integrated report 2013 - jse · susta inab l ty integrated sustainability report ... member: audit...

i n t e g r a t e d r e p o r t 2 0 1 3

Mission stateMent

Brimstone investment Corporation seeks to be profitable, empowering and to have a

positive Social impact on the businesses and the individuals with whom it is involved,

including shareholders, e mployees, suppliers, customers and the greater community.

Corporate profile

Brimstone is a black controlled and managed investment company incorporated and

domiciled in the republic of South africa, employing in excess of 3 200 employees in

its subsidiaries and in excess of 16 000 in its associates and investments. Brimstone

seeks to achieve above average returns for its shareholders by investing in wealth

creating businesses and entering into strategic alliances to which it contributes capital,

innovative ideas, management expertise, impeccable empowerment credentials and a

values driven corporate identity.

Integrated report 2013

Brimstone investment Corporation Limited 1

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contents

corporate overvIewsalient Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Five Year Financial review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Corporate information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Five Year share price performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Chairman’s review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Board of directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

executive directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

tribute to nelson mandela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Group profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

sustaInabIlItyintegrated sustainability report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

corporate governanceintrinsic net asset value report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52

social & ethics Committee report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54

remuneration report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

audit & risk Committee report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

audIted annual fInancIal statementsContents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

notes to the annual Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

notice of annual General meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

Curriculum vitae . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164

proxy Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

for the year ended 31 december 2013

2013 Integrated report

2 Brimstone investment Corporation Limited

percentager’000 2013 2012 Changerevenue 2 086 376 1 946 472 7%operating profit 64 386 131 038 (51%)Headline earnings 460 581 844 362 (45%)total assets 6 799 593 5 725 464 19%

Weighted average number of shares in issue net of treasury shares (000’s) 244 414 244 039 0%shares in issue at end of year net of treasury shares (000’s) 244 531 244 108 0%

performance per share (cents)Headline earnings 188 .4 346 .0 (46%)net asset value 1 324 .0 1 153 .1 15%

salIent fInancIal HIgHlIgHts

fIve year fInancIal revIew

restated 12 months

ended 12 months

ended 12 months

ended 12 months

ended 12 months

ended 31 december 31 december 31 december 31 december 31 december

2013 2012 2011 2010 2009operating results (r’ 000)revenue 2 086 376 1 946 472 1 867 915 1 796 904 855 731 operating profit 64 386 131 038 132 623 314 237 165 611 Headline earnings 460 581 844 362 429 883 415 418 311 298

balance sheet (r’000)total assets 6 799 593 5 725 464 4 604 804 3 619 830 5 596 248 net assets 3 372 120 2 929 986 2 113 630 1 673 122 2 568 462

performance per share (cents)Headline earnings 188 .4 346 .0 176 .3 172 .7 130 .7 dividend 30 .0 25 .0 18 .0 15 .0 32 .0 special dividend 10 .0 — — — — net asset value 1 324 .0 1 153 .1 819 .6 643 .9 1 030 .3 intrinsic net asset value 1 708 .8 1 473 .7 981 .0 774 .0 1 136 .6

share statisticsWeighted average number of shares in issue net of treasury shares 244 413 514 244 038 657 243 878 492 240 499 546 238 237 582 shares in issue at end of year net of treasury shares 244 531 075 244 108 075 243 873 731 243 891 472 239 323 989 Closing share price: ordinary (cents) 1 400 1 125 1 000 760 810 Closing share price: “n” ordinary (cents) 1 400 1 195 820 510 780

market capitalisation: ordinary shares (r’000)* 598 638 481 364 428 298 355 491 365 404 market capitalisation: “n” ordinary shares (r’000)* 2 824 798 2 405 776 1 648 560 1 359 049 1 740 571 total (r’000) 3 423 436 2 887 140 2 076 858 1 714 540 2 105 975

*Net of treasury shares




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directors F robertson (59) (executive Chairman) †∞ma Brey (59) (Chief executive officer) †∞LZ Brozin (58) (Financial director) †pL Campher (66) (Lead independent director) ^º*>#∞•mJt Hewu (50) ^º#•n Khan (57) ^º>*∞Kr moloko (45) ^º>mK ndebele (64) ^º#•La parker (60) ^º>*Fd roman (50) ^º>

membership of committees at 31 december 2013Non-Executive ^Independent ºExecutive †Member: Audit Committee >Member: Nominations Committee #Member: Remuneration Committee€•Member: Investment Committee *Member: Social and Ethics Committee ∞

company secretarytiloshani moodley Ba (Law) LLB

chief financial officermichael o’dea BCom (Ca)sa

sponsornedbank Capital(a division of nedbank Ltd)135 rivonia roadsandton 2196po Box 144, Johannesburg 2000+27 11 295 8602

company registration number1995/010442/06

corporate InformatIon

registered office1st Floor, slade HouseBoundary terraces1 mariendahl Lane, newlands 7700po Box 44580, Claremont 7735

telephone number+27 21 683 1444

fax number+27 21 683 1285

websitewww .brimstone .co .za

emailinfo@brimstone .co .za

bankersnedbank LtdFirst national Bank of southern africa Ltd

auditorsdeloitte & touche

Internal auditorsKpmG

attorneysCliffe dekker Hofmeyr inc .edward nathan sonnenbergs

transfer secretariesComputershare investor services (pty) Ltd70 marshall street, Johannesburg 2001po Box 61051, marshalltown 2107+27 11 370 7700




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s p e C i a L d i v i d e n d o r d i n a rY d i v i d e n d



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cHaIrman’s revIew

two decadesit was on the 10th of may 1994 that nelson mandela took the oath to become the first black president of south africa . in his inaugural speech he promised democratic freedom to the nation and said, “never, never and never again shall it be that this beautiful land will again experience the oppression of one by another and suffer the indignity of being the skunk of the world . Let freedom reign . the sun shall never set on so glorious a human achievement!” What a bold statement by such a visionary and champion of human rights! Who would have imagined the south africa we have today? the successes of our wonderful nation are vastly doc-umented, yet there still lies an immense responsibility on each and every south african, individual and corporate to ensure that the vision of madiba remains alive and real . this year south africa celebrates twenty years of democracy . in 1994, this institution of democracy was new or almost foreign to our nation, and so was its leadership . new structures had to be created starting from the constitution itself . our constitution is not just south africa’s pride but a constitution hailed and respected by the rest of the world . madiba envisioned a constitution “for all”, and true to his word this constitution is a sterling example of what can be achieved when all participants’ views are respected . the history of Brimstone closely mirrors the history of our democracy . Whilst the country attained freedom in 1994, a seed and vision of a new generation economic participant was planted and Brimstone was founded in 1995 . similar to the new democracy, the realm of big business was new to the founders of Brimstone and all the structures had to be created; structures that would uphold good governance and be accountable to all its stake-holders . Brimstone today is a good example of real empowerment – it has enabled previously marginalised individuals to participate in the mainstream economy and added significant value to its stakeholders . it proves what can achieved when all stakeholders’

views are respected and aligned . Brimstone will continue to build on this premise as it enters the third decade of its existence . the history of Brimstone and south africa is even further closely paralleled, as both lost great leaders in the recent past – south africa, madiba, and Brimstone, prof Gerwel . one sees these two paths so parallel yet so close . the relationship and deep friendship between these two leaders was special and intertwined .

macro-economic overviewthe performance of the global economy in 2013 reflected a role reversal of the major players . some of the leading economies started showing signs of recovery after years of slower growth than many emerging-market counterparts . the international monetary Fund (imF) forecasts that world output will grow 3 .6% in 2014, compared to the 2 .9% estimate for 2013 . as the year unfolded, the euro zone showed signs of recovery from the recession . the Us economy picked up momentum in 2013 as the drag from changes in government spending and taxation faded . China’s economy expanded at the slowest rate in 20 years, stalling growth across the region . However, the second half of the year brought reassurance of the resilience of the world’s second-largest economy . south africa itself has much to celebrate by way of economic progress over the past 20 years . Goldman sachs in its report titled “two decades of Freedom” identified some of the key milestones for the local economy . these include: improved credit rating from sub-investment grade to investment grade, increase in Gdp from $136 billion to $400 billion, decrease in inflation from an average 14% to 6% . tax receipts increased from r114 billion to r814 billion with a wider tax net including 13 .7 million taxpayers . Gross gold and forex reserves increased from $3 billion to $50 billion, and the total market capitalisation of the Jse increased from $101 billion to $800 billion over the two decades .

“ Who would have imagined the south africa we have today? the successes of our wonderful nation are vastly documented, yet there still lies an immense responsibility on each and every south african, individual and corporate to ensure that the vision of madiba remains alive and real .”



cHaIrman’s revIew (contInued)

the south african economy recorded erratic quarter-to-quarter growth in 2013, with the overall growth in real output for the year estimated at 1 .9% . apart from longer-term impediments to growth such as constrained electricity supply and logistical bottlenecks, production in the first and last quarter of 2013 was constrained by widespread strikes . south africa’s erratic growth pattern could well continue through 2014, with protracted industrial action again affecting production . the imF revised its growth forecast for south africa downwards to 2 .8% for 2014 . the investor dynamics generated by the tapering announce-ments in the Usa, the ongoing labour strife and the sizeable current account deficit contributed to a further depreciation in the exchange value of the rand in the final weeks of 2013 . although the pass-through of the depreciation in the exchange rate to inflation remained muted, prices and expectations started to respond; bolstered by higher food and fuel prices, consumer price inflation increased to just below the 6% upper limit of the inflation target range . Food prices have been the main contributor to the increase in domestic inflation with prices increasing by 3 .5% in december . Global food prices generally declined during 2013 amidst improved wheat and maize harvests . extended periods of drought locally have increased the spot prices of local maize . the south african reserve Bank’s (sarB) forecast average inflation rate for 2014 is higher at 6 .3%, and 6% for 2015 . the sarB expected inflation to breach the upper end of the target range in the second quarter of 2014, and to reach a peak of 6 .6% in the final quarter of the year, before declining to 6% in the second quarter of 2015 . average wage settlements in 2013 remained just below 8% throughout the year . modest growth in employment in the formal sector was reported for the year, with the public sector rather than the private sector responsible for the more jobs created . according to the Quarterly employment statistics (Qes) survey of statistics south africa, formal sector employment increased by 13,400 in the year to the third quarter of 2013, or by 0 .2% . in the third quarter of 2013, employment losses were most pronounced in mining and construction . Unemployment still remained unacceptably high at approximately 24% of the workforce .

strategic updateBrimstone is well resourced, has cash resources and immediate access to significant funding facilities, and will continue to pursue opportunities that fit our criteria of strong cash flows, solid management, real assets and socially responsible policies . We believe in long-term relationships and our partnership approach has made us a partner of choice in the universe of black controlled entities . our primary objective remains to enhance and deliver value to our shareholders . this is proven in our track record of building nav and paying cash dividends to shareholders . Whilst the group’s key investment sectors to date are the defensive sectors of food, financial services and healthcare, it has also seeded an enterprise development fund which has a broader focus . For the year under review total assets increased by r1 .1 billion to r6 .8 billion . Brimstone’s intrinsic net asset value (inav) grew by r582 million from the previous year to r4 .19 billion . Headline earnings per share decreased from 346 cents per share to 188 .4 cents per share . it should be noted that the results for the year were materially influenced by the lower fair market value adjustments of r557 .4 million in the reporting period compared to r1 .05 billion in the prior period . the prior period reported bigger gains in the price of Life Healthcare shares which is the single largest contributor to the group’s inav . this year, 2014, we proudly celebrate the 50th birthday of our subsidiary sea Harvest . the business has truly stood the test of time through very challenging conditions including changing legislation, and we are proud that it is the market leader in the supply of white fish . it still remains the largest employer on the West Coast town of saldanha and one of the biggest economic drivers on the entire west coast of south africa .

corporate social responsibilityas corporates we have a responsibility of growth, profitability, creating sustainable jobs, eradicating poverty, and generating opportunities for all south africans . our support programmes are primarily directed at developing and empowering previously disadvantaged groupings . i am

“ as corporates we have a responsibility of growth, profitability, creating sustainable jobs, eradicating poverty, and generating opportunities for all south africans .”



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pleased to advise that the Brimstone empowerment share trust (Best) has allotted 140 000 shares to four new beneficiaries during the year . the recipients of these shares were: sinothando (Kimberley, northern Cape), port elizabeth sentraal Khayelethu Youth Centre (port elizabeth, eastern Cape), missionvale Care Centre (port elizabeth, eastern Cape), and Cheshire Home summerstrand (port elizabeth, eastern Cape) . We trust that these shares will make a big difference in the lives of many truly deserving beneficiaries . to date Best has allotted 1 090 000 Brimstone ‘n’ ordinary shares to 23 beneficiaries across the country . the value of these shares at year end was approximately r 15 .3 million . at a meeting of Best beneficiaries in the latter half of last year, we were pleased to hear of the positive contribution and impact our Brimstone shares have made on the beneficiary organisations and their dependants . Brimstone was founded with the support of economically marginalised individuals, mainly from the Cape . almost two decades on, most of these initial investors are still proud share-holders of Brimstone . during the forthcoming year we will further cement the relationship between the company and all its stake-holders as we embark on the journey into the next decade of our existence . We continue to provide a personal service to all shareholders, and particularly to many of those for whom Brimstone is their only investment . We are proud of our track record in creating wealth for all shareholders by way of capital growth, a steady stream of dividends, and unbundling certain of the Company’s assets to its shareholders .

governance and the boardthis is our third integrated report and we remain cognisant that corporate governance should be an integral part of the way we do business . For this reason we continuously review, modify or

adapt our risk and governance policies to ensure a sustainable, responsible business . mr pL Campher continues as lead independent non-executive director . We also welcome to the board mrs Kr moloko and look forward to her input and guidance as a new board member .

dividend distributionthe board considered the results and approved a final dividend of 30 cents per share, and a special dividend of 10 cents per share payable to shareholders on 29 april 2014 .

acknowledgementsi would like to thank my fellow executive directors, mustaq Brey and Lawrie Brozin for their continued support as a robust executive team . i wish to thank the entire board for their invaluable good counsel and continued dedication to excellence in corporate governance, always placing the interest of our shareholders first . i also wish to thank all our shareholders who continue to support, trust and believe in the Company’s ability to deliver to their expectations . thank you to our executive team and staff of all our subsidiaries and investments for their continued delivery on our growth strategy . may Brimstone always remain true to its mission of being profitable, empowering, and having a positive social impact as it embarks on its journey into its third decade .

f robertsonExecutive Chairman

“ Brimstone today is a good example of real empowerment – it has enabled previously marginalised individuals to participate in the mainstream economy and added significant value to its stakeholders . it proves what can achieved when all stakeholders’ views are respected and aligned .”



board of dIrectors

f robertson Executive Chairman length of service with the company: 18 years directorships: non-executive chairman of Lion of africa insurance Company Ltd; sea Harvest Holdings (pty) Ltd; House of monatic (pty) Ltd and serves on the boards of remgro Ltd; aon re africa (pty) Ltd; old mutual Life assurance Company (south africa) Ltd .

pl campherLead Independent Director date appointed to the board: 7 march 2006Qualification: Becon directorships: sun international Ltd; strate Ltd; savings and invest ments association of south africa (asisa); saFeX Clearing Company (pty) Ltd; international investment Funds association .

mJt Hewudate appointed to the board: 15 september 1997Qualification: BComm (Hons)directorships: southern ambition trading; Kayamnandi investments; onyx Financial services and amahlathi Logistics .

n khan date appointed to the board: 1 november 1995Qualifications: Bsc(Qs); maQs; aaarbdirectorships: stonefountain properties (pty) Ltd; perthpark properties (pty) Ltd; BtKm inc and proman project management services (pty) Ltd .

kr molokodate appointed to the board: 5 november 2013Qualifications: ndip (Building survey), Bsc (Qs), BCom, pGda, Ca(sa)directorships: the prescient Foundation, KWv Holdings, Fairvest property Holdings, inkari Basadi investments, prescient Limited .

Independent non-executive directors

executive directors

mk ndebele date appointed to the board: 7 march 2006 Qualifications: Ba (economics); msW (social planning) (Usa denver) directorships: imam abdullah Haron education trust (trustee); anglican diocese of Cape town and st Georges Cathedral (Chancellor) .

la parker date appointed to the board: 1 november 1995directorships: FpG Group (pty) Ltd; suburban Cigarette distributors (pty) Ltd; investbrands CC; al amien Foods CC and is a member of the board of red Cross Childrens’ Hospital .

fd roman date appointed to the board: 26 march 2008Qualifications: Ba; post Graduate secondary teacher’s diploma directorship: direng investment Holdings .

ma brey Chief Executive Officer length of service with the company: 18 years directorships: non-executive chairman of oceana Group Ltd; Life Health care Group Holdings Ltd: and serves on the boards of nedbank Ltd; Lion of africa insurance Company Ltd; aon re africa (pty) Ltd; House of monatic (pty) Ltd and the scientific Group (pty) Ltd .

lZ brozin Financial Director length of service with the company: 17 years directorships: the scientific Group (pty) Ltd; nandos Group Holdings Ltd and sea Harvest Holdings (pty) Ltd .



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team brImstone

n Feleza n Jogee tJ tapela C vanda s Hamit

p sibanda m o’dea L ramgopaul e visagie n pangarker

F allie t Lebasa s patel d masango s dhansay

t moodley m Brey L mangesi W sonday G Kotze




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Highlightsprofit for the year under review is satisfactory, albeit lower than the previous reporting period as a result of a decrease in fair value adjustments of underlying investments . there were also challenging conditions in the insurance underwriting market which were partially offset by improved profitability at sea Harvest . total assets increased by r1 .1 billion to r6 .8 billion at 31 december 2013 . intrinsic net asset value (inav) grew 16 .1% from r582 million in the previous year to r4 .19 billion . the food sector contributed 41% to intrinsic gross asset value, followed by healthcare at 37% and financial services at 15% . the balance comprises smaller investments across various sectors . the company’s shares performed well during the year with the ordinary share price growing by 24 .4% and the n ordinary share price growing by 17 .2% over the reporting period . the company declared a final dividend of 30 cents per share and a special dividend of 10 cents per share . We are pleased to report that this is our 12th and 13th dividend payment respectively .

net asset valuetotal assets increased by 19% from r5 .7 billion to r6 .8 billion in the year under review . net asset value increased by 15% from r2 .8 billion to r3 .2 billion reported in the year under review . inav at 31 december 2013 calculated on a line-by-line basis, totalled r4 .19 billion, or r17 .09 per share (31 december 2012 – r3 .6 billion or r14 .74 per share), representing an increase of 15 .9% from 2012 . on a fully diluted basis inav per share is r16 .16 or an increase of 15 .5% on the r13 .99 reported at 31 december 2012 . as at 31 december 2013, Brimstone ordinary shares were trading at a discount of 18 .1% to intrinsic net asset value (31 december 2012 – 23 .7%) . Brimstone “n” ordinary shares traded at a discount of 18 .1% to Brimstone’s intrinsic net asset value (31 december 2012 – 18 .9%) .

Investment portfolio review

food sector

sea Harvestdespite lower catches, sales volumes were 16% up on the prior year, with revenue up by 20% to r1 .2 billion . the Us and europe economies have started to show signs of recovery . With firm prices and a favourable exchange rate, export revenue was up 22% on the prior year . although the local market experienced a slowdown, sea Harvest performed well, delivering an 18% increase in local sales revenue while maintaining the market leader position .the total allowable catch (taC) for hake increased by 7 .9% in 2013 and sea Harvest’s quota was increased by 1 .7% . the company holds hake fishing rights to 25 .2% of the taC . overall catch rates were reasonable, albeit 10% lower than the prior year’s highs . Lower catch rates led to higher catch costs, which were

further impacted by significant increases in the price of fuel . Land-based operations performed well, yielding positive processing variances despite lower throughput volumes . operating profit before interest increased by 78% to r72 million . We wish to thank the former Ceo George Bezuidenhout for his tenure at sea Harvest and welcomes his incumbent, the former marketing and sales director Felix ratheb as the Ceo of sea Harvest .

oceanaoceana accounts for 27 .4% of Brimstone’s intrinsic gross asset value . oceana reported satisfactory results for the financial year 2013 . turnover improved by 8%, and operating profit before abnormal items increased by 5% from the previous year . revenue growth in the second half of the year was affected by weaker local consumer demand, resulting in a slowdown in canned fish sales volumes and a significant decline in industrial fish landings . Basic earnings per share for the year ended 30 september 2013 increased by 10% and basic headline earnings per share increased by 7% compared to the previous year . a total dividend of 322 cents per share for the year was declared, representing a 7% increase on the total dividend of 301 cents per share in the prior year . Growth opportunities in the rest of africa are being explored . oceana’s share price closed at r82 .00 per share, up from r69 .82 per share at 31 december 2012 . Brimstone received dividends of r64 .7 million from oceana during the period under review and recorded r8 .1 million in equity accounted earnings .

taste Holdingstaste Holdings reported an increase in revenue of 24% and a consequent rise in headline earnings per share of 27% to 5 .7 cents (2012 – 4 .5 cents) . taste Holdings’ share price closed at r3 .75 per share, down from r4 .30 per share at 31 december 2012 . the investment was revalued downwards by r13 .5 million .

tiger brandsBrimstone’s rights to tiger Brands shares, accounted for as options, have been revalued at period end . the independently calculated option valuation was based on a closing share price of r266 .93 per share, down from r325 .25 per share at 31 december 2012 . the investment was revalued downwards by r87 .5 million .

financial services sector

lion of africa HoldingsLion of africa insurance Company is the largest black-owned short term insurer in the country . the company experienced a dismal underwriting cycle in the period under review . Gross written premiums increased by 12 .4% to r925 .3 million from r823 .0 million in the prior year . net written premiums decreased by 30 .3%, from r500 .0 million in the previous year to r348 .5 million in the year under review . the

executIve dIrectors’ report




deterioration in the net loss ratio from 60 .0% in the previous year to 78 .4%, resulted in a 75 .7% decrease in underwriting profit before expenses to r35 .8 million . the reduction in operating expenditure by 0 .8% to r157 .0 million, tempered by net investment returns of r29 .5 million, resulted in a net loss after tax for the year of r64 .6 million compared to a net profit of r18 .3 million in the prior year .

aon re africaaon re africa (pty) Ltd, trading as aon Benfield, is the leading reinsurance broker licensed and operating in south africa and the rest of the continent . aon re africa successfully secured new business across all divisions with impressive organic growth specifically in africa . Brimstone received a dividend of r3 .9 million from aon re africa and recorded r2 .9 million in equity accounted earnings during the period under review .

afena capitalafena Capital is an investment management firm that offers specialist equity and balanced portfolios serving the south african institutional market . Brimstone received a dividend of r3 .1 million from afena during the period under review . Brimstone recorded r0 .9 million in equity accounted earnings from afena Capital .

nedbankBrimstone’s rights to nedbank shares, accounted for as options, have been revalued at period end . this independently calculated option valuation was based on a closing price of r210 .00 per share, up from r188 .00 per share at 31 december 2012 . the investment was revalued upwards by r99 .1 million . Brimstone earned r7 .5 million in performance fees from nedbank .

old mutual plcBrimstone’s rights to old mutual plc shares, accounted for as options, have been revalued at period end, based on a closing price of r32 .79 per share, up from r24 .49 per share at 31 december 2012 . the investment was revalued upwards by r105 .1 million . Brimstone earned r8 .2 million in performance fees from old mutual .

Healthcare sector

life Healthcare Life Healthcare’s share price closed at r41 .86 per share, up from r33 .70 per share at 31 december 2012 . the investment was revalued upwards by r428 .5 million . Brimstone received dividends amounting to r66 .3 million during the year . Brimstone remains one of the largest shareholders in Life Healthcare . We pay tribute to the retiring Ceo michael Flemming for his leadership and immense contribution to the growth of Life Healthcare .

the scientific groupthe scientific Group, supplier of instrumentation and consum-ables for pathology laboratories, reported strong results for the 2013 trading period with double digit growth in turnover and profitability . the scientific Group was successful in building on its long term relationships by securing the distribution rights for a cardiology product portfolio . pressure on margins continued given the current market conditions and the consistent depreciation of the rand . Brimstone recorded r0 .2 million in equity accounted earnings from the scientific Group .

other investments

House of monaticWhile House of monatic’s turnover only increased by 3% to r180 million its net profit increased by 40% to r6 .9 million . employment levels remained stable throughout the year . monatic continues to benefit from the production incentive put in place by the department of trade and industry for the clothing and textile industry . this has enabled monatic to upgrade its plant and equipment by approximately r15 million over the last three years .

rex trueform and african & overseas (Queenspark)Brimstone holds a 33% effective economic ownership in rex trueform and african & overseas, which it acquired for a total consideration of r47 .3 million in 2007 . the market price of all classes of rex trueform and african & overseas enterprises shares reduced during the period under review resulting in a downward revaluation of r35 .3 million .

mtn ZakheleBrimstone’s mtn Zakhele shares, accounted for as options, have been revalued at period end . the independently calculated option valuation was based on a closing mtn share price of r217 .02 per share, up from r177 .60 per share at 31 december 2012 . the investment was revalued upwards by r44 million .

environment and the communitythis is Brimstone’s third integrated report which complies with the guidelines and recommendations of the King report on Governance for south africa 2009 (King iii) . the sustainability report included in this integrated report is based on guidelines provided by the Global reporting initiative (Gri) . the Group is proud to report continued improvement against applicable benchmarks set by these guidelines, which are continuously being refined and enhanced . this integrated report provides a snapshot of the Group’s activities and successes over the reporting year, not the least of which is the impact of its social programmes and the empower ment of communities . during the year under review, the Group intro-duced an additional four beneficiaries to its share participation scheme, the Brimstone empowerment share trust (Best) .

executIve dIrectors’ report (contInued)



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there are currently 23 beneficiaries in the trust, each with an allocation of Brimstone “n” ordinary shares . these shares vest over a period of five years, but beneficiaries have immediate economic participation in the form of dividends . the net effects are measurable, sustainable and far reaching social programmes with a meaningful impact on society . a very successful feedback session was held with these beneficiaries in november 2013, and this feedback will be utilised to further enhance the role, structure and processes of Best .

dividendBrimstone’s board has declared a final dividend of 30 cents per share for the year ended 31 december 2013 and a special dividend of 10 cents per share for the year ended 31 december 2013, payable on tuesday, 29 april 2014 . the final dividend and the special dividend have been declared out of income reserves . the special dividend has been declared as Brimstone will receive a special dividend from Life Healthcare Group Holdings Limited on 17 march 2014 . therefore, after due consideration, the board of Brimstone has decided to pay a special dividend to its shareholders . shareholders should note that the special dividend is subject to exchange Control approval and an announcement will be released on sens once this has been obtained .

our strategic focusthe Group’s focused investment strategy remains in the defensive sectors namely food, healthcare and financial services . management is considering a number of nav enhancing and earnings enhancing options .

looking aheadas Brimstone enters its 20th year of existence it is even more committed to creating value for all stakeholders . the Group has a solid track record of unlocking shareholder value, supported by an experienced team with proven deal-making ability . the Group is defined by its ability to enhance nav, pay dividends, and real empowerment credentials . Brimstone remains well capitalised to pursue value enhancing transactions based on cash generative, quality assets . management takes cognisance of the market’s current high earnings multiples and will continue its prudent approach to investment opportunities . the Group maintains a long-term view and partnership approach to its underlying investments . Brimstone will continue to do empowerment differently, for the benefit of all its stakeholders .

thanksthe executive directors, Fred robertson, mustaq Brey and Lawrie Brozin thank their fellow board members for their continued guidance and good counsel, the executive team, staff, shareholders and all stakeholders for contributing to Brimstone’s continued success .


14 Brimstone investment Corporation Limited 14 Brimstone investment Corporation Limited

nelson mandela



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Whilst we celebrate our freedom today, you gave up yours;

selfless.

Whilst many showed us the road to freedom, you crafted that road;

vIsIonary.

Whilst the world cherished your triumphs, you cherished the nation;

HumIlIty.

From prisoner to president, you stood your ground .

legendary.

1918 – 2013



i n t e r e s t: 5 . 0 4 %

– Listed on the Jse– Chief executive officer: m Flemming– principal business is acute hospital care and comprises one of the

widest geographic spreads of acute care hospitals and day surgical centres in south africa .

– Website: www .lifehealthcare .co .za

i n t e r e s t: 2 8 . 2 %

– Unlisted– Chief executive officer: s Landman– supplier of high quality science and medical equipment .– Website: www .scientificgroup .com

i n t e r e s t: 1 0 0 %

– Unlisted– managing director : m maurer– Company involved in the design, marketing and manufacturing of

mens and ladies clothing and accessories .– Website: www .monatic .co .za

i n t e r e s t: 3 3 %

– Listed on the Jse (rex trueform Clothing Company Ltd and african & overseas enterprises Ltd) .

– Chief executive officer: C radowsky– Group involved in the manufacturing, marketing and retailing of

mens and ladies clothing nationally and internationally .– Website: www .rextrueform .com

i n t e r e s t: 5 8 . 1 %

– Unlisted– Chief executive officer: F ratheb– the principal business of sea Harvest is deep sea trawling of hake .

Largest employer on the West Coast .– Website: www .seaharvest .co .za

i n t e r e s t: 1 6 . 8 2 %

– Listed on the Jse – Chief executive officer: F Kuttel– oceana engages in the catching, processing and procurement of

marine species including pilchard, sardine anchovy, redeye herring, lobster, horse mackerel, squid, tuna, hake and other deep sea species . products are sold through international and local marketing channels . in addition, oceana provides extensive cold storage and fruit handling facilities .

– Website: www .oceana .co .za

group profIle



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– Listed on the Jse – Chief executive officer: C Gonzaga– taste Holdings invests in a portfolio of mainly franchised, category

specialist and formula driven, quick service restaurants and retail brands, including st elmos, maxis, scooters pizza, nWJ and the Fish & Chips Co .

– Website: www .tasteholdings .co .za i n t e r e s t: 1 2 . 4 6 %

– Unlisted– Chief executive officer: s Chikumba– aon re africa is a leading reinsurance and retrocession

intermediary in sub saharan africa, based in Johannesburg, south africa with a subsidiary office in Harare, Zimbabwe .

– Website: www .aon .comi n t e r e s t: 1 8 %

– Unlisted– Chief executive officer: a samie– Formed in august 1999, Lion of africa is an established, growing

insurance brand on the south african insurance landscape . it is the only Level 1 short-term Bee insurere . it represents a new breed of insurer, founded on the premise of transformation and the provision of innovative insurance solutions for all south africans .

– Website: www .lionsure .com i n t e r e s t: 1 0 0 %

– Unlisted– Chief executive officer: t naledi – afena Capital is an investment asset manager . they are active,

valuation driven long term investors and generate returns by adhering to a clearly defined investment philosophy .

– Website: www .afenacapital .co .za i n t e r e s t: 2 8 . 7 9 %

– Listed on the Jse – Chief executive officer: m Brown– nedbank Group Ltd is a bank holding company, which operates

as one of the four largest banking groups in south africa .– Website: www .nedbankgroup .co .za i n t e r e s t: 0 . 7 8 %

– Listed on the Jse and on the London, Zimbabwe, stockholm and malawi stock exchanges .

– Chief executive officer: J roberts– diversified financial services, including life insurance, investment

management and administration .– Website: www .oldmutual .com i n t e r e s t: 0 . 3 5 %

– Listed on the Jse – Chief executive officer: p matlare– a branded FmCG (Fast moving Consumer Goods) company that

operates mainly in south africa and selected emerging markets .– Website: www .tigerbrands .co .za

i n t e r e s t: 0 . 9 5 %

re aFriCa

plc




Integrated sustaInabIlIty report

this is the fifth sustainability report prepared by Brimstone and its subsidiaries . it has recorded considerations from the Company and its three operating subsidiaries . the guidelines provided by the Global reporting initiative (Gri) Boundary protocol was used in determining the parameters of this report . disclosure is therefore limited to the underlying investments where the Company exercises control over the financial and operating policies of these investments . the King iii report on Corporate Governance (King iii) requires that the Company’s sustainability report has been audited by an independent external professional . Brimstone’s sustainability report had not been audited but verification of certain key sustainability metrics have been obtained through agreed upon procedures performed by deloitte & touche . a copy of the agreed upon procedures report is available at the registered office of the Company . Brimstone is committed to conducting all its businesses in an environmentally, economically and socially responsible manner .

strategy and analysis as an investment holding company, Brimstone will continue to create value for its wide range of shareholders by expanding on the successful business model that has been followed since inception . its strategy will continue to be that of creating value for its shareholders in an environmentally responsible way by giving them exposure, either directly or indirectly, to a number of busi-nesses that display great development and growth potential accompanied by good cash flows . the Group structure referred to later in this report shows the entities that we partner with as investments, associates, joint venture or subsidiaries . Brimstone will continue to play a role in the development of these investments into fully operational and meaningful businesses that contribute environmentally, economi-cally and socially . each of these entities are currently at different phases of this development cycle . at all stages Brimstone will act in a responsible manner, thereby creating value for all stake-holders . the focus of its strategy will continue to be the creation of multiple exposures for its shareholders to a variety of business sectors and decrease their dependency on Brimstone and the sector in which it operates . to enhance the above Brimstone will continue to search for solid businesses that generate strong cash flows in business sectors that it prefers . Brimstone’s track record has proven that it is a worthy partner in that it provides a network, management expertise and a culture of ethics and good corporate governance . this culture and track record has ensured that the Company has been able to secure a number of investments in large corporates in the mainstream economy .

organisational profile

brimstone Investment corporation limitedregistration number: 1995/010442/06Head office: newlands, Cape town branch: sandton, Johannesburgthe Company operates as a listed investment holding company in south africa . the Group comprises of three operating subsidiaries and a number of associates, investments and options . it operates with the highest governance and subscribes to the principles of King iii . this ensures that it is governed by a board of directors and the relevant sub committees . operationally it consists of an executive team which performs governance, operational and evaluation roles in the Company and its subsidiaries and associates . all operations are south african although some of the investee companies serve international markets .

the three operating subsidiaries are:

sea Harvest Holdingsthe effective percentage held is 58 .1% . the principal business of sea Harvest is deep sea trawling of hake . sea Harvest is the largest employer on the West Coast of the Western Cape and serves local and international markets . it is the leading supplier of white fish in the country .

lion of africa Insurance company Lion of africa is a wholly-owned subsidiary of Brimstone . it is a midsized short-term insurance company and services the corporate, commercial and parastatal market . it is the largest black-owned insurer and the only Level 1 BBBee rated insurer in the country . it was founded on the principle of transformation and premise of black ownership .

House of monatic House of monatic is a wholly-owned subsidiary of Brimstone . it is a leading manufacturer of high quality mens formal wear in south africa . the business is over 100 years old and has developed well-known brands such as Carducci and viyella . it also manufactures garments for leading local retailers and high-end fashion labels currently being sold in south africa .



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other Investments

associates investments option investments the scientific Group (pty) Ltd Life Healthcare Group Holdings Ltd old mutual plcoceana Group Ltd rex trueform Clothing Company Ltd nedbank Group Ltdaon re africa (pty) Ltd african & overseas enterprises Ltd tiger Brands Ltdafena Capital (pty) Ltd taste Holdings Ltd mtn Zakhele

phuthuma nathi investments Ltd

refer to appendix 2 and appendix 3 for a complete list of investments in associate companies and Joint venture, and investments .

market capitalisation the market capitalisation of Brimstone at the beginning of the year was r2 .9 billion . this has grown steadily during the year to reach r3 .4 billion at the year end . We believe that this steady growth will continue as the market recognises Brimstone’s strategy of value creation .

report profile this report is for the year ended 31 december 2013 . this is the fifth integrated sustainability report produced by Brimstone . it is intended to continue along this journey of integrated reporting to enable the Company to refine the report to fully comply with King iii and the Jse Listings requirements . For any enquiries on this report please contact nisaar pangarker (npangarker@brimstone .co .za), michael o’dea (modea@brimstone .co .za) or tiloshani moodley (tmoodley@brimstone .co .za) at the e-mail addresses provided or telephone number +27 21 683 1444 .

report scope and boundary as an investment holding company Brimstone endeavours to report on all businesses where it exercises significant influence . Where it does not enjoy control it has chosen to influence the principles of sustainability within the context of that business, but will however not report on the landscape and progress . Brimstone currently has three operating subsidiaries, i .e . sea Harvest, Lion of africa and House of monatic . these subsidiaries are unlisted and are operated and managed as independent entities with autonomous boards of directors . data relating to investments where Brimstone does not exercise operational control are not presented in this report . this approach has been determined using the Gri guidelines on boundary setting, as published .

ownership

58.1%number of employees

2 317

ownership

100%number of employees

166

ownership

100%number of employees

761

associates, Investments, and option Investments

scale of the operationnumber of employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 334Group revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .r2 .1 billionmarket capitalisation* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .r3 .4 billiontotal debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .r1 .2 billionBlack beneficial economic interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 .25%Black voting rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68 .25%

* Based on the total issued number of shares, net of treasury shares.

organisational structureBelow is a schematic presentation of Brimstone and its operating subsidiaries, including information regarding their number of employees and ownership interest . only summarised “non-financial” disclosures relating to the social and environmental per-formance of Brimstone’s operating subsidiaries are provided in this report .




Integrated sustaInabIlIty report (contInued)

stakeholders stakeholders are continually identified by a careful examination of the businesses and the effects they have on the wider economy and community . this is done at Group level and includes similar assessments at subsidiary level . By engaging with these stake-holders common issues emerge and these have been consolidated in the stakeholder table provided in this report . Brimstone considers all issues to be important but has prioritised them by the availability of the relevant resources and legislative deadlines . this report is not restrictive and it endeavours to include all areas raised in the economic, environmental and social spheres of our Group . as an investment holding company, Brimstone continues to emphasise the qualitative aspects of the triple bottom line (economic, environmental and social) and has started to develop measurement techniques on the quantitative measure-ments in the subsidiaries that are appropriately exposed .

governance, commitments and engagement

governance the highest governing body at Brimstone continues to be the Board of directors . the Board remains fully committed to the principles of integrity, transparency and accountability in its dealings with all its stakeholders . it endorses good corporate governance and ensures that the Company is compliant with the Code of Corporate practices and Conduct contained in the King iii report on Corporate Governance (King iii) . Brimstone is an investment holding company and accordingly all references to the “the Group’’ in this context denote the Company and its subsidiaries . the Board is satisfied that Brimstone has met the principles of King iii as legislatively required throughout the year under review .

When a principle of King iii has not been adhered to as specified, this is explained where relevant . a summary of all the principles of King iii that were not applied is presented below: – the Chairman of the Board, mr F robertson was appointed

as executive Chairman effective 17 January 2013 . in line with good corporate governance, best practice and the Listing requirements of the Jse Limited, mr pL Campher serves as Lead independent director .

– the nominations committee and board perform evaluations annually, but have decided not to disclose the overview of the evaluation process, results and action plans in the integrated report due to the potentially sensitive nature .

– the Board does not intend to institute a formal dispute reso-lution processes as it believes that the existing processes within the Group operate satisfactorily and do not require a more formal and separate mechanism . shareholders have remedies in terms of the Companies act .

– the Board does not believe that directors should earn

attendance fees in addition to base fees for board meetings . attendance at board meetings has generally been very good and where directors were unable to attend a meeting, they nevertheless contributed to matters to be considered at the relevant meeting .

– While the social and ethics committee comprises of both executive and non-executive, it does not comprise of a majority of non-executive directors . the Board is satisfied however that the members possess the requisite knowledge and expertise on matters to be considered by the committee in performance of its duties .

the Board is further satisfied that the Company has met the requirements of the Companies act and the Jse Listings requirements . during the year under review the Company focused on ensuring compliance with the new requirements of the Companies act, such as the replacement of the memorandum and articles of association of the Group’s companies with the newly required memorandum of incorporation (moi) . the Company’s moi was presented to shareholder’s at the annual General meeting on 22 may 2013 and was subsequently lodged with and accepted by the Companies and intellectual property Commission (CipC) .

board of directorsthe Board has a formal charter setting out, inter alia, its compo-sition, meeting frequency, powers and responsibilities, particularly with regard to financial, statutory, administrative, regulatory and human resource matters .

Key responsibilities in terms of the charter include the following: – determining the Company’s vision, mission and key

objectives; – determining the Group’s values and incorporating them into

the Code of Conduct; – appointment of new directors;– providing strategic direction to the Company, and taking

responsibility for the adoption of strategic plans; – monitoring compliance with laws and regulations and codes

of best business practice; – ensuring that relevant and accurate information is timeously

communicated to stakeholders; and– evaluating the Company and the Group as a going concern .

the Board is satisfied that it has discharged its duties and obligations as described in the Board charter, during the past financial year . to ensure a balance with no individual having unfettered powers of decision-making, a clear division of responsibilities exists between the Board and executive management . the Board provides effective leadership and vision, aiming to enhance shareholder value and ensure long-term sustainable



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development and growth of the Company for the benefit of shareholders and stakeholders over time . the Board meets at least four times a year . additional meetings are convened as and when necessary . all members of the Board have unlimited access to the services of the Company secretary and senior management, as well as all Company records .

composition of the boardthe composition of the Board reflects a balance of executive and non-executive directors . taking into account the size of the Board, diversity and demographics, the majority of directors are inde-pendent . the Board appointed mrs Keneilwe moloko as independent non-executive director on 6 november 2013 .as at year end the Board consisted of three executive and seven independent non-executive directors (one of whom is the Lead independent director) . non-executive directors are selected to serve on the Board for their broader knowledge and experience and are expected to contribute effectively to decision-making and the formulation of policy . the independence of non-executive directors, who have served on the Board for more than nine years, is subject to review by the Board . in terms of the moi of the Company at least one third of the directors must retire by rotation annually and may make them-selves available for re-election at an annual general meeting . the roles and responsibilities of the Chairman of the Board and the Chief executive officer are separated . one of the principles of King iii is that the Chairman of the Board be an independent non-executive director . mr F robertson was appointed executive Chairman early in 2013 . the Board believes that mr robertson (who previously served as executive deputy-Chairman since 2002) has the required level of expertise and expe-rience to act as Chairman of the Group and oversee the strategy of unlocking shareholder value for the benefit of shareholders . mr pL Campher serves as Lead independent director, in compliance with King iii and the Jse Listings requirements .

evaluation of the board, board committees and individual directorsthe Board and subcommittees are evaluated annually by its members . the results of these evaluations are not disclosed in the integrated report, but the nomination for reappointment of directors only occurs after the evaluation of the performance of the Board .

Induction of directors to assist directors, the Board has established a formal orientation programme for new directors which include background material, meetings with executive directors and senior management and visits to the various Group Companies’ locations . in addition, new directors will also receive information on the Jse Listings requirements and the obligations it imposes on directors .

should circumstances arise where a non-executive director needs to obtain independent professional advice in order to act in the best interest of the Company, that director is encouraged to seek such advice with all reasonable costs being borne by the Company .

company secretary’s role and responsibilitiesall directors have unlimited access to the services of the Company secretary, mrs t moodley, who is responsible to the Board for ensuring that proper corporate governance principles are adhered to and that Board orientation and training is provided where appropriate . the Board has considered and satisfied itself on the competence and qualifications of the Company secretary . the Company secretary is not a director of Brimstone and has an arm’s length relationship with the Board and the directors .

board committeesspecific responsibilities have been delegated to board committees with defined terms of reference set out in their respective charters . Copies of the Board and committee charters, which are reviewed annually, are available on request from the Company secretary . the current subcommittees of the Board are the audit & risk committee, investment committee, remuneration committee, nominations committee and the social and ethics committee . notwithstanding the delegation of functions to board committees, the Board remains ultimately responsible for the proper fulfilment of such functions, except for the functions of the audit & risk committee relating to the appointment, fees and terms of engagement of the external auditor .

nominations committeeBrimstone strives to be an employer of choice that reflects the rich potential of the whole of south african society . For part of the year under review, the nominations committee was chaired by the executive Chairman, mr F robertson . the Board took into consideration the King iii recommendation that an executive chairman of the board should not chair the nomina-tions committee and in this regard appointed mr Hewu (inde-pendent non-executive director) as chairman of the nominations committee . at year-end the nominations committee comprised mr mJt Hewu (chairman of the committee), mr pL Campher (member) and mrs m ndebele (member) . the main objective of the nominations committee is to assist the board to determine, and regularly review the size, structure, composition and effectiveness of the board and its subcommittees, in the context of the company’s strategy . the committee meets at least twice a year . the committee is responsible for nominating directors for appointment and it annually evaluates the perfor-mance of executive and non-executive directors . Brimstone relies on the extensive experience and networks that the members of the Board possess to recruit the requisite skills for the Board . directors do not have long-term contracts or exceptional benefits associated with the termination of services .





remuneration committeethe committee comprises of three non-executive directors, all of whom are independent . the committee is chaired by the Lead independent director, mr pL Campher and meets at least twice a year . the other members of the committee are mr Hewu and mrs ndebele . the main purpose of the committee is to discharge the board’s responsibilities in respect of strategic human resources issues of the group, with special focus on executive appointments, remuneration and succession and the management of the company’s Code of ethics .

audit & risk committeethe committee is governed by a mandate that includes the recommendations of King iii and the requirements of the Companies act . the committee consists of five independent non-executive directors, elected by shareholders on recommendation of the Board . the committee is chaired by mr n Khan . the other members of the committee are mr pL Campher, mrs Kr moloko, mr La parker and ms Fd roman . the Board is satisfied it has an effective and independent audit & risk committee . the governance activities undertaken by the audit & risk committee, in terms of the Companies act, King iii and as requested by the Board, are detailed in the audit & risk committee report on pages 57 to 58 .

