in respect of ordinary shares as is currently the position. The proposed amendments will not affect the maximum number of shares that may be utilised for the Plan (i.e. 63 500 000 in the aggregate). The maximum number of shares that any one employee may acquire in terms of the Plan shall also remain the same (i.e. 12 700 000 shares, irrespective of whether they are N ordinary shares or ordinary shares).

• ThePlanwillbeamendedtorectifythedefinitionof“MiddleMarketPrice”soastorefertothevolumeweighted average price of the relevant class of shares as traded on the JSE during the 20 business day period prior to the relevant date (as opposed to the volume weighted average of the middle market price of the shares, which is incorrect). The definition is utilised in determining the price at which options are granted to participants.

• ThePlanwillbeamended toclarify that ifa subsidiary in theGroupthatemploysparticipants in thePlan (“Employer Company”) ceases to be part of the Group for any reason, a change in control of that Employer Company will have taken place, with the result that any unexercised options granted after the date on which the third deed of amendment became effective and which are held by participants in the Plan who are employees of that Employer Company, will lapse.

• ThePlanwillbeamendedtoprovidethat,if: – thesharesofanEmployerCompanyarelistedontheJSE;or – the shares of any company which is a subsidiary of Seardel, and of which an Employer Company is a

subsidiary,arelistedontheJSE;or – the Seardel board resolves that the shares of a company contemplated above will be listed on the JSE

within a period of 12 months after the adoption of such resolution,

then, the Seardel board will have the discretion to either allow the unexercised options granted in terms of the Plan after the date on which the third deed of amendment became effective to continue to exist under the Plan, or to exchange them for new options in the newly listed company on materially the same terms.

5 to transact such other business which may be transacted at an annual general meeting

By order of the board

hci managerial services Proprietary limitedCompany Secretary

Cape Town16 September 2013




FORM OF PrOXy

seardel investment corporation limited(Incorporated in the Republic of South Africa) (Registration number 1968/011249/06)Ordinaryshares(sharecode:SER•ISIN:ZAE000029815)Nordinaryshares(sharecode:SRN•ISIN:ZAE000030144)(“Seardel” or “the company” or “the Group”)

I/We,____________________________________________________________________________________ (name in full)

of address ___________________________________________________________________________________________

being a registered holder of __________ ordinary shares and __________ N ordinary shares in the company, hereby appoint

1. ___________________________________________________________________________________ or failing him/her



the chairman of the meeting, as my/our proxy to vote for me/us and on my/our behalf at the annual general meeting of the company to be held at 10:00 on, 28 October 2013 at the offices of HCI, Block B, Longkloof Studios, Darters Road, Gardens, Cape Town and at any adjournment thereof as follows:

agenda description for against abstain2 Ordinary resolutions2.1 Election of director: Mr M Ahmed (ordinary resolution No. 1)2.2 Election of director: Mr Y Shaik (ordinary resolution No. 2)2.3 Election of director: Mr D Duncan (ordinary resolution No. 3)2.4.1 Appointment of audit committee member: Mr M Ahmed (ordinary resolution No. 4)2.4.2 Appointment of audit committee member: Mr Y Shaik (ordinary resolution No. 5)2.4.3 Appointment of audit committee member: Ms R Watson (ordinary resolution No. 6)2.5 Appointment of auditor (ordinary resolution No. 7)2.6 General authority over unissued shares (ordinary resolution No. 8)2.7 General authorisation of directors to implement resolutions passed (ordinary

resolution No. 9)3 non-binding resolution3.1 To approve the Remuneration Report for the year ended 31 March 2013 (non-

binding resolution No. 1)4 special resolutions4.1 General authority to issue shares (special resolution No. 1)4.2 To approve annual fees to be paid to non-executive directors (special resolution No. 2)4.3 General authority to repurchase company shares (special resolution No. 3)4.4 General authority to provide financial assistance in terms of sections 44 and 45 of

the Companies Act (special resolution No. 4)4.5 Amendment to the Seardel Long Term Incentive Plan (special resolution No. 5)

Indicate instruction to proxy by way of a cross in the space provided above (100 votes per ordinary share and one vote per N ordinary share).

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

Signed this _______________________________________ day of________________________________________ 2013.

Signature ____________________________________________

Assisted by me (where applicable)

Please read the notes overleaf


nOtes tO the PrOxy fOrm1 A form of proxy is only to be completed by those shareholders who are: • holdingsharesincertificatedform;or • recordedinthesub-registerindematerialisedelectronicformin“ownname”.

2 If you have already dematerialised your shares through a Central Securities Depository Participant (“CSDP”) or broker, other than with “own name” registration, and wish to attend the annual general meeting, you must request your CSDP or broker to provide you with a letter of representation or you must instruct your CSDP or broker to vote by way of proxy on your behalf in terms of the agreement entered by into yourself and the CSDP or broker.

3 A shareholder entitled to attend and vote at the meeting is entitled to appoint an individual as a proxy, who need not be a shareholder of the company, to attend, participate in and vote at a shareholders’ meeting on the shareholder’s behalf, and may appoint more than one proxy to exercise voting rights attached to different securities held by the shareholder.