Investment committeethe committee comprises of independent non-executive directors messrs pL Campher, n Khan and La parker (appointed during april 2013) executive management makes recommendations to the committee who then submit investment decisions to the Board for approval . the committee meets at least twice a year and when the need arises .

the duties and responsibilities of the committee are:– to assist the directors to discharge their duties relating to the

development and recommendation of long-term investment opportunities for the Company;

– the investment committee does not relieve the directors of any of their responsibilities, but assists them in fulfilling those responsibilities; and

– the investment committee shall not perform any management functions or assume any management responsibilities and shall provide the Board with independent and objective oversight and review of the information provided by executive management around investment decisions and make recom-mendations to the Board for its approval or final decision .

social and ethics committeethe committee comprises two executive directors and two independent non-executive directors . the committee is chaired by mr F robertson and comprises of mr pL Campher, n Khan and

ma Brey . the committee invites representatives from each of its subsidiary companies as permanent attendees to all meetings . the Board is satisfied that the current members of the social and ethics committee have sufficient expertise and knowledge on matters to be considered by the committee in performance of its duties under the Companies act . the committee’s responsibilities are governed by a formal mandate as approved by the Board and the main objectives of the committee are to: – assist the Board in monitoring the Group’s performance as

a responsible corporate citizen by the monitoring of its sustainable development practices; and

– perform the statutory duties of a social and ethics committee in terms of the Companies act and other functions assigned to it by the Board .

the committee’s report describing how it has discharged its statutory duties in terms of the Companies act and its additional duties assigned to it by the Board in respect of the financial year ended 31 december 2013 is included in the integrated report on page 54 .

policy on trading in company securitiesin accordance with the Listings requirements of the Jse, the Company has adopted a code of conduct for insider trading . directors and employees are prohibited from trading in Company securities during prohibited and closed periods . directors and designated employees may only deal in the Company’s securities outside the closed period, with the approval of the Chairman, Chief executive officer or Lead independent director .

conflicts of interestsall directors of the Company and its subsidiaries and senior man-agement, are reminded of the requirement to submit, at least annually, a list of all their directorships and interests in contracts with Brimstone . directors are required to disclose their personal financial interests, and those of persons related to them, in contracts or other matters in which Brimstone has a material interest or which are to be considered at a Board or committee meeting . Where a potential conflict exists; directors are expected to recuse them-selves from relevant discussions and decisions .

risk management the Board is responsible for overseeing governance and risk . the Board charter outlines the directors’ responsibilities for ensuring that an appropriate system and process of risk man-agement is implemented and maintained .

directors’ attendance at meetingssee table on page 25 .



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communicationthe Board appreciates that it is required to provide timeous, relevant and accurate information to all its stakeholders . to this end it consistently strives to maintain direct dialogue with all of those who have a relationship with Brimstone on any level . reports and announcements are conveyed to all audiences through the media, sens announcement, the Brimstone website, social media and through direct correspondence . the Company encourages transparent, objective and relevant communication with its shareholders, with members of the investment community and with its business associates and partners . While board members are expected to attend Brimstone’s annual general meetings, the Company encourages shareholder attendance at annual general meetings . these meetings offer an opportunity for shareholders to provide input into the running of their company, to raise issues of concern and to participate in

Attendees at the Breast Cancer Dialogue, October 2013.Handover of blankets and food as part of the Winter Campaign with Nedbank in Phillipi.

Attendees at the Brimstone AGM, May 2013. Mandela Day at Mimosa Primary School, Bonteheuwel.

discussions related to items included in the notice of meeting . these meetings are very well attended . all investee organisations are represented to enable the Company’s stakeholders to under-stand investee company products and services .

mission statement Brimstone seeks to be profitable, empowering and to have a positive social impact on the businesses and the individuals with whom it is involved, including shareholders, employees, suppliers, customers and the greater community . this is the way of conducting business at Brimstone . the deep effects of this mission statement have now become part of the ethos of the business . it is applied across all spheres together with the mindset of ethical behaviour and complete honesty and integrity . When examined carefully the elements of the triple bottom line become very visible .





stakeholder engagement stakeholders have been identified by involving all reporting subsidiaries . the list below has been developed over the four year period that this report has been presented . issues identified have all been considered and the concept of materiality has not been applied . all stakeholder issues are important to Brimstone and will be considered in the context of its business in one way or another .

stakeholder engagement frequency type of engagement material issues response to issues shareholders annually

QuarterlyWeeklyadhoc

aGmperformance publications shareholder interactionreport back meetings shareholder meetings

value creation Cash distributionsstrategic directionprofitability and long-term business existencemarine and resource sustainability

value creation and maintenance is foremost on our agendadividend distribution is part of our business model

employees ongoingWeeklymonthly Quarterly

interactive feedback meetingsmemos performance evaluationsWorkshops Conferences

employee wellbeingremuneration and benefitsWorking conditionsshort timeemployment equity and equal opportunityproductivity incentive schemeeconomic performance

Honest feedbackmarket related benefit surveysremuneration committees governed at highest level

Unions monthlyQuarterlyadhoc

meetings – Collective and individual

Labour relationsstate of work continuityproductivity incentive scheme

Honest and participative feedbackrelationship buildingregular communication with staff

providers of Capital annual reviewsmonthly submissions

meetingsproviding cash flow information monthly

affordabilityBusiness continuity

providing sufficient information to overcome risks

Government and regulators regulators meetings and inspectionsannual and quarterly returns

meetingssubmission of performance returnssite visits

Completeness of levies and taxes Compliance with governing lawspi claimsCompetitiveness Fund

audits of financial performanceQuality assurance auditsCompliance integration

investee Companies ongoingQuarterlyannually

meetingsWorkshopsFeedback evaluations

FundingBBBeemarket and trading conditions

resolved speedily with holding company executives feeding

back market intelligenceWe provide feedback and strategic direction regularly to

subsidiaries

Customers/Clients dailyongoing

telephonic meetings emailpersonal visits

pricingQualitydeliverypayment terms

regular interaction and assurance on these issues

suppliers ongoing all interactions payment termsdelivery schedulesCredit worthiness

assurance interaction

ratings agencies annually inspectionsmeetings

performance hurdle complianceCredit rating

executive interaction on inspectionsClarification of queries

partners/Business – associates including international licensors

Quarterlyannual

meetings and workshopsregular visits Quality audits

industry challengesBusiness expectations

industry compliancedelegation of responsibility for performance

media ongoing interviews presentationsmedia announcementssite visits

Financial results strategy and value creation

detailed financial results extensive disclosureContinuous demonstration of value creation strategymanagement of media relationship

Communities ad-hoc marketingCsi

effectiveness of Csi spend Core part of company values



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broad based black economic empowerment (bbbee)the Board and management of Brimstone has a firm belief in BBBee and supports and encourages its subsidiaries and investments to subscribe to the principles of BBBee . at Brimstone BBBee is a core part of our mission which is to be profitable, empowering and to have a positive social impact . during the period under review Brimstone engaged empowerdex (pty) Ltd to certify the “equity ownership” score of the Company . verification of BBBee ownership is governed by the Codes of Good practice on BBBee which were gazetted on 9 February 2007 in terms of section 9(1) of the Broad-Based Black economic empowerment act (no . 53 of 2003) . the methodology followed for the verification and certification of Brimstone’s contributions to BBBee ownership was taken from the provisions of Code 100 of the Broad-Based Black economic empowerment Codes of Good practice . the BBBee equity ownership scorecard is represented below .

ownership indicators Weighting targets achieved scoreBlack voting rights 3 25 .10% 68 .25% 3 .00Black female voting rights 2 10 .00% 12 .95% 2 .00Black economic interest 4 25 .00% 55 .25% 4 .00Black female economic interest 2 10 .00% 7 .97% 1 .59designated groups economic interest 1 2 .50% 0 .36% 0 .14ownership fulfilment 1 Fulfilled Fulfilled 1 .00net value 7 10 .00% 55 .25% 7 .00Bonus: Black new entrants 2 10 .00% 28 .34% 2 .00Black participants in employee ownership schemesBlack beneficiaries of broad based ownership schemesBlack participants in co-operatives

1 10 .00%0 .36%0 .00%0 .00%

0 .04

total score 20 .77

directors’ attendance at meetings

Board audit Committeeinvestment Committee

nominations Committee

remuneration Committee

social and ethics Committee

attendance by directors p

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F robertson1 4 4 — — — — 1 1 — — 2 2LZ Brozin 4 4 — — — — — — — — — —ma Brey 4 4 — — — — — — — — 2 2pL Campher 4 4 3 3 6 6 3 3 2 2 2 2mJ Hewu 4 4 — — — — 3 3 2 2 — —n Khan 4 4 3 3 6 6 — — — — 2 2mK ndebele 4 4 — — — — 3 3 2 2 — —La parker2 4 4 3 3 4 4 — — — — — —Kr moloko3 — — — — — — — — — — — —Fd roman 4 4 3 3 — — — — — — — —

1 Mr F Robertson resigned as chairman and member of the Nominations Committee effective 17 July 2013

2 Mr LA Parker was appointed as a member of the Investment Committee effective 16 August 2013

3 Mrs KR Moloko was appointed as a member of the Board of Directors and as a member of the Audit Committee effective 06 November 2013




brimstone’s social commitment nature, scope and effectiveness of all programmes on communitiesBrimstone’s social commitment is an extension of its mission statement of being profitable, empowering and to have a positive social impact on the businesses and the individuals with whom it is involved . as reported on in this integrated report, the Group’s activities and its impacts, be it corporate, social or environmental are measured against these yardsticks to ensure long-term sustainability . as the largest employer on the Cape West Coast – and one of the largest in the Western Cape – Brimstone directly employees in excess of 3 300 individuals in its subsidiaries and more than 17 500 through its associates and investments . a large number of these employees have been shareholders in Brimstone since its early start-up days almost two decades ago, which makes the Group’s stakeholder community arguably unique among Jse listed companies . this inevitably means that the nature and scope of Brimstone’s involvement in the community also requires a unique approach . For this reason, Brimstone through its own corporate social initiatives and those of its subsidiaries and investments is involved in education, training and development, the arts and the support of specific charitable and social campaigns . apart from its internal corporate social investment programmes, Brimstone has established the Brimstone Foundation and the Brimstone empowerment share trust to extend the long-term reach and sustainable impact of its initiatives .

brimstone empowerment share trust (best) Best was established in 2005 with the intention of supporting a broad range of nGos and not-for-profit organisations through the allotment of Brimstone shares . these shares have a vested value and can be sold by the nominated beneficiaries after a period of five years, in increments of 20% per annum . recipients however participate fully in any dividends declared by Brimstone from the date of receipt of shares . Best allocates Brimstone “n” ordinary shares (“Brn shares”) to various organisations (at no cost to the organisation) throughout south africa .

during the review period four organisations were awarded Brimstone “n” ordinary shares . they are: sinothando (Kimberley, northern Cape), sentraal Khayelethu Youth Centre (port elizabeth, eastern Cape), missionvale Care Centre (port elizabeth, eastern Cape), and Cheshire Home summerstrand (port elizabeth, eastern Cape) . to date Best has allotted 1 090 000 Brimstone shares to 23 organisations across south africa . Further information on Best can be found on the company’s website .

corporate social initiatives

project winter warmthon an annual basis the Brimstone Foundation embarks upon project Winter Warmth . in excess of 5 500 blankets (of which the Foundation sponsored 1 250) were distributed by Brimstone staff to various organisations (including children’s homes, old aged homes and shelters) as well as to needy and deserving households of Brimstone subsidiary/investee companies . an amount of r93 750 was spent by the Brimstone Foundation on this project .

bursary awardsHouse of monatic employees are able to apply for a bursary towards their children’s tertiary education on an annual basis . students are not limited to specific courses, although bursaries are awarded in varied increments, based on the type of studies and the year of study . students are currently enrolled in a variety of courses, including diplomas and post graduate degrees . during the financial year, the total spend on bursaries was r81 370 .

maths and science tuition projectsduring the review period, Brimstone supported the imam abdullah Haron education trust (www .iahet .com) which facilitates various maths and science tuition projects in schools throughout the Western Cape . the principal aim of the trust is to provide funding across the entire spectrum of education, ranging from the provision of infrastructure for pre-primary educational institutions to grants for post-graduate study . an amount of r40 441 was spent on this project .

life Healthcare nursing collegein may 2011 Brimstone agreed to sponsor 10 students to study nursing at the Life Healthcare nursing College . the course ran over two years and ended in may 2013 . the progress report for Year 1 and 2 of all the students reflected a 100% pass rate . Brimstone paid the cost of tuition and textbooks . Brimstone further assisted an additional two students who are now in their second year of study toward their diploma in General nursing . an amount of r206 463 was spent on the entire initiative during the year .

youth unemployment prevention project (yupp) and the mitchells plain education forumBrimstone is cognisant that youth unemployment is a serious problem in south africa and has annually assisted the YUpp project and the mitchells plain education Forum in their initiatives to counter this . Brimstone supported this project with an amount of r43 000 .




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suid oosterfeesBrimstone and Lion of africa annually participate as sponsors of the suid oosterfees . during the review period Brimstone con-tributed r125 000 towards the event .

mandela dayon 18 July each year all south africans are encouraged to devote 67 minutes of their time to society in lieu of the 67 years that nelson mandela spent dedicated to the freedom struggle . Brimstone staff nominated mimosa primary school in Bonteheuwel to be the recipient of filled lunch boxes on mandela day . all Brimstone staff actively participated (from early in the morning) in preparing cheese sandwiches for 600 learners at mimosa primary school and filling the lunch boxes . included in the boxes were a juice, fruits, chocolate, chips and a muffin . the lunch boxes were distributed at the school . Brimstone spent r16 854 on the mandela day initiative .

winter campaign nedbank Group Limited in partnership with Brimstone extended its 2013 Winter Campaign to four provinces within south africa . nedbank donated blankets and water tanks and Brimstone donated blankets and food parcels .

the beneficiaries in the four provinces were: western cape – masibambane senior Club and sizakuyenza safe Home in phillipi northern cape – tsholofelo Care Centre in Galesheweeastern cape – Flood victims from the King sabata dalindyebo (Ksd) municipalitylimpopo – Communities of Bochum, mogwadi and dendron nationwide coverage in both print media and radio stations was achieved . Live radio interviews were held by saFm in each of the four provinces mentioned above . nedbank, Brimstone and the various beneficiaries actively participated in the interviews .Brimstone spent r200 000 on this initiative .

mitchells plain community advice and development project the mpaCdp was established in 1985 and offers free basic para-legal, referrals, advice and information and pro bono services to the indigent communities of mitchells plain . Community education and awareness programmes are pivotal goals of the service provided . Brimstone annually supports the centre with a donation of blankets from the Brimstone Foundation . However this year mpaCdp approached the Company to assist with a monetary donation . Brimstone believes in the dedication and commitment of the staff and management of the Centre in ensuring that the services provided are justified and sustainable . Brimstone agreed to support the organisation with an amount of r50 000 .

breast cancer dialogue Brimstone in partnership with nedbank held a successful dialogue on Breast Cancer in october 2013 . the event featured a discussion with a breast cancer survivor, and engagement with various medical professionals and members of the audience . Brimstone spent r60 000 on this initiative .

Jakes gerwel commemorative lecturethe inaugural Jakes Gerwel Commemorative Lecture was held on sunday 1 december 2013 at the Great Hall, University of the Western Cape . the keynote speaker was the archbishop emeritus desmond tutu . professor Jakes Gerwel served as chairman of Brimstone from 1999 to 2012 . Brimstone management and staff assisted with the planning of the event . Brimstone spent r70 000 on this initiative .

“Journey into the unknown” book launchin may 2013 Brimstone assisted with the launch of the book ‘’Journey into the Unknown’’ by noorjehaan and adam mohamed . the book is the true story of noorjehaan and dr adam mohamed, who lost their three young daughters in a tragic motor car accident . Journey into the Unknown will inspire people every-where to face tragedy and loss with the knowledge that grieving is nature’s way of healing . Brimstone spent r60 000 on this initi-ative .



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sea Harvest

climate changesouth africa has accepted that climate change represents the most urgent and far-reaching challenge of our time . sea Harvest acknowledges that as a company it has a responsibility to develop its own adaptive responses to the effects of climate change by implementing practical measures to mitigate climate change to ensure that the disruption caused by humans in the fish stock is within manageable parameters . sea Harvest believes south africa’s acknowledgement of the effects of climate change is a positive development and sea Harvest will make every effort to also adopt a positive attitude to mitigate climate change effects, particularly in the fishing arena . sea Harvest’s responses to climate change are evident from its participation in industry bodies such as fisheries management, scientific forums and the marine steward Council (msC) . sea Harvest is involved in these industry initiatives in order to be at the forefront of dealing with issues that are affecting the sustainable utilisation of fish stocks . as a founding member of the responsible Fisheries alliance, sea Harvest together with other industry players will continue to meaningfully participate in strategic initiatives aimed at minimising the effects of climate change . to this end, sea Harvest will strive to strengthen its support to south africa’s approach in imple-menting the adopted eaF to protect and enhance the marine eco-system’s health as whole, on which life and human benefits depend . Human activities are continuing to affect the earth’s energy budget by changing the emissions and resulting atmospheric con-centrations of radioactively important gases and aerosols and by changing land surface properties . previous assessments have already shown through multiple lines of evidence that the climate is changing across the planet, largely as a result of human activ-ities . the most compelling evidence of climate change derives from observations of the atmosphere, land, oceans and cryosphere . Unequivocal evidence from in situ observations and ice core records shows that the atmospheric concentrations of important greenhouse gases such as carbon dioxide, methane and nitrous oxides have increased over the last few centuries [ipCC WGi Fifth assessment report 2013] . the impact of climate change on sea Harvest affects the availability of fish to be caught, which also affects the annual quota allocations and ultimately impacts negatively on the company’s financial performance . in the United nations Conference Cop17 held in durban (2011), south africa announced its position on climate change in that it expects a balance between climate and development initia-

tives, and calls for a balance between mitigation of and adaptation to climate change . these interests will be better served by a legally binding global action that ensures that temperature increases from greenhouse gas emissions are kept below two degrees celsius . since the adoption of the ecosystem approach to Fisheries (eaF), south africa has adopted a concept of taking ecological considerations into account in environmental resource management, which requires protection of fisheries and secures ecologically sustainable development and use of natural resources, while promoting justifiable economic and social devel-opment . this fisheries management strategy combined with classic management tools, inter alia; individual quota rights, annual total allowable Catch (taC), closed seasons, fishing effort and gear limitations are designed to promote yield sustainability in fish stocks alongside on-going fluctuations in environmental conditions . this implies that the potential effects of climate change are largely ‘built in’ to the fisheries management strategy .

market presence

ratios of entry level wage and local minimum wage ratesthe amendments to the wage agreement and wage increases for the shore-based employees are done annually at plant level between management and the Food and allied Workers’ Union . the company’s minimum wage for the shore-based employees is amended annually and was negotiated at r27 .92 per hour during the last annual wage negotiations . approximately 70% of the factory employees are currently on this rate . the amendments to the wage agreement and wage increases for the sea-going employees are done annually at bargaining council level between the various fishing companies represented by the south african Fishing industry employer organisation and the various unions . sea Harvest is currently paying above the minimum rates in all the categories for the sea-going employees .

policy, practices, and proportion of spending on locally based suppliers in terms of the sea Harvest procurement policy, preference is given to saldanha based black businesses which are able to provide the necessary services or products at the right price . With regard to national services, a procurement manager evaluates all suppliers and appoints service providers after taking into account the reliability and speed of provision for perishable products . Where possible, smme/ black women-based businesses are being afforded the opportunity to present their credentials to systematically merge them into the cycle .




procedures for local hiring and the proportion of senior management hired from the local community at locations of significant operationall senior positions at sea Harvest are advertised internally and externally (local newspapers and employment agencies) simulta-neously . due to the nature of its business in saldanha, it is important for persons working at its plant to live in saldanha and the surrounding suburbs . this often means that successful appli-cants living beyond the West Coast have to relocate closer to saldanha . Where possible, candidates from the local community are given preference . during the year under review 12% of the successful applicants in senior positions were from the local community .

Indirect economic Impacts

understanding and describing significant indirect economic impacts and the extents thereof provided by the group’s business existenceduring 2008 sea Harvest undertook a socio-economic impact assessment through the University of Cape town, to indepen-dently verify sea Harvest’s contribution to the West Coast and the surrounding areas .

the study confirmed the following:– sea Harvest is the largest single employer on the West Coast– sea Harvest created between 3 800 and 4 900 indirect jobs– sea Harvest accounted for about 15% of all the employment

in the saldanha Bay municipal area– sea Harvest accounted for about 30% of all household

income in the town saldanha Bay .

labour practices and decent work

workforce analysisemployment type = 2 401 total

salaried employees male FemaleGrand

totaloccupation Level african Coloured indian White african Coloured indian White 01 – top management 0 1 0 3 0 2 0 0 602 – senior management 1 6 1 10 0 2 0 1 2103 – middle management 2 19 1 17 3 18 2 8 7004 – Junior management 3 22 2 9 7 19 1 4 6705 – semi skilled employees 0 3 0 0 2 33 1 2 4106 – Unskilled employees 0 0 0 0 0 0 0 0 0Grand total 6 51 4 39 12 74 4 15 205

Waged employees male FemaleGrand

totaloccupation Level african Coloured indian White african Coloured indian White 01 – top management 0 0 0 0 0 0 0 0 002 – senior management 0 0 0 0 0 0 0 0 003 – middle management 3 30 0 2 0 0 0 0 3504 – Junior management 22 127 0 12 20 97 0 0 27805 – semi skilled employees 338 423 0 4 391 679 0 1 1 83606 – Unskilled employees 23 7 0 0 6 11 0 0 47Grand total 386 587 0 18 417 787 0 1 2 196




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employment contract = 2 401 total

permanent employees male FemaleGrand

totaloccupation Level african Coloured indian White african Coloured indian White 01 – top management 0 1 0 3 0 2 0 0 602 – senior management 1 6 1 10 0 2 0 1 2103 – middle management 4 43 1 16 3 16 2 8 9304 – Junior management 22 127 2 18 26 111 0 4 31005 – semi skilled employees 254 268 0 2 293 495 1 2 1 31506 – Unskilled employees 16 6 0 0 6 11 0 0 39perm total 297 451 4 49 328 637 3 15 1 784

temporary employees male FemaleGrand

totaloccupation LvL african Coloured indian White african Coloured indian White 01 – top management 0 0 0 0 0 0 0 0 002 – senior management 0 0 0 0 0 0 0 0 003 – middle management 1 6 0 3 0 2 0 0 1204 – Junior management 3 22 0 3 1 5 1 0 3505 – semi skilled employees 84 158 0 2 100 217 0 1 56206 – Unskilled employees 7 1 0 0 0 0 0 0 8temp total 95 187 0 8 101 224 1 1 617

male FemaleGrand

totalage Group african Coloured indian White african Coloured indian White >55 7 34 0 18 5 11 0 1 7646-55 40 138 0 17 28 121 0 9 35336-45 115 148 1 18 106 210 0 4 60226-35 196 189 3 4 226 295 2 2 917<26 34 129 0 0 64 224 2 0 453Grand total 392 638 4 57 429 861 4 16 2 401

employee benefits

employee benefitsfuneral assistance (permanent employees – sea-going & shore-based and contract/flexi employees)

Insured person Insured amountprimary insured person (employee) r20 000insured spouse/Life partner r20 000insured Child:1 . aged 14yrs + (up to 21yrs or a full-time student under 25yrs)2 . aged 6yrs + (younger than 14yrs)3 . aged 2yrs + (younger than 6yrs)4 . aged younger than 2yrs (excluding stillborn)5 . stillborn

r20,000r10,000r5,000r2,500r2,500




death and disability cover

permanent employees – seagoing & shore-based contract/flexi employees

death cover – death on board or in service – 3 times annual income . – death on board or in service due to an accident – a further 3 times

annual income

disability coverFor seagoing employees: employees injured on board are covered by the Workman’s Compensation act as well as the Company insurance . – receives 75% of average remuneration during the first 2 years

if declared unfit for duty– Will continue to receive 75% remuneration until retirement, should

they be declared unfit for duty in the open market after this time– Continuous contribution to the provident Fund by the Company to

ensure a reasonable retirement income

For all other employees:– employees who are declared disabled – covered by the Workman’s

Compensation act as well as the Company insurance– 3 times annual salary from Company insurance

death cover – r75 000 for the family when the employee dies in service

disability cover– r75 000 for the employee if permanently disabled while in

service

provident/pension fund (permanent employees – seagoing & shore-based only)membership is compulsory and the company pays 7% of basic salary

medical aid (permanent employees – seagoing & shore-based only)the employee has the option of two medical schemes:1 . tiger Brands2 . Fishmed (a low cost, industry specific scheme)

Company contributes 50% of the medical aid Contributions .

labour and management relations percentage of employees covered by collective bargaining agreements56% of our employees are unionised (see Union representation table below) and 92% are covered by plant Level or Bargaining Council Wage agreements .

minimum notice periodsthere are no set notice periods at sea Harvest . the time frame depends entirely on the specific circumstances . the notice periods for layoffs, short time and retrenchments are set out in the Labour relations act for the factory based employees and the Bargaining Council agreement for the sea going employees . short time, change in conditions of employment and retrenchments all have very well documented procedures that need to be followed before they are implemented . these procedures are agreed to with the relevant unions and are adhered to .

union representationat sea Harvest the following is the breakdown of the union representation:

union %Food and allied Workers Union 54 .1%trawler and Line Fisherman Union 1 .4%independent Labour Union of south africa 0 .5%not Unionised 44 .0%




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occupational Health, safety and environment (oHse)a comprehensive land based risk management program, which focuses on health, safety, security, risk control, fire defence and emergency planning continues to be performed by sea Harvest . the risk audit is performed by marsh incorporated risk Consulting . sea Harvest achieved the targets set for the last 3 years to date .

the oHse audit scores for the past 3 years to date were as follows:

Year safety & Health environment2011 98% 96%2012 96% 95%2013 98% 93%

sea Harvest conducts medical assessments of all staff and costs incurred are paid for by the company . in order to ensure that the company complies with applicable standards and legislation, monthly internal oHse audits are performed . this process is achieved by electing oHse representatives, who participate in monthly oHse meetings . these representatives also form part of the internal auditing team . this intervention ensures that injuries to staff are prevented and where possible avoided in particular disabling injuries . Where such disabling injuries occur in such isolated instances, these are thoroughly investigated in order to prevent reoccurrence . in addition to the monthly osHe meeting, risk steering committee meets on quarterly basis to deal with all oHse issues that cannot be resolved at a departmental level . these meetings are chaired by the operations director and attended by senior management .

Health and safety topics covered in formal agreements with trade unionsas a standard negotiated item with the unions, safety remains sea Harvest’s priority in these negotiations . the agreements with the unions recognise the selection and training of safety represent-atives to ensure that injuries at the work place are prevented, minimised or, where possible, avoided .

average hours of training per year per employee per category of employee1 . Candidates on Learnerships are deemed to be “on training”

throughout the period of the Learnerships .2 . apprentices (section 13) – same principle as above .3 . tradehands targeting trade test within 2 years from date of

reporting- same as above rating .4 . Cadets and all officers in training- all duty and college days at

rate of 12 hours per day (due to onboard working hours) .5 . For persons studying by distance learning/e-learning –

no training hours recorded .6 . all short courses actual classroom time is based on an 8 hour

classroom day .7 . Candidates on learning programmes differ in their job

categories .

descriptiontraining

Hours remarkstop management 0 no formal trainingsenior management 160 Communication & ir training

middle management 1 280ir & Communication training, Compliance training

Junior management 46 080Learnerships/ FetC & ir training, Compliance training

semi-skilled Workers 203 520

Certificate Learnerships/ processing/ Food safety, Compliance training

Unskilled Workers 97 648

Learnerships/ Basic safety/ Food safety, Compliance training

(not included e-learning; nated Classes (after hours attendance), Cadet and intern experiential training, and learnership workplace training)




programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

these training courses were presented:

project participants objectiveComplianceFire FightingFirst aid at seaCooks’ trainingsafety officerpssrsafety FamiliarizationForklift and reach truck driversinduction and HaCCp refresher

2020252131

all staff

to ensure that we comply with legislation regarding employee and food safety .

Level 1 (GetC) – Food & beverages processes 22 to prepare new employees for effective participation and personal development by growing their communication (english), numeracy and food safety awareness .

nQF Level 2 – national Certificate: Fish & seafood processing

72 to further develop the processing skills, communication skills and safety awareness of staff in processing areas .

nQF Level 4 – national Certificate: production management 31 to develop a new stream of leaders for supervisory management . Learners are screened for promotional posts within the processing areas as well as the service department


workplace exposure

1. Interns and graduate interns sea Harvest has placed 5 graduates and 5 interns from

various institutions to offer workplace exposure across the organization . (s&m/Finance/technical/Hr)

supporting partnershipssea Harvest has partnered with a range of institutions to achieve the Company’s strategy for Learning and development . Listed below are some of the institutions:

2. west coast fet college sea Harvest provides workplace exposure to their students as

well as mentoring, coaching and career guidance . We provide mentoring and coaching and career guidance . they provide onsite training for staff for the nated (ntC 1 – 3) courses (mathematics, engineering science, electrical trade theory . they provide the theory and some workshop training for apprentices .

3. national fishing forum national Fishing Forum provides support for local maritime

programmes . sea Harvest partners with project implemen-tation and support .

4. foodbev seta Food Bev seta provides learnership funding and appren-

ticeship funding . they provide pivotaL programme support . sea Harvest provides expertise to their board, exco and processing chamber . sea Harvest partners on community development programmes eg . smme’s on the West Coast .

5. wwf (responsible fishing alliance) a partnership whereby training of sea-going staff on

conserving the marine environment and fishing responsibly is provided . WWF monitors the material development and co-ordinates the activities between alliance partners (oceana, viking, i&J and sea Harvest) . all partners pay an annual levy to WWF and purchase all learning material from WWF .



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percentage of employees receiving regular performance and career development reviewsat sea Harvest 8% of employees (monthly & executive payrolls only) receive performance and career reviews .

composition of the highest governance bodythe table below depicts the composition of the board of directors . a complete analysis of the employees has been included in the table La1 and La2 above .

Gender split male 9Female 3

total 12age Group 30 – 40 6

40 – 50 150 – 60 2

>60 3total 12race Group african 4

White 5Coloured 3

indian 0total 12

environmental performance Indicators

water

total water withdrawal by sourceat sea Harvest between 370 000 cubic meters per annum of sea water is withdrawn from the sea . Water is initially treated for contaminants and disinfected before being used for slurry ice making and cleaning flumes within the processing area .

biodiversity

location and size of land owned, leased, managed, or adjacent to protected areas and areas of high biodiversity value outside protected areassea Harvest operates in the Cape west coast in waters between 200 and 800 metres . sea Harvest continues to comply with the General policy for the allocation and management of Fishing rights in the Hake deep sea trawl sector . the policy states that on the Cape south coast hake deep-sea trawlers may not fish in water depths of less than 110 metres or within 20 nautical miles of the coast, whichever is the greater, and trawling is generally restricted to areas where the sea bed is sandy or muddy .

as a founding member of the association we continue observing and complying with the industry agreement that no fishing may take place on fishing grounds that have been ringed in order to allow the ecosystem to rehabilitate . sea Harvest supports this self-imposed industry initiative as it ensures continuous protection of the benthic habitat outside the ring fenced areas . We are proud that to date sea Harvest has contributed significantly to the south african hake trawl fishery with the result that the Hake deep sea trawl sector is the only south african fishery sector to carry the marine stewardship Council eco-label . this initiative reinforces that local fisheries’ products are from a well-managed and sustainable resource that meet international standards .

emissions, effluents and waste

total direct and indirect greenhouse emissions by weightsea Harvest fishing vessels’ diesel usage for the year 2013 was 14 .9 million litres, compared to 10 .3 million litres in 2012 the fuel usage by the vessels is dependent on various factors the distance the vessel needs to travel, weather and fishing conditions . it is sea Harvest’s objective to significantly minimise the fuel used in its operations . in the coming years, climate sensitive practices are likely to be centre stage and a company’s carbon accounts will be critically scrutinised . the reduction of fuel consumed is a continuous focus including bi-annual vessel refits, when engines are overhauled and hulls are cleaned .

total water discharge by quality and destinationthe total water discharge is estimated at approximately 2500 cubic meters per day at sea Harvest

sustainable fishing sea Harvest is a responsible corporate citizen and conducts its business in a sustainable manner for the benefit of present and future generations . Compliance with the regulations and quota conditions and international standards is central to sea Harvest’s business . since the launch of the responsible Fisheries alliance in 2009, sea Harvest and other south african fishing companies together with the World Wildlife Fund (WWF) support the implementation of an ecosystems approach to marine resource management aimed at further promoting responsible fisheries practice in south african maritime waters .




total weight of waste (tons) by type and disposal method

Waste Year 2013 Year 2012municipal Waste 469 406 disposed to municipal dumping site via municipal truckscrap metal 154 178 removed by Contractor to scrap yard (recycled)Cardboard 220 235 removed by supplier for recyclingFish offal 3838 4 039 Collected by fishmeal processorplastics 186 35 removed for recycling purposesCut tubs 11 11 removed for recycling purposes210L drums 20 10 removed for recycling purposes20L plastic containers 1 3 removed for recycling purposesLight steel 6 2 removed for recycling purposesoffice paper 4 15 removed for recycling purposespallets 107 48 donated to community Waste diesel oil 26 201 removed for recycling purposes (safe disposal certificates provided)added value dump Fish 562 887 disposed to pig farm for feedBuilding rubble 19 41 disposed to municipal dumping site stainless steel 23 14 removed for recycling purposesscrap nets & ropes 8 11 sold to local contractor for harvesting of musselsasbestos 0 — disposed to landfill site (safe disposal certificates provided)scrap rubbers 0 — disposed to municipal dumping site


total number and volume of significant spillsthere were no significant spillages during 2013 at sea Harvest .

certifications sea Harvest follows a very intensive methodology to ensure that the standards covering safety, health, environment and quality are achieved and maintained .

sea Harvest continues to uphold exceptionally high standards with its compliance to:1 . european Union2 . south african Food and associated Compulsory specification

standards3 . responsible Fishing programme with WWF4 . Hazard analysis Critical Control point approval5 . msC Certification accreditation6 . British retail Consortium accreditation

customer Health and safety life cycle stages in which health and safety impacts of products and services are assessed for improvement and percentage of significant products categories subject to such procedures

Food safety is a key focus across all sea Harvest products . to ensure strict compliance with food safety regulations the following mitigating activities are in place:1 . internal systems are in place to ensure continuous mainte-

nance of quality and safety systems .2 . Food systems that are currently in place include the

Compulsory specifications for Frozen Fish, frozen marine

molluscs and frozen products derived therefrom, (vC8017:2003), HaCCp (audited by the nrCs), BrC, Fsa and eU regulations .

total number of incidents on non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during the life cycle by types of outcomesthere were no non-compliance incidents recorded for 2013 .

type of product and service information required by procedures and the percentage of significant products and procedures subject to such information requirement

the Fsa audit is implemented at sea Harvest, which ensures that the following systems are in place: 1 . regulations governing general hygiene requirements for food

premises and the transport of food (r918) . Food safety management prerequisite program (prp’s) requirements as published by saBs . supplemented by the Codex principles of the HaCCp system; GFsi guidance document; applicable laws, regulations and compulsory specification; Customer requirements .

2 . all systems are audited by accredited third party auditors . 3 . all systems are backed up by an on-site, micro laboratory

which operates according to iso 17025 standards . this ensures products are only released if they comply with specified microbial levels . Bi-annual inter laboratory verifica-tions are done to ensure the results delivered by the labo-ratory are comparative to iso 17025 accredited laboratories .



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4 . all food contact packaging material suppliers are certified under either the BrC/iop “Global standard for packaging and packaging materials” or the iso 22 000:2005 “Food safety managements systems” . migration tests are done by the packaging suppliers to ensure food safety can be assured and food contaminations by inks are prevented . packaging suppliers supply sea Harvest with declarations to ensure packaging material is safe to use as food contact material .

5 . all raw material suppliers are HaCCp certified by an accredited third party auditor . in addition, all suppliers are audited on annual basis by a trained sea Harvest auditor as part of an integrated system . specifications are set up and approved by both the supplier and sea Harvest to ensure products supplied are safe .

6 . incoming microbial testing is done on all raw materials . only raw materials conforming to specification will be released for production purposes .

7 . all imported product is purchased from HaCCp approved/certified suppliers, which are audited by accredited 3rd party auditors .

8 . all liability claims are provided for by insurance cover .9 . a disaster recovery plan is in place, which includes a recall

strategy, as well as a notification and media engagement strategy .

10 . management reviews of the systems are done on an annual basis .

11 . annual audit is done on the Food safety system by an independent internal auditor .

12 . review of the HaCCp plan is annually done by the HaCCp team .

total number of incidents of non-compliance with regula-tions and voluntary codes concerning product and service information and labelling by types of customerssea Harvest did not have any such incidents in 2013 .

practices related to customer satisfaction, including results of surveys measuring customer satisfactionall hake caught by sea Harvest are msC certified . this ensures that the fish resource is sustainably and responsibly fished . all added value products are manufactured to the highest standards of food safety as reflected in the multiple food safety certificates in place . integrated in these systems is an allergen management policy and system . this system is validated on an annual basis to ensure cross contamination of allergens does not occur with current control measures in place . all packaging for local product complies with the south african food labelling act of 2012 (r146) . as part of an integrated food safety system monthly food safety meetings are held . all incidents of non-compliance are recorded, trended and action plans are reviewed at the same forum . any incidents of non-compliance are recorded via the

customer care line or in the case of export (pnp and sFs) product via the sales and marketing channel . each vessel in the fleet is subject to a nrCs inspection to ensure food safety standards are met on board the vessel .

community

nature, scope and effectiveness of all programmes on communitiessea Harvest has engaged in community upliftment initiatives for many years . of significance this year are the following:For the period January 2013 to december 2013 an amount of r472 000 was contributed to organisations and institutions operating within the spheres of education, health, sports devel-opment, community development and business development .

Healthan amount of r63 000 was granted towards various institutions within the community .

education46 Bursars benefitted in the amount of r123 750 . Bursaries are awarded to children of employees as well as to other candidates based on their matric or tertiary results .

sports developmentsports development continues to be high on the agenda of community development and donations to a number of sport codes and clubs have continued . sea Harvest continues to commit over r38 750 in this regard . investment in school sports development was prioritised by the sea Harvest Foundation as it can benefit large numbers . sports equipment was donated to 23 schools . two local rugby clubs also received donations . Last year an amount of r138 981 was donated towards sports development .

community developmentrecipients that benefitted included churches, crèches and various other institutions . an amount of r131 627 was made available towards community development during 2013 .

business developmentthe sea Harvest Foundation partners with the West Coast Business development Centre in support of small business devel-opment and support of r35 000 was granted last year . the social investment program of sea Harvest is managed by the board of trustees of the sea Harvest Foundation trust . the social investment program includes education, sports devel-opment, health, business and community development . the effectiveness of the program is highlighted by the many beneficiaries it reaches . Feedback from the institutions clearly indicates that the program is making a difference in the community .



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House of monatIc (Hom)

economic performance

direct economic value generated and distributed

revenue 179 264 577operational Costs 129 245 896employee Compensation 67 569 883profit for the year 6 907 975payments to capital providers and government – sars emp201 (Jan 13 – dec 13) 7 324 395payments to capital providers and government – sars vat (Jan 13 – dec 13) 6 800 546

climate changesome of the raw materials used are natural fabrics, such as cotton and wool for shirts and suits respectively with most fabrics being imported from europe, China and india . the european Union accounts for about a third of australia’s wool exports by value, importing approximately 30%, with italy by far the predominant purchaser of australian wool in the eU . China is also a significant importer of australian wool . there have been reports of climate changes impacting the australian sheep farmers and a study was conducted on how it will impact the australian farmers in years to come . (source: australian Federal department of industry, innovation, Climate Change, science, research and tertiary education .) at this stage there has been no direct effect of climate change on our business . another risk is that most of our raw materials are shipped and the weather can play an integral part on the timeous delivery but during 2013 we have not had any such instances .

financial assistance from governmentthe department of trade and industry (dti) granted a subsidy in the form of a production incentive (pi) which is part of an overall Clothing and textile Competitiveness programme, admin-istered on behalf of the dti by the industrial development Corporation . Hom received Upgrade of Capital equipment Grant funding during financial year 2013, which was used to purchase machinery . the following was purchased during the year: 185 plain lockstitch machines, 1 automatic cutter, 2 fusing machines and 1 shoulder press . Hom also participated in a cluster project under the Clothing and textile Competitiveness program whereby the company focused on lean business principles . extensive training on lean was undertaken during 2013 and certain key improve-ments were made . the pi subsidy has been running for 3 years and has assisted the company significantly .

employment

employees(see table on following page .)

there were 66 new employee engagements and the company has an employee turnover rate of 8 .3% .

employee benefits– pension Fund for monthly employees: twilight Group

Umbrella Fund (7 .5% of basic salary contribution from employer)

– death and disability cover: for monthly staff employees who qualify to participate

– provident Fund for weekly employees: national Bargaining Council for the Clothing industry (6 .25% of basic salary contribution from employer)

– Health Care Fund for weekly employees: national Bargaining Council for Clothing industry (6 .25% of basic salary contribution from employer and 6 .03% from employee)

– medical aid for monthly employees: discovery medical aid (two thirds contribution by the employer up to a maximum determined by the employer each year)

labour/management and relations

percentage of employees covered by collective bargaining agreementsapproximately 89% of House of monatic staff are covered by the national Bargaining Council for the Clothing industry

minimum notice periodsthe time frame depends on the various issue at hand, most of which are covered by the Labour relations act or the Collective agreement . short-time – Consultation with the union organiser takes place, employees are informed well ahead of time, in order to prepare themselves for the financial impact it might have on them . short time consultation is done according to the Clothing industry main agreement: Change in conditions of employment – depending on the specific issue the notice period can range from 24hrs to 30 days . retrenchments – the company adheres to the procedure in the Labour relations act . Hom has a very good working relationship with the union . issues are addressed immediately and through a progressive process . When concerns are raised by the union organisers, they send a formalised communication to the company which addresses the issue on hand .




Headcounttotal

2013 2012

total african White Coloured indian total african White Coloured indian

region sa 758 80 11 663 4 760 70 16 670 4non sa 2 1 1 0 0 1 0 1 0 0

total 760 81 12 663 4 761 70 17 670 4

employment type

salaried 142 13 12 113 4 140 10 14 112 4Waged 618 68 0 550 0 618 60 0 558 0Commission 0 0 0 0 0 4 0 4 0 0

total 760 81 12 663 4 761 70 17 670 4

employment contractpermanent 739 71 12 652 4 735 63 17 651 4temporary 21 10 0 11 0 26 7 0 19 0

total 760 81 12 663 4 761 70 17 670 4

Gender splitmale 159 16 10 131 2 163 10 14 137 2Female 601 65 2 532 2 598 60 3 533 2

total 760 81 12 663 4 761 70 17 670 4

age Group

<26 63 6 0 57 0 91 10 0 81 026-35 127 27 0 98 2 114 23 0 89 235-45 139 22 3 114 0 160 21 2 137 045-55 288 23 1 262 2 294 13 3 276 2>55 143 3 8 132 0 102 3 12 87 0

total 760 81 12 663 4 761 70 17 670 4

Level

normal 730 80 3 644 3 732 70 8 650 4Junior management 12 1 1 9 1 10 0 1 9 0middle management 12 0 3 9 0 13 0 3 10 0senior management 6 0 5 1 0 6 0 5 1 0

total 760 81 12 663 4 761 70 17 670 0

occupational Health and safety (oHse)Hom operates a comprehensive Health and safety programme . Hom has 5 safety committees . monthly safety committee meetings are held, as well as quarterly meetings with the executive directors . an independent audit was conducted during the year for compliance, with a rating of 73,8% being achieved .

the following number of Health and safety reps, First aiders and Fire Fighters are used to monitor health and safety:

Health and safety reps 16 2 .1%First aiders 18 2 .3%Fire Fighters 17 2 .2%

there are 5 safety committees representing various areas of the company who meet on a monthly basis . Quarterly Health and safety management meetings are held with the oversight committee where health and safety is monitored and assessed .

rates of Injury

rates of injuries 26 average pm (not serious)occupational diseases noneLost days/absenteeism 46 days Coidanumber of work related fatalities 0

Workmen’s Compensation act (WCa) cases for 2013

19 cases(Lacerations and punctures to fingers; fractured arm; burnt hand and muscles and ankle sprained)




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education, training, counselling programmes in placeHom focussed on healthy lifestyle living and conducted the following programmes:– Breast Cancer awareness – Healthy Lifestyle Choices – Woman’s day – Hiv/aids & tB prevention in the Workplace– Wellness day with discovery Health– Blood donation day

discovery wellness day – since 2010 Hom has participated in the annual discovery Wellness day, where the employee’s overall health is assessed . a comprehensive report is handed to the company on the general health of employees . social worker – the responsibility of the social worker is to provide the employees with further assistance as well as to care for the employee’s psychological and emotional wellbeing . cancer awareness – Hom invited Cansa to create awareness and educate the staff about the early signs of cancer and where they could seek medical assistance for the symptoms . the session with Cansa proved successful as there were many employees who made appointments for screening . Healthy lifestyle choices – during this awareness session the employees were taught the importance of a balanced diet as it helps to control body weight, heart rate and blood pressure . HIv/aIds & tb prevention – educates the employees to take the necessary precautions to prevent Hiv/aids and tB and also to encourage employees to get tested for Hiv/aids and screened for tB . the company has a strict policy of no discrimination for employees living with Hiv/aids .

Hom:– acknowledges the seriousness of the Hiv / aids epidemic;– seeks to minimize the social, economic and developmental

consequences to the company and its staff;– is committed to implementing an Hiv / aids and std

programme .

no staff member has to undergo Hiv testing, but voluntary testing is made available by the company . Where testing is done at the request of the employee, this will be with his/her informed consent .

Health and safety topics covered in formal agreements with trade unionsHealth and safety issues are discussed formally at quarterly safety meetings with management and minutes are taken, filed and signed off . there are no formal agreements in place .

training and education

average hours of training per employee per category of employees

occupational Levels actual amount average hours occupational Level 1 0 0occupational Level 2 68 6occupational Level 3 126 11occupational Level 4 637 4occupational Level 5 8303 18occupational Level 6 3192 24

Hom provided the following training during the year:– Learnerships – CtFL manufacturing processes and Garment

Construction – multi skilling – production operations– apprenticeships – mechanics – microsoft excel – successful retail selling– professional Grooming– Health and safety and First aid– Hiv/aids awareness– information technology– Work experience– Clothing management internships – Core Lean training– Leadership development

performance reviews are done on operators by their supervisors and managers, as well as performance evaluations . skills assessments are conducted on employees, especially the matriculants who have the potential to be developed . during 2013 Hom started its performance management roll-out project which will be implemented bi-annually to assess the performance of the monthly paid staff .

diversity and equal opportunity

composition of the highest governance body the table below depicts the composition of the Board of directors:

Gender split male 7Female 1

age group 40-50 251-60 3

>60 3race Group african 1

White 3Coloured 4

return to work and retention rate after maternity leave: 100%




environmental Issues

materials materials used in the production by weight or volume the total fabric used for the year was 699 870 meters .

percentage of materials used that are recycled input materialsHom does not use recycled material .

energydirect energy consumption by primary energy source 100%

Indirect energy consumption by primary source 0% as we use direct energy (electricity supply)

energy saved due to conservation and efficiency improvementsHom uses a 50:50 blend oil and has moved away from using HFo . there has been an increase in electricity usage in 2013, as the shirt factory, which was previously in another building, was moved to the main factory along with the other production lines . 163 180 litres of boiler fuel was consumed as at the end of september 2013 .

Initiatives to provide energy efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives(a) an energy efficiency survey is currently being conducted with

Csir . (b) the lighting replacement project is almost complete . (c) Hom replaced 185 of the smaller consumption sewing

machines with sewing machines, which improves efficiency up to 40% .

Initiatives to reduce indirect energy consumption and reductions received the company is liaising with Csir in order to become more energy efficient .

watertotal water withdrawal by sourcethe total water used for the year was 674 527 litres . there was an increase in usage due to the production floors working over-time . the relocation of the shirt factory also impacted on the water consumption .

percentage and total volume of water recycled and reused Water is not recycled as the water is turned into steam .

biodiversity location and size of land owned, leased, managed in, or adjacent to protected areas and areas of high biodiversity value outside protected areasHom is located in an industrial area and does not operate close to any protected areas .

description of significant impacts of activities, products and services on biodiversity in protected areas and areas of high biodiversity value outside protected areasBoiler Gas emission is limited and is within environmental guidelines .

emissions, effluents and wastetotal direct and indirect greenhouse emissions by weighttotal mass used is 163 180 litres x 0 .91 = 148 493 Kg as at the end of september 2013, which is an improvement compared to 218 400 kg being used in 2012 .

Initiatives to reduce greenhouse gas emissions and the reductions achieveddue to the increases in electrical costs, it is cheaper to keep running oil fired boilers .

no, so and other significant air emissions by type and weightmost of the emissions are compressed air or steam . the plant does not emit no or so into the environment .

total number and volume of significant spillsno spills have been recorded to date .

weight of transported , imported, exported or treated waste deemed hazardous under the terms of the basel convention annexure I,II, III and vIII and percentage of transported waste shipped internationallyno hazardous waste is created in the processes .

Identity, size, protected status and biodiversity value of water bodies and related habitats significantly affected by the reporting organisation’s discharges of water and runoffHom does not create harmful water run offs .




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lIon of afrIca

Insurance company

economic considerationsLion of africa insurance Company, as part of the broader short-term insurance industry, contributes significantly within the economy . some of the Company’s economic contributions are highlighted below:– economic growth which includes, but is not limited to,

employment creation, the purchase of goods and services from suppliers, contributions to the fiscus through tax payment, contributions to social development through various sponsorships, the upliftment as well as distribution of wealth to providers of capital;

– the provision of financial protection against risks to customers, which in turn provides these individuals, entities and businesses with the security to invest in incremental infrastructure needed for future growth without the risk of financial loss from catastrophe, damage or litigation;

– the contribution to society through the Company’s products and services by encouraging our customers to adopt behav-iours that have environmental and social benefits, including innovation in risk management processes, the reduction of energy consumption and the promotion of safer driving .

financial assistance from governmentWhile Lion of africa insurance is not a direct beneficiary of any specific financial assistance from government, it does benefit from government incentive programmes and subsidisation of the following people development initiatives:– rebates received from the insurance sector education and

training authority (inseta) for short-term insurance skills development initiatives .

– a learnership allowance in terms of the income tax act in respect of the Company’s approved learnership programme .

procurement and related transformationLion of africa insurance has developed two policies; a General procurement policy as well as a preferential procurement policy . Both policies are in line with the nation’s Broad-Based Black economic empowerment (B-BBee) objectives . the primary objectives of these policies are:– to validate the Company’s commitment to preferential pro-

curement;– to achieve compliance with the Generic Code 500 of the

Codes of Good practice; and– to align with the guidelines as stated by the Financial sector

Charter (FsC) .

in accordance with these policies, all material procurement of goods and services is performed centrally from the Johannesburg

head office for all the Company’s branches in Johannesburg, durban, port elizabeth, Cape town and pretoria . this enables the Company to control whom it does business with by way of service level and performance contracting .the policies have been designed and implemented to offer clear guidelines with respect to procurement matters . these aim to redress the imbalances of the past and they perpetuate the Company’s overall commitment to the transformation of the south african economy . the implementation of the procurement policies is expressed, not only in terms of Code 500 of the Codes of Good practice of the B-BBee act, but also in terms of the FsC of which Lion of africa insurance is a signatory . all procurement is done in support of the principles as outlined in the department of trade and industry’s (dti) Codes of Good practice for Bee and B-BBee . Where a supplier has no Bee status, the Company will seek to find alternative sources of supply . in the most recent review, 70% of the Company’s total procurement spend was recognised as ‘qualifying spend’ as deter-mined by the dti . the Company encourages current non-Bee suppliers to become Bee compliant in the interests of a fairer and more sus-tainable economy . While the policy aims to contain or reduce costs for the Company through strategic procurement, it is important to note that it will not compromise on health, safety, commercial quality and service standards in the pursuit of its B-BBee objec-tives . it is Lion of africa insurance’s policy to procure high quality commodities, obtain technically suitable services and dispose of salvage at optimum value . the Company believes in and remains committed to ensuring the promotion, development and support of businesses from historically disadvantaged communities, as well as being sensitive to the need of establishing and supporting local and regional suppliers where possible . the Company also strives to conduct its procurement activities in terms of its ethical code which dictates balanced, moral and sound business practice . at Lion of africa insurance, economic and social transfor-mation is a belief system; these are not simply scorecard considera-tions . the Company holds a unique position in the south african business environment, being one of the few successful financial services companies to have been seeded and grown organically in post-democratic south africa . From humble beginnings, the Company is conscious of the need to continuously reinvest in dis-advantaged communities and businesses . approximately 70 .0% of procurement spend occurs through claims settlement . the Company ensures that key suppliers within the claims supply chain hold adequate and credible Bee certifica-tions . However, this is not to the detriment of the policyholders who retain the right to obtain replacements and/or services from their own chosen suppliers . Corporate procurement spend is done strictly in accordance with stringent policies and procedures in line with the guidelines



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as set out by the dti . Where practical, the procurement division has developed and maintains a database of approved preferred suppliers, for claims and corporate expenditure . in 2012, the Company introduced an online procurement tool which enables Lion users and brokers to appoint service providers involved in the claims process from a selected panel of chosen suppliers, thus enabling us to direct the spend appropriately towards suitably empowered service providers . this also dramatically enhances the service to the insured client and broker .

Indirect economic impactsLion of africa endeavours to produce sustainable growth in revenues and earnings to reward its parent and its shareholders . over the years significant dividends were distributed to the share-holder, and through their distribution mechanisms these dividends end up in the poorest communities, helping to alleviate poverty and uplift individuals .We participate in the inseta Learnership & Graduate programme . our participation in this programme enables us to contribute to skills development within south africa . the young individuals that we employ gain a stepping stone into a career within the short-term insurance industry . We believe that job creation and skills development in this manner is vital . in addition, Lion of africa insurance is committed to partnering with builders and vehicle repairers that are geared towards a transformed business environment . We undertake to list, as part of our procurement strategy, small businesses that may not otherwise have operated in structured partnerships within the developed business sector . the direct benefit to them is that they contract with the Company and are listed on the preferred panel of service providers . this means that they become part of a wider network of service providers in south africa, available for business to other short-term insurance companies . more often than not, their services are called upon by the clients for whom they would have done insurance repairs .

employeesin 2013, Lion of africa embarked on a partial survey that was intended to gauge staff sentiment on a number of pertinent issues . the survey was developed around staff’s experiences of the various divisions in the organisation . although the survey was centred around the information technology department, the results that were obtained offered an extensive view of staff’s per-ceptions and these were incorporated in the formulation of the various management solutions in 2013 and 2014 . the questions asked in this survey were themed around Communication: both internal and external, using electronic platforms versus face to face, management approachability, Customer centricity and lastly team and the dynamic of collaboration . the response rate was overwhelming at more than 50%, it offers the belief that the corporate survey that we plan to run in 2014 will be just as well received if not better . the corporate

survey will be used as an indicator of Lion’s performance as we progress towards our strategic objective of providing a great work environment for all our colleagues . the company’s employee value proposition remains unchanged; it continues to seek to balance the employee’s contri-bution and performance with the set objectives of the organisation . the company will continue to refine its performance management processes in order to ensure that performance management is understood and applied effectively within the organisation . the efforts of the individual are always enhanced multiple fold when applied within the context of the team . through management interventions such as performance management the company is able to ensure that each individual employee knows exactly what it is that they are required to be doing, while those with lacklustre performance are aware of what it is that is required in order to contribute to the efforts of the team . the competition for skilled employees continues in the short term insurance industry with Lion of africa feeling similar effects as other insurers . its approach to the competition for skills is to offer training to new entrants . its view is a long term one where the company believes that by offering training to unskilled or new entrants, it begins to reduce the skills constraint . However, as much as this solution is a long term one, in the short term, the company applies a two pronged approach . Firstly, it relies on word of mouth where the majority of the people that the company recruits would hear about the company from its current and past employees . this helps to lessen the cost of recruitment fees as charged by recruitment agencies . every potential candidate must undergo assessment of their technical ability and organisational fit . this is done through psychometric assessments, which also include an integrity measurement . all the people policies and practices are free of inequitable distinctions, as discrimination based on race, gender, pregnancy, marital status, ethnic, sexual orientation, age, disability, religion, Hiv status or language is unacceptable to Lion of africa insurance . it offers a comprehensive benefit portfolio to all employees . Lion of africa insurance will ensure that all people management practices are in compliance with south african labour laws . these include, but are not limited to, the Labour relations act, the sa tax Legislation and the Basic Conditions of employment act . employees are required to take up membership of the Company healthcare scheme . the services of an independent medical aid scheme provider is utilised for this offering . the scheme is coupled with a program that assists employees to focus on their holistic well-being and they get rewarded for their healthy lifestyles . in terms of the pension Funds act, 1956, the Company has an established contribution fund which provides for the retirement benefits of its employees . participation in this fund is compulsory for all employees . in total, the company offers the following as benefits to all its permanent employees, regardless of location .





– Group Life assurance– dread disease– pHi (disability Benefit)– pension– medical aid– Funeral Cover

over and above the mandated benefits, the company has a com-prehensive wellness program that covers physical, financial, mental and emotional wellbeing which it offers to all employees . these are offered at no cost to the employees, it is part of the company’s stated intention to provide wellness for our employees . employees receive professional assistance in dealing with chal-lenges that may impact them at a personal or interpersonal level . they also receive life skills, awareness and education programmes to promote healthy lifestyle choices and coping skills . these benefits are also available to immediate family members of our staff where extra support may be required to manage domestic life before it starts to impact on work . this assistance is offered through various means such as:– professional support line call centre– personal counselling (face to face)– Critical incident services– Hiv/aids education, counselling and support– referral services

the Company pays contributions to the privately administered pension insurance plan on a contractual basis . these contributions are recognised as employee benefit expenses when they are due, and once paid, the Company has no further obligations that require coverage . the organisation does not hold any collective bargaining agreements as we have no employees that have union membership . Lion of africa ascribes to the law of the land especially that per-taining to freedom of association; we do not discourage our employees from union membership .

employee statisticsthe company’s staff equity matrix as at 31 december 2013 including the 2012 prior year comparative, is tabled on page 47 . 2013 was a challenging year for Lion of africa as the organi-sation embarked on a company-wide restructure that affected a total of 21 people . the main purpose of the restructure was to streamline its customer facing operations by doing away with functionally identical positions . this has enabled the company to employ the right calibre of employee at the right position . the total number of staff that left its employment in 2013 was 53, this number includes 21 people that were affected by the restructure . it is evident that the organisation has an abnormally high amount of staff churn albeit that this churn rate is similar to that of the industry .

Below is the total number of staff that left the organisation as well as an indication of the reasons why they left . since the inception of Lion of africa insurance, only 4 staff members have retired .

committeesstaff participate in various committees within the organisation as well as industry committees . the internal committees are mandated to report on the organisation’s operations and the executive committees within the organisation at both operational and strategic levels . participation in these committees by staff is very important as it allows for wider and higher level engagement and it also encourages growth . Lion of africa insurance also believes that it should be satisfac-torily represented in industry committees . to this end staff partici-pation is encouraged .

learning and developmentas a BBBee Level 1 insurer, transformation is foremost to Lion of africa insurance’s continued success . the company continues to invest in the learning and development of its staff and of learners and graduates who join each year as part of the inseta training program . the company has improved in its development of its learners and graduates . in 2014 it will welcome 25 new learners and graduates . the company has developed specific projects for them to undertake, as these will catapult their development and offer them unique on the job training .its permanent employees remain a primary focus and to this end the company continues to encourage them to take up learning opportunities that are job specific but also that offer them com-pliance with the regulatory requirements of the industry . the company is pleased that a significant number of its staff have obtained their qualification and are certified in accordance with the FsB guidelines .

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environment matters in 2013, Lion of africa insurance Company acknowledged that preventative actions the company as members of society at large can positively impact the environment for future generations . in a concerted endeavour to substantially diminish its carbon footprint, its goal is to continue to enhance and implement work place initia-tives that will focus on better controlling the Company’s impact on natural resources, including water, electricity, waste and emissions . Lion of africa insurance gaines significant traction in two ini-tiatives that were undertaken in an effort to minimise usage of certain resources . in march 2011 the company started the statis-tical monitoring of its waste paper recycling initiatives . paper saving was identified as the meekest way in which it could lend its efforts in beginning to save the planet . While the company recycled a total paper tonnage of 3750 kilograms in 2012, its created a target for 2013 of 5000 kilograms . that target was surpassed as the company recycled a total of 5650 kilograms in 2013 . the target for 2014 is to recycle 8000 kilogram . at this level of paper tonnage recycled, 106 trees was saved that would have otherwise have been chopped down . its efforts to install electro sensor controlled lighting throughout its head office was fast tracked by the most unlikeliest of events . Lion of africa insurance’s head office building experi-enced a fire in september 2013 . Fortunate by the fire was

contained to the ground floor . the fire took place in the early hours on a saturday morning . as a result energy saving bulbs and install electro sensor controllers were installed . the company should start to measure the savings from these initiatives in 2014 .

Lion of africa insurance continues to anticipate a direct impact on the business in the coming years with respect to:– the level and types of cover provided;– pricing and underwriting criteria for environmental hazards;– the range of short-term insurance products .

the company is regularly receiving requests from brokers asking for quotations on large renewable energy business . this shows that there is a mind shift towards the preservation of the envi-ronment . the company is tasked to support this and work to develop bespoke insurance products for these markets . Lion of africa insurance is mindful that only a small portion of renewable business is finding its way in the local market with the remainder largely placed in overseas markets . Lion of africa insurance is committed to continue to providing smart risk solutions to its clients, in contrast to the tra-ditional insurer role of merely acting as a risk transfer vehicle . in the face of climate change, certain businesses will encounter signif-icant new operational challenges and will be looking for risk

2013 2012total african Coloured indian White total african Coloured indian White

nationalitysa 135 46 33 19 37 170 54 44 24 48non-sa 15 13 0 2 0 14 12 0 2 0

total 150 59 33 21 37 184 66 44 26 48

employment contract

permanent 137 52 32 19 34 166 58 42 24 42temporary 13 7 1 2 3 18 8 2 2 6

total 150 59 33 21 37 184 66 44 26 48

Gender splitmale 72 33 15 7 17 90 34 24 10 22Female 78 26 18 14 20 94 32 20 16 26

total 150 59 33 21 37 184 66 44 26 48

age group

<26 16 10 4 1 1 18 12 4 1 126-35 58 30 5 12 11 59 26 9 15 935-45 35 15 9 2 9 47 19 9 4 1545-55 27 3 13 2 9 37 6 16 2 13>55 14 1 2 4 7 23 3 6 4 10

total 150 59 33 21 37 184 66 44 26 48

Level

Clerical 106 50 16 17 23 95 46 22 11 16Jnr management 8 1 3 2 2 62 17 13 12 20mid management 31 7 13 1 10 21 2 8 2 9snr management 5 1 1 1 2 6 1 1 1 3

total 150 59 33 21 37 184 66 44 26 48

employee statistics





partners to help eliminate and mitigate these risks . the company’s clients include some of the country’s largest recycling and waste disposal companies as well as leaders in envi-ronmental management . Lion of africa insurance will collaborate with these companies, in order to strengthen its own under-standing of the challenges faced by other entities thereby enabling the company to respond, in most cases, to insurance needs around these new challenges and risks .

some recent and well-publicised effects of climate change include:– rising sea levels that will potentially threaten coastal property

and infrastructure;– sustained droughts that could destroy crops and livestock;– severe unseasonal flooding that could impact agriculture,

property and transport infrastructure .

While Lion of africa insurance’s activities, products, and services in themselves may have little evident direct or indirect impacts on biodiversity, the company will continue to challenge itself to create an impactful offering to the fight against the destruction of our beloved planet . the company realised the need to develop risk covering products that respond to such environmental risks .

product responsibility

market locationsLion of africa insurance has sales branches in four of the nine provinces in the country, with the head office situated in Johannesburg . While the Company operates nationally and provides insurance cover and risk solutions to clients on a national scale, we have ambitions to extend our operations to the rest of africa in the near future .

productsthe Company’s short-term insurance products are classified into the following categories based on the profile of the policyholder:– personal insurance providing cover to individuals and their

personal property;– Commercial insurance, providing cover on the assets and lia-

bilities of business enterprises .

Within the abovementioned categories, the Company offers risk cover associated with damages to or losses in respect of the following:– property and structures;– motor vehicles;– all risks, such as money, theft of goods and computers (mis-

cellaneous);– machinery (engineering);– public liability;– marine .

in the development of products that are:

– demanded by our markets;– economically viable and systemically sound;– Compliant from a legal and regulatory perspective;– Considerate of environmental and social influences .

the placement of insurance cover and the mitigation of under-writing risk are dependent on the following information:– type of risk;– values at risk;– past claims history;– spread of the risk;– risk management procedures used to minimise potential loss

incidents .

the Company further offers a risk improvement service to clients through periodic surveying of the risk in an effort to mitigate the potential loss . the various risks that insured clients are exposed to on a daily basis are identified and rated accordingly . each of these risks is subject to general and specific terms, exceptions and con-ditions, which will take into account the guidelines of the treating Customers Fairly regulatory regime (tCF) .

the tCF principles are being adopted across our product range along with plain language as our tCF standard .

customer satisfactionthrough constant engagement with the intermediaries and the broader client base, customer satisfaction is measured and service improvements are continually made . all stakeholders are encouraged to provide feedback to lioninfo@lionsure .com .the Company has implemented a communication portal on its website called “talk to the Lion” . through this portal, clients, brokers and any other visitors are invited to post complaints, queries or compliments which are routed to a dedicated individual within the Company who redirects the comment for follow up . the Company commits to responding to all comments posted within 72 hours .

the following six-step customer complaints handling procedure is applied in the resolution of lodged complaints:step 1 – receive complaint notificationstep 2 – determine nature of complaint and assign to responsible

personstep 3 – assign tracking number and inform complainant step 4 – resolve complaintstep 5 – inform complainant of resolutionstep 6 – obtain feedback from complainant and update

complaints status log



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the core principles of tCF have been addressed with regards to our claims settlement process . the Company is represented at the saia tCF Committee .

the Company has implemented a formal customer relationship management structure which ensures that our tCF obligations are not overlooked .

society matters

public policyLion of africa insurance is an active member of the south african insurance association (saia) . as such, the Company elects various members of its staff to sit on committees and forums, whose objectives include providing commentary on proposed leg-islation and other public policy developments . internal forums are also held to collate feedback and commentary on pertinent industry-related topics and pending legislative reforms . examples of these include solvency assessment and management, treating Customers Fairly, and the Fais act and related Board notices .in addition to the above participation in public policy devel-opment, Lion of africa insurance also follows an apolitical approach to business . therefore any financial and in-kind contri-butions to political parties, politicians, and related institutions would contravene the Company’s public policy . as the largest insurer of local authorities, the Company also has a professional image to uphold when participating in the provision of insurance products to the public sector and state owned enterprises, and will therefore continue to ensure that the necessary checks and balances are in place to avoid prejudice and conflicts of interest in this regard . the Company will however respond to calls from the south african Government to support national and international disaster relief programmes . in the past we have contributed to the Gift of the Givers Foundation to support the famine relief effort in somalia .

corporate social Investmentas a short-term insurance Company, Lion of africa insurance’s business operations must positively impact and uplift local commu-nities . the Company continues to support initiatives that embrace skills development, recreation and education . as a proud corporate citizen, the Lion of africa insurance is passionate about promoting a sustainable environment through these direct interventions that make a significant difference in the lives of our community members . detailed below are the various community-based programs and other initiatives that Lion of africa insurance is involved with in the continued growth of its contribution to the dynamic socio-economic transformation of south africa .

collaborative saIa Industry consumer education Initiative as a member of the south african insurance association (saia), Lion of africa insurance has contributed towards the saia Consumer education initiative since its inception in 2004 . to date, through this important collaborative initiative of the short-term insurance industry, over r50 .0m has been spent on consumer financial literacy and generic insurance knowledge development in our country . With this initiative, saia annually pools the financial contributions of over 50 of its member companies to ensure that projects are collaboratively financed and strategically co-ordinated to ensure that industry efforts are not duplicated and that needs are addressed holistically . participation in the saia Consumer education initiative is not only a saia membership requirement but also takes into account the access needs of the Company in terms of the Financial sector Charter (FsC) . accordingly, participation fulfils both the social imperative and moral obligation aspect, as well as providing a commercial incentive for the Company .

lion of africa Half marathonsince 2006, Lion of africa insurance has sponsored over towards this premier race on the Cape town running calendar . as a conse-quence, the race has grown from 400 participants in 2006 to over 3000 . the Lion of africa Half marathon has become a festival of running and now includes a half marathon, a 10 kilometre run, a 10 kilometre “philip rabinowitz” walk (in honour of the legendary spartan Harriers club member who passed away at the age of 104 in February 2008) and, for the not so fit, a 5 kilometre fun run/walk . the race is open to runners of all fitness levels and boasts a challenging but scenic marathon which starts and finishes in Constantia . as a result of the growth, spartan Harriers, the organ-ising club, contributes to the payment of school fees for a student at the academy of mathematics, science and technology . the academy was established to give talented students from the previ-ously disadvantaged communities an opportunity to progress to the highest academic levels . the sponsorship also supports a development programme in spartan Harriers whereby underprivileged children from the nearby informal settlement of masiphumelele, receive financial assistance . the club also supports other indigent and/or disadvan-taged members . in 2010, the Half marathon was elevated to the status of being a Western province (Wpa) Championship event and during the year under review, the race was again successfully organised . as part of the Company strategy, it has been decided that specific attention would be given to ensure that the race continues to grow from strength to strength and becomes a highlight on the Cape town road running calendar .




Itheko sports athletic clubthe Lion of africa itheko sports athletic club was set up to promote a healthy lifestyle through running, by introducing the activity to broader communities . in addition to being the only running club that specifically caters for people who have never participated in any kind of sport before, the club also has a squad of high performing athletes who inspire club members and further improve the image of the club . in its four short years of existence the club has become the largest of the 80 running clubs in the Wpa, with a membership that continues to grow . the club has been using the Lion of africa logo on their running vests since the 2011 two oceans marathon and has made a tremendous impact on the running scene and on the local communities in Cape town . the Company is considering merging the Lion of africa Half marathon and the itheko running Club to further increase the significance, exposure and Csi value of the race .

yabonga children, HIv & aIds in south africaLion of africa insurance has supported Yabonga since 2008 and continues to contribute significantly towards its worthy initiatives, which aim to bring about meaningful change in the lives of women, men and children who are infected or directly affected by Hiv/aids . the objective of the initiative is to promote positive and healthy living by improving self-esteem, prospects for work and providing healthy meals for community mothers and children . throughout the years Lion of africa insurance has donated funds to help sustain the orphan and vulnerable Children programme, which today caters for almost 550 children directly affected by Hiv . this programme runs in 13 impoverished areas around Cape town where Yabonga operates its Hiv programme at support Centres on the grounds of the local clinics . donations have also been made towards the adults psychosocial support programme which offers psychosocial support and empowers people to be independent by teaching them skills such as gardening, craft and personal development through support groups to combat poverty and regain self-confidence .

other donations and sponsorshipsthe Company has decided to revisit its plan on sCi spending . this was done with a view to realign its funds and spend towards the various geographic locations where it has operations .

enterprise developmentthe Lion of africa’s commitment to enterprise development is carried out through the opportunities that it offers new and previ-ously marginalised service providers . the company’s business requires that it partners with contractors in various industries and by affording them the opportunity to do business with the company it has seen a significant number of these grow to become significant players in the industry .

corruptionLion of africa insurance, is determined to live its values and be guided by a clear sense of ethics in all its business endeavours . We believe it is essential that the integrity of our people, processes and practices remain beyond reproach, and remain proud of our long record of integrity in this regard . anti-corruption interventions are covered by the Company’s policies and procedures and are regularly reinforced through on-going training and development interventions directed at all employees . in 2014, these policies will continue to be reinforced in conjunction with the south african insurance Crime Bureau, of which the Company was a founding member . Further, the activ-ities of Quality assurance and outsourced internal audit function are directed at identifying, monitoring and mitigating the risk of corrupt activity . the Company adopts a zero-tolerance approach to corruption and employees found guilty of corrupt practises face disciplinary action and dismissal . the Company has two whistle-blowing pro-grammes in place which are further discussed in the Corporate Governance .

marketing communicationsthe Company prescribes to the General Code of Conduct of Financial services providers (Fsp) and to the south african insurance association (saia) Code of Conduct . a general Lion of africa insurance Code of Conduct is modelled on these codes to ensure adherence to all relevant laws and standards in terms of marketing communications .in compliance with the Company Code of Conduct, the Lion of africa advertising policy ensures that:– advertising considers the best interest of consumers and is

not misleading in any way;– advertising is factual and verifiable;– advertising is in no way derogatory towards any individual

or entity, thus bringing any other party including the insurance industry into disrepute;

– our Fsp number is appended to all print advertising and that all

– radio advertisements mention that the Company is an authorised financial services provider .

in order to ensure adherence to the above, the Company, in conjunction with its external compliance officer, regularly inspect samples of advertisements as part of routine compliance checks . a compliance check-list has been developed to simplify and tighten the controls to ensure that each advertisement adheres to all relevant codes and laws . this will further mitigate the risk of damage to the Company’s reputation through unintentional oversights . no incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotions, and sponsorship have to date been reported .




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the intrinsic net asset value (intrinsic nav) of Brimstone at 31 december 2013 was r4 187 million (2012 – r3 604 .9 million), translating to 1 709 cents per share (2012 – 1 474 cents per share), based on 245 .0 million shares (2012 – 244 .6 million shares) in issue, net of treasury shares . Fully diluted intrinsic nav per share was 1 616 cents per share (2012 – 1 399 cents per share), based on 260 .9 million shares (2012 – 259 .4 million) in issue, net of treasury shares after taking into account the notionally realised shares issued in terms of the circular to shareholders dated

IntrInsIc net asset value report

18 november 2010 and fully diluted for outstanding share options . the Book net asset value (Book nav) of Brimstone on 31 december 2013 was r3 237 .6 million (2012 – r2 814 .9 million), translating to 1 324 cents per share (2012 – 1 153 cents per share), based on the respective number of shares in issue . the closing share prices on 31 december 2013 of Brimstone ordinary and “n” ordinary shares on the Jse Limited (Jse) were 1 400 cents and 1 400 cents (2012 – 1 125 cents and 1 195 cents) per share respectively .

31 dec 13 31 dec 12intrinsic nav of Brimstone (r’m) 4 187 .0 3 604 .9Book nav (r’m) 3 237 .6 2 814 .9intrinsic nav per share (cents)* 1 709 1 474 Fully diluted intrinsic nav per share (cents)** 1 616 1 399Book nav per share (cents) 1 324 1 153 market price per share (cents)– ordinary shares– “n” ordinary shares

1 4001 400

1 1251 195

discount to intrinsic nav:– ordinary shares– “n” ordinary shares

18%18%

24%19%

* Based on 245.0 million shares (December 2012 – 244.6 million shares) in issue, net of treasury shares.

** Based on 260.9 million shares (December 2012 – 259.4 million shares) in issue, net of treasury shares after taking into account the notionally realised shares issued in terms of the circular to

shareholders dated 18 November 2010 and fully diluted for outstanding share options.

sea Harvest– the intrinsic nav of the 58 .1% shareholding in sea Harvest

was based on an equally weighted average value using public market valuations as a proxy and the discounted cash flow valuation methodology .

– For the public market valuation an ev/eBitda multiple of 6 times, representing a 58% discount to the average ev/eBitda multiple at which listed peers traded at 31 december 2013 was applied .

lion of africa– the intrinsic nav of the 100% shareholding in Lion of

africa was based on a weighted average value using public market price: book multiples and public market price: earnings multiples as proxies .

– a price: book multiple of 1 .67 times was used, which equates to a 39% discount to the average price: book multiple at which listed peers traded at 31 december 2013 and a price: earnings multiple of 7 times, representing a 69% discount to the average price: earnings multiple at which listed peers traded at 31 december 2013 .

oceana– the intrinsic nav of the 20 .1 million shares in oceana was

based on the closing share price of oceana on the Jse at 31 december 2013 of r82 .00 per share .

life Healthcare– the 5 .04% interest was valued at the closing share price

of Life Healthcare on the Jse at 31 december 2013 of r41 .86 per share .

mtn Zakhele, nedbank, old mutual and tiger brands options– these rights are carried as options and were valued as

disclosed in appendix 4 to the annual financial statements .



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Intrinsic nav analysis by assetan analysis of the intrinsic nav of Brimstone as at 31 december 2013 is set out below, including the valuation basis of each asset . Where applicable, intrinsic nav is net of ring-fenced debt and potential CGt relating to that asset .

r’000asset % held valuation basis Gross value debt CGt inavLife Healthcare 5 .04% market value per share 2 197 990 — (401 053) 1 796 937oceana 16 .82% market value per share 1 647 934 (285 521) (201 710) 1 160 703

sea Harvest 58 .10%dCF & ev/eBitda valuations *** 531 987 — (52 304) 479 683

Lion of africa 100 .00%price to book and price earnings valuations 192 556 — (2 367) 190 189

nedbank option 0 .78% option valuation 424 119 — (51 489) 372 630tiger Brands option 0 .95% option valuation 180 631 — (31 180) 149 451a&o / rex trueform 33% eco market value per share 77 839 — (5 693) 72 146old mutual option 0 .35% option valuation 172 333 — (28 012) 144 321mtn Zakhele option 1 .25% option valuation 132 271 — — 132 271taste Holdings 12 .46% market value per share 92 025 — (9 997) 82 028afena Capital 28 .79% aUm & pe valuations 44 931 — — 44 931investment properties 100 .00% discount to market cap rate 49 825 (24 256) (7 081) 18 488phuthuma nathi 2 .53% market value per share 153 442 — (2 683) 150 759aon re africa 18 .00% price to earnings valuation 53 810 — (8 546) 45 264the scientific Group 28 .20% ev / eBitda valuation 26 946 — (481) 26 465House of monatic 100 .00% Book value 35 173 — (965) 34 208other investments various Book value 7 220 — 9 401 16 620other Bee options various market value 6 149 — (1 147) 5 002Funding Book value (3 975) (653 870) (77 265) (735 109)

6 023 206 (963 646) (872 572) 4 186 988intrinsic net asset value per share (cents)* 2 458 (393) (356) 1 709Fully diluted intrinsic net asset value per share (cents)** 2 319 (369) (334) 1 616

* Based on 245.0 million shares (December 2012 – 244.6 million shares) in issue, net of treasury shares.

** Based on 260.9 million shares (December 2012 – 259.4 million shares) in issue, net of treasury shares after taking into account the notionally realised shares issued in terms of the circular to

shareholders dated 18 November 2010 and fully diluted for outstanding share options.




socIal & etHIcs commIttee report

the social and ethics committee (“the committee”) was estab-lished to assist in monitoring the Group’s performance as a good and responsible corporate citizen and to perform the statutory functions required of a social and ethics committee in terms of the Companies act, 71 of 2008, as amended (‘’the Companies act’’) . this report is presented by the committee to describe how it has discharged its duties in terms of the Companies act as well as its additional duties assigned to it by the Board in respect of the financial year ended 31 december 2013 .

composition of the committeeFor the period under review the committee consisted of executive chairman, mr F robertson, lead independent director, mr pL Campher, non-executive director, mr n Khan and executive director, mr ma Brey . the chief executive officers and/or managing directors of the Group’s three operating subsidiary companies are invited to attend all committee meetings . in terms of the committee’s mandate at least two meetings should be held annually .

the committee’s role and responsibilitiesthe Board approved the committee’s charter during the year and agreement was reached on the proposed committee structure and method of operation .

rolethe committee fulfils an oversight role with accountability to the Board . the main objective of the committee is to assist the Board in monitoring the Group’s performance as a good corporate citizen .

responsibilitiesthe committee performs all the necessary functions to fulfil its role as stated above, including the following statutory duties: (a) monitoring the Group’s activities, having regard to any

relevant legislation, other legal requirements or prevailing codes of best practice, with regard to matters relating to:

– social and economic development, including the Group’s standing in terms of the goals and purposes of:

•The10principlessetoutintheUnitedNationsGlobalCompact principles;

•TheOrganisationforEconomicCo-Operationanddevelopment (“oeCd”) recommendations regarding corruption;

•TheEmploymentEquityAct;and •TheBroad-BasedBlackEconomicEmpowermentAct.

– Good corporate citizenship, including the Group’s •Promotionofequality,preventionofunfairdiscrimi-

nation, and reduction of corruption; •Contributiontothedevelopmentofthecommunities

in which its activities are predominantly conducted or within which its products or services are predomi-nantly marketed; and

•Recordofsponsorship,donationsandcharitablegiving .

– the environment, health and public safety, including the impact of the Group’s activities and of its products or services;

– Consumer relationships, including the Group’s advertising, public relations and compliance with consumer protection laws; and

– Labour and employment, including: •TheGroup’sstandingintermsoftheInternational

Labour organisation protocol on decent work and working conditions; and

•TheGroup’semploymentrelationships,andits contribution toward the educational development of its employees;

(b) ensure that the Group’s ethics risks and opportunities are assessed and that an ethics risk profile is compiled;

(c) ensure that the ethical standards guiding the Group’s relationships with internal and external stakeholders are clearly identified;

(d) ensure that the Group’s ethical standards are integrated into all the Group’s strategies and operations;

(e) ensure that the Group’s ethics performance is assessed, monitored, reported and disclosed;

(f) to draw matters within its mandate to the attention of the Board as may be required; and

(g) to report, through one of its members, to the shareholders at the Company’s annual general meeting on matters within its mandate .

in addition, the committee performs the following duties delegated by the Board:– the Group’s integrated report contains a large amount of

information reviewed and considered during the course of the committee’s activities . the committee will review the content of the integrated report that is relevant to the committee .

report to shareholdersthe committee has reviewed and is satisfied with the content in the integrated report that is relevant to the activities and responsibilities of the committee .




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remuneratIon report

this report deals with matters covered by the human resources and nominations committee .

remuneration policyit is the policy of the Company to attract and retain employees of the highest calibre through its remuneration practices . the committee annually reviews fixed remuneration to ensure that employees who contribute to the success of the Company receive market related remuneration . top and senior management receive short and long-term incentives . Until 30 June 2013, these were based on the amount of shareholder value created measured against targets set for profitability, growth in assets under management and other “softer” performance criteria . each performance criterion is measured independently . the remuneration committee engaged the services of consultants to propose a revised incentive scheme to be implemented from 1 July 2013 . the new incentive scheme also sets targets for management and focuses on growth in intrinsic net asset value, deal creation, achievement of strategic issues and cash management . the short-term incentive, payable in cash, is limited to a maximum of 95% of annual cost to company depending on the level of seniority of the participant . the long-term incentive, equal to the short-term incentive, is in the form of share-options awards .

executive directors’ remunerationthe committee utilised the services of remuneration consultants to set the level of remuneration for executive directors . their earnings were benchmarked against recognised remuneration surveys .

r’000

paid by the company other 2013 2012name Basic salary Bonus benefits* total totalma Brey 2 155 1 499 311 3 965 4 393 F robertson 2 062 1 499 263 3 824 3 970 LZ Brozin 2 118 1 499 191 3 808 3 958

6 335 4 497 765 11 597 12 321

paid by subsidiariesma Brey 206 202 F robertson 487 507

693 709 total - executive directors 12 290 13 030

* Company contributions to retirement fund and medical aid.

non-executive directors’ remunerationnon-executive directors receive fees for membership of the Brimstone investment Corporation Limited Board .they also receive fees for work done on committees of the Board .

paid by company Committee 2013 2012name Board fees fees total totalpL Campher 174 210 384 321 GJ Gerwel — — — 717 mJt Hewu 116 47 163 131 n Khan 116 156 272 233 Kr moloko — — — —mK ndebele 116 35 151 131 Y pahad — — — 90 La parker 116 94 210 142 aa roberts — — — 64 Fd roman 116 35 151 142

754 577 1 331 1 971




r’000paid by subsidiaries 2013 2012pL Campher 33 11 n Khan 33 11

66 22 total – non-executive directors 1 397 1 993 total – directors’ remuneration 13 687 15 023

prescribed officersthe Board has determined that there are no prescribed officers in the employ of the Company as defined by the Companies act no .71 of 2008 .

share incentive schemeshare option allocations to directors, top and senior managers are considered periodically . the Brimstone investment Corporation Limited share trust makes allowances for the granting of options to directors of the company who do not hold salaried employment or office to acquire shares in the company .the options issued can only be exercised on the basis of a maximum of 20% per annum and must be exer-cised within 6 years from date of grant .

remuneratIon report (contInued)

share option details of executive directors

“n” ordinary shares Gain onexerciseof shareoptions

Balanceat

31 dec 13

exercisableat

31 dec 13Balance at31 dec 12

Granted during the

yearexercise

pricedate of

Grantexpiry

date

exercisedduring

the yearname number number Cents number r’000 number numberma Brey 456 720 152 500 1250 27 Feb 13 27 Feb 19 103 440 586 505 780 —LZ Brozin 411 060 137 200 1250 27 Feb 13 27 Feb 19 93 100 651 455 160 —F robertson 411 060 137 200 1250 27 Feb 13 27 Feb 19 93 100 586 455 160 —

1 278 840 426 900 289 640 1 823 1 416 100 —

share option details of staff“n’ ordinary shares

the following options were granted to staff during the year:

“n” ordinaryshares

exerciseprice

no Cents 376 300 1250



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Introduction the Brimstone audit & risk committee is a formal committee of the Board . the responsibilities of the committee are outlined in its written terms of reference which are reviewed annually and are in line with the Companies act, King iii and the Jse Listings requirements . the committee has an independent role with accountability to the Board and shareholders . this report of the audit & risk committee is presented to the shareholders in terms of section 94(7)(f) of the Companies act and as recommended by King iii . the members of the committee were recommended by the Board and appointed by shareholders for the 2013 financial year .

committee members and attendance at meetingsthe Committee comprises five independent non-executive directors (as set out in the table below) and is chaired by mr n Khan . mrs Kr moloko was appointed as a member of the committee on 6 november 2013 . all the committee members are suitably skilled and experienced . the committee meets at least three times per year .

composition of the committee

number of meetings held

number ofmeetings attended

committee membern Khan (Chairman) 3 3pL Campher 3 3Kr moloko (Appointed 6 November 2013) n/a n/aLa parker 3 3Fd roman 3 3

the executive directors and senior management make themselves available to attend meetings and answer questions . representatives from Brimstone’s subsidiary companies attend the meetings by invitation . the audit committee chairman and Brimstone’s lead independent director are representatives at the subsidiaries finance committees .

roles and responsibilitiesthe committee has a charter approved by the Board . the charter is reviewed annually and was updated during the year under review . the committee’s roles and responsibilities include its statutory duties in accordance with the Companies act, as well as the responsibilities assigned to it by the Board . the audit or finance committees of Brimstone’s operating subsidiary companies, namely, Lion of africa, sea Harvest and House of monatic report to this committee at each meeting by way of report backs via the respective chairperson of the subsidi-ary’s audit or finance committee or invited representatives .

audIt & rIsk commIttee report

in the case of Lion of africa, Brimstone’s wholly-owned subsidiary, its own audit committee comprises three independent non-executive directors and consequently fulfils its responsibilities independent of the committee .

statutory dutiesin the conduct of its duties, the committee has performed the following statutory duties: – nominated deloitte & touche and mr Lester peter Cotten,

who in the opinion of the committee, are both independent of the Company, for re-appointment as the external auditor for the ensuing year to the shareholders;

– determined the fees to be paid to the external auditor and their terms of engagement;

– ensured that the appointment of the external auditor complies with the provisions of the Companies act and any other legislation relating to the appointment of auditors;

– determined the nature and extent of any non-audit services; and

– pre-approved any proposed agreement with the auditors for the provision of non-audit services .

appointment of external and Internal auditorsthe committee is satisfied that the Company’s external auditor, deloitte & touche is independent of the Company and is able to conduct their audit functions without any influence from the Company . the committee has rules regulating the services and conditions of use of non-audit services provided by the external auditors . in terms of its charter this committee is responsible for the appointment of the Company’s internal auditors . KpmG performed this function for the past year and were reappointed as internal auditors for the 2014 financial year . the committee meets at least three times a year with the Company’s internal and external auditors together with management to review accounting, internal and external auditing, internal control and financial reporting issues . Both the internal and external auditors enjoy unrestricted access to the audit & risk committee and vice versa . the committee chairman meets at least three times per year with both internal and external audit without management being present . the committee approves the fees and scope of external and internal audit services . it is responsible for the maintenance of a professional relationship with both the external and internal auditors and oversees co-operation between these two parties .