4 The proxy may delegate his/her authority to act on the shareholder’s behalf to another person, subject to any restriction set out in this proxy form.

5 Every person present and entitled to vote at the meeting as a shareholder or as a proxy or as a representative of a body corporate shall, on a show of hands, have one vote only, irrespective of the number of shares such a person holds or represents, but in the event of a poll, a shareholder shall be entitled to that proportion of the total votes in the company which aggregate amount of the nominal value of the shares held by such shareholder bears to the aggregate amount of the nominal value of all shares issued by the company.

6 Please insert the relevant number of shares/votes and indicate with an X in the appropriate spaces on the face thereof, how you wish your votes to be cast. If you return this form duly signed without specific directions, the proxy will vote or abstain from voting at his/her discretion.

7 A deletion of any printed details and the completion of any blank space/s need not be signed or initialled. Any alteration must be initialled.

8 The chairman of the annual general meeting shall be entitled to decline to accept the authority of the signatory under a power of attorney, or on behalf of a company, unless the power of attorney or authority is produced.

9 The signatory may insert the name of any person/s that the signatory wishes to appoint as his/her proxy, in the blank space/s provided for that purpose.

10 When there are joint holders of shares and if more than one such joint holder be present or represented, then the person whose name stands first in the register in respect of such shares or his/her proxy, as the case may be, shall alone be entitled to vote in respect thereof.

11 A minor should be assisted by his parents or legal guardian unless the relevant documents establishing his legal capacity are produced.

12 The completion and lodging of this proxy form will not preclude the signatory from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof should such signatory wish to do so.

13 A shareholder’s instructions must be indicated by the insertion of a cross, or where applicable, the relevant number of votes exercisable by the shareholder, in the appropriate box of this proxy form.

14 If the signatory does not indicate how he/she wishes to vote in the appropriate place/s on the face hereof in respect of the resolution, his/her proxy shall be entitled to vote as he/she deems fit in respect of the resolutions.

15 If the shareholding is not indicated on the proxy form, the proxy will be deemed to be authorised to vote the total shareholding.

16 The chairman of the general meeting may reject or accept any proxy form which is completed other than in accordance with these instructions, provided that he is satisfied as to the manner in which a shareholder wishes to vote.

17 The appointment of the proxy or proxies will be suspended at any time and to the extent that the shareholder chooses to act directly and in person in the exercise of any of the shareholder’s rights as a shareholder at the annual general meeting.

18 The appointment of your proxy is revocable unless you expressly state otherwise in this proxy form. As the appointment of the proxy is revocable, the shareholder may revoke the proxy appointment by (i) cancelling it in writing, or making a later inconsistent appointment of a proxy and (ii) delivering a copy of the revocation instrument to the proxy, and to the company. Please note the revocation of a proxy appointment constitutes a complete and final cancellation of the shareholder’s proxy’s authority to act on the shareholder’s behalf as of the later of (i) the date stated in the revocation instrument, if any, or (ii) the date on which the revocation instrument was delivered to the company and the proxy as aforesaid.

19 If the proxy form has been delivered to the company, as long as that appointment remains in effect, any notice that is required by the Companies Act or the company’s memorandum of incorporation to be delivered by the company to the shareholder will be delivered by the company to the shareholder or the shareholder’s proxy or proxies, if the shareholder has directed the company to do so, in writing and paid a reasonable fee charged by the company for doing so.

20 The appointment of the proxy remains valid only until the end of the relevant meeting or any adjournment or postponement thereof or for a period of one year, whichever is shortest, unless it is revoked by the shareholder before then on the basis set out above.

21 Forms of proxy must be returned by the shareholders concerned to the registered office of the company or the transfer secretaries, Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) so as to be received, for administrative purposes, by no later than 10:00 on Friday, 25 October 2013.


seardel investment cOrPOratiOn limited (“Seardel” or “the Group”)

The company’s shares are listed under the Consumer Goods – Personal and Household Goods Sector of the JSE Limited.

registration number: 1968/011249/06 (Incorporated in the Republic of South Africa)

Jse share code: SER isin: ZAE000029815Jse share code: SRN isin: ZAE000030144

registered office: 1 Moorsom Avenue, cnr Bofors Circle and Moorsom Avenue, Epping Industria II 7460 PO Box 524, Eppindust 7475, South Africa

directors: J A Copelyn* (Chairman), Adv N N Lazarus*^ (Lead Independent Director), M H Ahmed*^, D Duncan, T G Govender*, A M Ntuli, S A Queen (Chief Executive Officer), Y Shaik*^, R Watson*^, G D T Wege (Financial Director) (* Non-executive ^ Independent)

company secretary: HCI Managerial Services Proprietary Limited

transfer secretaries: Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg 2001 PO Box 61051, Marshalltown 2107

auditors: KPMG Inc.

sponsors: Investec Bank Limited

CORPORATE infOrMATiOn


SER ISIN ZAE000029815 SRN ISIN ZAE000030144

Designed by GroundPepper in Cape Town

Made in southern Africa

www.seardel.co.za


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