Internal financial controls Brimstone is responsible for ensuring that a sound system of internal control exists to safeguard shareholders’ investments and the assets of the Group . the Group’s internal controls, systems and procedures are designed to provide reasonable, but not




absolute assurance as to the integrity and reliability of the annual financial statements, that assets are adequately safeguarded against material loss and that transactions are properly authorised and recorded .

expertise and experience of the financial director and finance function the committee has satisfied itself of the appropriateness and experience of the Financial director, mr LZ Brozin and the Chief Financial officer, mr m o’dea . the committee has furthermore considered and has satisfied itself of the appropriateness of the expertise and adequacy of resources of the Company’s finance function and the experience of the senior members of management responsible for the finance function .

financial statements and going concernthe committee reviewed the annual financial statements and Group annual financial statements and is satisfied that they comply with international Financial reporting standards and the Companies act, and that the accounting policies used are appropriate . the committee has also reviewed a documented assessment by management of the going concern premise of the Company before recommending to the Board that the Company will be a going concern for the foreseeable future .

risk management in giving effect to risk management responsibilities the Group has implemented a continuous risk management review programme to ensure a coherent governance approach throughout the Group . the Group has ensured that no undue, unexpected or unusual risks have been undertaken in pursuit of reward .

compliancethe committee is responsible for reviewing any major breach of relevant legal, regulatory and other responsibilities . the committee is satisfied with the compliance to these standards and with the applicable laws and regulations . Furthermore, the committee is satisfied that it has complied with all its legal, regulatory and other responsibilities during the year under review .

recommendation of the integrated report for approval by the boardthe committee has reviewed and considered the integrated report, including the annual financial statements, and has recommended it for approval by the Board .

n khanChairman of the Audit & Risk Committee

audIt & rIsk commIttee report (contInued)



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contents

directors’ approval of annual Financial statements, preparation of annual Financial statements

and Certificate by secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

independent auditor’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

statements of Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

statements of Financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

statements of Changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

notes to the annual Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

supplementary reports on Investmentsinterest in subsidiaries (appendix 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134

investments in associate Companies and Joint venture (appendix 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

investments (appendix 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

valuation of options (appendix 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

directors’ interests in shares (appendix 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

shareholding information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

notice of annual General meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

Curriculum vitae . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164

proxy Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165



dIrectors’ approval of annual fInancIal statements, preparatIon of annual fInancIal statements and certIfIcate by secretary

the directors of the Company are responsible for the preparation, integrity and objectivity of the consolidated and separate annual financial statements as well as for all other information contained in this integrated report . to fulfil this responsibility, the Company and Group maintain controls to provide reasonable assurance that assets are safeguarded and that records accurately reflect the transactions of the Company and Group . the consolidated and separate annual financial statements are prepared in terms of international Financial reporting standards and have been examined by our auditors in con-formity with international standards on auditing . the consoli-dated and separate annual financial statements for the year ended 31 december 2013 which appear on pages 62 to 138 were approved by the Board and authorised for issue on 14 march 2014 .

on behalf of the Board:

f robertson ma breyExecutive Chairman Chief Executive Officer

preparation of financial statementsthe consolidated and separate annual financial statements of Brimstone investment Corporation Limited for the year ended 31 december 2013 have been prepared and supervised by LZ Brozin (Financial director) BCom Bacc Ca(sa) and m o’dea (Chief Financial officer) BCom Ca(sa) .

certificate by secretaryin terms of section 88 (2)(e) of the Companies act, i certify that the Company has lodged with the Commissioner all such returns and notices as are required by the Companies act, and that all such returns and notices are true, correct and up to date .

t moodleyCompany Secretary

14 march 2014



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Independent audItor’s reportto the shareholders of Brimstone investment Corporation Limited

We have audited the consolidated and separate annual financial statements of Brimstone investment Corporation Limited as set out on pages 64 to 138, which comprise the statements of financial position as at 31 december 2013, and the statements of compre-hensive income, statements of changes in equity, and statements of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information .

directors’ responsibility for the consolidated and separate annual financial statementsthe company’s directors are responsible for the preparation and fair presentation of these consolidated and separate annual 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 consolidated and separate financial statements that are free from material mis-statement, whether due to fraud or error .

auditor’s responsibilityour responsibility is to express an opinion on these consolidated and separate financial statements based on our audit . We conducted 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 consolidated and separate financial statements are free from material misstatement . an audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements . the procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error . in making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control . an audit also includes evaluating the appropriateness of accounting principles used and the reasona-bleness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements . We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion .

opinionin our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Brimstone investment Corporation Limited as at 31 december 2013, and its consolidated and separate

financial performance and consolidated and separate cash flows for the year then ended in accordance with international Financial reporting standards and the requirements of the Companies act of south africa .

other reports required by the companies act as part of our audit of the consolidated and separate financial statements for the year ended 31 december 2013, we have read the directors’ report, the audit & risk Committee report and the Certificate by the secretary for the purpose of identifying whether there are material inconsistencies between these reports and the audited consolidated and separate 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 consolidated and separate financial statements . However, we have not audited these reports and accordingly do not express an opinion on these reports .

deloitte & toucheRegistered auditors

per Lp CottenPartner

14 march 2014

1st Floor the squareCape Quarter27 somerset roadGreenpoint, 8005 national executive: LL Bam (Chief executive); ae swiegers (Chief operating officer); Gm pinnock (audit); dL Kennedy (risk advisory); nB Kader (tax); tp pillay (Consulting); K Black (Clients & industries); JK mazzocco (talent & transformation); Cr Beukman (Finance); m Jordan (strategy); s Gwala (special projects); tJ Brown (Chairman of the Board); mJ Comber (deputy Chairman of the Board)regional Leader: mn alberts a full list of partners and directors is available on request BBBee rating: Level 2 contributor in terms of the Chartered accountancy profession sector Code member of deloitte touche tohmatsu Limited




dIrectors’ report

principal activities of the groupBrimstone remains an investment holding company . the successful model of active partnership with well established players in the sectors of choice will continue to be the focus going forward .

review of operationsthe results for the year under review are set out in the attached financial statements .

dividendBrimstone’s Board declared a final dividend of 30 cents per share and a special dividend of 10 cents per share for the year ended 31 december 2013, payable on 29 april 2014 . the final dividend and special dividend have been declared out of income reserves . the special dividend was declared as Brimstone will receive a special dividend from Life Healthcare Group Holdings Limited on 17 march 2014 . therefore, after due consideration, the board of Brimstone has decided to pay a special dividend to its share-holders . shareholders should note that the special dividend is subject to exchange Control approval and an announcement will be released on sens once this has been obtained . in compliance with the requirements of strate, the Company has determined the following salient dates for the payment of the final dividend and special dividend . the last day to trade cum dividend for both the final dividend and special dividend is Wednesday, 16 april 2014 . the final dividend and the special dividend is payable to all shareholders of Brimstone recorded in the books of the Company at the close of business on Friday, 25 april 2014 . shares will commence trading ex-dividend from thursday, 17 april 2014 . shares may not be rematerialised or dematerialised from thursday, 17 april 2014 to Friday, 25 april 2014, both days inclusive . the final dividend and special dividend are subject to dividend withholding tax at 15% . in determining dividend with-holding tax, secondary tax on companies (“stC”) credits must be taken into account . Brimstone has sufficient stC credits to cover the dividend withholding tax . the stC credits to be utilised as part of the final and the special dividend declarations amount to r82 433 927 .70 being 30 cents per share for the final dividend and r27 477 975 .90, being 10 cents per share, for the special dividend, respectively . Consequently no dividend withholding tax is payable by shareholders who are normally not exempt from dividend withholding tax . all shareholders will receive the final dividend of 30 cents per share and the special dividend of 10 cents per share . the number of Brimstone ordinary and “n” ordinary shares eligible for both the final dividend and the special dividend at the date of declaration was 46 775 135 and 228 004 624 respectively (this excludes 39 140 000 “n” ordinary shares held by the Brimstone Black executives investment trust, the Brimstone General staff investment trust and the Brimstone Broad-Based Bee trust which are not eligible to receive dividends) . the company’s tax reference number is 9397002719 .

voting rightsordinary shares carry 100 votes per share, while “n” ordinary shares carry one vote per share . “n” ordinary shares rank pari passu with ordinary shares in all other respects, including receipt of dividends and proceeds on the winding up of the Company .

share capitalthe following shares were issued during the year:share option scheme ‘’n’’ ordinary28 march 2013 313 04028 may 2013 103 020

there were no changes to the authorised ordinary and “n” ordinary share capital . the unissued shares are the subject of a general authority granted to the directors in terms of the Companies act, which authority remains valid only until the forthcoming annual general meeting .

general authoritythe Board is proposing that the general authority granted at the last annual general meeting held in may 2013, to permit the Company or a subsidiary to acquire the Company’s own shares and to permit the Company to issue shares for cash, be renewed at the forthcoming annual general meeting . Full details are set out in the notice to members on page 142 .

Interest in and earnings of subsidiariesdetails of the Company’s interests in and share of aggregate profits and losses of its subsidiaries are set out in appendix 1 on page 134 .

directors’ interests in contractsdetails of relevant transactions during the year are included in note 42 to the financial statements .

Interests of directors in the shares of the companythe details of directors’ interest in the shares of the Company are set out on page 138 . details of the director’s interest in options held in terms of the Company’s share incentive scheme are set out on page 53 .

Insurance, interest rate and currency risk managementthe Board utilises appropriate expertise in controlling and managing material identified risks in asset holdings, borrowings and foreign currency exposure both in the holding company and in advising and assisting subsidiaries and associates .

special resolutionat the annual general meeting held in may 2013, a special resolution was passed to enable the Company and/or any subsidiary to acquire its own issued shares from time to time on



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such terms and conditions and in such amounts as the directors from time to time decide, subject to certain statutory provisions and the Listings requirements of the Jse Limited . the non-executive directors’ fees for the year ended 31 december 2013 were also approved by special resolution at the annual general meeting held in may 2013 .

going concernthe directors believe that the Group and Company will be a going concern for the foreseeable future .

directors and secretarythe names of the directors in office at the date of this report appear on page 3 . ma Brey, mJt Hewu, F robertson and Fd roman are due to retire by rotation in terms of the Company’s moi and, being eligible, offer themselves for re-election . the company secretary’s name and her business and postal address appear on page 3 .

audit & risk committee reportthe audit & risk committee report on the performance of its duties in terms of section 94(7) of the Companies act is set out on pages 54 to 55 of the integrated report .

events subsequent to 31 december 2013there are no significant subsequent events affecting these results .

litigationthere is no material litigation outstanding for the Company or its subsidiaries .




group company

r’000 notes 2013 2012 2013 2012

revenue 2 2 086 376 1 946 472 78 137 148 356 sales and fee income 1 930 997 1 795 026 18 713 16 029 dividends received 155 379 151 446 59 424 132 327 operating expenses 3 (2 021 990) (1 815 434) (80 516) (60 328)

operating profit/(loss) 64 386 131 038 (2 379) 88 028 Fair value gains 4 557 402 1 053 311 83 024 206 063 exceptional items 5 7 828 (2 280) — (292)share of profits of associates and joint venture 13 204 27 612 — —

profit before net finance costs 6 642 820 1 209 681 80 645 293 799 income from investments 8 23 037 26 410 14 034 7 311 net finance costs 9 (110 553) (131 597) (5 468) (3 067)outside unit holders’ interest (507) (1 357) — —

net profit before taxation 554 797 1 103 137 89 211 298 043 taxation 10 (81 405) (261 021) (16 004) (58 035)

profit for the year 473 392 842 116 73 207 240 008 other comprehensive income, net of tax 7 592 (3 938) — — Items that may be reclassified subsequently to profit or lossCash flow hedges Loss arising during the year (7 711) (11 606) — — net value gain on available-for-sale financial asset 15 303 7 668 — —

total comprehensive income for the year 480 984 838 178 73 207 240 008

profit attributable to:equity holders of the parent 464 111 849 398 non-controlling interests 9 281 (7 282)

473 392 842 116

total comprehensive income attributable to:equity holders of the parent 468 523 847 110 non-controlling interests 12 461 (8 932)

480 984 838 178

earnings per share (cents)Basic 12 189 .9 348 .1 diluted 162 .2 297 .2

statements of comprehensIve Income




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group company

r’000 notes 2013 2012 2013 2012

assetsnon-current assets 5 051 016 4 344 407 1 793 147 1 624 493 property, plant, equipment and vehicles 13 278 348 266 663 1 539 2 021 Goodwill 14 12 140 12 140 — — intangible assets 15 135 599 152 169 — — interest in subsidiaries 16 — — 736 382 781 401 investments in associate companies and joint venture 17 799 029 781 995 29 378 30 893 investments 18 3 633 291 3 080 415 1 016 667 809 677 deferred taxation 31 21 654 — — — insurance assets 22 161 774 50 524 — — other financial assets 19 9 181 501 9 181 501

current assets 1 748 577 1 381 057 21 999 109 236 inventories 20 250 648 230 226 — — trade and other receivables 21 617 731 407 288 19 949 26 968 insurance assets 22 505 785 418 432 — — taxation 9 949 9 090 — 2 000 investments 18 103 251 — — — Cash and cash equivalents 261 213 316 021 2 050 80 268 total assets 6 799 593 5 725 464 1 815 146 1 733 729

eQuIty and lIabIlItIescapital and reserves 3 372 120 2 929 986 1 256 176 1 238 750 share capital 23 45 45 49 49 Capital reserves 24 325 434 310 132 382 510 369 622 revaluation reserves 25 23 223 14 331 1 730 1 730 Cash flow hedging reserve 26 (4 847) (367) — — Changes in ownership (11 839) (11 839) — — retained earnings 2 905 630 2 502 581 871 887 867 349 attributable to equity holders of the parent 3 237 646 2 814 883 1 256 176 1 238 750 non-controlling interests 27 134 474 115 103 — —

non-current liabilities 1 764 025 1 470 287 488 329 460 816 Long-term interest bearing borrowings 28 936 765 888 134 — — interest in subsidiaries 16 — — 352 470 340 987 Long-term provisions 29 22 211 20 882 — — other financial liabilities 30 — 125 — 125 insurance liabilities 22 168 749 — — — deferred taxation 31 636 300 561 146 135 859 119 704

current liabilities 1 663 448 1 325 191 70 641 34 163 short-term interest bearing borrowings 32 260 770 292 934 — — Bank overdrafts 34 49 604 15 434 32 890 — trade payables 575 358 293 087 1 803 1 874 other payables 92 731 71 130 33 412 31 167 insurance liabilities 22 634 817 616 860 — — outside unit holders’ interest 18 848 14 495 — — other financial liabilities 30 14 123 2 000 2 536 1 122 short-term provisions 29 16 992 16 305 — — taxation 205 2 946 — — total eQuIty and lIabIlItIes 6 799 593 5 725 464 1 815 146 1 733 729 nav per share (cents) 1 324 .0 1 153 .1 shares in issue at end of year (000’s) 244 531 244 108

statements of fInancIal posItIon




r’000share

capital Capital reserves

revaluation

reserves

Cash flow

hedging reserve

Changes in

owner-ship

retainedearnings

attributable to

equity holders

of the parent

non-control-

linginterests total

groupBalance at 1 January 2012 45 316 904 9 876 6 376 (11 839) 1 677 390 1 998 752 114 878 2 113 630 attributable profit for the year ended 31 december 2012 — — — — — 849 398 849 398 (7 282) 842 116 other comprehensive income — — 4 455 (6 743) — — (2 288) (1 650) (3 938)total comprehensive income — — 4 455 (6 743) — 849 398 847 110 (8 932) 838 178 recognition of share-based payments — 9 815 — — — — 9 815 — 9 815 dividend paid — — — — — (43 890) (43 890) (840) (44 730)subsidiary’s accrual for preference dividends — — — — — — — 9 881 9 881 issue of share capital — 1 363 — — — — 1 363 631 1 994 repurchase of trust units — (752) — — — — (752) (1 567) (2 319)disposal of treasury shares — 292 — — — — 292 — 292 transfer from statutory contingency reserve — (19 683) — — — 19 683 — — — share of non-distributable reserves of associates transferred directly to equity — 2 193 — — — — 2 193 1 052 3 245

Balance at 31 december 2012 45 310 132 14 331 (367) (11 839) 2 502 581 2 814 883 115 103 2 929 986 attributable profit for the year ended 31 december 2013 — — — — — 464 111 464 111 9 281 473 392 other comprehensive income — — 8 892 (4 480) — — 4 412 3 180 7 592 total comprehensive income — — 8 892 (4 480) — 464 111 468 523 12 461 480 984 recognition of share-based payments — 10 076 — — — — 10 076 — 10 076 dividend paid — — — — — (61 062) (61 062) (1 480) (62 542)subsidiary’s accrual for preference dividends — — — — — — — 8 004 8 004 issue of share capital — 2 812 — — — — 2 812 330 3 142 repurchase of trust units — (187) — — — — (187) (84) (271)disposal of treasury shares — 49 — — — — 49 — 49 share of non-distributable reserves of associates transferred directly to equity — 2 552 — — — — 2 552 140 2 692 Balance at 31 december 2013 45 325 434 23 223 (4 847) (11 839) 2 905 630 3 237 646 134 474 3 372 120

companyBalance at 1 January 2012 49 358 444 1 730 — — 676 726 1 036 949 — 1 036 949 attributable profit for the year ended 31 december 2012 — — — — — 240 008 240 008 — 240 008 dividend paid — — — — — (49 385) (49 385) — (49 385)issue of share capital — 1 363 — — — — 1 363 — 1 363 recognition of share-based payments — 9 815 — — — — 9 815 — 9 815

Balance at 31 december 2012 49 369 622 1 730 — — 867 349 1 238 750 — 1 238 750 attributable profit for the year ended 31 december 2013 — — — — — 73 207 73 207 — 73 207 dividend paid — — — — — (68 669) (68 669) — (68 669)issue of share capital — 2 812 — — — — 2 812 — 2 812 recognition of share-based payments — 10 076 — — — — 10 076 — 10 076 Balance at 31 december 2013 49 382 510 1 730 — — 871 887 1 256 176 — 1 256 176

statements of changes In eQuIty




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group company

r’000 notes 2013 2012 2013 2012

operating activitiesnet attributable profit 473 392 842 116 73 207 240 008 adjustments for:

share of profits of associates and joint venture (86 919) (103 455) — — income from investments (104 701) (102 013) (73 458) (139 638)increase in fair value of investments (557 402) (1 053 311) (83 024) (206 063)impairment of investment in associate 356 252 — — amortisation of intangible assets 22 368 19 079 — — net finance costs 110 553 131 597 5 468 3 067 taxation 81 405 261 021 16 004 58 035 depreciation of property, plant, equipment and vehicles 62 483 71 189 628 595 share-based payment expense 10 076 9 815 10 076 9 815 realised loss on disposal of available-for-sale asset — 292 — 292 additional purchase consideration on acquisition of business — 1 736 — — increase/(decrease) in long and short-term provisions 2 016 (1 165) — — profit on disposal of property, plant, equipment and vehicles (143) (204) — 18

operating cash flows before movements in working capital 13 484 76 949 (51 099) (33 871)increase in inventories (20 422) (3 423) — — (increase)/decrease in trade and other receivables (221 152) 58 706 7 019 3 030 outside unit holders’ interest 4 353 3 835 — — increase in trade and other payables 303 872 60 877 3 052 5 433 net (increase)/decrease in insurance assets (198 603) 13 682 — — net increase in insurance liabilities 186 706 10 783 — — Cash generated from/(used in) operations 68 238 221 409 (41 028) (25 408)interest received 23 037 26 410 5 765 7 311 dividends received from associates and joint venture 73 715 75 843 — — dividends received from other equity investments 81 664 75 603 7 985 13 171 dividends received from subsidiaries — — 51 439 119 156income taxes paid/(refunded) 34 .1 (32 188) (37 235) 2 151 — Finance costs 34 .2 (68 365) (108 359) (5 468) (1 443)net cash from operating activities 146 101 253 671 20 844 112 787Investing activitiesCash effect of change in investment in subsidiaries 34 .3 — — 56 502 64 313Loan repayments and recoveries from associate and investments 6 163 — 5 995 — proceeds on disposal of investments 44 602 173 977 365 2 395 proceeds on disposal of property, plant, equipment and vehicles 2 021 773 — — acquisition of property, plant, equipment and vehicles (76 046) (52 756) (146) (964)acquisition of business — (1 736) — (1 736)acquisition of intangible assets (5 798) (13 018) — — acquisition of investments (132 000) (131 705) (128 811) (45 096)net cash used in investing activities (161 058) (24 465) (66 095) 18 912 financing activitiesdividends paid by company and subsidiaries (62 542) (44 730) (68 669) (49 385)repayments of borrowings (84 071) (196 555) — (8 260)Loans raised 69 672 185 014 — — shares sold 49 292 — — proceeds on issue of shares 3 142 1 994 2 812 1 363 Units/shares repurchased by subsidiaries (271) (2 319) — — increase in bank overdrafts 34 170 2 071 32 890 — net cash used in financing activities (39 851) (54 233) (32 967) (56 282)net (decrease)/increase in cash and cash equivalents (54 808) 174 973 (78 218) 75 417 Cash and cash equivalents at beginning of year 316 021 141 048 80 268 4 851 Cash and cash equivalents at end of yearBank balances and cash 261 213 316 021 2 050 80 268

statements of cash flows




1. accounting policies and basis of preparationthe consolidated and separate annual financial statements are

prepared in accordance with international Financial reporting

standards (iFrs) of the international accounting standards

Board, the saiCa Financial reporting Guides as issued by the

accounting practices Committee and the Financial reporting

standards Council, the requirements of the Jse Limited’s Listing

requirements and the Companies act of south africa .

the financial statements have been prepared on the historical

cost basis except for the revaluation of certain financial instru-

ments . the principal accounting policies set out below, have been

applied on a basis consistent with the previous year .

the principal accounting policies are:

1.1 basis of consolidationthe consolidated financial statements incorporate the financial

statements of the Company and entities (including special purpose

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

achieved where the Company has the power to govern the

financial and operating policies of an entity so as to obtain benefits

from its activities .

the results of subsidiaries acquired or disposed of during the

year are included in the consolidated statement of comprehensive

income from the effective date of acquisition and up to the

effective date of disposal, as appropriate .

Where necessary, adjustments are made to the financial state-

ments of subsidiaries to bring their accounting policies in line with

those used by other members of the Group .

all intra-group transactions, balances, income and expenses

are eliminated in full on consolidation .

non-controlllng interests in subsidiaries are identified

separately from the Group’s equity therein . the interests of non-

controlling shareholders may be initially measured either at fair

value or at the non-controlling interests’ proportionate share of the

fair value of the acquiree’s identifiable net assets . the choice of

measurement basis is made on an acquisition-by-acquisition basis .

subsequent to acquisition, the carrying amount of non-controlling

interests is the amount of those interests at initial recognition plus

the non-controlling interests’ share of subsequent changes in

equity . Changes in the Group’s interests in subsidiaries that do not

result in a loss of control are accounted for as equity transactions .

the carrying amounts of the Group’s interests and the non-con-

trolling interests are adjusted to reflect the changes in their relative

interests in the subsidiaries . any difference between the amount

by which the non-controlling interests are adjusted and the fair

value of the consideration paid or received is recognised directly in

equity and attributed to owners of the Company .

When the Group loses control of a subsidiary, the profit or

loss on disposal is calculated as the difference between (i) the

aggregate of the fair value of the consideration received and the

fair value of any retained interest and (ii) the previous carrying

amount of the assets (including goodwill) and liabilities of the

subsidiary and any non-controlling interests . amounts previously

recognised in other comprehensive income in relation to the

subsidiary are accounted for (i .e . reclassified to profit or loss or

transferred directly to retained earnings) in the same manner as

would be required if the relevant assets or liabilities were disposed

of . the fair value of any investment retained in the former

subsidiary at the date when control is lost is regarded as the fair

value on initial recognition for subsequent accounting under las

39 Financial instruments: recognition and measurement or, when

applicable, the cost on initial recognition of an investment in an

associate or jointly controlled entity .

1.2 subsidiary companiessubsidiary companies are valued at cost less amounts written off

when the directors believe that there has been a permanent dimi-

nution in value . on consolidation any write off is apportioned and

deducted from the underlying assets of the subsidiary .

the outside unit holders’ interest arising on consolidation of

the subsidiary relates to the third party share in the spes which

are effectively demand deposits and are consequently measured at

fair value, i .e . the quoted unit value as derived by the fund admin-

istrator with reference to the rules of each particular fund . the

outside unit holders’ interest recognised in the statement of com-

prehensive income relates to the third party share in gains or

losses in the fair value of the spes .

1.3 business combinations acquisitions of subsidiaries and businesses are accounted for using

the acquisition method . the consideration for each acquisition is

measured at the aggregate of the fair values (at the date of

exchange) of assets given, liabilities incurred or assumed, and

equity instruments issued by the Group in exchange for control of

the acquiree . acquisition-related costs are recognised in profit or

loss as incurred .

Where applicable, the consideration for the acquisition

includes any asset or liability resulting from a contingent consider-

ation arrangement, measured at its acquisition-date fair value .

subsequent changes in such fair values are adjusted against the

cost of acquisition where they qualify as measurement period

adjustments . all other subsequent changes in the fair value of a

contingent consideration classified as an asset or liability are

accounted for in accordance with relevant iFrss . Changes in the

notes to the annual fInancIal statements



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fair value of a contingent consideration classified as equity are not

recognised .

Where a business combination is achieved in stages, the

Group’s previously held interests in the acquired entity are

remeasured to fair value at the acquisition date (i .e . the date the

Group attains control) and the resulting gain or loss, if any, is

recognised in profit or loss . amounts arising from interests in the

acquiree prior to the acquisition date that have previously been

recognised in other comprehensive income are reclassified to profit

or loss, where such treatment would be appropriate if that interest

were disposed of .

the acquiree’s identifiable assets, liabilities and contingent

liabilities that meet the conditions for recognition under iFrs 3

Business Combinations are recognised at their fair value at the

acquisition date, except that:

– deferred tax assets or liabilities and liabilities or assets related

to employee benefit arrangements are recognised and

measured in accordance with ias 12 income taxes and ias

19 employee Benefits respectively;

– liabilities or equity instruments related to the replacement by

the Group of an acquiree’s share-based payment awards are

measured in accordance with iFrs 2 share-based payment;

and

– assets (or disposal groups) that are classified as held for sale

in accordance with iFrs 5 non-current assets Held for sale

and discontinued operations are measured in accordance

with that standard .

if the initial accounting for a business combination is incomplete

by the end of the reporting period in which the combination

occurs, the Group reports provisional amounts for the items for

which the accounting is incomplete . those provisional amounts

are adjusted during the measurement period, or additional assets

or liabilities are recognised, to reflect new information obtained

about facts and circumstances that existed as of the acquisition

date that, if known, would have affected the amounts recognised

as of that date .

the measurement period is the period from the date of acqui-

sition to the date the Group obtains complete information about

facts and circumstances that existed as of the acquisition date –

and is subject to a maximum of one year .

1.4 Investments in associatesan associate is an entity over which the Group has the ability to

exercise significant influence, but which it does not control or

jointly control .

the results and assets and liabilities of associates are incorpo-

rated in these financial statements using the equity method of

accounting . the carrying amount of such investments is reduced

to recognise any impairment in the value of individual investments .

When a group entity transacts with an associate of the Group,

unrealised profits and losses are eliminated to the extent of the

Group’s interest in the relevant associate, except where unrealised

losses provide evidence of an impairment of the asset transferred .

Where the Group’s share of losses of an associate exceeds the

carrying amount of the associate, the associate is carried at a

nominal amount . additional losses are only recognised to the

extent that the Group has incurred obligations in respect of the

associate .

the Company’s interest in associates is carried in the

statement of financial position at cost less amounts written off

when the directors believe that there has been a permanent

diminution in value .

1.5 Interests in joint venturesa joint venture is a contractual arrangement whereby the Group

and other parties undertake an economic activity that is subject to

joint control, that is, the strategic financial and operating policy

decisions relating to the activities require the unanimous consent

of the parties sharing control .

the Group reports its interest in jointly controlled entities

using the equity method of accounting, except when the

investment is classified as held for sale, in which case it is

accounted for under iFrs 5 non-current assets Held for sale

and discontinued operations .

When a group entity transacts with a jointly controlled entity

of the Group, unrealised profits and losses are eliminated to the

extent of the Group’s interest in the joint venture .

1.6 goodwillGoodwill arising on consolidation represents the excess of the cost

of acquisition over the Group’s interest in the fair value of the

identifiable assets and liabilities of a subsidiary, associate or jointly

controlled entity at the date of acquisition . Goodwill is recognised

as an asset and is not amortised but subjected to an annual

impairment review .

Goodwill arising on the acquisition of an associate or jointly

controlled entity is included within the carrying amount of the

investment and is assessed for impairment as part of the

investment . Goodwill arising on the acquisition of a subsidiary is

presented separately in the statement of financial position .

on disposal of a subsidiary, associate or jointly controlled

entity, the attributable amount of goodwill is included in the

determination of the profit or loss on disposal .




notes (contInued)

1.7 negative goodwillnegative goodwill represents the excess of the Group’s interest in

the fair value of the identifiable assets and liabilities of a sub-

sidiary, associate or jointly controlled entity at the date of acqui-

sition over the cost of the acquisition . negative goodwill, after

reassessment, is recognised immediately in profit or loss .

1.8 financial assetsall financial assets are recognised and derecognised on a trade

date where the purchase or sale of a financial asset is under a

contract whose terms require delivery of the financial asset within

the time frame established by the market concerned, and are

initially measured at fair value, plus transaction costs, except for

those financial assets classified as at fair value through profit or

loss, which are initially measured at fair value .

Financial assets are classified into the following specified

categories: financial assets ‘at fair value through profit or loss’

(FvtpL), ‘held-to-maturity’ investments, ‘available-for-sale’

(aFs) financial assets and ‘loans and receivables’ . the classifi-

cation depends on the nature and purpose of the financial assets

and is determined at the time of initial recognition .

effective interest methodthe effective interest method is a method of calculating the

amortised cost of a financial asset and of allocating interest income

over the relevant period . the effective interest rate is the rate that

exactly discounts estimated future cash receipts through the expected

life of the financial asset, or, where appropriate, a shorter period .

income is recognised on an effective interest basis for debt

instruments other than those financial assets designated as at FvtpL .

financial assets at fvtplFinancial assets are classified as at FvtpL where the financial

asset is either held for trading or it is designated as at FvtpL .

a financial asset is classified as held for trading if:– it has been acquired principally for the purpose of selling it in

the near future; or

– on initial recognition it is a part of an identified portfolio of

financial instruments that the Group manages together and

has a recent actual pattern of short-term profit taking; or

– it is a derivative that is not designated and effective as a

hedging instrument .

a financial asset other than a financial asset held for trading may be designated as at fvtpl upon initial recognition if:– such designation eliminates or significantly reduces a meas-

urement or recognition inconsistency that would otherwise

arise; or

– the financial asset forms part of a group of financial assets or

financial liabilities or both, which is managed and its perfor-

mance is evaluated on a fair value basis, in accordance with

the Group’s documented risk management or investment

strategy, and information about the grouping is provided

internally on that basis; or

– it forms part of a contract containing one or more embedded

derivatives, and ias 39 Financial instruments: recognition

and measurement permits the entire combined contract (asset

or liability) to be designated as at FvtpL .

Financial assets at FvtpL are stated at fair value, with any gains

or losses arising on remeasurement recognised in profit or loss .

the net gain or loss recognised in profit or loss incorporates any

dividend or interest earned on the financial asset . Fair value is

determined in the manner described in note 41 .12 .

held-to-maturity investmentsBills of exchange and debentures with fixed or determinable

payments and fixed maturity dates that the Group has the positive

intent and ability to hold to maturity are classified as held-to-

maturity investments . Held-to-maturity investments are recorded

at amortised cost using the effective interest method less

impairment, with revenue recognised on an effective yield basis .

afs financial assets Unlisted shares and linked loans held by the Group are classified

as being aFs and are stated at fair value based on the most recent

traded prices . Gains and losses arising from changes in fair value

are recognised directly in equity in the investments revaluation

reserve with the exception of impairment losses and interest calcu-

lated using the effective interest method, which are recognised

directly in profit or loss . Where the investment is disposed of or is

determined to be impaired, the cumulative gain or loss previously

recognised in the investments revaluation reserve is included in

profit or loss for the period .

dividends on aFs equity instruments are recognised in profit

or loss when the Group’s right to receive the dividends is established .

loans and receivables trade receivables, loans, and other receivables that have fixed or

determinable payments that are not quoted in an active market are



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classified as ‘loans and receivables’ . Loans and receivables are

measured at amortised cost using the effective interest method less

any impairment . interest income is recognised by applying the

effective interest rate, except for short-term receivables where the

recognition of interest would be immaterial .

Impairment of financial assetsFinancial assets, other than those at FvtpL, are assessed for indi-

cators of impairment at each reporting date . Financial assets are

impaired where there is objective evidence that, as a result of one

or more events that occurred after the initial recognition of the

financial asset, the estimated future cash flows of the investment

have been impacted . For financial assets carried at amortised cost,

the amount of the impairment is the difference between the asset’s

carrying amount and the present value of estimated future cash

flows, discounted at the original effective interest rate .

the carrying amount of the financial asset is reduced by the

impairment loss directly for all financial assets with the exception

of trade receivables where the carrying amount is reduced through

the use of an allowance account . When a trade receivable is

uncollectible, it is written off against the allowance account .

Changes in the carrying amount of the allowance account are

recognised in profit or loss .

With the exception of aFs equity instruments, if, in a subse-

quent period, the amount of the impairment loss decreases and the

decrease can be related objectively to an event occurring after the

impairment was recognised, the previously recognised impairment

loss is reversed through profit or loss to the extent that the

carrying amount of the investment at the date the impairment is

reversed does not exceed what the amortised cost would have

been had the impairment not been recognised .

in respect of aFs equity securities, any increase in fair value

subsequent to an impairment loss is recognised directly in equity .

derecognition of financial assetsthe Group derecognises a financial asset only when the con-

tractual rights to the cash flows from the asset expire; or it

transfers the financial asset and substantially all the risks and

rewards of ownership of the asset to another entity . if the Group

neither transfers nor retains substantially all the risks and rewards

of ownership and continues to control the transferred asset, the

Group recognises its retained interest in the asset and an asso-

ciated liability for amounts it may have to pay . if the Group

retains substantially all the risks and rewards of ownership of a

transferred financial asset, the Group continues to recognise the

financial asset and also recognises a secured borrowing for the

proceeds received .

1.9 financial liabilities and equity instruments issued by the group

classification as debt or equitydebt and equity instruments are classified as either financial

liabilities or as equity in accordance with the substance of the

contractual arrangement .

equity instrumentsan equity instrument is any contract that evidences a residual

interest in the assets of an entity after deducting all of its liabilities .

equity instruments issued by the Group are recorded at the

proceeds received, net of direct issue costs .

compound instruments the component parts of compound instruments (re deemable pref-

erence shares) issued by the Group are classified separately as

financial liabilities and equity in accordance with the substance of

the contractual arrange ment . at the date of issue, the fair value of

the liability component is estimated using the prevailing market

interest rate for a similar redeemable instrument . this amount is

recorded as a liability on an amortised cost basis using the

effective interest method until the instrument’s redemption date .

the equity component is determined by deducting the amount of

the liability component from the fair value of the compound

instru ment as a whole . this is recognised and included in equity,

net of tax effects, and is not subsequently remeasured .

financial liabilitiesFinancial liabilities are classified as either financial liabilities at

FvtpL or other financial liabilities .

financial liabilities at fvtplFinancial liabilities are classified as at FvtpL where the financial

liability is either held for trading or it is designated as at FvtpL .

a financial liability is classified as held for trading if:

– it has been incurred principally for the purpose of repur-

chasing in the near future; or

– on initial recognition, it is a part of an identified portfolio of

financial instruments that the Group manages together and

has a recent actual pattern of short-term profit taking; or

– it is a derivative that is not designated and effective as a

hedging instrument .

a financial liability other than a financial liability held for trading

may be designated as at FvtpL upon initial recognition if:




notes (contInued)

– such designation eliminates or significantly reduces a

measurement or recognition inconsistency that would

otherwise arise; or

– the financial liability forms part of a group of financial assets

or financial liabilities or both, which is managed and its

performance is evaluated on a fair value basis, in accordance

with the Group’s documented risk management or investment

strategy, and information about the grouping is provided

internally on that basis; or

– it forms part of a contract containing one or more embedded

derivatives, and ias 39 Financial instruments: recognition

and measurement permits the entire combined contract (asset

or liability) to be designated as at FvtpL .

Financial liabilities at FvtpL are stated at fair value, with any

gains or losses arising on remeasurement recognised in profit or

loss . the net gain or loss recognised in profit or loss incorporates

any interest paid on the financial liability . Fair value is determined

in the manner described in note 41 .12 .

other financial liabilitiesother financial liabilities, including borrowings, are initially

measured at fair value, net of transaction costs .

other financial liabilities are subsequently measured at

amortised cost using the effective interest method, with interest

expense recognised on an effective yield basis .

the effective interest method is a method of calculating the

amortised cost of a financial liability and of allocating interest

expense over the relevant period . the effective interest rate is the

rate that exactly discounts estimated future cash payments

through the expected life of the financial liability, or, where

appropriate, a shorter period, to the net carrying amount on initial

recognition .

Insurance liabilitiesone of the purposes of insurance is to enable policyholders to

protect themselves against uncertain future events . this uncer-

tainty as reflected in the financial statements of the insurer princi-

pally arises in respect of the insurance liabilities of the Group .

the estimation of the ultimate liability arising from claims made

under insurance contracts is a critical accounting estimate . there

are several sources of uncertainty that need to be considered in the

estimate of the liability that the Group will ultimately pay for such

claims . these sources of uncertainty include:

– Judicial decisions – courts may set new levels of award or

compensation for existing claim categories which may be

difficult to predict;

– decisions relating to imprecise policy wordings may lead to

the admission of new claim types not currently allowed for in

pricing; and

– Changes in attitudes to policyholders claiming .

refer to note 41 .14 for the processes used to decide on assump-

tions for outstanding claims and claims incurred but not reported .

derecognition of financial liabilitiesthe Group derecognises financial liabilities when, and only when,

the Group’s obligations are discharged, cancelled or they expire .

1.10 derivative financial instrumentsthe Group enters into a variety of derivative financial instruments

to manage its exposure to interest rate and foreign exchange rate

risks, including foreign exchange forward contracts and interest

rate swaps .

Further details of derivative financial instruments are

disclosed in notes 19, 30 and 41 .6 .

derivatives are initially recognised at fair value at the date a

derivative contract is entered into and are subsequently

remeasured to their fair value at each reporting date . the resulting

gain or loss is recognised in profit or loss immediately unless the

derivative is designated and effective as a hedging instrument, in

which event the timing of the recognition in profit or loss depends

on the nature of the hedge relationship .

(a) hedge accountingthe Group designates certain hedging instruments, which include

derivatives, embedded derivatives and derivatives in respect of

foreign currency risk, as either fair value hedges, cash flow

hedges, or hedges of net investments in foreign operations . Hedges

of foreign exchange risk on firm commitments are accounted for

as cash flow hedges .

at the inception of the hedge relationship, the entity

documents the relationship between the hedging instrument and

the hedged item, along with its risk management objectives and its

strategy for undertaking various hedge transactions . Furthermore,

at the inception of the hedge and on an ongoing basis, the Group

documents whether the hedging instrument that is used in a

hedging relationship is highly effective in offsetting changes in fair

values or cash flows of the hedged item attributable to the hedged

risk .

(b) cash flow hedgesthe effective portion of changes in the fair value of derivatives

that are designated and qualify as cash flow hedges are deferred in



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equity . the gain or loss relating to the ineffective portion is recog-

nised immediately in profit or loss .

amounts previously recognised in other comprehensive

income and accumulated in equity are reclassified to profit or loss

in the periods when the hedged item is recognised in profit or loss,

in the same line of the statement of comprehensive income as the

recognised hedged item . However, when the forecast transaction

that is hedged results in the recognition of a non-financial asset or

a non-financial liability, the gains and losses previously recognised

in other comprehensive income and accumulated in equity, are

transferred from equity and included in the initial measurement of

the cost of the non-financial asset or liability .

Hedge accounting is discontinued when the Group revokes

the hedging relationship, the hedging instrument expires or is sold,

terminated, or exercised, or no longer qualifies for hedge accounting .

any gain or loss recognised in other comprehensive income and

accumulated in equity at that time remains in equity and is

recognised when the forecast transaction is ultimately recognised

in profit or loss . When a forecast transaction is no longer expected

to occur, the gain or loss accumulated in equity is recognised

immediately in profit or loss .

1.11 borrowing costsinterest costs are charged against income in the period in which

incurred, unless they are directly attributable to the acquisition,

construction or production of a qualifiying asset, in which case they

are capitalised to the cost of the asset . dividends on preference

shares, classified as liabilities, are recognised as finance costs .

1.12 revenue recognitionincluded in revenue are net invoiced sales, excluding vat, to

customers for goods delivered, where title has passed .

management fees, performance fees and royalties are recog-

nised on an accrual basis in accordance with the substance of the

relevant agreements . Cash dividends and the full cash equivalent

of capitalisation share awards are recognised when the right to

receive payment or transfer is established . interest is recognised

on a time proportion basis, taking account of the principal out-

standing and the effective rate over the period to maturity, when it

is determined that such income will accrue to the Group .

Fee income from insurance contracts arises from adminis-

tering alternative risk transfer policies . the income is recognised

in profit or loss, as the service is provided on a straight-line basis .

Fee income is included as part of the premium income .

1.13 property, plant, equipment and vehiclesFixed property utilised for manufacturing and administration is

stated at its deemed cost less accumulated depreciation . plant,

equipment and vehicles are stated in the Group financial statements

at cost to the Group less accumulated depreciation . depreciation is

calculated on the straight line method to write assets down to

estimated net residual values at the end of their useful lives at the

following rates: Fishing trawlers (including refits) 5 .5% – 50%,

plant and machinery and computers 20% – 33 .3%, office furniture

and equipment 10% – 17%, motor vehicles 20% and improvements

to leasehold premises 20% . the residual value of fixed property

utilised for manufacturing and administration is estimated and the

difference between cost and the estimated residual value is written

off on the straight line method at 10% per annum . the depreciation

methods, estimated remaining useful lives and residual values are

reviewed at each reporting date with the effect of any changes

accounted for on a prospective basis . the comments in 1 .2 above

relating to write-downs in value of investments, apply here as well .

1.14 other intangible assetsintangible assets acquired in a business combination are identified

and recognised separately from goodwill where they satisfy the

definition of an intangible asset and their fair values can be

measured reliably . the cost of such intangible assets is their fair

value at the acquisition date .

subsequent to initial recognition, intangible assets with finite

useful lives, acquired in a business combination are reported at

cost less accumulated amortisation and accumulated impairment

losses and at cost less accumulated impairment losses in the case of

such assets with indefinite useful lives . amortisation is charged on

a straight-line basis over the assets estimated useful lives . the

estimated useful lives and amortisation methods are reviewed at

the end of each reporting period, with the effect of any changes in

estimate being accounted for on a prospective basis .

1.15 computer software(a) acquired computer softwarethe cost of acquired computer software licences consists of the

purchase price and any directly attributable costs of preparing the

asset for its intended use .

(b) developed computer softwaredevelopment costs, other than research costs, that are directly

attributable to the design, implementation and testing of identi-

fiable and unique software products controlled by the Group are

recognised as intangible assets when the following criteria are met:

– it is technically feasible to complete the software product so

that it will be available for use .

– management intends to complete the software product and

use or sell it .




notes (contInued)

– management is able to use or sell the software product .

– it can be demonstrated how the software product will

generate probable future economic benefits .

– adequate technical, financial and other resources to complete

the development and to use or sell the software product are

available .

– the expenditure attributable to the software product during

its development and implementation can be reliably measured .

directly attributable costs, which are capitalised as part of the

software product, include the software development employee

costs, and an appropriate portion of directly attributable

overheads . other development expenditures that do not meet

these criteria are recognised as an expense when incurred .

development costs previously recognised as an expense are not

recognised as an asset in a subsequent period . developed

computer software costs recognised as assets are amortised over

their useful lives, which does not exceed three years .

(c) subsequent costssubsequent costs are capitalised at cost only when they increase

the future economic benefits embodied in the specific asset to

which they relate . all other expenditure is recognised in profit or

loss when incurred .

Costs associated with maintaining computer software

products are recognised as an expense as incurred .

(d) amortisation amortisation is calculated on the cost of the asset less its residual

value, from the date it is available for use .

1.16 assets acquired under suspensive sale agreements

Finance costs are accrued and expensed annually, based on the

effective rate of interest applied consistently to the remaining

balance on the liability .

1.17 Impairment of assetsthe carrying amounts of the Group’s assets are reviewed at each

reporting date to determine whether there is any indication of

impairment, except for goodwill and other intangible assets with

indefinite useful lives, which are tested for impairment annually .

if any such indication exists, the recoverable amount is estimated

as the higher of fair value less costs to sell and value in use .

in assessing value in use, the expected 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 . an impairment loss is recog-

nised whenever the carrying amount of the cash-generating unit

exceeds its recoverable amount .

a previously recognised impairment loss is reversed if there

has been a change in the estimates used to determine the recov-

erable amount, however not to an amount higher than the carrying

amount that would have been determined (net of depreciation/

amortisation) had no impairment loss been recognised in

prior years . For goodwill a recognised impairment loss is not

reversed in a subsequent period .

1.18 Inventoriesinventories are stated at the lower of cost and estimated net

realisable value . Cost is determined on the first-in, first-out basis .

Finished goods and work-in-progress include labour costs and

an appropriate portion of related fixed and variable overhead

expenses based on the normal level of activity . the comments in

1 .2 above relating to write-downs in value of investments in

subsidiaries, apply here as well .

1.19 cash and cash equivalentsactual bank balances are reflected . outstanding cheques and

deposits are included in accounts payable and accounts receivable

respectively . For the purpose of the statement of cash flows, cash and

cash equivalents includes cash on hand and deposits held with banks .

1.20 deferred taxationdeferred taxation is provided for at the tax rates that are expected

to apply in the period in which the liability is settled or the asset

realised, based on tax rates (and tax laws) that have been enacted

or substantively enacted by the reporting date . Full provision is

made for all temporary differences between the tax base of an

asset or liability and its carrying amount . Where the tax effects of

temporary differences arising from computed tax losses give rise to

a deferred tax asset, the asset is recognised only to the extent that

it is probable that future taxable income will be sufficient to realise

the tax benefit of the losses .

1.21 retirement benefit costspayments to defined contribution retirement benefit plans are

charged as an expense as they fall due . payments made to

industry-managed retirement benefit schemes are dealt with as

defined contribution plans where the Group’s obligations under

the schemes are equivalent to those arising in a defined

contribution retirement benefit plan .



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1.22 government grantsGovernment grants are not recognised until there is reasonable

assurance that the Group will comply with the conditions

attaching to them and that the grants will be received .

Government grants are recognised in profit or loss on a

systematic basis over the periods in which the Group recognises as

expenses the related costs for which the grants are intended to

compensate . specifically, government grants whose primary

condition is that the Group should purchase, construct or

otherwise acquire non-current assets are recognised as deferred

revenue in the consolidated statement of financial position and

transferred to profit or loss on a systematic and rational basis over

the useful lives of the related assets .

Government grants that are receivable as compensation for

expenses or losses already incurred or for the purpose of giving

immediate financial support to the Group with no future related

costs are recognised in profit or loss in the period in which they

become receivable .

1.23 earnings per shareBasic – is based on net attributable profit .

Headline – is based on basic earnings adjusted for capital items

specified in Circular 2/2013 – Headline earnings issued by the

south african institute of Chartered accountants .

the above earnings measures are calculated on the weigh ted

average number of shares in issue during the year .

1.24 foreign currenciestransactions denominated in foreign currencies are translated at

the rate of exchange ruling at the transaction date . Balances

denominated in foreign currencies are translated at the rate of

exchange ruling at the reporting date . Gains or losses arising on

translation are credited to or charged against income .

1.25 segment reportingthe primary business segments of the Group are fishing,

insurance, clothing and investments . the basis of segment

reporting is representative of the internal structure used

for management reporting purposes .

1.26 share-based paymentsequity-settled share-based payments to certain employees are

measured at fair value (excluding the effect of non market-based

vesting conditions) at the date of grant . the fair value determined

at the grant date of the equity-settled share-based payments is

expensed on a straight-line basis over the vesting period, based on

the Group’s estimate of the shares that will eventually vest and

adjusted for the effect of non market-based vesting conditions .

Fair value is measured using the Binomial tree pricing model

and Finite difference method . the expected life used in the model

is adjusted, based on management’s best estimate, for the effects of

non-transferability, exercise restrictions and behavioural conditions .

For cash-settled share-based payments, a liability is recog-

nised for the goods and services acquired, measured initially at the

fair value of the liability . at the end of each reporting period until

the liability is settled, and at the date of settlement, the fair value

of the liability is remeasured, with any changes in fair value recog-

nised in profit or loss for the year .

Fair value is measured using the Black scholes method .

1.27 operating leasesrentals payable under operating leases are charged to profit or

loss on a straight-line basis over the term of the relevant lease .

1.28 comparative figuresWhen an accounting policy is changed, comparative figures are

restated in accordance with the new policy where material to the

comparison .

1.29 Key sources of estimation uncertainty and critical judgements

management use their judgement in selecting an appropriate

valuation technique for financial instruments not quoted in an

active market . valuation techniques commonly used by market

practitioners are applied . the estimation of fair value of unlisted

shares and options includes some assumptions not supported by

observable market prices, indicators or rates . in addition, refer

below for details of judgements made in the determination of

insurance liabilities .

except for the aforegoing, and as disclosed in the relevant

notes or appendices, management has not made any critical judge-

ments or estimations that have a significant effect on the amounts

recognised in the financial statements .

1.30 Insurance contractsthe Group issues insurance contracts where it accepts significant

insurance risk from another party by agreeing to compensate the

policyholder if a specified uncertain future event adversely affects

the policyholder . insurance contracts entered into by the Group,

under which the contract holder is another insurer (inwards

reinsurance), are included with insurance contracts .

insurance risk is risk other than financial risk, transferred

from the holder of a contract to the issuer .




short-term insurance provides benefits under short-term policies,

which include engineering, liability, motor, property, marine and

miscellaneous business classes . short-term insurance contracts are

further classified into the following categories:

– personal insurance, consisting of insurance provided to

individuals and their personal property .

– Commercial insurance, providing cover on the assets and

liabilities of business enterprises .

the Group continues to apply its existing accounting policies for

the recognition and measurement of obligations arising from

insurance contracts and reinsurance that it holds . the Group

developed its accounting policies for insurance contracts before

the adoption of iFrs 4 insurance Contracts (iFrs 4) and in the

absence of a specific standard for insurance contracts . the existing

accounting policies implemented by the Group are in accordance

with the policies for recognition and measurement of short-term

insurance contracts as outlined in Circular 2/2007 issued by the

south african institute of Chartered accountants and iFrs 4 .

recognition and measurement(a) short-term insurance contractsthese contracts are casualty and property contracts . Casualty

insurance contracts protect the Group’s customers against the risk of

causing harm to third parties as a result of their legitimate activities .

damages covered include both contractual and non-contractual

events . property insurance contracts mainly compensate the

Group’s customers for damage suffered to their properties or for

the value of property lost . Customers who undertake commercial

activities on their premises could also receive compensation for the

loss of earnings caused by the inability to use the insured

properties in their business activities (business interruption cover) .

Claims and loss adjustment expenses are charged to income

as incurred based on the estimated liability for compensation owed

to contract holders or third parties damaged by the contract

holders . they include direct claims settlement costs and arise from

events that have occurred up to the end of the reporting period

even if they have not yet been reported to the Group . the Group

does not discount its liabilities for unpaid claims other than for

disability claims . Liabilities for unpaid claims are estimated using

the input of assessments for individual cases reported to the Group

and statistical analyses for the claims incurred but not reported,

and to estimate the expected ultimate cost of more complex claims

that may be affected by external factors (such as court decisions) .

(b) premiumsFor all insurance contracts underwritten by the Group, premiums

are recognised as revenue over the period of coverage, which is in

line with the risk profile of the contracts . premiums are shown

before deduction of commission .

outward reinsurance premiums are recognised as an expense

in accordance with the pattern of indemnity received .

(c) unearned premiums provisionthe portion of premium received on in-force contracts that relates

to unexpired risks at the reporting date is reported as the

unearned premiums provision . Unearned premium is calculated

using the 365th method or released over the risk profile .

premiums are recognised as revenue (earned premiums)

proportionally over the period of coverage . premiums are shown

before deduction of commission and are gross of any taxes or

duties levied on premiums .

(d) provision for unexpired riskWhere it is anticipated that unearned premiums will be insufficient

to cover future claims and expenses attributable to the unexpired

periods of policies in force at the reporting date, a provision is

raised for unexpired risks .

(e) claims incurredinsurance claims and loss adjustment expenses are recognised in

profit or loss as incurred based on the estimated liability for

compensation owed to contract holders or third parties damaged by

the contract holders . the costs include direct claims settlement costs

and arise from events that have occurred up to the reporting date,

even if they have not yet been reported to the Group .

(f) provision for outstanding claimsprovision is made for the estimated final cost of all claims that had

not been settled by the reporting date, less amounts already paid .

Liabilities for unpaid claims are estimated using the input of assess-

ments for individual cases reported to the Group and statistical

analyses to estimate the expected ultimate cost of more complex claims

that may be affected by external factors (such as court decisions) . the

Group does not discount its liabilities for unpaid claims .

(g) provision for claims incurred but not reported (Ibnr)provision is also made for claims arising from insured events that

occurred before the end of the reporting period, but which had not

been reported to the Group at that date . statistical analysis is used

to estimate the claims incurred but not reported .

deterministic methods project the value of ultimate losses

with no probability of occurrence . stochastic methods project a

range of ultimate losses with each value having a probability of

notes (contInued)



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occurrence . iBnr reserves were projected using both claims paid and incurred claims development patterns .

(h) deferred acquisition costs (dac) Commissions and other acquisition costs that vary with and are related to securing new contracts and renewing existing contracts are capitalised as an intangible asset (daC) and are amortised over the term of the policies as premiums are earned . all other costs are recognised as expenses when incurred .

(i) Income from reinsurance contracts Commissions received on reinsurance contracts are deferred and recognised as revenue evenly over the life of the reinsurance contract .

(j) liability adequacy testat each reporting date, liability adequacy tests are performed to ensure the adequacy of the contract liabilities net of related daC . in performing these tests, current best estimates of premiums to be collected, outstanding claims and future claims handling and administration expenses are discounted . any deficiency is immedi-ately recognised in profit or loss initially by writing off daC and by subsequently establishing a provision for losses arising from liability adequacy tests . any daC written off as a result of this test cannot subsequently be reinstated .

(k) reinsurance contracts heldContracts entered into with reinsurers, under which the Group is compensated for losses on one or more contracts issued by the Group and that meet the classification requirements for insurance contracts, are classified as reinsurance contracts held . the benefits to which the Group is entitled under its reinsurance contracts held are recognised as reinsurance assets . these assets consist of short-term balances due from reinsurers, as well as longer term receivables that are dependent on the expected claims and benefits arising under the related reinsured insurance contracts . amounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the reinsured insurance contracts and in accordance with the terms of each reinsurance contract . reinsurance liabilities are primarily premiums payable for reinsurance contracts and are recognised as an expense when due . the Group assesses its reinsurance assets for impairment on an annual basis . the Group follows the same process adopted for impairment of financial assets described in note 1 .8 . Contracts that do not meet the classification requirements are classified as financial assets .

(l) receivables and payables related to insurance contracts receivables and payables are recognised when due . these include amounts due to and from agents, brokers and insurance contract holders .

if there is objective evidence that the insurance receivable is impaired, the Group follows the same process adopted for impairment of financial assets described in note 1 .8 .

(m) salvage and subrogation reimbursementsinsurance contracts allow the Group to sell property acquired when settling a claim . the Group may also have the right to pursue third parties for payment of some or all costs incurred in the settlement of any claim . recoveries of this nature are recog-nised as reimbursements and set off against claims incurred when recoverable .

1.31 adoption of new and revised standardsthe following new and revised standards were adopted by the Group or Company in the current year:– iFrs 7: Financial instruments: disclosure– iFrs 10: Consolidated Financial statements– iFrs 11: Joint arrangements– iFrs 12: disclosure of interests in other entities– iFrs 13: Fair value measurement– ias 1: presentation of Financial statements– ias 19: employee Benefits– ias 27: Consolidated and separate Financial statements– ias 28: investments in associated Joint ventures– ias 31: interests in Joint ventures

there was no impact on the amounts recognised in the consoli-dated and separate annual financial statements in respect of the changes to iFrs 7, iFrs 10, ias 27, ias 28 and ias 31 . other than additional disclosures, the application of iFrs 11, iFrs 12, iFrs 13 and ias 19 has not had any material impact on the amounts recognised in the consolidated and separate annual financial statements . Under the amendments to ias 1, items of other compre-hensive income are required to be grouped into two categories: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met .

at the date of approval of these financial statements, the following relevant new or revised standards were in issue, but not yet effective:– iFrs 10: Consolidated Financial statements– iFrs 12: disclosure of interests in other entities– ias 19: employee Benefits– ias 27: Consolidated and separate Financial statements– ias 32: Financial instruments: presentation– ias 36: impairment of assets

the Group is in the process of evaluating the effects of these standards . these standards will be effective for the year ending december 2014 . the Group has decided not to early adopt any of these new or revised standards .




notes (contInued)

group company

r’000 2013 2012 2013 2012

2. revenuethe Group’s revenue comprises sales of insurance products, fish, formal and casual clothing, rentals, dividends, royaltiesand management performance and other fees received .

revenue from industrial and other operationssales 1 411 459 1 202 553 — — management and performance fees received 15 929 13 248 17 864 15 183 rental income 932 1 169 — — royalties for use of trademarks 326 115 849 846 other — 16 000 — — total revenue from industrial and other operations 1 428 646 1 233 085 18 713 16 029

revenue from insurance operationsshort-term insurance contracts– Gross written premiums 925 340 822 976 — — – Change in unearned premium provision (66 521) (27 177) — — insurance premium revenue 858 819 795 799 — — short-term reinsurance contracts– premiums payable (576 878) (322 964) — — – Change in unearned premium provision 115 951 15 164 — — premium ceded to reinsurers on insurance contracts issued (460 927) (307 800) — —

net insurance premium revenue 397 892 487 999 — — Fee income from insurance contracts 104 459 73 942 — — total revenue from insurance operations 502 351 561 941 — —

total sales and fee income 1 930 997 1 795 026 18 713 16 029

dividends received:– associate companies and joint venture 73 715 75 843 — — – listed investments 73 320 74 403 3 141 12 788 – unlisted investments 8 344 1 200 4 844 383 – subsidiaries — — 51 439 119 156 total dividends received 155 379 151 446 59 424 132 327

business and geographic segments:the clothing and fish products mentioned above are processed and manufactured in the Group’s factories in the Western Cape and sold throughout south africa, as well as the United states of america, Great Britain, italy, Germany, the netherlands, spain, australia, France, the sadC countries and other parts of africa . all other revenue is sourced from within south africa . the table below shows the geographical breakdown of the clothing and fish sales .



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group company

r’000 2013 2012 2013 2012

sales revenue by geographical market:south africa 871 263 757 453 — — other sadC countries 26 291 26 817 — — United states of america 9 167 6 500 — — Great Britain 3 318 1 504 — — italy 147 930 140 065 — — Germany 74 363 68 253 — — netherlands 16 209 17 271 — — spain 33 019 35 905 — — australia 160 841 110 567 — — France 37 388 26 840 — — other 31 670 11 378 — —

1 411 459 1 202 553 — —

3. operating expensesoperating expenses industrial and other operationsproduction, selling and administration expenses 414 175 358 945 80 516 60 328 raw materials and consumables used 982 810 865 211 — — total operating expenses industrial and other operations 1 396 985 1 224 156 80 516 60 328

operating expenses insurance operationsnet insurance claims 312 112 292 803 — — insurance claims and loss adjustment expenses 701 024 440 613 — — insurance claims and loss adjustment expenses recovered from reinsurers (388 912) (147 810) — —

expensesexpenses for the acquisition of insurance contracts 154 478 137 844 — — selling and administration expenses 156 240 158 315 — — asset management services received 2 175 2 316 — — total operating expenses insurance operations 625 005 591 278 — —

total operating expenses 2 021 990 1 815 434 80 516 60 328

4. fair value gainsChanges in fair value of financial assets designated as at fair value through profit or loss– mark-to-market revaluation of listed investments 403 306 835 520 (27 089) 14 674 – mark-to-market revaluation of unlisted investments (6 663) (5 542) (6 663) (31 944)– revaluation of options 160 759 223 333 116 776 223 333

557 402 1 053 311 83 024 206 063




group company

r’000 2013 2012 2013 2012

5. exceptional itemsGains– insurance proceeds on loss of trawler 9 972 — — —

Losses– additional purchase consideration on acquisition of business — (1 736) — — – on disposal of fishing trawler (1 788) — — — – impairment in value of investment in associate (356) (252) — — – on disposal of available-for-sale asset — (292) — (292)total losses (2 144) (2 280) — (292)net exceptional items 7 828 (2 280) — (292)

6. profit before net finance costsprofit before net finance costs includes the following itemsof income and expenditure not shown separately in the statement of comprehensive income:

6.1 Incomeprofit on disposal of property, plant, equipment and vehicles 143 244 — — Foreign exchange gains — 3 925 — — Write up of inventory to net realisable value 578 — — Government grants– production incentive 8 924 5 846 — — – training refunds 2 287 2 623 — —

6.2 expenditureauditors’ remuneration Fees – current year 4 866 4 438 1 238 1 059 – under/(over) provided previous year 685 342 429 (55)other services 302 610 114 540

5 853 5 390 1 781 1 544

depreciation property, plant, equipment and vehicles 62 483 71 189 628 595 amortisation of intangible assets 22 368 19 079 — — Loss on disposal of equipment and vehicles — 40 — 18 Foreign exchange losses 26 664 20 319 — — rentals under operating leases Land and buildings 14 413 14 119 1 179 854 plant, machinery and vehicles 11 859 13 012 — 64 staff costs 476 771 441 523 27 713 28 724

retirement benefit plan contributions defined contribution plans 26 890 24 415 1 560 1 451 royalties paid for use of trademarks 4 276 3 986 — — Fees for services secretarial 367 324 367 324 other professional 26 162 20 729 9 619 6 597 Write down of inventory to net realisable value 1 627 3 426 — —

notes (contInued)



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group company

r’000 2013 2012 2013 2012

7. directors’ emolumentsdirectors’ emoluments– paid by Company

fees for services as directorsexecutive directors — — non-executive directors 1 331 1 539

1 331 1 539 management and other servicesexecutive directors 11 597 12 321 non-executive directors — 494

11 597 12 815 gain on exercise of optionsexecutive directors 1 823 507 non-executive directors — —

1 823 507 total paid by Company 14 751 14 861

– paid by subsidiaries

fees for services as directorsexecutive directors 693 709 non-executive directors 66 7 total paid by subsidiary companies 759 716 total paid by Company and subsidiaries 15 510 15 577

executive directors do not have fixed term contracts . they have employment agreements with the Company which are subject to a one month notice period by either party . detailed information appears in the remuneration report on page 55 .

8. Income from investmentsinterest rate swap — — 8 269 — interest received on bank deposits and loansto associates and subsidiaries 23 037 26 410 5 765 7 311

23 037 26 410 14 034 7 311

9. net finance costsinterest on borrowings 38 411 40 252 5 468 1 443 Listed bond — 3 156 — — interest rate swap (8 269) 1 624 — 1 624 preference dividends 80 411 86 565 — —

110 553 131 597 5 468 3 067




group company

r’000 2013 2012 2013 2012

10. taxation10.1 taxation charge

sa normal taxation 81 062 260 764 16 004 58 035 Current – current year 28 391 29 043 — — – over provision prior year (147) (472) (151) (407)deferred – current year 52 313 161 530 16 110 39 093 – under/(over) provision prior year 505 (1 658) 45 (1 558) – rate change – capital gains tax — 72 321 — 20 907

dividends taxCurrent – current year 333 257 — —

secondary tax on companiesCurrent – under provision prior year 10 — — —

81 405 261 021 16 004 58 035

Unutilised computed tax losses carried forward 138 964 36 964 11 327 15 311 saving in taxation attributable thereto at current rate 38 910 10 350 3 172 4 287

10.2 reconciliation of taxation charge net profit before taxation 554 797 1 103 137 89 211 298 043

tax at statutory rates (28% – 40%) 157 617 311 978 24 979 83 452 Under/(over) provided previous year 367 (2 130) (105) (1 965)tax effect of change in tax rate — 72 321 — 20 907 tax effect of share of results of associates and joint venture (3 443) (3 334) — — tax effect of non-deductible expenses 40 103 38 759 14 167 10 225 tax effect of non-taxable income (208 321) (341 449) (40 070) (94 668)tax effect of utilisation of prior year losses (1 663) — — — deferred tax assets 1 269 (458) — — dividends tax 333 257 — — Capital gains tax 95 143 185 077 17 033 40 084 taxation charge 81 405 261 021 16 004 58 035

11. dividendson 22 april 2013, a cash dividend of 25 cents per share (total dividend r68 669 185) was paid to shareholders . in may 2012, the dividend was 18 cents per share (total dividend r49 385 466) . in respect of the current year, a dividend of 30 cents per share and a special dividend of 10 cents per share will be paid to shareholders on 29 april 2014 . the proposed dividend will be paid to share-holders recorded in the books of the company on 25 april 2014 . the total dividends paid will be r109 911 904 . the company has unutilised stC credits of r274 829 961 which will be utilised for the benefit of shareholders in accordance with the dividends tax rules .

notes (contInued)



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group company

r’000 2013 2012 2013 2012

12. earnings per sharethe following is a reconciliation of the profitfigures used in the earnings per share calculations:

basic earningsnet profit attributable to equity holders of the parent 464 111 849 398

2013 2012Gross net Gross net

headline earnings calculationnet profit attributable to equity holders of the parent 464 111 849 398 profit on disposal of property, plant, equipment and vehicles (8 267) (3 492) (447) (324) Loss on disposal of available-for-sale asset — — 292 237 impairment of intangible asset of associate — — 2 647 —impairment of investment in associate 356 290 252 —additional purchase consideration on acquisition of business — — 1 736 —adjustments relating to results of associate (456) (328) (9 584) —Headline earnings (8 367) 460 581 (5 104) 849 311

Headline earnings per share (cents) 188 .4 346 .0diluted headline earnings per share (cents) 160 .9 295 .4

Weighted average number of shares on which earnings and headline earnings per share is based is 244 413 514 (2012 – 244 038 657)

Weighted average number of shares on which diluted earnings and diluted headline earnings per share is based is 286 172 134 (2012 – 285 813 384)

group

r’000 2013 2012

reconciliation of weighted average number of shares between basic and diluted earnings per share and headline earnings and diluted headline earnings per share .Basic 244 413 514 244 038 657 dilutive share options 41 758 620 41 774 727 diluted 286 172 134 285 813 384 number of share options treated as anti-dilutive 703 098 —




group company

r’000 2013 2012 2013 2012

13. property, plant, equipment and vehicles13.1 land and buildings – freehold

Carrying value 1 January and 31 december 24 567 24 567 — — deemed cost 24 682 24 682 — — accumulated depreciation and impairment losses (115) (115) — — depreciation rate: 10%

13.2 land and buildings – leasehold improvementsCarrying value 1 January 16 103 17 614 269 367 deemed cost 25 412 25 392 757 757 accumulated depreciation and impairment losses (9 309) (7 778) (488) (390) additions 3 199 1 044 — — disposals — (1 024) — — depreciation for the year (2 725) (2 555) (99) (98) accumulated depreciation on disposals — 1 024 — — Carrying value 31 december 16 577 16 103 170 269 deemed cost 28 611 25 412 757 757 accumulated depreciation and impairment losses (12 034) (9 309) (587) (488) depreciation rate: 20%

13.3 plant and machineryCarrying value 1 January 62 020 66 459 — — Cost 115 873 110 834 — — accumulated depreciation and impairment losses (53 853) (44 375) — — additions 20 173 7 716 — — disposals (1 084) (2 677) — — depreciation for the year (12 064) (11 737) — — accumulated depreciation on disposals 1 049 2 259 — — Carrying value 31 december 70 094 62 020 — — Cost 134 962 115 873 — — accumulated depreciation and impairment losses (64 868) (53 853) — — depreciation rates: 20 – 33 .33%

13.4 fishing trawlers (including refits)Carrying value 1 January 150 546 164 307 — — Cost 306 744 268 980 — — accumulated depreciation and impairment losses (156 198) (104 673) — — additions 46 329 37 764 — — disposals (8 150) — — — depreciation for the year (42 344) (51 525) — — accumulated depreciation on disposals 6 362 — — — Carrying value 31 december 152 743 150 546 — — Cost 344 923 306 744 — — accumulated depreciation and impairment losses (192 180) (156 198) — — depreciation rates: 5 .5 – 50%

notes (contInued)



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group company

r’000 2013 2012 2013 2012

13.5 computersCarrying value 1 January 2 605 1 911 240 254 Cost 8 078 7 037 775 775 accumulated depreciation and impairment losses (5 473) (5 126) (535) (521) additions 2 655 1 702 133 168 disposals (46) (661) (21) (168) depreciation for the year (1 747) (988) (163) (164) accumulated depreciation on disposals 21 641 21 150 Carrying value 31 december 3 488 2 605 210 240 Cost 10 687 8 078 887 775 accumulated depreciation and impairment losses (7 199) (5 473) (677) (535) depreciation rates: 20 – 33 .33%

13.6 office furniture and equipmentCarrying value 1 January 9 089 9 943 876 1 049 Cost 23 420 20 735 1 528 1 490 accumulated depreciation and impairment losses (14 331) (10 792) (652) (441) additions 3 515 3 202 14 38 disposals (191) (517) — — depreciation for the year (3 081) (3 925) (214) (211) accumulated depreciation on disposals 161 386 — — Carrying value 31 december 9 493 9 089 676 876 Cost 26 744 23 420 1 542 1 528 accumulated depreciation and impairment losses (17 251) (14 331) (866) (652) depreciation rates: 10 – 17%

13.7 motor vehiclesCarrying value 1 January 1 733 864 636 — Cost 3 063 1 973 758 — accumulated depreciation and impairment losses (1 330) (1 109) (122) — additions 175 1 328 — 758 disposals (21) (238) — — depreciation for the year (522) (459) (152) (122) accumulated depreciation on disposals 21 238 — — Carrying value 31 december 1 386 1 733 484 636 Cost 3 217 3 063 758 758 accumulated depreciation and impairment losses (1 831) (1 330) (274) (122) depreciation rate: 20%

13.8 leased motor vehiclesCarrying value 1 January and 31 december — — — — Cost — 126 — — accumulated depreciation — (126) — — additions — — — — disposals — (126) — — depreciation for the year — — — — accumulated depreciation on disposals — 126 — — Carrying value 31 december — — — — Cost — — — — accumulated depreciation — — — —




group company

r’000 2013 2012 2013 2012

13. property, plant, equipment and vehicles (continued)total property, plant, equipment and vehiclesCarrying value 1 January 266 663 285 665 2 021 1 670 Cost/deemed cost 507 272 459 759 3 818 3 022 accumulated depreciation and impairment losses (240 609) (174 094) (1 797) (1 352)additions 76 046 52 756 146 964 disposals (9 492) (5 243) (21) (168) depreciation for the year (62 483) (71 189) (628) (595) accumulated depreciation on disposals 7 614 4 674 21 150 Carrying value 31 december 278 348 266 663 1 539 2 021 Cost/deemed cost 573 826 507 272 3 943 3 818 accumulated depreciation and impairment losses (295 478) (240 609) (2 404) (1 797)

details of land and buildings are contained in a register which is open for inspection by members or their duly authorised representatives at the registered office of the Company .

details of encumbered assetsother items of property, plant, equipment and vehicles with a net book value of r235 .1 million (2012 – r230 .3 million) are encumbered by a notarial bond (refer note 28) .

14. goodwillCost 12 140 12 140 — —

there have been no impairment losses since goodwill was initially recognised .

Goodwill has been allocated for impairment testing purposes to Lion of africa Holdings Company (pty) Ltd . the recoverable amount of this investment is determined on a price:book multiple of 1 .67 times and a price:earnings multiple of 7 times .

notes (contInued)



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group company

r’000 2013 2012 2013 2012

15. Intangible assetslong-term fishing rightsCarrying value 1 January 140 702 156 789 — — Cost 198 437 198 437 — — accumulated amortisation (57 735) (41 648) — — amortisation (16 087) (16 087) — — Carrying value 31 december 124 615 140 702 — — Cost 198 437 198 437 — — accumulated amortisation (73 822) (57 735) — — amortisation rate: 10 – 15 yearscomputer software developmentCarrying value 1 January 11 467 1 441 — — Cost 22 650 9 632 — — accumulated amortisation (11 183) (8 191) — — additions 5 798 13 018 — — amortisation (6 281) (2 992) — — Carrying value 31 december 10 984 11 467 — — Cost 28 448 22 650 — — accumulated amortisation (17 464) (11 183) — — amortisation rate: 1 – 3 yearstotal intangible assetsCarrying value 1 January 152 169 158 230 — — Cost 221 087 208 069 — — accumulated amortisation (68 918) (49 839) — — additions 5 798 13 018 — — amortisation (22 368) (19 079) — — Carrying value 31 december 135 599 152 169 — — Cost 226 885 221 087 — — accumulated amortisation (91 286) (68 918) — —




group company

r’000 2013 2012 2013 2012

16. Interest in subsidiariesshares at cost less amounts written off 441 459 441 447 Loans owing by subsidiaries less amounts written off 294 923 339 954

736 382 781 401 Loans owing to subsidiaries 352 470 340 987

the loans owing by/to subsidiaries are interest free, unsecured and have no fixed terms of repayment except for a loan of r19 .6 million (2012 – r22 .2 million) from a subsidiary which bears interest at the prime bank overdraft rate minus 1% . the intention of the directors is not to call on these loans within the next 12 months .

refer to appendix 1 for details of subsidiary companies .

Brimstone has written down its investment in the clothingsubsidiary to what it considers to be the recoverable amount .For Group purposes, this write-down has been appliedproportionately to the subsidiary’s assets as follows:

plant and machinery 2 623 2 623 — — inventory 14 477 14 477 — —

17 100 17 100 — —

notes (contInued)



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details of non-wholly owned subsidiaries that have material non-controlling interests

name of subsidiary

proportion of ownership interests and voting rights held

by non-controlling interests2013 2012

% %sea Harvest Holdings (pty) Ltd 41,9% 41,9%Brimsure (pty) Ltd 40% 40%total

summarised financial information in respect of each of the Group’s subsidiaries that has material non-controlling interests is set out below . the summarised financial information below represents amounts before intragroup eliminations .

group

r’000 2013 2012

sea harvest holdings (pty) ltdCurrent assets 491 114 467 864 non-current assets 420 430 411 700 Current liabilities 396 862 224 320 non-current liabilities 361 497 533 341 equity attributable to owners of the Company 18 535 5 009 non-controlling interests 134 650 116 894 – share of equity 14 586 4 834 – preference shares 96 965 88 961 – Loan 23 099 23 099

revenue 1 237 687 1 037 707 profit/(loss) for the year 15 685 (21 640)profit/(loss) attributable to owners of the Company 9 114 (12 574)profit/(loss) attributable to the non-controlling interests 6 571 (9 066)

other comprehensive income attributable to owners of the Company 4 412 (2 288)other comprehensive income attributable to the non-controlling interests 3 180 (1 650)other comprehensive income for the year 7 592 (3 938)

total comprehensive income attributable to owners of the Company 13 526 (14 862)total comprehensive income attributable to the non-controlling interests 9 751 (10 716)total comprehensive income for the year 23 277 (25 578)

dividends paid to non-controlling interests — —

net cash inflow from operating activities 88 079 148 195 net cash outflow from investing activities (53 461) (46 622)net cash outflow from financing activities (32 864) (32 895)net cash inflow 1 754 68 678




group

r’000 2013 2012

16. Interest in subsidiaries (continued)

brimsure (pty) ltdCurrent assets 17 27 non-current assets 34 218 30 952 Current liabilities 21 20 non-current liabilities 1 171 equity attributable to owners of the Company 20 528 18 473 non-controlling interests 13 685 12 315

revenue 3 900 5 100 profit for the year 6 775 4 462 profit attributable to owners of the Company 4 065 2 677 profit attributable to the non-controlling interests 2 710 1 785

other comprehensive income attributable to owners of the Company — — other comprehensive income attributable to the non-controlling interests — — other comprehensive income for the year — —

total comprehensive income attributable to owners of the Company 4 065 2 677 total comprehensive income attributable to the non-controlling interests 2 710 1 785 total comprehensive income for the year 6 775 4 462

dividends paid to non-controlling interests 1 480 840

no details of cash flows have been supplied for Brimsure (pty) Ltd as the company does not transact in cash . any expenses incurred and dividends declared are paid by the company’s holding company, Brimstone investment Corporation Limited, via the intercompany loan . any receipts of income are paid into the bank account of the company’s holding company via the intercompany loan account .

significant restrictions– Brimstone has ceded and pledged all of its ordinary and preference shares in oceana spv (pty) Ltd and all of its claims held in

and against the subsidiary as security for the a preference shares issued by oceana spv (pty) Ltd (refer note 28) .– Brimstone has ceded its loan to a subsidiary of r29 039 501 (2012 – r28 077 136) as security for overdraft facilities granted to

the subsidiary (refer note 32) .

financial supportrefer to note 33 and 36 for details of financial support given by the Company to its subsidiaries .

notes (contInued)



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group company

r’000 2013 2012 2013 2012

17. Investments in associate companies and joint venture Cost of investment in associate companies and joint venture less amounts written off 671 655 668 654 7 056 7 056 Loans to associate companies 24 499 26 363 22 322 23 837 share of non-distributable reserves of associates 11 109 8 417 — — share of post acquisition profit, net of dividends received 91 766 78 561 — — total carrying value 799 029 781 995 29 378 30 893

associatesrefer to appendix 2 for full details of associate companies . the aggregate assets, liabilities and results of operations of associate companies are summarised below:

17.1 details of material associatedetails of the Group’s material associate are as follows:

proportion of ownership interest and voting power

held by the Group

name of associateprincipal

activity

place of incorporation and operation

30 september 2013

31 december 2012

oceana Group Limited Fishing south africa 20 .013% 20 .046%

the above associate is accounted for using the equity method in these consolidated financial statements .

the financial year end of oceana Group Limited is 30 september . Brimstone does not have the authority to change this date . For purposes of applying the equity method of accounting, the financial statements of oceana Group Limited for the year ended 30 september 2013 have been used . no adjustments have been deemed necessary for the period between that date and 31 december 2013 . as at 31 december 2013, the fair value of the Group’s interest in oceana Group Limited, which is listed on the Jse, was r1 647 933 910 (2012 – r1 403 155 434) based on the quoted market price available on the Jse, which is a level 1 input in terms of iFrs 13 .




group

r’000 2013 2012

17. Investments in associate companies and joint venture (continued)non-current assets 725 407 687 095 Current assets 2 169 999 2 089 669 total assets 2 895 406 2 776 764

non-current liabilities 183 688 162 673 Current liabilities 922 343 1 132 665 total liabilities 1 106 031 1 295 338

non-controlling interests 60 761 43 838

revenue 4 997 354 4 794 928 profit from continuing operations 524 390 447 417 post-tax profit from discontinued operations — — profit for the year 524 390 447 417 other comprehensive income/(loss) for the year 15 016 (7 252)total comprehensive income for the year 539 406 454 282 dividends received from the associate during the year 64 712 60 491

reconciliation of the above summarised financial information to the carrying amount of the interest in oceana Group Limited recognised in the consolidated financial statements .

net assets of the associate 1 728 614 1 437 588 proportion of the Group’s effective ownership interest in oceana Group Limited 20 .013% 20 .046%share of net assets 345 955 288 185 Goodwill 362 475 362 475 dividend accrued (44 615) — Carrying amount of the Group’s interest in oceana Group Limited 663 815 650 660

17.2 aggregate information of associates that are not individually materialGroup’s share of profit from continuing operations 4 026 6 316 Group’s share of post-tax profit/(loss) from discontinued operations — — Group’s share of other comprehensive income — — Group’s share of total comprehensive income 4 026 6 316 aggregate carrying amount of the Group’s interests in these associates 119 269 116 476

17.3 Joint ventureaggregate information of joint venture that is not individually materialGroup’s share of profit/(loss) from continuing operations 1 086 (6 410)Group’s share of post-tax profit from discontinued operations — — Group’s share of other comprehensive income — — Group’s share of total comprehensive income/(loss) 1 086 (6 410)aggregate carrying amount of the Group’s interests in this joint venture 15 944 14 858

notes (contInued)



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group company

r’000 2013 2012 2013 2012

18. Investmentsavailable-for-sale investmentsUnlisted investments:shares at fair value 46 954 28 245 2 154 2 429 total available-for-sale investments 46 954 28 245 2 154 2 429

Investments designated as at fair value through profit or lossListed investments:shares at fair value 2 456 503 2 062 957 77 834 113 143 debt securities at fair value 60 884 62 149 — — total listed investments 2 517 387 2 125 106 77 834 113 143

Unlisted investments:shares and units at fair value 159 596 35 483 159 596 35 483 Fixed deposit accounts at fair value 95 251 129 670 — — money market at fair value 8 000 15 000 — — Linked loan at fair value — 6 157 — 6 157 options at fair value 909 354 740 754 777 083 652 465 total unlisted investments 1 172 201 927 064 936 679 694 105

unlisted investmentsnon-current 1 068 950 927 064 936 679 694 105 Current 103 251 — — —

1 172 201 927 064 936 679 694 105

total investments designated as at fair value through profit or loss 3 689 588 3 052 170 1 014 513 807 248

total investmentsnon-current 3 633 291 3 080 415 1 016 667 809 677 Current 103 251 — — —

3 736 542 3 080 415 1 016 667 809 677

refer to appendix 3 for full details of the investments .

19. other financial assetsFinancial assets carried at fair value through profit or loss:interest rate swap – not designated in hedge accounting relationship 9 181 501 9 181 501

non-current 9 181 501 9 181 501 Current — — — —

9 181 501 9 181 501

interest rate swap agreements linked to prime and for a period of five years have been concluded to convert floating rates to fixed rates . the notional value of the two swaps are r250 million and r121 .03 million and the fixed rates are 9 .737% and 9 .187% respectively .




group company

r’000 2013 2012 2013 2012

20. Inventoriesraw materials 46 717 50 913 — — Work in progress 42 097 27 555 — — Finished goods 134 892 134 255 — — Consumable stores 26 942 17 503 — —

250 648 230 226 — —

inventories with a net book value of r181 .1 million (2012 – r169 .6 million) are encumbered by a notarial bond (refer note 28) .

inventories have been stated at the lower of cost and net realisable value by the Group’s subsidiaries with a total amount in their books of r31 139 103 (2012 – r28 484 821) being shown at net realisable value .

21. trade receivables and other receivablesamounts receivable from the sale of goods or insurance and reinsurance contracts 535 525 329 012 — — Less: allowance for irrecoverable amounts (5 591) (5 919) — — trade receivables 529 934 323 093 — — other receivables 87 797 84 195 19 949 26 968

617 731 407 288 19 949 26 968

the average credit period on sales of goods is 76 days (2012 – 54 days) . no interest is charged on the trade receivables within agreed credit terms . thereafter, interest is charged at prime bank overdraft rates on the overdue balance . the Group has provided fully for all receivables over 180 days, except where recovery is considered probable and where recovery is considered doubtful fol-lowing investigations into the specific debtor whose debt is outstanding for less than 180 days .

Before accepting any new customer, the Group uses credit agency reports to assess creditworthiness together with reports from agents, visits to and interviews with the customer when deemed necessary . Credit limits are set and debtor balances are reviewed monthly . in some instances, security by way of personal surety, cession of debtors or notarial bond over assets is obtained . there are no uninsured customers who represent more than 5% of the total balance of trade receivables .

included in the Group’s trade receivable balance are receivables with a carrying value of r39 174 288 (2012 – r29 205 002) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable . the Group does not hold any collateral over these balances .

notes (contInued)



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group company

r’000 2013 2012 2013 2012

age analysis of trade receivables past due but not provided for:31 to 60 days 14 373 16 184 — — 61 to 90 days 2 989 1 299 — — 91 to 120 days 9 048 — — — over 120 days 12 764 11 722 — —

39 174 29 205 — — age analysis of trade receivables past due and provided for:31 to 60 days — — — — 61 to 90 days — 95 — — 91 to 120 days — 34 — — over 120 days 5 591 5 790 — —

5 591 5 919 — —

movement in the allowance for doubtful debtsBalance at beginning of the year 5 919 6 185 — — amounts (written off)/received during the year (761) 501 — — amounts recovered during the year (52) (8) — — increase/(decrease) in allowance recognised in profit or loss 485 (759) — — Balance at end of the year 5 591 5 919 — —

in determining the recoverability of trade receivables, the Group considers any change in the credit quality of trade receivables from the date credit was initially granted up to the reporting date . the concentration of credit risk is limited because of the custom-er base being large and unrelated and large credit risks are insured against irrecoverability . accordingly, the directors believe that there is no further credit provision required in excess of the allowance for doubtful debts . included in the allowance for doubtful debts are specific trade receivables with balances of rnil (2012 – r12 073 165) which have been placed under liquidation . the impairment recognised represents the difference between the carrying amount of the specific trade receivable and the present value of the expected liquidation proceeds .

trade receivables with a value of r65 127 804 (2012 – r63 388 018) have been ceded as security for a discounting facility (refer note 32) .

trade receivables with a value of r145 568 302 (2012 – r145 015 545) are encumbered by a notarial bond (refer note 28) .




group company

r’000 2013 2012 2013 2012

22. Insurance assets and liabilitiesInsurance contract liabilities and reinsurance contract assetsInsurance contract liabilitiesshort-term insurance contracts:– claims reported and loss adjustment expenses 392 250 289 864 — — – claims incurred but not reported 84 200 66 401 — — – unearned premiums provision 327 116 260 595 — — total insurance liabilities, gross 803 566 616 860 — —

Insurance contract assetsshort-term insurance contracts:– claims reported and loss adjustment expenses 343 438 266 961 — — – claims incurred but not reported 34 371 28 414 — — – unearned premiums provision 239 008 123 057 — — total reinsurers’ share of insurance liabilities 616 817 418 432 — —

deferred acquisition costsCommissions related to securing new insurance contracts and renewing existing contracts are deferred when incurred and recognised in profit or loss over the terms of the policies as premiums are earned .

Balance at 1 January 50 524 39 610 — — Costs deferred during the year 50 494 48 955 — — Costs amortised during the year (50 276) (38 041) — — Balance at 31 december 50 742 50 524 — —

assetsnon-current 161 774 50 524 — — current 505 785 418 432 — —

667 559 468 956 — —

liabilitiesnon-current 168 749 — — — current 634 817 616 860 — —

803 566 616 860 — —

notes (contInued)



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22.1 process used to estimate insurance liabilitiesinsurance risks are unpredictable and the Group recognises that it is impossible to forecast with absolute precision, future claims payable under existing insurance contracts . over time the Group has developed methodologies that are aimed at establishing insurance provisions that have a reasonable likelihood of being adequate to settle all its insurance obligations . these liabilities comprise of reported claims not yet paid (outstanding claims), a provision for claims incurred but not yet reported (iBnr) and an unearned premium provision at the reporting date .

outstanding claimsClaims on insurance contracts are recognised on a claims-made basis . this means that the Group is liable for all insured events that occurred and for which the claim is first made in writing, during the term of the contract . the outstanding liability in respect of claims is the Group’s best estimate of the current commitment to its policyholders at any particular time .

the estimated cost of claims includes direct expenses to be incurred in settling claims, net of the expected subrogation value and other recoveries . the Group takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures . However, given the uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from the original liability established .

initial estimates of outstanding claims are based on historical trends per class of business and are updated as soon as new informa-tion is available . the outstanding liability is reduced commensurate to any interim payments that may be made . on settlement of the claim, the outstanding liability is reduced to nil .

claims incurred but not reported (Ibnr)the iBnr reserve relates to the uncertainty concerning the eventual outcome of claims that have occurred but not reported .

the iBnr provision is arrived by calculating the ultimate claims reserve using a deterministic chain-ladder method to paid losses to statistically estimate the best estimate position of triangulated data by modelling development factors (alternatively known as link ratios) which are derived from the data . the chain ladder method is based upon the assumption that the paid losses will continue in a similar manner in the future for all accident years . that is, the method assumes that the development factor of two successive cumulative loss amounts of each accident year from one evaluation point to the next is similar in size for all accident years consid-ered . this method is extended by curve fitting to predict tail development . a stochastic bootstrapping method is applied over the best estimate so that the iBnr reserves are held to be at least sufficient at the 75th percentile . the bootstrapping method involves a model-free method of estimating variability based on stochastic techniques applied to development factor models . this method produces full probability distributions of reserve estimates . to arrive at the iBnr reserve figures as at 31 december 2013, the outstanding claims (including estimates) have then been subtracted from the ultimate claims reserve . the projected liabilities were not discounted and consequently no allowance was made for the expected investment returns on assets matching the liabilities . the iBnr rate, determined by dividing the iBnr by net written premium, simulates the solvency assessment and management (sam) interim measures iBnr rate .

Based on these assumptions, the iBnr liability as a percentage of net written premiums has been set at 12 .5% for the 2013financial year (2012 – 7 .6%) . a 10% upward adjustment in the level of sufficiency of the iBnr reserve would result in anadditional charge of approximately r22 .6 million (2012 – r22 million), while an equivalent downward adjustment in the level ofsufficiency would result in a release of reserves on the statement of comprehensive income of approximately r15 .1 millionbefore taxation (2012 – r13 .5 million) .




22. Insurance assets and liabilities (continued)22.1 process used to estimate insurance liabilities (continued)

Based on the methodologies outlined above, the following iBnr results were estimated for selected levels of confidence:

Level of sufficiency of

iBnr liability

iBnr liability percentage of

net written premium for

2013 year

pre-tax rand value of iBnr

(r'000) 55% 6 .1% 35 011 65% 8 .1% 46 459 75% 10 .7% 61 624 85% 14 .7% 84 260 95% 23 .1% 132 531

unearned premiums provisionthe Group raises provisions for unearned premiums on a basis that reflects the underlying risk profile of its insurance contracts . an unearned premiums provision is created at the commencement of each insurance contract and is then released as the risk under the contract expires . the majority of the Group’s insurance contracts have an even risk profile and therefore the unearned premiums provisions are released evenly over the period of insurance using the 365th time proportionate basis . For the remainder of the insur-ance portfolio, for example the engineering class, the unearned premium is released on a basis consistent with the increasing, decreasing or uneven risk profile of the contracts . the provisions for unearned premiums are first determined on a gross level and thereafter the reinsurance impact is recognised .

group company

r’000 2013 2012 2013 2012

23. share capital23.1 authorised

500 000 000 ordinary shares of 0 .1 cents each 500 500 500 500 1 000 000 000 “n” ordinary shares of 0 .001 cents each 10 10 10 10

510 510 510 510

23.2 Issued and fully paidordinary sharesat beginning and end of year46 775 135 (2012 – 46 775 135) ordinary shares of 0 .1 cents each 47 47 47 47

“n” ordinary sharesat beginning of year266 728 564 (2012 – 266 480 204) “n” ordinary shares of 0 .001 cents each 2 2 2 2 issued in terms of employee share option plan416 060 (2012 – 248 360) “n” ordinary shares of 0 .001 cents each — — — — at end of year267 144 624 (2012 – 266 728 564) “n” ordinary shares of 0 .001 cents each 2 2 2 2

notes (contInued)



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group company

r’000 2013 2012 2013 2012

23.3 held as treasury sharesordinary sharesat beginning of year3 987 231 (2012 – 3 945 291) ordinary shares of 0 .1 cents each (4) (4) — — repurchased for cash28 080 (2012 – 41 940) ordinary shares of 0 .1 cents each — — — — at end of year4 015 311 (2012 – 3 987 231) ordinary shares of 0 .1 cents each (4) (4) — —

“n” ordinary sharesat beginning of year65 408 393 (2012 – 65 436 317) “n” ordinary shares of 0 .001 cents each — — — — sold for cash(35 020) (2012 – (27 924)) “n” ordinary shares of 0 .001 cents each — — — — at end of year65 373 373 (2012 – 65 408 393) “n” ordinary shares of 0 .001 cents each — — — — total at end of year 45 45 49 49

23.4 unissued shares (number)Under option in terms of the Company’s share option scheme“n” ordinary shares at 590 cents exercisable until 1 July 2016 594 298 603 378 “n” ordinary shares at 550 cents exercisable until 16 February 2017 838 800 1 139 260 “n” ordinary shares at 820 cents exercisable until 31 december 2017 200 000 200 000 “n” ordinary shares at 900 cents exercisable until 16 February 2018 898 120 1 063 700 “n” ordinary shares at 1250 cents exercisable until 16 February 2019 790 500 —

3 321 718 3 006 338

the directors are authorised, by resolution of the shareholders and until the forthcoming annual general meeting, to dispose of the unissued shares for any purpose and upon such terms and conditions as they see fit .




group company

r’000 2013 2012 2013 2012

24. capital reservesshare premiumBalance at 1 January 267 312 266 409 337 822 336 459 issue of share capital 2 824 1 370 2 824 1 370 share issue expenses (12) (7) (12) (7)repurchase of trust units (187) (752) — — decrease in treasury shares 49 292 — — Balance at 31 december 269 986 267 312 340 634 337 822

share options reserveBalance at 1 January 16 972 9 275 16 972 9 275 recognition of share-based payments 10 076 9 815 10 076 9 815 transfer to share options exercised reserve (1 173) (2 118) (1 173) (2 118)Balance at 31 december 25 875 16 972 25 875 16 972

share options exercised reserveBalance at 1 January 14 828 12 710 14 828 12 710 transfer from share options reserve 1 173 2 118 1 173 2 118 Balance at 31 december 16 001 14 828 16 001 14 828

capital redemption reserve fundBalance at 1 January and 31 december 3 655 3 655 — —

statutory contingency reserveBalance at 1 January — 19 683 — — transfer to distributable reserves — (19 683) — — Balance at 31 december — — — —

share of non-distributable reserves of associatesBalance at 1 January 7 365 5 172 — — Current year movement 2 692 3 245 — — non-controlling shareholders’ share of reserves (140) (1 052) — — Balance at 31 december 9 917 7 365 — — total capital reserves 325 434 310 132 382 510 369 622

notes (contInued)



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group company

r’000 2013 2012 2013 2012

25. revaluation reservesproperties revaluation reserveBalance at 1 January and 31 december 2 297 2 297 — —

Investments revaluation reserveBalance at 1 January 12 034 7 579 1 730 1 730 Current year movement 18 984 8 917 — — Less deferred taxation (3 681) (1 249) — — non-controlling shareholders’ share of reserve (6 411) (3 213) — — Balance at 31 december 20 926 12 034 1 730 1 730

total revaluation reserves 23 223 14 331 1 730 1 730

26. cash flow hedging reserveBalance at 1 January (367) 6 376 — — Current year movement (10 709) (16 119) — — Less deferred taxation 2 998 4 513 — — non-controlling shareholders’ share of reserve 3 231 4 863 — — Balance at 31 december (4 847) (367) — —

27. non-controlling interestsBalance at 1 January 115 103 114 878share of profit for the year 9 281 (7 282)share of other comprehensive income for the year 3 180 (1 650)dividend paid (1 480) (840)subsidiary’s accrual for preference dividends 8 004 9 881issue of share capital 330 631repurchase of trust units (84) (1 567)share of non-distributable reserves of associates taken directly to equity 140 1 052Balance at 31 december 134 474 115 103




group company

r’000 2013 2012 2013 2012

28. long-term interest bearing borrowingsLoan from financial institution to the property owning subsidiary secured by a first mortgage bond over the property . the loan bears interest at a rate of .75% below prime and is repayable by 1 June 2017 . at 31 december 2013 the monthly instalment payable was r263 225 . 19 366 21 187 — —

Loan from a financial institution to the property owning subsidiary secured by a second mortgage bond over the property . the loan bears interest at prime minus .75% and is repayable by 1 June 2017 . at 31 december 2013 the monthly instalment payable was r60 576 . 4 889 5 150 — —

issued by its subsidiary, oceana spv (pty) Ltd, for investment in oceana Group Limited:– Class a cumulative redeemable preference shares issued on

26 september 2006 and bear interest at an effective rate of 6 .12% .

Brimstone has ceded and pledged all of its ordinary and preference shares and all of its claims held in and against the subsidiary as security for the a preference shares . the pref-erence shares are repayable as follows:

after the third anniversary of the issue date reduce to r63 000 000; after the fourth anniversary of the issue date reduce to r59 000 000; after the fifth anniversary of the issue date reduce to r53 000 000; after the sixth anniversary of the issue date reduce to r47 000 000; after the seventh anniversary of the issue date reduce to r39 000 000; after the eighth anniversary of the issue date reduce to rnil . 28 984 28 889 — — (refer note 16)– Class B cumulative redeemable preference shares issued on

26 september 2006 . the preference shares have no specified date of repayment and bear interest at a rate of 95% of the prime interest rate . the preference shares are unsecured . 101 723 132 708 — —

interest free shareholders’ loans to subsidiary . the sharehold-ers may vary such rate, provided it does not exceed the prime rate . these loans are unsecured and are repayable only if and to the extent that such payment is permissible under the third party Funding agreements and the directors resolve that they shall be repaid . Based on the terms of the third party Funding agreement, these loans will not be repaid before 31 december 2014 . 23 099 23 099 — —

notes (contInued)



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group company

r’000 2013 2012 2013 2012

Loans from financial institution to sea Harvest Corporation (pty) Ltd– Loan bearing interest at a fixed rate of 12 .46% n .a .c .q . until

april 2010 . after april 2010 the fixed portion decreased in line with the amortised capital balance until 1 June 2011 when r30 million reverted to a variable interest rate of JiBar plus 4 .05% . repayments of r6 .7 million are made quarterly in arrears until this balance is fully amortised in may 2014 . overall the average quarterly repayment over the remaining term of the debt is r9 .5 million . the loan is secured by a general notarial bond over all of sea Harvest Corporation (pty) Ltd’s moveable assets (refer notes 13 and 20) . 16 798 37 312 — —

– Loan repayable in full on expiry thereof (4 may 2014), interest payments are made quarterly in arrears . on 1 october 2009, the interest rate was fixed at 17 .3% until June 2011, after which r50 million of the outstanding capital will reverted to a variable interest rate of JiBar plus 8 .5% n .a .c .q . the loan is secured by a general notarial bond over all of sea Harvest Corporation (pty) Ltd’s moveable assets (refer notes 13 and 20) . 104 252 103 877 — —

– Loan repayable in quarterly instalments, inclusive of interest, as from 1 July 2012 . Until such time, interest payments are made quarterly in arrears . interest is charged at a variable rate linked to a 3 month Jibar and matures on 29 may 2014 . the loan is secured by a general notarial bond over all of sea Harvest Corporation (pty) Ltd’s moveable assets (refer notes 13 and 20) . 10 799 24 059 — —

– Loan repayable in quarterly instalments, inclusive of interest, as from 1 July 2012 . Until such time, interest payments are made quarterly in arrears . interest is charged at a variable rate linked to a 3 month Jibar and matures on 29 may 2014 .the loan is secured by a general notarial bond over all of sea Harvest Corporation (pty) Ltd’s moveable assets (refer notes 13 and 20) . 51 744 51 736 — —




group company

r’000 2013 2012 2013 2012

28. long-term interest bearing borrowings (continued)Class d fixed rate cumulative redeemable non-participating preference shares of r100 million issued by a subsidiary, newshelf 831 (pty) Ltd, on 15 december 2010 . the prefer-ence shares were redeemed in full during the year under review . the dividend rate was 8 .1% nominal annual com-pounded semi-annually . preference share dividends were pay-able on 15 January and 15 July of each year . the Class d fixed rate preference shares (together with the other prefer-ence shares issues by newshelf 831 (pty) Ltd) were secured by a cession and pledge in security of 46 000 000 shares in Life Healthcare Group Holdings Limited held by newshelf 831 (pty) Ltd . — 103 917 — —

Class d floating rate cumulative redeemable non-participating preference shares of r100 million issued by a subsidiary, newshelf 831 (pty) Ltd, on 15 december 2010 . the prefer-ence shares were initially redeemable in full in 3 years and 1 day from date of issue . on 17 december 2013 a further r100 million Class d floating rate cumulative redeemable non-participating preference shares were issued and these together with the existing Class d floating rate cumulative redeemable non-participating preference shares have a redemption date of 30 Jun 2017 . the dividend rate is 83% of the prime bank lending rate . preference share dividends are payable on 15 January and 15 July of each year . the Class d floating rate preference shares (together with the other preference shares issued by newshelf 831 (pty) Ltd) are secured by a cession and pledge in security of 23 000 000 (2012 – 46 000 000) shares in Life Healthcare Group Holdings Limited held by newshelf 831 (pty) Ltd . 173 669 73 470 — —

Class e fixed rate cumulative redeemable non-participating preference shares of r50 million issued by a subsidiary, newshelf 831 (pty) Ltd, on 6 June 2011 . the preference shares are redeemable in full in 3 years and 1 day from date of issue . the dividend rate is 10 .13% nominal annual compound-ed semi-annually . preference share dividends are payable on 15 January and 15 July of each year . the Class e fixed rate preference shares (together with the other preference shares issued by newshelf 831 (pty) Ltd) are secured by a cession and pledge in security of 23 000 000 (2012 – 46 000 000) shares in Life Healthcare Group Holdings Limited held by newshelf 831 (pty) Ltd . 64 437 58 262 — —

notes (contInued)



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group company

r’000 2013 2012 2013 2012

variable rate cumulative redeemable preference shares of r390 million issued by a subsidiary, newshelf 1063 (rF) (pty) Ltd on 21 december 2011 . the preference shares are redeemable in full in 5 years and 1 day from date of issue . the dividend rate in respect of the preference shares is 101 .75% of the prime lending rate nominal annual compounded monthly until 30 June 2014 and thereafter is 90% of the prime bank lending rate nominal annual compounded monthly . the com-pany is not obliged (but is entitled) to declare and pay any scheduled preference share dividends that are deemed to accrue during the first three years after the subscription date on 1 march and 1 september of these years . the company is obliged to declare and pay any scheduled preference share dividends that are deemed to accrue during the fourth and fifth years after the subscription date on 1 march and 1 september of these years . Brimstone has agreed to guarantee to the holders of the preference shares the due and full performance by the company of the guaranteed liabilities and to pay all guaranteed amounts and gross up amounts to the holders . 347 542 320 413 — —

variable rate cumulative redeemable preference shares of r42 million issued by a subsidiary, newshelf 1063 (rF)(pty) Ltd on 19 september 2013 . the preference shares are redeem-able in full in 5 years and 1 day from date of issue . the dividend rate in respect of the preference shares is 101 .75% of the prime lending rate nominal annual compounded monthly until 30 June 2014 and thereafter is 90% of the prime bank lending rate nominal annual compounded monthly . the company is not obliged (but is entitled) to declare and pay any scheduled preference share dividends that are deemed to accrue during the first three years after the subscription date on 1 march and 1 september of these years . the company is obliged to declare and pay any scheduled preference share dividends that are deemed to accrue during the fourth and fifth years after the subscription date on 1 march and 1 september of these years . Brimstone has agreed to guarantee to the holders of the preference shares the due and full performance by the company of the guaranteed liabilities and to pay all guaranteed amounts and gross up amounts to the holders . 42 923 — — —




group company

r’000 2013 2012 2013 2012

28. long-term interest bearing borrowings (continued)variable rate cumulative redeemable preference shares of r25 million issued by a subsidiary, newshelf 1063 (rF) (pty) Ltd on 12 november 2013 . the preference shares are redeem-able in full in 5 years and 1 day from date of issue . the divi-dend rate in respect of the preference shares is 101 .75% of the prime lending rate nominal annual compounded monthly until 30 June 2014 and thereafter is 90% of the prime bank lending rate nominal annual compounded monthly . the company is not obliged (but is entitled) to declare and pay any scheduled pref-erence share dividends that are deemed to accrue during the first three years after the subscription date on 1 march and 1 september of these years . the company is obliged to declare and pay any scheduled preference share dividends that are deemed to accrue during the fourth and fifth years after the subscription date on 1 march and 1 september of these years . Brimstone has agreed to guarantee to the holders of the prefer-ence shares the due and full performance by the company of the guaranteed liabilities and to pay all guaranteed amounts and gross up amounts to the holders . 25 263 — — —

Floating rate cumulative redeemable non-participating prefer-ence shares of r170 million issued by a subsidiary, newshelf 1064 (rF) (pty) Ltd, on 1 november 2012 . the preference shares are redeemable in full in 5 years and 1 day from date of issue . the dividend rate is 97% of the prime bank lending rate . the preference shares are secured by a cession and pledge of all present and future investments of newshelf 1064 (rF)(pty) Ltd . the preference shares are redeemable on 1 november 2017 . 154 770 172 384 — —

total 1 170 258 1 156 463 — — Less: amount transferred to short-term borrowings (note 32) (233 493) (268 329) — —

936 765 888 134 — —

notes (contInued)



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group company

r’000 2013 2012 2013 2012

29. provisionslong-term provisionspost-retirement medical assistancepresent value of unfunded obligations 22 211 20 882 — — refer to note 40 for details of the post-retirement medical assistance plan .

short-term provisionsproduct claimsCarrying value 1 January 152 100 — — additional provision 7 52 — —

159 152 — —

bonusCarrying value 1 January — 4 000 — — provision utilised — (4 000) — —

leave payCarrying value 1 January 16 153 14 082 — — additional provision 13 222 13 573 — — provision utilised (12 542) (11 502) — —

16 833 16 153 — — total carrying amount – short-term 16 992 16 305 — —

30. other financial liabilitiesFinancial liabilities carried at fair value through profit or lossForward exchange contracts – designated and effective in hedge accounting relationship 11 587 878 — —interest rate swap – not designated in hedge accounting relationship 2 536 1 247 2 536 1 247

non-current — 125 — 125 Current 14 123 2 000 2 536 1 122

14 123 2 125 2 536 1 247 refer note 19 for further disclosures regarding the interest rate swap agreements .




group company

r’000 2013 2012 2013 2012

31. deferred taxationdeferred taxation asset (21 654) — — — deferred taxation liability 636 300 561 146 135 859 119 704 net deferred taxation liability 614 646 561 146 135 859 119 704

the major components of the deferred tax provisiontogether with movements during the year were as follows:difference between tax wear and tear allowances and depreciation charges on assets 45 192 46 841 115 106 difference between doubtful debt allowance and amount allowable for tax purposes (1 174) (1 243) — — taxation allowance for future trawler repairs 18 227 26 095 — — Fair value adjustment on fishing rights 34 478 38 923 — — other (69) (58) — — differences on revaluation of investments (taken directly to equity) 7 478 3 798 — — revaluation of properties (taken directly to equity) 2 668 3 856 — — arising from cash flow hedging reserve (taken directly to equity) (3 244) (246) — — prepayments 912 376 — — investments 560 442 461 329 141 052 124 019 provisions (16 167) (13 100) (2 136) (134)Utilisation of estimated tax losses (34 097) (5 424) (3 172) (4 287)deferred tax liability – 31 december 614 646 561 146 135 859 119 704

reconciliation between deferred taxation opening and and closing balances:deferred tax liability – 1 January 561 146 332 217 119 704 61 261 Under/(over) provided previous year 1 210 (1 658) 45 (1 558)effects of change in tax rate – capital gains tax — 72 321 — 20 907 statement of comprehensive income effect of temporary differences in value of assets (13 518) (7 181) 9 25 statement of comprehensive income effect of temporary differences in doubtful debt allowance (228) (2 173) — — provisions (3 119) 670 (2 002) 62 prepayments deducted for normal tax 390 (452) — — investments 96 802 169 926 17 033 40 140 differences on revaluation of investments (taken directly to equity) 3 681 — — — arising from cash flow hedging reserve (taken directly to equity) (2 998) (246) — — estimated tax losses (28 720) (2 279) 1 070 (1 133)deferred tax liabilities – 31 december 614 646 561 146 135 859 119 704

notes (contInued)



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group company

r’000 2013 2012 2013 2012

32. short-term interest bearing borrowingsCurrent portion of long-term borrowings (note 28) 233 493 268 329 — —

amount owing to bank resulting from the discounting of a subsidiary company’s sales invoices to its customers, secured by a cession of its debtors bookand limited guarantee (note 36) by the holding company and bearing interest at the bank’s prime overdraft rate . 27 277 24 605 — —

260 770 292 934 — —

33. bank overdraftsthe Company has an overdraft facility amounting to r50 million (2012 – r50 million) . the facility bears interest at the bank’s prime lending rate . as security for the facility, the Company’s wholly-owned subsidiary, septen investments (pty) Ltd, has pledged and ceded 1 799 700 (2012 – 1 799 700) ordinary shares and 19 851 279 (2012 – 19 851 279) “n” ordinary shares in Brimstone .

the Company has guaranteed the overdraft facility of a wholly-owned subsidiary to the extent of r21 500 000 and has also ceded its loan to the subsidiary to the bank concerned as security for the overdraft . at the end of the year, the overdraft secured by this guarantee was r16 713 971 (2012 – r15 433 670) .

34. notes to the cash flow statements34.1 taxation paid

Income tax(prepaid)/owing at the beginning of the year (6 123) 2 169 (2 000) (1 592)other 1 (1) — (1)

(6 122) 2 168 (2 000) (1 593)

provided during year 28 244 28 571 (151) (407)prepaid at the end of the year 9 733 6 123 — 2 000 income tax paid 31 855 36 862 (2 151) —

dividends taxdividends tax paid 333 257 — —

stcprepaid at the beginning of the year (21) 95 — — provided during year 10 — — — prepaid at the end of the year 11 21 — — stC paid — 116 — — total taxes paid/(refunded) 32 188 37 235 (2 151) —

34.2 finance costsFinance costs recognised in profit or loss 110 553 131 597 5 468 3 067 adjustment for non-cash items (42 188) (23 238) — (1 624)Finance costs paid 68 365 108 359 5 468 1 443

34.3 cash effect of change in investment in subsidiariesnet decrease in investment — — 56 502 64 313




group

r’000 2013 2012

35. segmental informationinformation reported to the Group’s operating decision makers for the purpose of resource allocation and assessment of segment performance is specifically focused on the individual entity in which Brimstone has invested . the Group’s reportable segments under iFrs 8 are therefore fishing, insurance, clothing and investments . investments include investments in associates, available-for-sale investments, investments at fair value through profit or loss, the Group’s property portfolio and administrative head office .

segment revenues and resultssegment revenue

Fishing 1 237 687 1 037 707 insurance 505 246 581 144 Clothing 179 600 174 394 investments 163 843 153 227

total revenue 2 086 376 1 946 472 segment profit/(loss) from operationsFishing 69 062 49 511 insurance (120 662) (10 134)Clothing 10 460 8 377 investments 105 526 83 284

total profit from operations 64 386 131 038 Fair value gains 557 402 1 053 311 exceptional items 7 828 (2 280)share of profits of associates and joint venture 13 204 27 612 income from investments 23 037 26 410 net finance costs (110 553) (131 597)outside unit holders’ interest (507) (1 357)profit before taxation 554 797 1 103 137

group

r’000 2013 2012segment assets and liabilities Gross net Gross netsegment assets

Fishing 911 544 911 544 879 564 879 564 insurance 1 391 025 1 391 025 988 065 988 065 Clothing 165 658 165 658 149 804 149 804

2 468 227 2 468 227 2 017 433 2 017 433 investments 4 742 653 4 331 366 4 100 747 3 708 031 intergroup balances 411 287 — 392 716 — other 4 331 366 4 331 366 3 708 031 3 708 031 total segment assets 7 210 880 6 799 593 6 118 180 5 725 464

segment liabilitiesFishing 781 458 530 553 780 759 547 463 insurance 1 334 204 1 244 270 864 410 774 476 Clothing 130 479 60 031 122 726 53 240

2 246 141 1 834 854 1 767 895 1 375 179 investments 1 181 332 1 181 332 1 420 299 1 420 299 total segment liabilities 3 427 473 3 016 186 3 188 194 2 795 478

notes (contInued)



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r’000 2013 2012 2013 2012

other segmental informationdepreciation and amortisation

Fishing 73 015 82 840 insurance 8 097 4 315 Clothing 3 111 2 520 investments 628 595

total segment depreciation and amortisation 84 851 90 270

additions to non-current assetsFishing 63 495 46 623 insurance 8 287 2 239 Clothing 9 916 2 930 investments 146 964

total segment additions to non-current assets 81 844 52 756

the Group’s revenue by geographical area is set out in note 2 . all operations are based in the republic of south africa .

36. contingent liabilitiesthe Company has guaranteed the invoice discounting facility operating in wholly-owned subsidiary, House of monatic (pty) Ltd, to a maximum amount of r40 million (2012 – r40 million) but limited to any shortfall in collection of the debtors ceded in terms of the facility . the amount owing on the facility at 31 december 2013 was r27 276 812 (2012 – r24 604 846) .

the Company has guaranteed the post-redemption obligations of newshelf 1064 (rF) (pty) Ltd for preference shares issued by newshelf 1064 (rF) (pty) Ltd .

the Company has issued a suretyship of r7 .5 million in favour of a financial institution that has granted H investments no 219 (pty) Ltd a mortgage bond of r6 .9 million over one of its properties . at 31 december 2013 the debt covered by this suretyship was r4 889 695 (2012 – r5 150 522) .

the Company has indemnified a financial institution, the holder of preference shares issued by oceana spv (pty) Ltd, against any losses it may incur as a result of oceana spv (pty) Ltd not meeting its obligations under the preference share subscription agreement .

37. capital commitmentsCommitments for the acquisition of property, plant, equipmentand vehicles:Contracted for but not provided in the financial statements 32 050 30 205 — — authorised by directors but not contracted 7 471 2 787 — — total commitments 39 521 32 992 — —

the commitments will be funded from internal cash resources .




group company

r’000 2013 2012 2013 2012

38. lease commitmentsat the reporting date the Group and Company had outstanding commitments under non-cancellableoperating leases with a term of more than one year,which fall due as follows: Within one year 14 552 12 976 — 639 in the second to fifth years inclusive 34 672 49 329 — 635

49 224 62 305 — 1 274

39. share-based paymentsthe Company has a share option scheme for its employees . options are exercisable at a price equal to the middle market price of the share on the most recent trading day on the Jse immediately preceding the date on which the option is granted . no options are exercisable in the first year from the date of granting of the options . thereafter, options up to a maximum of 20% may be exercised annually . the sale arising from the exercise of options must be implemented by not later than 6 years from the date on which an option is granted .

group2013 2012

Weighted Weightedaverage average

number of exercise price number of exercise priceshare options (cents) share options (cents)

details of share options outstanding are as follows:

“n” ordinary sharesoutstanding at beginning of year 3 006 338 700 2 479 058 584 awarded during year 803 200 1 250 1 164 700 900 Forfeited (35 260) 909 (214 760) 715 exercised during the year (452 560) 671 (422 660) 566 outstanding at end of year 3 321 718 835 3 006 338 700 exercisable at the end of the year 454 195 226 643

the options outstanding at the end of the year have a weighted average remaining contractual life of 2 .82 years (2012 – 3 .41 years) .

the following options were awarded to executive directors and staff during the year:“n” ordinary shares27 February 2013 – 1250 cents per share 803 200

notes (contInued)



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the estimated fair values of the options were calculated using the Binomial tree option pricing model . the results of the calculations and inputs into the model are set out below:

ordinary “n” ordinary shares shares

options issued 1 July 2010Fair value (cents) 139 exercise price (cents) 270 expected volatility (%) 73expected life 5 .0 risk free rate (%) 7 .824dividend forecast (cents)2011 10 2012 11 2013 12 2014 13 2015 14

options issued 16 february 2011Fair value (cents) 167 exercise price (cents) 550 expected volatility (%) 23 .82 expected life 5 .0risk free rate (%) 8 .02 dividend forecast (cents)2012 18 2013 17 2014 17 2015 17 2016 17

options issued 31 december 2011Fair value (cents) 285 exercise price (cents) 820 expected volatility (%) 27 .76 expected life 5 .0risk free rate (%) 7 .12 dividend forecast (cents)2012 15 2013 15 2014 15 2015 15 2016 15




39. share-based payments (continued)ordinary “n” ordinary

shares sharesoptions issued 16 february 2012Fair value (cents) 304 exercise price (cents) 900 expected volatility (%) 26 .27 expected life 5 .0risk free rate (%) 7 .05 dividend forecast (cents)2013 15 2014 15 2015 15 2016 15 2017 15

options issued 27 february 2013Fair value (cents) 400 exercise price (cents) 1 250 expected volatility (%) 27 .21 expected life 5 .0risk free rate (%) 6 .29 dividend forecast (cents)2014 19 2015 19 2016 19 2017 19 2018 19

expected volatility was determined calculating the historical volatility of the Company’s share price over the previous five years .the expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability,exercise restrictions and behavioural considerations . the Company recognised total expenses of r15 275 794 (2012 – r15 446 650)related to equity and cash-settled share-based payment transactions during the year .

on 31 december 2010, a new share scheme, Cocoon, was introduced for employees of Brimstone . in terms of the scheme, partici-pants subscribed for 39 140 000 newly issued Brimstone “n” ordinary shares at a subscription price of r0 .5075 per share . the scheme involves three distinct participants, namely:1 . the Brimstone Black executives investment trust, an executive equity investment scheme established for the benefit of the

s econd tier management of Brimstone which holds 35 140 000 “n” ordinary shares;2 . the Brimstone General staff investment trust, an employee equity investment scheme established in line with the requirements

of the Bee codes for the benefit of the broader staff of Brimstone which holds 1 500 000 “n” ordinary shares; and3 . the Brimstone Broad-based Bee trust, a broad-based equity investment scheme, which holds 2 500 000 “n” ordinary shares .

the difference between the subscription price and the subscription vWap (the volume weighted average price of traded securities at the close of business on the day before any particular date) are notionally funded by Brimstone through notional vendor funding . the outstanding balance accrues interest at the hurdle rate (8 .5% fixed nominal rate) and any distributions received (including interest, dividends and capital contributions) will be used to reduce the notional funding .

at the relevant final date, Brimstone will, in terms of a call option, be entitled to repurchase that number of subscription shares which, at the then market value, have a value equal to the then outstanding notional vendor funding . this will occur in three tranches:1 . the first tranche comprises 50% of the subscription shares and has a final date of 31 october 2016;2 . the second tranche comprises 40% of the subscription shares and has a final date of 31 october 2017;3 . the third tranche comprises 10% of the subscription shares and has a final date of 31 october 2018 .the participants will retain the balance of the subscription shares .

notes (contInued)



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fair valuer’000 2013 2012Brimstone Black executives investment trust equity-settled 42 049 42 049 Brimstone General staff investment trust equity-settled 2 556 2 556 Brimstone Broad-based Bee trust Cash-settled 20 457 15 256

the equity-settled schemes were valued at inception of the schemes, while the fair value of the cash-settled scheme is re-measured each year . Fair value is measured using the Black scholes method .

the value of the Brimstone Black executive investment trust and the Brimstone General staff investment trust is expensed over the 6 year vesting period . the Brimstone Broad-based Bee trust scheme has no vesting conditions, the full value was therefore expensed immediately and any changes in fair value are expensed in the year of the change .

40. retirement benefit plansthe Company contributes to the twilight Group provident Fund, a defined contribution fund . the fund is underwritten by old mutual employee Benefits and administered by Fairsure administration, in terms of the pension Funds act, 1956 . Contributions payable to the fund and charged against income amounted during the year to r1 559 854 (2012 – r1 450 913) .

Wholly-owned subsidiary, House of monatic (pty) Ltd, is a member of the Clothing industry national Bargaining Council and as such, it is compulsory for all qualifying employees to be members of the Clothing industry Bargaining Council provident Fund . employees of House of monatic (pty) Ltd who do not qualify for membership of the Bargaining Council Fund are members of the twilight Group provident Fund . the assets of the fund are held separately from those of the company, under the control of the fund’s trustees . the contributions payable to the funds by the employer in terms of the rules of the funds are charged against income and during the year amounted to r3 746 081 (2012 – r3 495 369) . the contributions vest immediately upon payment in the members of the funds .

all permanent staff of Brimstone investment Corporation Limited and its subsidiaries were members of a retirement fund .

sea harvest holdings (pty) ltd

sea harvest old mutual superfund provident fundthis fund have been set up as a result of negotiations with employees . a total of 1 612 (2012 – 1 445) employees of the group were members of this fund at the year end . this defined contribution fund is not exempt from actuarial valuations .

sea harvest twilight group management provident fundthe group has 29 (2012 – 27) employees who are members of this fund . this defined contribution fund is not exempt from actuarial valuations .

sea harvest twilight group pension fundthe group has 113 (2012 – 115) employees who are members of this fund . this defined contribution fund is not exempt from actuarial valuations .

the group has also transferred the management provident Fund and defined Contribution pension Fund from tiger Brands to the twilight Group pension and provident Funds with effect from 1 october 2013 . the group’s only obligation under these funds is to meet the agreed level of contributions .

post-retirement medical assistancethe group has undertaken to subsidise a portion of medical aid subscriptions for certain employees who meet specific criteria . the projected unit credit method was used to value the liability, as prescribed by ias 19: employee Benefits . the latest full actuarial valuation was performed on 31 december 2013 . the group has no separately identified plan assets to fund the liability . at 31 december 2013 there were 47 employees who qualified for the benefit .

contributions paidthe contribution payable to these funds by the employer in terms of the rules of the fund and that are charged against income during the year amounted to r13 276 357 (2012 – r11 397 613) .




group

r’000 2013 2012

40. retirement benefit plans (continued)amounts recognised in profit or loss in respect of these defined benefit schemes are as follows:

Current service cost 168 155 interest cost 1 552 1 506actuarial (gain)/loss recognised (699) 43

1 021 1 704

Changes in the present value of the defined benefit obligation are as follows:defined benefit obligation at beginning of year 20 882 20 169 Current service cost 168 155 interest cost 1 552 1 506 actuarial gain arising in the current year (due to experience adjustments) 699 43Benefits paid (1 090) (991)defined benefit obligation at year end 22 211 20 882 the principal assumptions of the actuarial valuation are:discount rate (%) 8 .25% 8 .25%Health care cost inflation (%) 7 .90 – 8 .40% 6 .75 — 7 .25%retirement age 63 or 65 63 or 65

the sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions above occurring at the end of the reporting period, while holding all other assumptions constant .– if the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by r2 404 000 (increase

by r2 926 000) .– if the expected health care cost inflation increases (decreases) by 1%, the defined benefit obligation would increase by

r2 847 000 (decrease by r2 378 000) .– if the expected retirement age increases (decreases) by one year for both men and women, the defined benefit obligation would

decrease by r366 000 (increase by r325 000) .

the sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated .Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the statement of financial position .

there are no changes in the methods and assumptions used in preparing the sensitivity analysis from prior years .

notes (contInued)



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the risks faced by the Group as a result of the post-employment healthcare obligation can be summarised as follows: – inflation: the risk that future Cpi inflation and healthcare cost inflation are higher than expected and uncontrolled . – Longevity: the risk that pensioners live longer than expected and thus their healthcare benefit is payable for longer than

expected . – open-ended, long-term liability: the risk that the liability may be volatile in the future and uncertain . – Future changes in legislation: the risk that changes to legislation with respect to the post-employment liability may increase

the liability for the Group . – Future changes in the tax environment: the risk that changes in the tax legislation governing employee benefits may increase

the liability for the Group . – perceived inequality by non-eligible employees: the risk of dissatisfaction of employees who are not eligible for a post-

employment healthcare subsidy . – administration: administration of this liability poses a burden to the Group . – enforcement of eligibility criteria

the average duration of the benefit obligation at 31 december 2013 is 13 .1 years (2012 – 13 .1 years) .

the Group expects to make a contribution of r1 .2 million (2012 – r1 .1 million) to the defined benefit plans during the next financial year .

lion of africa holdings company (pty) ltdthe group operates a pension scheme on a defined contribution basis . this pension scheme is governed by the pension Funds act,1956 . a defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity . the scheme is funded through payments to trustee-administered funds on a mandatory basis . the group has no legal or constructive obligations to pay further contributions once the contributions have been paid . the contributions are recognised as an employee benefit expense when they are due . Contributions of r8 307 600 (2012 – r8 070 864) were paid during the year .

41. financial instruments41.1 capital risk management

the Group manages its capital to ensure that entities within the group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance .

the capital structure of the Group consists of debt, which includes the borrowings disclosed in notes 28 and 32, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in notes 23 to 26 . the Group’s board reviews the capital structure on a regular basis and in particular when an acquisition of an investment is planned . as a part of this review, the board considers the cost of capital and the risks associated with each class of capital . the Group will balance its overall capital structure through the payment of dividends, new share issues and share buy-backs as well as the issue of new debt or the redemption of existing debt .

the Group’s overall strategy remains unchanged from the previous year .

the Financial services Board (FsB), sets and monitors capital requirements for short-term insurers registered in south africa . effective 1 January 2012, the prescribed requirements for the calculation of the value of the assets, liabilities, and the capital adequacy requirement (Car) of short-term insurers were amended in terms of Board notice 169 of 2011 . this was done as an interim measure pending the final implementation of the FsB solvency assessment and management (sam) risk based capital regime . on a sam interim measures basis, the Group’s Car at 31 december 2013 was 1 .03 (2012 – 1 .36) .




group company

r’000 2013 2012 2013 2012

41. financial instruments (continued)41.2 significant accounting policies

details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements .

41.3 categories of financial instrumentsfinancial assetsdesignated as at fair value through profit or loss 3 689 588 3 052 170 1 014 513 807 248 derivative not in a hedge accounting relationship carried at fair value 9 181 501 9 181 501 Loans and receivables (including cash and cash equivalents) 903 443 749 672 44 321 131 073 trade and other receivables 617 731 407 288 19 949 26 968 Cash and cash equivalents 261 213 316 021 2 050 80 268 Loans to associates and investments less amounts written off 24 499 26 363 22 322 23 837 Loans owing by subsidiaries — — 294 923 339 954 available-for-sale investments 46 954 28 245 2 154 2 429

financial liabilitiesamortised cost (long and short-term borrowings, bank overdrafts, trade and other payables) 1 915 228 1 560 719 68 105 33 039 Loans owing to subsidiaries — — 352 470 340 987 derivative not in a hedge accounting relationship carried at fair value 2 536 1 247 — 1 247 derivative designated and effective as hedging instrument carried at fair value 11 587 878 — —

41.4 financial risk management objectivesa committee consisting of executives of the holding company and of the Group’s subsidiaries monitors and manages the Group’s financial risks relating to the operations of the Group . these risks include market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk . the recommendations of this committee are presented to the audit and risk Committee and, if necessary, the Board of directors for approval . the Group does not enter into or trade in financial instruments, including derivative instruments, for speculative purposes .

41.5 market riskthe Group’s activities expose it primarily to the financial risks of changes in foreign exchange (see 41 .6 below), interest rates (see 41 .7 below) and equity price risk (see 41 .11 below) . there has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk .

notes (contInued)



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group company

2013 2012 2013 2012

41.6 foreign currency risk managementthe Group undertakes certain transactions denominated in foreign currencies which give rise to exchange rate fluctua-tions . the carrying amount of the Group’s uncovered foreign currency denominated monetary assets and monetary liabilities at the reporting date is as follows:LiabilitiesUs $ (‘000) 366 286 — — european Union € (‘000) 176 1 114 — —

current assetCash (United states dollars, Usd) 3 692 1 782rand equivalent of cash 38 722 15 094exchange rate used for conversion of foreign item 10 .49 8 .47

foreign currency sensitivity analysisthe following table details the Group’s sensitivity to a 10% increase and decrease in the rand against the respective foreign currencies . the sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 10% change in foreign currency rates . a positive number indicates an increase in profit where the rand strengthens by 10% against the rele-vant currency . For a 10% weakening in the rand against the relevant currency, there would be an equal and opposite effect on the profit .

Us $ (‘000)profit 37 29

european Union € (‘000)profit 18 111

all profits or losses are attributable to the exposure on outstanding receivables and payables at year end in the group .

forward exchange contractsthe Group enters into forward exchange contracts to buy and sell specified amounts of various foreign currencies in the future at a predetermined exchange rate . the contracts are entered into to manage the Group’s exposure to fluctuations in foreign currency exchange rates on specific transactions . the contracts are matched by anticipated future cash flows in foreign currencies, primarily from sales . it is the Group’s policy to enter into forward exchange contracts for all net foreign currency trade or capital items .

Where a relatively short settlement period is involved and risk is minimal, no forward exchange contract is entered into . there were open forward exchange contracts to the value of r445 298 361 (2012 – r300 043 127) at year end .

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




41. financial instruments (continued)41.6 foreign currency risk management (continued)

the following table details the forward foreign currency contracts outstanding at the reporting date:

at 31 december 2013, the Group had contracted to buy the following amounts under forward exchange contracts in respect of future receivables:

Foreign currency r’000

average contract

exchange rate Contractual expiry dates

aUd 162 799 9 .543902 January 2014 – 31 march 2015

eUr 358 110 14 .0236 03 January 2014

– 27 February 2015

Usd 3 926 10 .331110 January 2014


at 31 december 2012, the Group had contracted to buy the following amounts under forward exchange contracts in respect of future receivables:


average contract


aUd 132 658 8 .646111 January 2013 – 28 march 2014

eUr 254 978 11 .6901 7 January 2013


Usd 1 392 8 .6612 17 January 2013

– 30 January 2013

at 31 december 2013, the Group had contracted to buy the following amounts under forward exchange contracts in respect of future payables:


average contract


dKK 807 1 .8442 31 January 2014

– 15 april 2014

eUr 1 114 13 .7356 03 January 2014 – 31 January 2014

Cad 30 9 .832817 december 2013 – 31 January 2014

seK 1 306 1 .5699 03 January 2014


Usd 7 661 10 .3812 02 January 2014


GBp 3 154 16 .6033 03 January 2014


notes (contInued)



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at 31 december 2012, the Group had contracted to buy the following amounts under forward exchange contracts in respect of future payables:


average contract


dKK 913 1 .4609 10 January 2013

– 15 may 2013

eUr 865 11 .4411 7 January 2013

– 15 march 2013

noK 53 1 .5482 25 January 2013 – 15 march 2013

seK 7 060 1 .2579 2 January 2013

– 1 February 2013

Usd 5 661 8 .5968 4 January 2013 – 15 march 2013

r’000 2013 2012

Hedge accounting applied in respect of foreign currency risk cash flow hedges – Fair value of liability – foreign currency forward on

exchange contracts (11 587) (878)

the foreign currency contracts have been acquired to hedge the underlying currency risk arising from firm commitments received from customers for the purchase of goods as well as forecast sales . all cash flows are expected to occur and affect profit or loss within the next twelve months .

41.7 Interest rate risk managementthe Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates .

the Group’s exposure to interest rate risk on financial liabilities is detailed in the interest rate management section .

Interest rate sensitivitythe sensitivity analysis below has been determined based on the exposure to interest rates for non-derivative instruments at the reporting date . For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the reporting date was outstanding for the whole year .

if interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group’s profit for the year would decrease/increase by r3 854 910 (2012 – decrease/increase by r3 032 101) and decrease/increase by r166 530 (2012 – increase/decrease by r237 243) in the Company as a result of their exposure to interest rates on their variable rate borrowings .




group company

r’000 2013 2012 2013 2012

41. financial instruments (continued)41.8 credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group . Financial assets which potentially subject the Group to concentrations of credit risk consist of cash and receivables . the Group’s cash is placed with recognised financial institu-tions . trade receivables comprise a large, widely spread cus-tomer base, avoiding an excessive concentration of risk with a small number of customers . the Company, prior to advancing funds to subsidiaries, associates and investments, reviews through its investment Committee the entity’s ability to repay the funds .

41.9 liquidity risk managementUltimate responsibility for liquidity risk management rests with the Board of directors, which has developed an appropri-ate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements . the Group manages liquidity risk by maintaining adequate reserves, banking facili-ties and reserve borrowing facilities by continuously monitor-ing forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities . included below is a listing of additional undrawn facilities to further reduce liquid-ity risk .

unutilised banking facilitiestotal banking and loan facilities 1 322 925 1 406 901 50 000 50 000actual interest-bearing borrowings (1 247 139) (1 196 502) (32 890) —Cash and cash equivalents 261 213 316 021 2 050 80 268 Unutilised banking facilities 336 999 526 420 19 160 130 268

41.10 Interest rate managementthe factors which would be considered in the decision on fixed versus floating interest rates in respect of the Group’s borrowings are:– the perceived stage in the interest rate cycle– the nature and characteristics of the borrowings concerned– the nature of the assets financed by the borrowings in question

interest rate swap contracts are entered into should conditions be such that it would be advantageous to switch from a fixed to a variable rate or vice versa . such contracts would not be entered into for speculative reasons .

liquidity and interest rate risk tablesthe following tables detail the Group’s remaining contractual maturity for non-derivative financial liabilities and assets . the liability tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the lia-bilities can be repaid and includes both interest and principal cash flows . the asset tables have been drawn up based on the undis-counted contractual maturities of the financial assets including interest that will be earned on those assets except where it is antici-pated that the cash flow will occur in a different period .

notes (contInued)



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the Group’s exposure to liquidity and interest rate risk and the effective rates of interest at reporting date are as follows:

Weighted average

effective interest rate

Less than 1 year 1—5 years over 5 years total

2013 % r’000 r’000 r’000 r’000assetsLoan to associate company 25 .00 — 17 622 — 17 622 Loan to associate company prime 1 771 — — 1 771Loan to associate company 95% of prime — 2 177 — 2 177Loan to associate company interest free — — 3 000 3 000 debt securities included in investments 8 .46 19 458 21 217 47 150 87 825interest bearing deposits included in investments 5 .58 95 127 10 496 — 105 623 trade receivables interest free 529 934 — — 529 934 other receivables interest free 87 797 — — 87 797 reinsurance contracts interest free 505 785 161 774 — 667 559Cash and cash equivalents Bank deposit rates 261 213 — — 261 213

1 501 084 213 287 50 150 1 764 521

liabilitiesLong-term interest bearing borrowings 7 .65 — 1 137 279 13 560 1 150 839 Long-term interest bearing borrowings interest free — — 23 099 23 099 short-term interest bearing borrowings 13 .06 304 693 — — 304 693 trade payables interest free 575 358 — — 575 358other payables interest free 92 731 — — 92 731insurance contracts interest free 634 817 168 749 — 803 566

Bank overdraft prime 49 604 — — 49 6041 657 203 1 306 028 36 659 2 999 890




41. financial instruments (continued)41.10 Interest rate management

Weighted average



2012 % r’000 r’000 r’000 r’000assetsLoan to associate company 25 .00 — 19 137 — 19 137 Loan to associate company prime — — 1 700 1 700 Loan to associate company interest free 356 2 170 3 000 5 526 Linked loan included in investments prime plus 5% 5 119 — — 5 119 Linked loan included in investments prime plus 6% 1 038 — — 1 038 debt securities included in investments 5 .48 13 731 16 517 81 117 111 365 interest bearing deposits included in investments 5 .52 144 670 — — 144 670 trade receivables interest free 323 093 — — 323 093 other receivables interest free 84 195 — — 84 195 reinsurance contracts interest free 418 432 — — 418 432 Cash and cash equivalents Bank deposit rates 316 021 — — 316 021

1 306 655 37 824 85 817 1 430 296

liabilitiesLong-term interest bearing borrowings 9 .98 — 888 245 235 405 1 123 650 Long-term interest bearing borrowings interest free — — 23 099 23 099 short-term interest bearing borrowings 8 .93 331 660 — — 331 660 trade payables interest free 293 087 — — 293 087 other payables interest free 71 130 — — 71 130 insurance contracts interest free 616 860 — — 616 860 Bank overdraft prime 15 434 — — 15 434

1 328 171 888 245 258 504 2 474 920

notes (contInued)



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the Company’s exposure to liquidity and interest rate risk and the effective rates of interest at reporting date are as follows:

Weighted average



2013 % r’000 r’000 r’000 r’000assetsLoan to associate company 25 .00 — 17 622 — 17 622 Loan to associate company prime 1 771 — — 1 771 Loan to associate company interest free — — 3 000 3 000 Loans to subsidiaries interest free — — 294 922 294 922 other receivables interest free 19 949 — — 19 949 Cash and cash equivalents Bank deposit rates 2 050 — — 2 050

23 770 17 622 297 922 339 314

liabilitiesLoans from subsidiaries prime less 1% — 19 566 — 19 566 Loans from subsidiaries interest free — — 332 903 332 903 trade payables interest free 1 803 — — 1 803 other payables interest free 33 412 — — 33 412 Bank overdraft prime 32 890 — — 32 890

68 105 19 566 332 903 420 574

2012assetsLoan to associate company 25 .00 — 19 137 — 19 137 Loan to associate company prime — 1 700 — 1 700 Loan to associate company interest free — — 3 000 3 000 Linked loan included in investments prime plus 5% 5 119 — — 5 119 Linked loan included in investments prime plus 6% 1 038 — — 1 038 Loans to subsidiaries interest free — — 339 954 339 954 other receivables interest free 26 968 — — 26 968 Cash and cash equivalents Bank deposit rates 80 268 — — 80 268

113 393 20 837 342 954 477 184

liabilitiesLoans from subsidiaries prime less 1% 3 600 14 400 11 673 29 673 Loans from subsidiaries interest free — — 318 764 318 764 trade payables interest free 1 874 — — 1 874 other payables interest free 30 289 — — 30 289

35 763 14 400 330 437 380 600




group company

r’000 2013 2012 2013 2012

41. financial instruments (continued)41.11 equity price risk

the portfolio of listed equities and equities held through the subsidiaries which are carried in the statement of financial position at fair value, has exposure to significant equity price risk, being the potential loss in market value resulting from an adverse change in prices . the Group’s holdings are diversified across more than one company . material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the investment committee . the primary goal of the Group’s investment strategy is to maximise investment returns without incurring undue market risk .

at 31 december, the exposure to equity price risk resulted from the financial assets listed below:investments

directly held equities 2 612 104 2 094 614 233 435 144 800 indirectly held equities 960 303 772 834 783 232 658 720

3 572 407 2 867 448 1 016 667 803 520

equity price risk sensitivitythe sensitivity analysis below has been determined based on the exposure to equity price movements from listed and unlisted equities .

if equity prices had been 1% higher/lower, the profit for the year would increase/decrease by r28 860 000 (2012 – r23 097 000) in the Group and increase/decrease by r8 253 000 (2012 – r6 517 000) in the Company as a result of their exposure to movements in equity prices .

41.12 fair value of financial instrumentsthe estimated net fair values at 31 december 2013 have been determined using available market information and appropriate valuation methodologies and are not necessarily indicative of the amounts that the Group could realise in the ordinary course of business .

the fair values of financial instruments in both the Group and the Company approximate the amounts reported in the statements of financial position .

the following methods and assumptions were used by the Company in establishing fair values:Investmentsthese investments are valued each 6 months on the basis considered most appropriate to the investment concerned .

cash and cash equivalents the carrying amounts reported in the statements of financial position approximate fair values .

trade receivablesthe carrying value of trade receivables reported in the statements of financial position approximate fair values .

other receivablesthe carrying amounts reported in the statements of financial position approximate fair values .

long-term interest bearing borrowingsthe carrying amounts reported in the statements of financial position approximate fair values .

short-term interest bearing borrowingsthe carrying amounts reported in the statements of financial position approximate fair values .

trade and other payablesthe carrying amounts reported in the statements of financial position approximate fair values .

notes (contInued)



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41.13. fair value measurementsthis note provides information about how the Group determines fair values of various financial assets and financial liabilities .

some of the Group’s financial assets and financial liabilities are measured at fair value at the end of each financial reporting period . the following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used) .

the directors consider that the carrying amounts of financial assets and financial liabilities not measured at fair value on a recurring basis (but fair value disclosures are required) in the consolidated financial statements approximate their fair values .

r’0002013 Level 1 Level 2 Level 3 total

financial assets at fvtplderivative financial assets — 918 535 — 918 535 Listed shares 2 456 503 — — 2 456 503 Unlisted shares and loan 153 442 6 149 5¹ 159 596 other investments 68 884 — — 68 884 available-for-sale financial assetsUnlisted shares — — 44 800² 44 800 Unlisted shares — — 2 154¹ 2 154 total 2 678 829 924 684 46 959 3 650 472

financial liabilities at fvtplderivative financial liabilities — 2 125 — 2 125

2012 Level 1 Level 2 Level 3 totalfinancial assets at fvtplderivative financial assets — 741 254 — 741 254 Listed shares 2 062 956 — — 2 062 956 Unlisted shares and loan — 41 635 5¹ 41 640 other investments 77 149 — — 77 149 available-for-sale financial assetsUnlisted shares — — 25 816² 25 816 Unlisted shares — — 2 429¹ 2 429 total 2 140 105 782 889 28 250 2 951 244

company (r'000)2013 Level 1 Level 2 Level 3 total

financial assets at fvtplderivative financial assets — 786 264 — 786 264 Listed shares 77 835 — — 77 835 Unlisted shares and loan 153 442 6 149 5¹ 159 596 available-for-sale financial assetsUnlisted shares — — 2 154¹ 2 154 total 231 277 792 413 2 159 1 025 849

financial liabilities at fvtplderivative financial liabilities — 2 125 — 2 125




41. financial instruments (continued)

2012 Level 1 Level 2 Level 3 totalfinancial assets at fvtplderivative financial assets — 652 966 — 652 966 Listed shares 113 143 — — 113 143 Unlisted shares and loan — 41 635 5¹ 41 640 available-for-sale financial assetsUnlisted shares — — 2 429¹ 2 429 total 113 143 694 601 2 434 810 178

the table provided analyses financial instruments that are measured subsequent to initial recognition at fair value, grouped in Levels 1 to 3 based on the degree to which fair value is observable .– Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities .– Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observa-

ble for the asset or liability, either directly (i .e . as prices) or indirectly (i .e . derived from prices) .– Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are

not based on observable market data (unobservable inputs) .

notes 1 . at cost or historical valuation . 2 . discounted cash flow method using a discount rate of 15% over 10 years .

transfer from level 2 to level 1Unlisted shares held in phuthuma nathi were transferred from Level 2 to Level 1 in the current year as this is deemed to be a more appropriate classification for the asset .

reconciliation of level 3 fair value measuresgroup company

unlisted shares and loan 2013 2012 2013 2012opening balance 28 250 53 842 2 434 36 943total gains or losses– in profit or loss — (31 944) — (31 944)– in other comprehensive income 18 984 8 917 — —advances 90 5 990 — 5 990disposals (365) (2 148) (275) (2 148)transfer to level 2 — (6 407) — (6 407)Closing balance 46 959 28 250 2 159 2 434

notes (contInued)



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41.14 risks that arise from insurance contractsInsurance riskthe Group issues contracts that transfer insurance risk .Underwriting is the term used to describe the process of transfer of risk from the insured to the insurer in return for payment of an appropriate consideration, termed premium . this process carries the risk of incorrect or inappropriate assumptions leading to draft-ing of incorrect insurance contracts .

the risk under any one insurance contract is the possibility that the insured event occurs and the uncertainty of the amount of the resulting claim . By the very nature of an insurance contract, this risk is random and therefore unpredictable . Changing risk param-eters and unforeseen factors, such as patterns of crime, economical and geographical circumstances, may result in unexpectedly large claims . these risks are controlled through a system of underwriting mandates and guidelines more thoroughly described below .

For a portfolio of insurance contracts where the theory of probability is applied to pricing and provisioning, the principal risk that the Group faces under its insurance contracts is that the actual claims and benefit payments exceed the estimated amount of the insurance liabilities . this could occur because the frequency or severity of claims and benefits are greater than estimated . insurance events are random and the actual number and amount of claims and benefits will vary from year to year .

experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability about the expected outcome will be . in addition, a more diversified portfolio is less likely to be affected across the board by a change in any subset of the portfolio .

the various types of insurance contracts, which can be grouped into a number of business classes, that have a material effect on the amount, timing and uncertainty of future cash flows arising from insurance contracts in the Group are described below:– property: property insurance contracts compensate the Group’s customers for damage suffered to their immovable or movable

properties or for the value of property lost . Customers who undertake commercial activities on their premises could also receive compensation for the loss of earnings caused by the inability to use the insured properties in their business activities (business interruption cover) .

– motor: motor insurance contracts provide indemnity for loss or damage to the insured motor vehicle . this cover is normally on an all risks basis providing a wide scope of cover following an accident or a theft of the vehicle but the insured can select restricted forms of cover such as cover for fire and theft only . Legal liabilities arising out of the use or ownership of the motor vehicle follow-ing an accident for damage to third party property or death or injury to a third party are also covered by this class of business .

– engineering: engineering insurance contracts provide indemnity for loss suffered through the use of machinery and equipment or the erection of buildings or structures . this type of contract includes contract works, removal of support, project delay, con-struction plant, machinery breakdown, loss of profits, deterioration of stock, dismantling, transit and erection, works damage and electronic equipment .

– marine: marine insurance contracts provide indemnity for both cargo and hull classes of business . Cargo covers physical loss of or damage to cargo, with a project delay option . Hull covers loss or damage to pleasure craft or commercial vessels as a result of accidents and also includes legal liability as a result of the accident .

– liability: Liability insurance contracts provide indemnity for actual or alleged breach of professional duty arising out of the insured’s activities, indemnify directors and officers of a company against court compensation and legal defence costs, provide indemnity for the insured against damages consequent to a personal injury or property damage .

– miscellaneous: these insurance contracts provide indemnity for any loss or damage in respect of insurance contracts that do not fall into any of the above classes .

management of insurance riskthis section summarises these risks and the way the Group manages them . an advanced internal model is applied to ensure appro-priate and accurate implementation of acceptable risk levels with regard to underwriting, reserving, credit risk and concentration of risk within the Group . this model has not changed since the previous year .




41. financial instruments (continued)41.14 risks that arise from insurance contracts (continued)

underwriting strategythe underwriting strategy seeks diversity to ensure a balanced portfolio in terms of type and amount of risk, industry and geogra-phy . the underwriting strategy is managed through exercising strict underwriting controls to ensure that the acceptance criteria for which risks are accepted meet both its underwriting guidelines and fall within its reinsurance acceptance limits .

Underwriting limits are in place to enforce appropriate risk selection criteria . For example, the Group has the right not to renew individual policies, it can impose deductibles or it can impose special conditions that may require the insured to enforce certain risk reduction measures (for example a burglar alarm) before it will accept the risk .

the insurance services division issues underwriting guides for the use of both internal staff (when policies are issued) and sales staff to utilise as guides when accepting risks or processing changes to policies already renewed with the Group . the underwriting guidelines cover all lines of business underwritten by the Group and include such matters as:– rating tables;– reinsurance risk categories and limits;– standard endorsements;– acceptance criteria; and– details of undesirable risks or risks for which the Group has no reinsurance facilities .

Underwriters and sales staff are given various levels of mandates that specify which risks they may accept, the degree to which the standard rates may be varied and the levels to which they may commit the Group’s reinsurance facilities . these mandates are set after taking into account the staff member’s qualifications, seniority and experience in dealing with various insurance risks .in the development of the Group’s it platform for underwriting, many of these controls have been automated in the system . this allows the Group even tighter control over the business underwritten and will be closely managed through the automatic produc-tion of exception reports generated by the system . these exception reports will be subjected to audit by the Group’s Quality assurance department .

reinsurance strategythe Group has an extensive proportional and non-proportional reinsurance programme, comprising share and surplus treaties and FaC placements, which are aimed at reducing the volatility of the Group’s underwriting results and protecting its capital . the Group purchases catastrophe reinsurance to protect itself from losses arising from major catastrophes . the level of catastrophe rein-surance purchased is based on the Group’s maximum possible loss and capital adequacy exercise, which is performed annually .

the Group selects its reinsurers from a panel of international and local reinsurers that meet criteria laid down by the Board of directors for their ability to meet their claims obligations in terms of the reinsurance treaties . in setting these criteria the Group makes use of specialist consulting services of its reinsurance consultants as well as the reports issued by international rating agen-cies . the Group’s senior management meets with its reinsurance partners on a regular basis to discuss matters relating to the Group’s underwriting accounts and to keep abreast with developments in the global reinsurance market .

in addition to the overall Group reinsurance treaty programme, individual business units are permitted to purchase additional rein-surance protection or to provide additional reinsurance capacity .

the Group’s reinsurance program is reviewed at least once annually and adjustments are made commensurate with the Group’s ability to absorb additional risk for its own account .

concentration of insurance risk and policies mitigating the concentrationsFactors that aggravate insurance risk include lack of risk diversification in terms of type and amount of risk, geographical location and type of industry covered .

the Group’s insurance risks are well spread throughout south africa and its exposure in one centre is relatively small and well within the limitations of its reinsurance treaties for both catastrophes and losses arising from a single event . the Group’s exposure to extreme losses arising out of concentration of risks is considered remote . nonetheless, its actual exposure is measured at least annually using statistics of its actual exposures as determined from the statistics of its live insurance policies in its it database .

notes (contInued)



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the Group has exposure to most major lines of insurance business with limited exposure to specialised areas of insurance, such as marine and engineering . this exposure is consistent with the market and the Group’s reinsurance policy limits the losses in any one class of business .

the above lines of business can be stratified into two groups based on the counterparty, namely commercial and personal . the com-mercial unit underwrites the risks of enterprises from small businesses to large corporations . the personal unit provides insurance to the general public in their individual capacities .

the personal lines portfolio is small and well spread and thus the concentration risk is negligible .

the commercial unit does have individual risk representing significant values as well as aggregated sums insured from all risk situa-tions . the Group implements a conservative reinsurance policy and thus calculates its aggregated values at risk in any one area or region . it also maintains a check on the highest values at an individual location with an area or region . the Group’s reinsurance strategy takes these individual and aggregated values into account when purchasing reinsurance facilities to protect the Group’s reserves in the event of losses emanating from these locations or risks .

exposure relating to catastrophe eventsthe Group sets out the total aggregate exposure that it is prepared to accept in certain territories to a range of events such as natu-ral catastrophes . the aggregate position is reviewed annually . the Group uses a number of modelling tools to monitor aggregation and to simulate catastrophe losses in order to measure the effectiveness of the reinsurance programmes and the net exposure to the Group .

the Group considers that its most significant exposure would arise in the event of an earthquake in the Gauteng region . this analy-sis has been performed through identifying key concentration of risks based on different classes of business exposed in the event of such an incident . the Group’s policies for mitigation of catastrophe risk exposure include the use of both excess and catastrophe coverage . the effect of such reinsurance arrangements is that the Group should not suffer total net insurance losses of more than r10 000 000 (2012 – r10 000 000) in any one insurance event .

other risks and policies for mitigation of these risksinsurance companies are exposed to the risk of false, invalid and exaggerated claims .

the Group has the right to reject the payment of a claim where the insured has not complied with any of the conditions specified in the policy contract or where the claim is fraudulent in some aspect . insurance contracts also entitle the Group to pursue third par-ties for payment of some or all costs (i .e . subrogation) . all claims are subject to reasonable investigation to establish that the loss is indemnifiable and that the quantum of the claim is reasonable and is commensurate with the damage suffered or awarded .

the Group employs its own legal team to investigate claims involving third parties and has an internal procurement team to procure replacement goods on terms that are fair and reasonable to both the Group and the insured . in addition the Group makes use of external loss adjusters and attorneys for specialist or complex claims .

claims developmentthe Group is liable for all insured events that occur during the term of the contract, even if the loss is discovered after the end of the contract term, subject to pre-determined time scales dependent on the nature of the insurance contract . the Group is therefore exposed to the risk that claims reserves will not be adequate to fund historic claims (run-off risk) . to manage run-off risk the Group takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures and adopts sound reserving practices . Consequently, the Group has a history of positive claims development, i .e . the reserves created over time proved to be sufficient to fund the actual claims paid .




41. financial instruments (continued)41.14 risks that arise from insurance contracts (continued)

claims development trianglesclaims paid in respect of accident year

total 2013 2012 2011 2010 2009gross r % % % % %reporting year2013 580 838 605 100 .0% 50 .0% 6 .2% 13 .3% 0 .7%2012 457 006 142 — 50 .0% 37 .4% 11 .4% 2 .2%2011 547 118 595 — — 56 .4% 34 .3% 10 .3%2010 448 442 019 — — — 41 .0% 30 .7%2009 445 103 514 — — — — 56 .1%

2 478 508 875 100 .0% 100 .0% 100 .0% 100 .0% 100 .0%

netreporting year2013 274 360 968 100 .0% 42 .0% 5 .4% 2 .4% 1 .7%2012 269 435 745 — 58 .0% 25 .6% 4 .6% 2 .9%2011 340 937 261 — — 69 .0% 35 .6% 8 .4%2010 237 394 918 — — — 57 .4% 42 .5%2009 153 301 333 — — — — 44 .5%

1 275 430 225 100 .0% 100 .0% 100 .0% 100 .0% 100 .0%

company

r’000 2013 2012

42. related party transactions and directors’ interestsCompensation of key management personnelthe remuneration of executive directors and other key members of management during the year was as follows:short-term benefits 23 682 26 268 post-employment benefits 1 353 1 338 share-based payments 9 650 9 389

34 685 36 995

F robertson, an executive director of the Company, is the majority shareholder in three companies, acting as short-term insurance brokers, employee benefits consultants and property managing agents respectively to the Company and certain of its subsidiaries . the services are performed on a strictly market related arms’ length basis and total fees paid for the services during the year amounted to r2 010 703 (2012 – r2 565 088) .

the Lion of africa insurance Company Ltd owns the majority of the issued units in two collective investment schemes namely, Lion of africa – General equity Fund and Lion of africa – real return Fund, which are consolidated as they are deemed to constitute special purpose entities, and therefore these are related parties .

Lion of africa insurance Company Ltd owns a 41% interest in auxis (pty) Ltd (“auxis”) . the company exercises significant influence over this associate and accordingly, auxis is also considered a related party .

Brimsure (pty) Ltd, which holds a 30% stake in aon re africa (pty) Ltd, is jointly controlled by Brimstone (60%) and Commlife Holdings (pty) Ltd (40%), a company controlled by F robertson .

notes (contInued)



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group company

r’000 2013 2012 2013 2012

42. related party transactions and directors’ interests (continued)Lion of africa Capital management (pty) Ltd, an investment management company, manages the investment portfolio of the Lion of africa insurance Company Ltd including its cash investments . this company is a wholly-owned subsidiary of Commlife Holdings (pty) Ltd .

the balances owing to/by subsidiaries are disclosed in appendix 1 on page 134 .

the balances owing by associate companies are disclosed in appendix 2 on page 135 .

the balances with subsidiaries and associates will be settled by the transfer of funds .

related party transactions are concluded on an arm’s length basis .

transactions between the company, its subsidiaries and associates:

subsidiariesdividends received 51 439 119 156 dividends paid (treasury shares) – subsidiary 6 382 4 595 – share trust 1 101 811 royalties received 849 846 interest received 114 — interest paid 1 589 792 management fees received 1 934 1 934

associates and Joint venturedividends received 73 715 75 843 — — management fees refunded — (370) — (370)interest received 4 800 4 320 4 624 4 320 impairment of loan to associate 356 252 — —

directoradditional purchase consideration on acquisition of business — 1 736 — 1 736

43. group borrowing powersin terms of the memorandum of incorporation of the Company, borrowings of the Company and its subsidiaries are unlimited, sub-ject to authorisation by the Board of directors of the holding company .



supplementary reports on Investmentsas at 31 december 2013

appendix 1Interest in subsidiaries

issued share capital percentage holding shares at cost net indebtedness2013 2012 2013 2012 2013 2012 2013 2012

held directly r r % % r’000 r’000 r’000 r’000

CompanyBrimco (pty) Ltd 1 1 100 100 — — 153 977 154 234 Holds investment in sea Harvest Holdings (pty) LtdHouse of monatic (pty) Ltd 30 572 408 30 572 408 100 100 32 427 32 427 29 040 28 077 manufacturer and distributor of clothingsepten investments (pty) Ltd 1 1 100 100 — — (143 161) (134 565) Holds treasury and Life Healthcare Group Holdings Limited sharesBrimstone properties (pty) Ltd 100 100 100 100 — — — — dormantBrimstone Commodities trading (pty) Ltd 100 100 100 100 — — — — dormantBrimstone securities trading (pty) Ltd 100 100 100 100 — — — — dormantBrimbrands (pty) Ltd 1 1 100 100 — — — — dormantBrimsure (pty) Ltd 100 100 60 60 — — 1 171 Holds investment in aon re africa (pty) Ltdnewshelf 831 (pty) Ltd 15 335 15 335 98 98 258 283 258 283 (171 526) (186 433) Holds investment in Life Healthcare Group Holdings Limitedoceana spv (pty) Ltd 100 100 100 100 39 000 39 000 22 019 21 998 Holds investment in oceana Group LimitedH investments no 219 (pty) Ltd 100 100 100 100 18 646 18 646 (19 566) (19 989) property owning Lion of africa Holdings Company (pty) Ltd 1 100 1 100 100 100 95 509 95 509 89 934 89 934 Holds investment in short-term insurer Lion of africa insurance Company Ltdnewshelf 1062 (pty) Ltd — 100 — 100 — — — 20 264 Holds investment in mtn Zakhelenewshelf 1063 (rF) (pty) Ltd 20 002 8 001 100 100 20 8 (18 217) 25 324 Holds investments in newshelf 1064 (rF) (pty) Ltd, newshelf 1062 (pty) Ltd, newshelf 1168 (pty) Ltd, newshelf 1169 (pty) Ltd and newshelf 1269 (pty) Ltd

443 885 443 873 (57 499) (985)

Less: amounts written off (2 426) (2 426) (48) (48)

441 459 441 447 (57 547) (1 033)

held indirectlynewshelf 1055 (pty) Ltd 100 100 100 100 — — — — dormantnewshelf 831 (pty) Ltd 15 335 15 335 2 .2 2 .2 — — — — Holds investment in Life Healthcare Group Holdings Limitednewshelf 1064 (rF) (pty) Ltd 17 000 17 000 100 100 — — — — Holds investment in oceana Group Limitedsea Harvest Holdings (pty) Ltd 1 000 1 000 58 .1 58 .1 — — — —investment holdingsea Harvest Corporation (pty) Ltd 100 100 100 100 — — — — deep sea fishingatlantic trawling (pty) Ltd 1 000 000 1 000 000 100 100 — — — — dormantsea Harvest Corporation of namibia (pty) Ltd n$100 000 n$100 000 100 100 — — — — dormantnewshelf 1062 (pty) Ltd 1 — 100 — — — — — Holds investment in mtn Zakhelenewshelf 1168 (pty) Ltd 1 1 100 100 — — — — Holds investment in taste Holdings Limitednewshelf 1169 (pty) Ltd 1 1 100 100 — — — — Holds investment in afena Capital (pty) Ltdnewshelf 1269 (pty) Ltd 1 — 100 — — — — —dormant

consolidated special purpose entitiesBrimstone investment Corporation Limited share trust — — — — — — 1 973 6 924 the Brimstone Black executives investment trust — — — — — — 9 622 9 951 the Brimstone General staff investment trust — — — — — — — 404 the Brimstone Broad-Based Bee trust — — — — — — — 1 269

the company’s interest in the aggregate profits and losses after taxation of consolidated subsidiaries was as follows:r’000 2013 2012

profits 518 782 772 346 Losses (105 991) (30 350)

all subsidiaries are incorporated in the republic of south africa with the exception of sea Harvest Corporation of namibia (pty) Ltd which is incorporated in namibia .



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appendix 2Investments in associate companies and joint venture

reporting date

effective percentage

holding shares at

cost/valuation

share of retained income/(losses) since acquisition

share of non-distributable

reserves since acquisition indebtedness

2013 2012 2013 2012 2013 2012 2013 2012 2013 2012Unlisted % % r’000 r’000 r’000 r’000 r’000 r’000 r’000 r’000held dIrectly:– by Company:the scientific Group (pty) Ltd 30 sept . 28 .2 28 .2 6 768 6 768 6 347 6 144 — — 17 622 19 137 (medical equipment distributors)Hot platinum (pty) Ltd 28 Feb . 20 .66 20 .66 288 288 (288) (288) — — 4 700 4 700 (manufacturer of machinery for jewellery industry)total held by company 7 056 7 056 6 059 5 856 — — 22 322 23 837

held IndIrectly:– by subsidiaries:aon re africa (pty) Ltd 31 dec . 18 .0 18 .0 13 359 13 359 17 878 14 963 2 981 2 631 — — (insurance industry)oceana Group Limited* 30 sept . 20 .1 20 .1 566 264 566 264 86 703 78 611 10 849 5 786 — — (Food industry )vuna Fishing Company (pty) Ltd 31 dec . 49 .8 49 .8 36 432 36 432 (20 488) (21 574) — — — — (Fishing and fish processing)afena Capital (pty) Ltd (asset management) 28 Feb . 31 .1 25 .1 48 544 45 543 1 614 705 (2 721) — 2 177 2 170 auxis (proprietary) Limited (Underwriter) 31 dec . 41 .0 41 .0 — — — — — — — 356

total associates and joint venture held via subsidiaries 664 599 661 598 85 707 72 705 11 109 8 417 2 177 2 526 totaL GroUp 671 655 668 654 91 766 78 561 11 109 8 417 24 499 26 363

valuations are carried out every six months using bases considered appropriate to the underlying investment .

* At 31 December 2013 the fair value of the investment in Oceana Group Ltd. was R1 647.9 million (2012 – R1 403.2 million). 8.5 Million shares held in Newshelf 1064 (RF) (Pty) Ltd have been pledged as

stated in note 28. In addition a call option has been granted to Oceana Group Limited and is exercisable should a share cover ratio of two times not be maintained.



as at 31 december 2013

valuatIon of optIons

appendix 3Investments

number of shares/units valuation of shares valuation of loans total investment 2013 2012 2013 2012 2013 2012 2013 2012

r’000 r’000 r’000 r’000 r’000 r’000

available-for-sale assetsheld by companyunlistedafrican Legends Ltd 2 829 798 2 842 204 2 154 2 429 — — 2 154 2 429 held by subsidiarydesert diamond Fishing (pty) Ltd 12 12 44 800 25 816 — — 44 800 25 816

total group 46 954 28 245 — — 46 954 28 245

valuations are carried out every six months using bases considered appropriate to the underlying investment .

Investments at fair value through profit or lossheld by companylistedrex trueform Clothing Company Limited ordinary shares 242 554 242 554 2 790 4 245 — — 2 790 4 245 rex trueform Clothing Company Limited n ordinary shares 2 646 254 2 646 254 27 786 43 663 — — 27 786 43 663 african & overseas enterprises Limited ordinary shares 254 026 254 026 3 048 4 445 — — 3 048 4 445 african & overseas enterprises Limited n ordinary shares 3 684 257 3 684 257 44 210 60 790 — — 44 210 60 790

unlistedWelkom Yizani investments Limited 430 430 5 5 — — 5 5 phuthuma nathi investments Limited 1 704 916 491 343 153 442 29 223 — — 153 442 29 223 emthunzini Bee Business partners trust (santam) 73 508 73 508 6 149 6 255 — — 6 149 6 255 Galaxy Gold mining Company Limited 16 000 000 16 000 000 — — — 6 157 — 6 157

rights to acquire sharesold mutual plc — — 172 333 63 161 — — 172 333 63 161 nedbank Limited — — 424 119 321 167 — — 424 119 321 167 tiger Brands — — 180 631 268 137 — — 180 631 268 137

total company 1 014 513 801 091 — 6 157 1 014 513 807 248

held by subsidiarieslistedUnit trust equity securities — — 38 850 32 016 — — 38 850 32 016 nedcor Limited 134 481 134 481 28 241 25 282 — — 28 241 25 282 rex trueform Clothing Company Limited ordinary shares 100 100 1 2 — — 1 2 rex trueform Clothing Company Limited n ordinary shares 100 100 1 2 — — 1 2 african & overseas enterprises Limited ordinary shares 100 100 1 2 — — 1 2 african & overseas enterprises Limited n ordinary shares 100 100 1 2 — — 1 2 taste Holdings Limited 24 540 099 24 540 099 92 026 105 522 — 92 026 105 522 Life Healthcare Group Holdings Ltd 53 021 681 53 021 681 2 219 548 1 786 986 — — 2 219 548 1 786 986 debt securities — — 60 884 62 149 — — 60 884 62 149

unlistedFixed deposit accounts — — 95 251 129 670 — — 95 251 129 670 money market — — 8 000 15 000 — — 8 000 15 000 rights to acquire sharesmtn Zakhele — — 132 271 88 289 — — 132 271 88 289

total group 3 689 589 3 046 013 — 6 157 3 689 589 3 052 170

total Investments 3 736 542 3 074 258 — 6 157 3 736 542 3 080 415

the loans are unsecured, have no fixed terms of repayment and are interest free .a register of investments is available for inspection at the registered office of the Company .



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appendix 4

Brimstone acquired rights to shares that have been valued as options . the results of the calculations and inputs into the models are set out below:

old mutual plc

method Black-scholesnumber of option shares 16 954 350 Fair value r172 332 860spot price per share r32 .79 risk free rate 6 .0% (naca)dividend yield 3 .0%volatility 23 .3%exercise date 1 may 2015debt at reporting date r373 479 220interest rate on debt 8% compounded

semi-annually plus 1 .5% onsubscription amount

approximate value– 18 .3% volatility r169 411 237– 23 .3% volatility r172 332 860– 28 .3% volatility r176 819 846

repayment termsa portion of the debt will be settled by dividends and a portion of performance fees . the balance at the exercise date will be settled either by sale of certain of the old mutual shares or a refinancing of the debt then outstanding .

nedbank group limited

method Black-scholesnumber of option shares 4 008 937 Fair value r424 118 525spot price per share r210 .00risk free rate 5 .52% (naca)dividend yield 0%volatility 21 .03%exercise date 1 January 2015debt at reporting date r405 475 676interest rate on debt 8% compounded

semi-annually plus 1 .5% oninitial market amount (notional)


repayment termsdividends will be received in the form of capitalisation shares or cash which cash shall be utilised to purchase further nedbank shares in the open market . the notional loan value at the exercise date is calculated by taking the initial market value less the deposit increased each year by a notional 8% p .a . compounded semi-annually plus 1 .5% on the initial market value amount . at the exercise date nedbank Group Limited in terms of a call option will have the right to acquire that number of shares at r1 .87 per share that at the then market value equates to the terminal value .

tiger brands limited

method monte Carlonumber of option shares 1 813 613 Fair value r180 631 198spot price per share r266 .93risk free rate 7 .07%dividend yield 3 .38%volatility 25 .50%exercise date 31 december 2017debt at reporting date r299 341 296interest rate on debt 93 .5% of prime n .a .c .m .


repayment termsvendor financing at date of transaction of r255 109 837 bearing interest at a rate of 85% of prime compounded monthly (and increasing to 93 .5% of prime compounded monthly from 1 april 2012) and repayable from dividends which are split between ser-vicing the debt and a trickle dividend in the ratio of 85%:15% .

mtn Zakhele

method monte Carlonumber of option shares 1 010 500 Fair value r132 271 286spot price per share r217 .02risk free rate 6 .60%dividend yield 4 .93%volatility 26 .42%exercise date 26 november 2016debt at reporting date r58 006 264

interest rate on debta preference shares – 77% of prime compounded monthly

notional vendor funding – 85% of prime compounded

monthly


repayment termsdividends received by mtn Zakhele from mtn will be used to repay outstanding preference share funding . at the end of the transaction sufficient mtn shares will be bought back by mtn from mtn Zakhele in order to settle outstanding preference share funding and notional funding .



appendix 5

as at 31 december 2013 direct indirect

directors Beneficialnon-

Beneficial Beneficialnon-

Beneficial total

ordinary sharesma Brey 1 299 039 — 3 494 543 65 164 4 858 746 LZ Brozin 58 714 — 1 823 997 — 1 882 711 F robertson 485 414 — 4 923 883 300 000 5 709 297 mJt Hewu 103 000 — — — 103 000 n Khan 128 136 — 126 712 — 254 848 La parker — — 403 000 — 403 000

2 074 303 — 10 772 135 365 164 13 211 602

“n” ordinary sharesma Brey 414 617 — 15 911 898 238 870 16 565 385 LZ Brozin 91 756 — 13 392 650 — 13 484 406 F robertson 73 742 — 14 423 875 100 000 14 597 617 mJt Hewu 212 650 — — 5 000 217 650 n Khan 123 227 — 1 062 039 — 1 185 266 mK ndebele 102 554 — — — 102 554 La parker — — 2 103 366 — 2 103 366

1 018 546 — 46 893 828 343 870 48 256 244

as at 31 december 2012 direct indirect

directors Beneficialnon-

Beneficial Beneficialnon-

Beneficial total

ordinary sharesma Brey 1 299 039 — 3 458 157 65 164 4 822 360 LZ Brozin 58 714 — 1 811 368 — 1 870 082 F robertson 485 414 — 4 890 257 300 000 5 675 671 mJt Hewu 103 000 — — — 103 000 n Khan 128 136 — 126 712 — 254 848 La parker — — 403 000 — 403 000

2 074 303 — 10 689 494 365 164 13 128 961

“n” ordinary sharesma Brey 414 617 — 15 759 178 238 870 16 412 665 LZ Brozin 91 756 — 13 371 696 — 13 463 452 F robertson 73 742 — 14 286 675 100 000 14 460 417 mJt Hewu 212 650 — — 5 000 217 650 n Khan 123 227 — 1 062 039 — 1 185 266 mK ndebele 102 554 — — — 102 554 La parker — — 2 103 366 — 2 103 366

1 018 546 — 46 582 954 343 870 47 945 370

There have been no changes to the directors’ interests in shares between 31 December 2013 and the date of this integrated report except for the purchase of 70 000 ordinary shares by MA Brey (indirect beneficial).

dIrectors’ Interests In shares



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shareholdIng InformatIon

shareholder spread

no . of shareholders in s .a .no . of shareholders other than in s .a . total shareholders

ordinary shares no . % no . % no . %public 1 238 99 .12% 8 100 .00% 1 246 99 .12%directors 6 0 .48% — 0 .00% 6 0 .48%other 5 0 .40% — 0 .00% 5 0 .40%total 1 249 100% 8 100% 1 257 100%

no . of shareholders in s .a .no . of shareholders other than in s .a . total shareholders

“n” ordinary shares no . % no . % no . %public 2 366 99 .25% 20 100 .00% 2 386 99 .25%directors 7 0 .29% — 0 .00% 7 0 .29%other 11 0 .46% — 0 .00% 11 0 .46%total 2 384 100% 20 100% 2 404 100%

share trading statistics

ordinary “n” ordinaryshares shares

market price per share (cents) High 1 500 1 420 Low 1 100 1 110 Year-end 1 400 1 400 volume of shares traded (number) 8 596 943 14 093 902 volume of shares traded as a % of issued shares 18 .38% 5 .28%value of shares traded (r) 111 967 458 183 870 546 number of transactions 616 2 627




shareholdIng InformatIon (contInued)

public vs non-public shareholdingnumber of % of issued

ordinary shares shares share capital

public shareholders 24 030 548 51 .38non-public shareholders directors and associates 13 211 602 28 .24 shareholder Holding more than 10% of issued share Capital – segregation GsCo equity security Client 5 517 674 11 .80treasury shares septen investments (pty) Ltd 3 629 700 7 .76 Brimstone investment Corporation Limited staff share trust 385 611 0 .82total 46 775 135 100

number of % of issued“n” ordinary shares shares share capital

public shareholders 153 515 007 57 .46 non-public shareholders directors and associates 48 256 244 18 .06 treasury shares

septen investments (pty) Ltd 21 898 143 8 .20 Lion of africa insurance Company Limited 497 389 0 .19 the Brimstone Black executives investment trust 35 140 000 13 .15 the Brimstone General staff investment trust 1 500 000 0 .56 the Brimstone Broad-Based Bee trust 2 500 000 0 .94 Brimstone investment Corporation Limited staff share trust 3 837 841 1 .44

total 267 144 624 100

combined ordinary and “n” ordinary shareholdings at 31 december 2013

major shareholders ordinary “n” ordinary total% of issued

share capitalthe Brimstone Black executive investment trust (treasury shares) — 35 140 000 35 140 000 11 .20%septen investments (pty) Ltd (treasury shares) 3 629 700 21 898 143 25 527 843 8 .13%ma Brey (direct and indirect, beneficial and non-beneficial) 4 858 746 16 565 385 21 424 131 6 .82%F robertson (direct and indirect, beneficial and non-beneficial) 5 709 297 14 597 617 20 306 914 6 .47%estate late GJ Gerwel (direct and indirect, beneficial and non-beneficial) 1 977 603 14 301 887 16 279 490 5 .19%LZ Brozin (direct and indirect, beneficial and non-beneficial) 1 882 711 13 484 406 15 367 117 4 .90%ellerine Bros (pty) Ltd — 10 785 000 10 785 000 3 .44%GepF mazi Capital pty Ltd — 8 254 451 8 254 451 2 .63%36one Hedge Fund — 7 122 450 7 122 450 2 .27%

18 058 057 142 149 339 160 207 396 51 .05%



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number of shareholders

ordinary sharesnumber of % of total number of % of shares

size of holding shareholders shareholders shares issued1 – 5 000 879 69 .93 1 559 317 3 .335 001 – 10 000 151 12 .01 1 240 621 2 .6510 001 – 100 000 168 13 .36 5 334 407 11 .41100 001 – 1 000 000 49 3 .90 15 815 680 33 .81over 1 000 000 10 0 .80 22 825 110 48 .80

1 257 100 46 775 135 100

major shareholderssegregation GsCo equity security Client 1 0 .08 5 517 674 11 .80african monarch 710 investment Holdings (pty) Ltd 1 0 .08 4 729 456 10 .11septen investments (pty) Ltd 1 0 .08 3 629 700 7 .76max Brozin investment Corp 1 0 .08 3 160 459 6 .76the mushaky Family trust 1 0 .08 1 901 400 4 .06Commlife Holdings (pty) Ltd 1 0 .08 1 648 100 3 .52

6 0 .48 20 586 789 44 .01

analysis of shareholdersindividuals 1 074 85 .44 10 095 118 21 .58nominee companies or trusts 100 7 .96 17 461 457 37 .33public companies 1 0 .08 1 106 000 2 .37Close corporations and private companies 82 6 .52 18 112 560 38 .72

1 257 100 46 775 135 100

“n” ordinary sharesnumber of % of total number of % of shares

size of holding shareholders shareholders shares issued1 – 5 000 1 670 69 .47 2 578 517 0 .965 001 – 10 000 241 10 .02 1 869 974 0 .7010 001 – 100 000 321 13 .35 10 950 448 4 .10100 001 – 1 000 000 125 5 .20 41 160 650 15 .41over 1 000 000 47 1 .96 210 585 035 78 .83

2 404 100 267 144 624 100

major shareholdersafrican monarch 710 investment Holdings (pty) Ltd 1 0 .04 50 405 508 18 .87the Brimstone Black executive investment trust 1 0 .04 35 140 000 13 .15septen investments (pty) Ltd 1 0 .04 21 898 143 8 .20ellerine Bros (pty) Ltd 1 0 .04 10 785 000 4 .04GepF mazi Capital (pty) Ltd 1 0 .04 8 254 451 3 .0936one Hedge Fund 1 0 .04 7 122 450 2 .66old mutual Life assurance Co .sa Ltd 1 0 .04 4 852 061 1 .82

7 0 .28 138 457 613 51 .83

analysis of shareholdersindividuals 1 954 81 .28 22 442 128 8 .40nominee companies or trusts 296 12 .31 119 058 974 44 .57public companies 5 0 .21 5 769 583 2 .16Close corporations and private companies 149 6 .20 119 873 939 44 .87

2 404 100 267 144 624 100




notice is hereby given that the eighteenth annual general meeting of shareholders of Brimstone will be held at old mutual Business school, presentation room, West Campus Building, Jan smuts drive, pinelands, Cape town at 18h30, on Wednesday, 21 may 2014 to conduct the business set out below: 1 . to receive, consider and adopt the consolidated and separate

annual financial statements, the directors’ report, audit and risk Committee report and social and ethics Committee report, for the year ended 31 december 2013 .

2 . to confirm annual dividend number 13 and a special dividend, in the amounts recommended by the directors of 30 (thirty) cents per share and 10 (ten) cents per share respec-tively, payable to those shareholders recorded in the register of the Company on Friday, 25 april 2014 . the dividend and special dividend will be paid on monday, 29 april 2014 .

3. ordinary resolution number 1:

re-election of directors in terms of the Company’s memorandum of incorporation

(“moi”), the following directors retire by rotation, and, being eligible, offer themselves for re-election .

3 .1 ma Brey 3 .2 mJt Hewu 3 .3 F robertson 3 .4 Fd roman

each re-election will be put to shareholders in a separate resolution . a brief Cv of each director to be re-elected appears on page 164 of this integrated report .


election of newly appointed director to elect mrs Kr moloko as a director of the Company .

mrs moloko was appointed as a director on 8 november 2013 and automatically retires in terms of the Company’s moi and makes herself available for re-election .

a brief Cv of mrs moloko appears on page 164 of this integrated report .


appointment of members of the audit & risk committee to approve the appointment of the following members of the

audit & risk Committee, each by way of a separate resolution: 5 .1 n Khan (Chairman) 5 .2 pL Campher 5 .3 Kr moloko (subject to her re-election as a director) 5 .4 La parker 5 .5 Fd roman (subject to her re-election as a director)

6. non-binding resolution number 4: remuneration policy to approve, as a non-binding advisory vote in terms of the

recommendations of the King report on Governance for south africa (“King iii”), the remuneration policy of the Company as set out in the remuneration report on pages 55 to 56 of this integrated report .


reappointment of auditors to re-appoint deloitte & touche (with the designated auditor

being mr Lester peter Cotten) as auditors for the ensuing year .


to place the unissued shares under the directors’ control. “resoLved tHat the entire authorised but unissued

ordinary and “n” ordinary share capital of the Company from time to time be placed under the control of the directors of the Company until the next annual general meeting, provided it shall not extend beyond 15 (fifteen) months from the date of passing of this ordinary resolution; with the authority to allot and issue all or part thereof in their discretion, subject to the Companies act, no 71 of 2008, as amended (“the act”) and the Jse Limited (“Jse”) Listings requirements .”

9. ordinary resolution number 7

approval to issue shares for cash “resoLved tHat the directors of the Company be and are

hereby authorised by way of a general authority, to issue all or any of the authorised but unissued ordinary and “n” ordinary shares (“securities”) in the capital of the Company for cash, as and when they in their discretion deem fit, subject to the act, the moi of the Company, the Jse Listings requirements, when applicable, and the following limitations, namely that:

– the securities which are the subject of the issue for cash must be of a class already in issue, or where this is not the case, must be limited to such securities or rights that are convertible into a class already in issue;

– any such issue will be made only to “public shareholders” as defined in the Jse Listings requirements and not related parties, unless the Jse otherwise agrees;

– the number of securities issued for cash shall not in the aggregate in any one financial year exceed 15% (fifteen percent) of the Company’s issued share capital of ordinary and “n” ordinary shares respectively, being an equivalent of 42 759 824 ordinary shares (excluding 4 015 311 treasury shares) and 201 771 251 “n” ordinary

notIce of annual general meetIng



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shares (excluding 65 373 373 treasury shares) as at the date of the annual general meeting;

– any securities issued in terms of this general authority must be deducted from the initial number of securities available under this general authority;

– in the event of a sub-division or consolidation of issued securities during the period of this general authority, the general authority must be adjusted accordingly to represent the same allocation ratio;

– this authority be valid until the Company’s next annual general meeting, provided that it shall not extend beyond 15 (fifteen) months from the date that this authority is given;

– a paid press announcement giving full details, including the number of securities issued, the average discount to the weighted average traded price of the securities over the 30 business days prior to the date that the issue is agreed in writing and the effects on net asset value, net

tangible asset value, earnings per share and headline earnings per share, will be published at the time of any issue representing, on a cumulative basis within 1 (one) financial year, 5% (five percent) or more of the number of ordinary or “n” ordinary shares in issue prior to the issue; and

– in determining the price at which an issue of securities may be made in terms of this authority, the maximum discount permitted will be 10% (ten percent) of the weighted average traded price on the Jse of the relevant class of shares over the 30 (thirty) business days prior to the date that the price of the issue is determined or agreed to by the directors of the Company .

ordinary resolution number 7 is required, under the Jse Listings requirements, to be passed by achieving a 75% majority of the votes cast in favour of such resolution by all members present or represented by proxy and entitled to vote, at the annual general meeting .

10. special resolution number 1:

non-executive directors’ fees to approve the non-executive directors’ fees for the years ending 31 december 2014 and 31 december 2015 as set out below:

1/1/2014 1/7/2014 1/1/2015to to to

30/6/2014 31/12/2014 31/12/2015board (annual fee)Chairman — — — Lead independent director 115 000 126 500 253 000Lead independent director (adjustment) 26 174 — —member 59 551 65 506 131 012

committees (per meeting)audit committeeChairman 21 438 23 582 23 582member 11 910 13 101 13 101

Investment committeeChairman 17 865 19 652 19 652member 11 910 13 101 13 101

nominations committeeChairman 17 865 19 652 19 652member 11 910 13 101 13 101

remuneration committeeChairman 17 865 19 652 19 652member 11 910 13 101 13 101

social and ethics committeeChairman 17 865 19 652 19 652member 11 910 13 101 13 101





approval to repurchase ordinary and “n” ordinary shares “resoLved tHat, as a general approval contemplated in

section 48 of the act, the acquisition by the Company, and/or any subsidiary of the Company, from time to time of the issued ordinary and “n” ordinary shares (“securities”) 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 moi of the Company, the provisions of the act and the Jse Listings requirements, where applicable, and provided that;

a) the repurchase of securities will be effected through the main order book operated by the Jse trading system and done without any prior understanding or arrangement between the Company and the counter party;

b) this general authority shall only be valid until the Company’s next annual general meeting, provided that it shall not extend beyond 15 (fifteen) months from the date of passing of this special resolution;

c) in determining the price at which the Company’s secu-rities are to be acquired by the Company in terms of this general authority, the maximum premium at which such securities may be acquired will be 10% (ten percent) of the weighted average of the market price at which such securities are traded on the Jse, as determined over the 5 (five) trading days immediately preceding the date of the repurchase of such securities by the Company;

d) the acquisitions of securities in the aggregate in any one financial year do not exceed 20% (twenty percent) of the Company’s issued share capital of each class from the date of the grant of this general authority;

e) the Company and the Group are in a position to repay their debts in the ordinary course of business for a period of 12 months from the Company first acquiring securities under this general approval and subject to (i) below;

f) the assets of the Company and the Group, being fairly valued in accordance with international Financial reporting standards, are in excess of the liabilities of the Company and the Group for a period of 12 months from the Company first acquiring securities under this general approval and subject to (i) below;

g) the ordinary capital and reserves of the Company and the Group are adequate for a period of 12 months from the Company first acquiring securities under this general approval and subject to (i) below;

h) the available working capital is adequate to continue the operations of the Company and the Group for a period of 12 months from the Company first acquiring securities under this general approval and subject to (i) below;

i) upon entering the market to proceed with the repur-chase, the Company’s sponsor has complied with its responsibilities contained in schedule 25 of the Jse Listings requirements;

j) the Company or its subsidiaries will not repurchase secu-rities during a prohibited period as defined in paragraph 3 .67 of the Jse Listings requirements unless they have in place a repurchase programme where the dates and quantities of securities to be traded during the relevant period are fixed (not subject to any variation) and full details of the programme have been disclosed in an announcement over sens prior to the commencement of the prohibited period;

k) when the Company has cumulatively repurchased 3% of the initial number of the relevant class of securities, and for each 3% in aggregate of the initial number of that class acquired thereafter, an announcement will be made;

l) the Company only appoints one agent to effect any repurchase(s) on its behalf; and

m) prior to entering the market to repurchase the Company’s shares, a company resolution passing the repurchase will have been passed in accordance with the requirements of the act, stating that the board has applied the solvency and liquidity test and has reasonably concluded that the Company will satisfy the solvency and liquidity test immediately after the repurchase .

the Jse Listings requirements require the following addi-tional disclosure for purposes of this general authority, some of which is disclosed in this report of which this notice forms part as set out below:

– directors and management – page 3 – major shareholders of Brimstone – page 141 – directors’ interest in shares – page 138 – share capital of Brimstone – page 98

material change there have been no material changes in the affairs or

financial position of Brimstone and its subsidiaries between 31 december 2013 and the date of the integrated report of which this notice of annual general meeting forms part .

directors’ responsibility statement the directors, whose names appear on page 3 of the inte-

grated report, collectively and individually accept full respon-sibility for the accuracy of the information pertaining to special resolution number 2 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 this resolution contains all such information .

notIce of annual general meetIng (contInued)



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litigation statement in terms of section 11 .26 of the Jse Listings requirements,

the directors, whose names appear on page 3 of the integrated report of which this notice forms part, are not aware of any legal or arbitration proceedings, including proceedings that are pending or threatened, that may have or have had in the recent past, being at least the previous 12 months, a material effect on the Group’s financial position .

reason for and effect of special resolution number 2 the reason for and effect of the special resolution number 2

is to authorise the Company and/or its subsidiaries and trusts by way of a general authority to acquire its own issued secu-rities on such terms, conditions and such amounts determined from time to time by the directors of the Company, subject to the limitations set out above .

the directors of the Company have no specific intention to effect the provisions of the special resolution number 2 but will, however, continually review the Company’s position, having regard to prevailing circumstances and market conditions, in considering whether to effect the provisions of the special resolution number 2 .


specific repurchase of ordinary and “n” ordinary shares special resolution number 3, which has been included in this

notice of annual general meeting of Brimstone and which forms part of the integrated report constitutes the document issued to Brimstone shareholders in compliance with part B and part C of Chapter 5 of the act . special resolution number 3, including the annexures thereto, contains all the information required to comply with the act and the Jse Listings requirements for a specific repurchase .

“resolved that, as a specific authority, the acquisition by the Company of the following ordinary and “n” ordinary shares from septen investments (proprietary) Limited, a wholly-owned subsidiary of Brimstone:

– 3 629 700 Brimstone ordinary shares at r13 .53 per Brimstone ordinary share at a total value of r49 109 841; and

– 21 898 143 Brimstone “n” ordinary shares at r13 .30 per Brimstone “n” ordinary share at a total value of r291 245 302, be and is hereby approved .”

the specific repurchase is subject to the provisions of the moi of the Company, the act and the Jse Listings requirements, where applicable . the directors of the Company are of the opinion that, after considering the effect of the specific repurchase:

a) the Company and the Group are in a position to repay

their debts in the ordinary course of business for a period of 12 months after the specific repurchase;

b) the assets of the Company and the Group, being fairly valued in accordance with international Financial reporting standards, are in excess of the liabilities of the Company and the Group for a period of 12 months after the specific repurchase;

c) the ordinary and “n” ordinary share capital and reserves of the Company and the Group are adequate for a period of 12 months after the specific repurchase;

d) the available working capital is adequate to continue the operations of the Company and the Group for a period of 12 months after the specific repurchase;

e) the Company’s sponsor has complied with its responsi-bilities contained in schedule 25 of the Jse Listings requirements .

a resolution by the board of directors has been passed in accordance with the requirements of the act, stating that the board has authorised the specific repurchase, applied the solvency and liquidity test and has reasonably concluded that the Company will satisfy the solvency and liquidity test imme-diately after the specific repurchase .

the Jse Listings requirements require the following addi-tional disclosure for purposes of the specific repurchase, some of which is disclosed in this integrated report of which this notice forms part as set out below:

– directors and management – page 3 – major shareholders of Brimstone – page 141 – directors’ interest in shares – page 138 – share capital of Brimstone – page 98

material change there have been no material changes in the affairs or

financial position of the Company and its subsidiaries between 31 december 2013 and the date of the integrated report of which this notice of annual general meeting forms part .

directors’ responsibility statement the directors, whose names appear on page 3 of the inte-

grated report, collectively and individually accept full respon-sibility for the accuracy of the information pertaining to special resolution number 3 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 this resolution contains all such infor-mation .




litigation statement in terms of section 11 .23 of the Jse Listings requirements,

the directors, whose names appear on page 3 of the integrated report of which this notice forms part, are not aware of any legal or arbitration proceedings, including proceedings that are pending or threatened, that may have or have had in the recent past, being at least the previous 12 months, a material effect on the Group’s financial position .

Further details of the specific repurchase are set out in annexures 1, 2 and 3 to this notice .

13. to transact such other business as may be transacted at an annual general meeting

voting and proxies the record date in terms of section 59 of the act for share-

holders to be recorded on the securities register of the Company in order to be able to attend, participate and vote at the annual general meeting is Friday, 16 may 2014, and the last day to trade in the Company’s shares in order to be recorded on the securities register of the Company in order to be able to attend, participate and vote at the annual general meeting is Friday, 9 may 2014 .

a member entitled to attend and vote at the annual general meeting is entitled to appoint a proxy or proxies to attend, speak and vote in his/her stead . a proxy need not be a member of the Company . For the convenience of certificated members and dematerialised members with “own name” registration of the Company, a form of proxy is enclosed herewith . on a show of hands, every member of the Company present in person or represented by proxy shall have one vote only . on a poll, every member of the Company present in person or represented by proxy shall have 100 votes for every ordinary share and 1 vote for every “n” ordinary share held in Brimstone by such member .

the attached form of proxy is only to be completed by those shareholders who are:

– holding shares in certificated form; or – dematerialised with “own name” registration .

all other beneficial owners who have dematerialised their shares through a Central securities depository participant (“Csdp”) or broker other than “own name” and who wish to attend the annual general meeting, must instruct their Csdp or broker to provide them with a Letter of representation or they must provide the Csdp or broker with their voting instructions in terms of the relevant custody agreement entered into between them and the Csdp or broker .

Forms of proxy should be lodged with or mailed to

Computershare investor services (pty) Ltd:

Hand deliveries to: postal deliveries to: Ground Floor po Box 61051 70 marshall street marshalltown 2107 Johannesburg 2001

to be received no later than 17h00 on monday, 19 may 2014 .

By order of the board

t moodley Company secretary

newlands 14 march 2014




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annexure 1further details of the specific repurchase

1. terms of the specific repurchase the specific repurchase will be effected as follows:– the repurchase by the Company from septen investments

(proprietary) Limited (“septen”), a wholly-owned subsidiary of Brimstone, of 3 629 700 Brimstone ordinary shares at a price of r13 .53 per Brimstone ordinary share, being the 30 day volume weighted average price (“vWap”) for Brimstone ordinary shares up to and including 7 February 2014, at a total value of r49 109 841; and

– the repurchase by the Company from septen of 21 898 143 Brimstone “n” ordinary shares at a price of r13 .30 per Brimstone “n” ordinary share, being the 30 day vWap for Brimstone “n” ordinary shares up to and including 7 February 2014, at a total value of r291 245 302 .

the specific repurchase represents 7 .76% of the Brimstone ordinary shares in issue and 8 .20% of the Brimstone “n” ordinary shares in issue, respectively, as at the date of this notice .

the Brimstone ordinary shares and “n” ordinary shares to be repurchased in terms of the specific repurchase are reflected as treasury shares in the annual financial statements of Brimstone . application will be made to the Jse for the delisting of the treasury shares once the specific repurchase has been effected .

Brimstone has appointed Bridge Capital advisors (pty) Limited as the independent expert to prepare a report to the Board in terms of section 48(8), read with section 114 of the act, to advise whether the terms and conditions of the specific repurchase are fair and reasonable as far as Brimstone shareholders are concerned . the independent expert’s report is attached as annexure 2 to this notice . as the specific repurchase is an intra-group transaction, it was determined that the appointment of an independent board is not required .

the subsidiaries of Brimstone (and their associates) will be excluded from voting on the special resolution of the shareholders required to authorise the specific repurchase .

a statement informing dissenting shareholders of their appraisal rights under section 164 and the required approval for transactions contemplated in part under section 115 of the act are included in annexure 3 to this notice .

2. rationale for the specific repurchase Brimstone repurchased a number of its shares in 2003 and

housed these shares in its wholly-owned subsidiary, septen as treasury shares . septen currently holds approximately 7 .76% of Brimstone’s issued ordinary shares and 8 .20% of Brimstone’s issued “n” ordinary shares as treasury shares . in terms of the Companies act, subsidiaries may hold up to 10% of the issued shares in their holding company . this leaves little room for Brimstone to repurchase its own shares through its subsidiaries . in order to create new capacity for Brimstone to repurchase its own shares through its subsidi-aries, the directors have resolved that Brimstone should purchase from, and cancel the treasury shares held by, septen .

the specific repurchase will be done intra-group with no cash flow implications, other than to cover the expenses as outlined in paragraph 7 below .

3. unaudited pro forma financial effects of the specific repurchase (“financial effects”)

Based on Brimstone’s audited results for the year ended 31 december 2013, the specific repurchase will have no effect on Brimstone’s earnings per share, headline earnings per share, net asset value per share and net tangible asset value per share as these metrics are already calculated on a net of treasury shares basis and as such the financial effects have not been disclosed . the only financial effect, which is approx-imately 0 .03% of Brimstone’s market capitalisation, will be the once-off impact of the expenses of the specific repurchase disclosed in paragraph 7 below . the financial effects are the responsibility of Brimstone’s directors .




4. directors and management 4.1 details of directors and management the names, qualifications, ages, business addresses and functions of the directors of Brimstone and directors of its major subsidiaries

are set out below .

name, qualifications and age Business address Functions

directors of brimstoneF robertson(59)

1st Floor, slade HouseBoundary terraces1 mariendahl LanenewlandsCape town, 7700

executive chairman

m a Brey BCompt (Hons), Ca (sa)(59)


Chief executive officer

LZ Brozin BComm, Bacc, Ca (sa)(58)

62 Wierda road eastWierda valleysandton, 2196

Financial director

pL Campher Becon (66)

Bridge HouseBoundary terraces1 mariendahl LanenewlandsCape town, 7700

Lead independent director

mJt Hewu B Comm (Hons), Bphil(50)

14 Queen victoria street7th Floor, Union HouseCape town, 8001

independent non-executive director

n Khan Bsc(Qs), maQs, aaarb(57)

2 orphan LaneCape town, 8001


mK ndebele Ba (economics); msW (social planning)( Usa denver)(64)

10 manatoka Closepinelands, 7405


La parker (60)

FpG House1 Fairways Closen1 City


Fd roman Ba; post Graduate secondary teacher’s diploma(50)

19 Glenluce drivedouglasdale, 2191Johannesburg


Kr molokondip (Building survey); Bsc (Qs), BCom, pGda, Ca(sa)(45)

8 melkhout Crescentplattekloof 3, 7500


directors of lion of africa who are not directors of brimstonema samieFCii, asrm, pmd (63)

sunridge park62 Wierda road eastWierda valleysandton, 2196

executive director




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name, qualifications and age Business address Functionsv mahlatiphd, msc (social policy & planning (49)



K LaglerB .Comm, post- graduate diploma in accounting, B .Comm (Hons) taxation, Ca (sa) (44)



L WortmBa(50)

271 veale streetnieuw muckleneukpretoria, 0181


directors of sea harvest who are not directors of brimstoneF rathebBsc eng (Hons) UCt, mBa(41)

1st Floor, Block CBoulevard office parksearle streetWoodstock, 7925

Chief executive officer

Jp de FreitasCa (sa)(44)


Chief financial officer

i esauB .Comm(45)

1st Floor Block CBoulevard office parksearle streetWoodstock, 7925

operations director

L penzhornB .Comm(68)


non-executive director

m norrisChemistry diploma, Bsc(67)



J HinsonB .Comm, Ca (sa)(40)

Kagiso tiso House100 West streetWierda valleysandton, 2196


t setshediBComm (Hons), Ca (sa)(33)

Kagiso tiso House100 West streetWierda valleysandton, 2196


K GeldenhuysBtech, mBa (UCt)(44)


sales and marketing director

t moodley Ba (Law) LLB(39)






4.2 abridged curricula vitaes of directors of brimstone and directors of its major subsidiaries of brimstone group

directors of brimstone

f robertson (executive chairman) executive chairman and co-founder of Brimstone, Fred

robertson is a leading figure in the south african business community, gaining experience on the national and interna-tional business stage through his directorships of remgro Limited, aon re africa (proprietary) Limited, old mutual Life assurance Company (south africa) Limited, chairman-ships of Lion of africa Life assurance Company Limited, Lion of africa insurance Company Limited, sea Harvest Corporation (proprietary) Limited, and House of monatic (proprietary) Limited .

ma brey (chief executive officer) Co-founder member and chief executive officer of Brimstone,

mustaq Brey is a Chartered accountant by profession . He currently serves as non-executive chairman of oceana Group Limited and Life Healthcare Group Holdings Limited, as well as on the boards of nedbank Limited, aon re africa (pty) Limited, Lion of africa insurance Company Limited, the scientific Group (pty) Limited and interfront soC Limited .

lZ brozin (financial director) part of the management team at Brimstone since october

1996,Lawrie has played a valuable role in the growth of Brimstone . Lawrie was appointed Financial director of Brimstone in 2007 . Lawrie is a non-executive director of nando’s Group Holdings Limited and alternate director of the scientific Group (pty) Limited and sea Harvest Corporation (proprietary) Limited .

pl campher after graduating from stellenbosch University Leon joined

old mutual in the investment division in 1973 . during the thirteen years with old mutual he was an investment analyst and portfolio manager . in 1985 he left old mutual to form syfrets managed assets where he was portfolio manager and Ceo .

in 1993 Leon Campher left syfrets and was one of the founding members of Coronation where he was Ceo of Coronation Fund managers and executive director of Coronation Holdings . during his time with Coronation he was also one of the founders of african Harvest and served as a director of african Harvest . in 2002 Leon Campher retired due to ill health .

in 2003 Leon Campher was instrumental in the formation of investment management association south africa (imasa) where he served as Ceo until 2008 . in 2008

Leon Campher was instrumental in the formation of association for savings and investment south africa (asisa) and was appointed Ceo on 1 october 2008 .

Leon Campher currently holds the following director-ships, asisa, asisa academy, international investment Fund association, sun international, Brimstone, saFCom and strate .

mJt hewu mzwandile Hewu is currently working as the Chief director

for service delivery management within the Western Cape department of social development . He worked as the Head of ministry in the same department for five years .

He was the former General manager of the ruling party (anC) in the parliament of the republic of south africa .

Having worked as a Head master in two different schools he has expertise in people and broader strategic man-agement . He served as the provincial Head of the biggest teacher’s Union in the country, sadtU, where he managed to build a number of value adding networks .

He has an excellent international and global exposure . His directorships include: amahlathi Logistics,

Khayamnandi investments, sharp move trading (pty) Ltd, southern ambitions and onyx Financial services .

He holds a BCom (Hons) degree from Unisa and a Bphil from the University of stellenbosch .

n Khan nazeem Khan was educated at athlone High school in the

Cape and attended the University of natal (durban) where he obtained a B .sc (Qs) degree . He has been in the pro-fession for the past 32 years and has varied experience in all aspects of property development . He is currently a director of the national firm Bham tayob Khan matunda Quantity surveyors with offices throughout south africa, india and mauritius . His current memberships include the association of arbitrators and the royal institution of Chartered surveyors . He is a Council member of the south african Council for Quantity surveyors as well as chairs the disci-plinary committee .

He serves on the boards of stonefountain properties (pty) Limited, perthpark properties (pty) Ltd . non-executive directorships include Brimstone investment Corporation and he currently chairs the Brimstone audit committee .

la parker a founder member of the Foodprop property Group Limited .

He is a director of al amien Foods CC and a board member of the red Cross Children’s Hospital .




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mK ndebele mpho was educated in south africa, Lesotho and the United

state of america and attained a Ba (economics) from UBLs and msW (social planning) from the University of denver . she is a past director of the trans-Caledon tunnel authority, siphumelele investment Corporation and the Black sash and is currently a trustee of the social Change assistance trust and impumelelo innovations awards and also serves as Canon of the diocese of Cape town and Chancellor of st . Georges Cathedral .

fd roman over a period of 10 years Felicia roman’s employment

record includes being the head of the regional office of the Friedrich ebert Foundation, the co-ordinator of the provincial development Council, the provincial director of the national Business initiative and the deputy Ceo of WesGro . she joined Kfm radio (pty) Ltd in may 2001 as managing director . in July 2006, Felicia joined sun international (pty) Ltd as the general manager of the Golden valley Casino in Worcester and has been promoted to senior management in Johannesburg . since leaving sun international at the end of 2012, Felicia has acquired 100% equity in Umlingo (pty) Ltd, a supplier to the casino industry and is the managing director .

Kr moloko Keneilwe is a Chartered accountant and a Quantity

surveyor . she has expertise in the built environment, auditing and investment management .

Keneilwe started her career as a Quantity surveyor with Grinaker Building, dawson & Frazer and Cp de Leeuw Quantity surveyors . after a period of six years in the con-struction industry, she went back to study to become a Chartered accountant . on completion of her articles at KpmG working in the financial services and tax divisions, she took up the position of development executive at spearhead properties .

thereafter, she joined Coronation Fund managers as a Fixed interest credit analyst and a member of the Coronation Credit Committee .

Keneilwe currently serves on the KWv Holdings, prescient Holdings and Fairvest property Holdings boards as an independent non-executive director . she is also on the board of ikamva Labantu Charitable trust, and is a trustee of ikamva Labantu investment trust .

directors of lion of africa who are not directors of brimstone

ma samie adam samie is chief executive officer and founder of Lion of

africa insurance Company Limited . He is also the chair-person of the south african special risks insurance association Limited (sasria) . He holds non-executive directorships with the south african actuarial development programme Limited, south african insurance association Limited, sasria (soe) Limited and sa nuclear pool administrators (pty) Limited, and is also a member of the short-term insurance advisory Board of the Financial services Board .

adam was the first black president of the insurance institute of south africa and he represented the short-term insurance industry in the development of the Financial sector Charter . He served as the first black chairman of the south african insurance association and, since its inauguration, is a sitting member of the Financial sector Charter Council . He is a chartered insurer, a fellow of the Chartered insurance institute in the UK and the insurance institute of south africa, and an associate of the institute of risk management of south africa . adam, a graduate of the management development program of the Graduate school of Business at the University of Cape town, he also holds a graduate diploma in Company directorship from the Graduate institute of management and technology and is a member of the institute of directors as well as the institute of Corporate ethics . He was recently appointed as non-executive Chairman of sasria (soe) Limited and is a member of the executive Committee of the insurance industry task Group for sustainability in the insurance sector .

v mahlati dr vuyo mahlati obtained her phd from the University of

stellenbosch . Her thesis focusing on the role of value chains in mainstreaming rural entrepreneurs into global markets was the only one selected by the Faculty of economic and management sciences to be presented at the University’s new voices in science Colloquium .

as a Lion of africa insurance independent Board member vuyo draws from vast experience as a policy spe-cialist trained in the UK London school of economics as well as her corporate leadership and entrepreneurship . she has served two terms as the Chairperson of the south african post office Board of directors which includes the post Bank . she previously served for two terms on the Financial markets advisory Board as well as a member of the Financial services Board Licensing Committee . she was a board member of fund manager Umbono Capital (now one stone), and was a director of micro Finance south africa assisting with the




transformation of micro lenders to align with the national Credit act . entrepreneurial experience includes participation in major business ventures that include the listed sasol oil and tongaat Hullet .

vuyo was appointed in may 2010 by the president to serve as one of the inaugural members of the national planning Commission for five years . she is currently the president of international Women’s Forum south africa . vuyo is the recipient of the 2008 Black management Forum presidential award for transformational Leadership . as a recognized global thought Leader she participated in the 2011 aspen seminar in Colorado, Usa .

K lagler Kari Lagler is a Chartered accountant (south africa) with a

B .Com (Hons) in taxation . she has over 20 years of expe-rience in insurance and financial services . Kari began her career with KpmG in 1992 and was appointed as a partner in 1999 . she later joined old mutual, serving on several Boards as a representative of the Group, as well as on the Life offices association (now called the association for savings and investments south africa) taxation standing Committee . since 2008 Kari has operated an independent consulting practice . she also serves as an accountant member of the tax Court .

l wort Logan Wort is the executive secretary of ataF (african tax

administration Forum); a multi-lateral organisation of the Heads of african revenue administrations . His role as executive secretary is to manage the african agenda in global tax and development . He is responsible for managing the business of ataF aimed at building strong and capable tax administrations in africa . the programmes of ataF include capacity development and leadership, establishing an african tax technical assistance programme as well as building inter-continental and international tax programs and systems for sustainable revenue collection in africa .

Logan is a Group executive at the south african revenue service . prior to being appointed as the Head of ataF, he was responsible for the organisation’s strategic engagements with the business, government and international affairs . during this time he also managed the Communication and marketing division .

prior to working at sars, mr Wort occupied the position of Chief operating officer at the south african national treasury . His previous position included being responsible for strategic positioning, management coordi-nation and risk management within the ministry of Finance, where he was spokesperson for the south african minister of Finance for eight years . mr Wort also served as the director of the Finance and investment sector Co-ordinating Unit of

the south african development Community (sadC) . Logan holds a masters degree in public administration

from the University of the Western Cape .

directors of sea harvest who are not directors of brimstone

f ratheb Felix completed his Bsc engineering degree (Hons) in 1995

at Wits University and went on to be an international trade executive working in various locations in the Far east . He completed his diploma in international trade in 1997 and successfully operated his own trading business in south africa . in 2000 he completed his mBa at UCt where he topped his class and was awarded the old mutual Gold medal for academic excellence . Felix was also a visiting lecturer at UCt for 5 years where he lectured on Business strategy and consulted to various firms on strategy projects .

Felix joined sea Harvest in 2003 as Commercial manager, was promoted to sales & marketing director in 2007, and in 2014 he was appointed as Chief executive officer .

J hinson Jacob is the Chief investment officer of Kagiso, having been

appointed in september 2011 . prior to joining Kagiso he was a senior director at actis LLp based in Johannesburg . in addition to having concluded several transactions in south africa, Jacob has been involved in transactions across emerging markets, most notably in West africa where he led one of the first LBo’s in that market, east africa, Brazil and China . While at actis LLp he was also responsible for managing and co-ordinating the industrial sector focus across the various offices in africa .

Jacob started his career in Corporate Finance initially within pwC’s corporate finance team and subsequently as a senior associate at deutsche Bank’s corporate finance division in Johannesburg .

Jacob currently serves as a non-executive director of actom south africa (pty) Limited and sea Harvest . Jacob obtained his BCom degree from the University of Cape town and completed his training as a chartered accountant with pwC . Jacob is a CFa charter holder and is registered with the CFa institute in the Usa .

t setshedi tshepo holds a Bachelor of Commerce Honours degree from

the University of pretoria and is a qualified Chartered accountant . He completed his articles with pricewaterhouseCoopers in Johannesburg and Boston massachusetts . prior to joining Kagiso he was with eskom treasury and then rejoined pWC as a manager in the




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financial services division where he gained extensive expe-rience in financial reporting and compliance . He is involved in transaction origination, execution and post investment value management and participates in various board and board sub-committees of portfolio companies .

Jp de freitas John paul is a qualified Chartered accountant and trained at

mazars in durban . in 1997 he was appointed as Finance director of pentravel (pty) Ltd, which at the time was south africa’s largest independently owned retail travel group . in 1999 John paul emigrated to the UK and spent two years in the contract market . in 2002 John paul joined aviva plc, and held a number of senior roles . in 2009 he was appointed Finance & Commercial director of Bupa Health and Wellbeing, the UK’s largest private medical insurer with over 3 million members and an annual turnover of £1 .7 bn . He had a wide remit and was responsible for Financial reporting; planning and analysis; pricing & actuarial; Governance, risk & Compliance; Legal and strategy . during this time he managed a team of over 200 professionals . in January 2013 John paul returned to sa and established a boutique finance house specialising in working capital funding to sme businesses . in 2014 he joined sea Harvest as the Chief Financial officer .

I esau irvin was born in piketberg . He completed his B .Com at the

University of stellenbosch . irvin joined sea Harvest in 1998 as Fleet management accountant . in 2006 he was appointed as operations executive and in July 2009 he became operations director of the company .

l penzhorn Louis graduated from the University of stellenbosch with a

B .Comm degree in 1969 . after graduating he held a number of marketing positions in multinational FmCG companies and joined sea Harvest as marketing manager in 1976 . Louis was appointed as a director of the Company in 1983 and as managing director in 1996 . He served a number of terms as Chairman of the south african deep sea trawling association and retired from sea Harvest Corporation in 2006 .

m norris mike has over 32 years experience in the pharmaceutical and

FmCG industries . He started his career with Unilever south africa and held various senior technical positions both in south africa and the United Kingdom . during this period he graduated with a Chemistry diploma and Bsc degree from natal University . after leaving Unilever in 1982 he joined CG smith/tiger Brands and held Board, managing director and Ceo positions within the group . during his pharmaceutical Ceo responsibilities he served on the executive of the pharmaceutical manufacturers association of south africa and was president for four terms . He retired from tiger Brands in 2007 and is currently a non-executive Board member of sea Harvest Holdings and vuna Fishing .

K geldenhuys Konrad has a long history in sales and marketing, including

operating his own business from 1992 until 2003 . For two years during this period Konrad was a part-time lecturer in public relations and media at tUt . in 2003 he was employed full time by the southern african affiliate of a German electronics firm, which was one of his clients in Johannesburg . Konrad completed a B-tec in international Communications at tUt in 2005 and in 2008 he relocated to Cape town to complete a full-time mBa at UCt . in January 2009 Konrad joined sea Harvest as Commercial manager . From 2013 Konrad headed up sea Harvest’s international Business until he was appointed as sales and marketing director in January 2014 .

t moodley tiloshani joined Brimstone investment Corporation Limited,

a Jse listed Company, in 2001 as the then Ceo’s profes-sional assistant and became Brimstone’s Compliance officer in 2004 . she was appointed as Brimstone’s Company secretary in 2010 . she is responsible for the legal review of agreements and monitoring of Brimstone’s continuing legal obligations and responsible for the establishment, implemen-tation and maintenance of the corporate governance framework that protects and facilitates the manner in which the organisation is directed, administered and controlled .

tiloshani serves as a director of sea Harvest Corporation (pty) Limited, the scientific Group (pty) Limited, afena Capital (pty) Limited and serves as Company secretary to Lion of africa insurance Company Limited .




share capital of brimstone the share capital before and after the specific repurchase is as follows:

before the specific repurchaseauthorised share capital r’000ordinary shares500 000 000 shares of 0 .1 cent each 500 000“n” ordinary shares1 000 000 000 shares of 0 .001 cent each 10 000

Issued share capitalordinary shares46 775 135 shares of 1 cent each 46 775“n” ordinary shares267 144 624 shares of 0 .001 cent each 2 671

after the specific repurchaseauthorised share capitalordinary shares500 000 000 shares of 0 .1 cent each“n” ordinary shares1 000 000 000 shares of 0 .001 cent each

Issued share capitalordinary shares43 145 435 shares of 0 .1 cent each“n” ordinary shares245 246 481 shares of 0 .001 cent each

500 000

10 000

43 145

2 452

after the specific repurchase, the company holds 385 611 Brimstone ordinary shares and 43 475 230 Brimstone “n” ordinary shares respectively as treasury shares .




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6. source of funds the specific repurchase is an internal, cashless transaction

and no funds are being utilised to effect the specific repur-chase .

7. expenses relating to the specific repurchase the expenses relating to the specific repurchase are estimated

at approximately r1 386 907 (excluding vat) and comprise:

description rnedbank Capital (investment bank and sponsor) 125 000Bridge Capital (independent expert)Cliffe dekker Hofmeyr inc (attorneys)trp fees

125 000125 000142 500

Jse documentation fees 18 519securities transfer tax 850 888total 1 386 907

8. salient dates and times the salient dates and times for the specific repurchase are as

follows:

2014record date for shareholders to be entitled to receive this notice of annual general meeting

thursday, 20 march

integrated report of which the notice of annual general meeting forms part posted to shareholders on

Friday, 28 march

announcement regarding posting of inte-grated report on

monday, 31 march

Last day to trade in order to be entitled to attend, participate and vote at the annual general meeting Friday, 9 mayrecord date to be entitled to attend, partic-ipate and vote at the annual general meet-ing Friday, 16 mayForms of proxy to be received no later than 17:00 on

monday, 19 may

annual general meeting at 18:30 onWednesday,

21 mayresults of annual general meeting released on sens on

thursday, 22 may

Cancellation and delisting of 3 629 700 Brimstone ordinary shares and 21 898 143 Brimstone “n” ordinary shares on or about Friday, 30 may

Notes:

1. All times indicated above are South African times.

2. These dates and times are subject to amendment. Any such amendment will be released on

SENS.

9. consents the investment bank and sponsor, independent expert and

attorneys have consented in writing to act in the capacities stated and to their names being stated in this notice, and in the case of the independent expert, reference to their report in the form and context in which it appears, and have not withdrawn their consents as at the date of this notice .

10. documents available for inspection the following documents, or copies thereof, will be available

for inspection during normal business hours at the registered office of Brimstone and at the offices of nedbank Capital (3rd Floor, F Block, 135 rivonia road, sandown, 2196), from the date of this notice up to and including the date of the annual general meeting:

– the memorandum of incorporation of Brimstone and and its subsidiaries;

– historical annual financial statements of Brimstone for the three years ended 31 december 2013, 2012 and 2011;

– the trp approval letter; – the signed independent expert’s report; and – the written consents of the professional advisors .




annexure 2Independent expert’s report in respect of the specific repurchase

the directors 1st Floor, slade HouseBoundary terraces1 mariendahl Lane, newlands Cape town7700 south africa

4 march 2014

dear sirs,

Independent expert report in respect of the specific repur-chase of shares by brimstone Investment corporation limited (“brimstone”) from its wholly owned subsidiary septen Investments (proprietary) limited (“septen”)

IntroductionBrimstone has resolved to implement a specific repurchase of ordinary shares and n ordinary shares from septen, a wholly-owned subsidiary for a combined value of r340 355 143 (“the specific repurchase” or “the transaction”) . the ordinary shares and “n” ordinary shares to be repurchased from septen are currently held and recognised as treasury shares in the annual financial statements of Brimstone . the details of which are set out below:– 3 629 700 Brimstone ordinary shares at r13 .53 per Brimstone

ordinary share at a total value of r49 109 841; and– 21 898 143 Brimstone “n” ordinary shares at r13 .30 per

Brimstone “n” ordinary share at a total value of r291 245 302 .

in terms of section 48(8)(b) of the Companies act, no . 71 of 2008 (“the Companies act”), a decision by the board of a company to repurchase its shares is subject to the requirements of sections 114 and 115 of the Companies act if, considered alone, or together with other transactions in an integrated series of transactions, it involves the acquisition by a company of more than 5% of the issued shares of any particular class of the company’s shares . accordingly, in terms of section 114(2) of the Companies act read together with regulation 90 of the Companies regulations, 2011 (“the Companies regulations”), the board of directors (“the Board”) must retain an independent expert to compile a report thereon .

scopeBridge Capital advisors (proprietary) Limited (“Bridge Capital”) has been appointed by the Board as the independent expert to

advise, in accordance with the Companies act and the Companies regulations on whether the terms and conditions of the specific repurchase are fair and reasonable as far as the Brimstone share-holders are concerned .

responsibilityCompliance with the Companies act is the responsibility of the Board . our responsibility is to report on the terms and conditions of the specific repurchase as they relate to Brimstone share-holders . We confirm that our fair and reasonable opinion has been provided to the Board for the sole purpose of assisting the Board in forming and expressing an opinion for the benefit of the Brimstone shareholders, which opinion the Board will distribute to the Brimstone shareholders in a circular (“the specific repurchase Circular”) on or about 28 march 2014 . We understand that the results of our work will be used by the Board to satisfy the requirements of the Companies act .

definition of the terms “fair” and “reasonable” a transaction will generally be considered fair to a company’s shareholders if the benefits received by shareholders, as a result of a corporate action, are equal to or greater than the value surren-dered by a company . the assessment of fairness is primarily based on quantitative considerations . the specific repurchase may be considered fair if the value attributable to Brimstone and its shareholders post the specific repurchase exceeds or is equal to the attributable value prior to the specific repurchase . the assessment of reasonableness is generally based on quali-tative considerations surrounding the specific repurchase . even though the consideration may differ from the market value of the assets being acquired, a transaction may still be fair and rea-sonable after considering other significant qualitative factors . We have applied the aforementioned principles in preparing our opinion . this fair and reasonableness opinion does not purport to cater for an individual shareholder’s position but rather the general body of shareholders subject to the specific repurchase . a shareholder’s decision regarding fair and reasonableness of the terms of the specific repurchase may be influenced by their par-ticular circumstances (for example taxation and the original price paid for the shares) .

sources of information in the course of our valuation analysis, we relied upon financial and other information, including prospective financial information, obtained from Brimstone management, their advisors and from various public, financial and industry sources . our conclusion is dependent on such information being complete and accurate in all material respects .




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the principal sources of information used in performing our indic-ative valuation include: – resolutions taken on the specific repurchase by Brimstone

(“resolutions”); – the specific repurchase Circular; – the annual reports of Brimstone for the years ended

31 december 2013 and 31 december 2012;– other financial and non-financial information and

assumptions made by management and discussions held with management, directors, and Brimstone advisors regarding Brimstone operations;

– discussions with Brimstone directors, management and advisors regarding the financial information relating to prevailing market, economic, legal and other conditions which may affect the underlying value and the rationale for the specific repurchase;

– discussions with Brimstone directors relating to the short and medium term strategy of Brimstone;

– the Brimstone intrinsic net asset value valuation (“inav”) as at 30 June 2013 as prepared by the Board;

– the Brimstone inav valuation as at 31 december 2013 as prepared by the Board, including valuations of each of the underlying investments;

– option valuations for the options held by Brimstone in nedbank Limited, old mutual pLC, mtn Zakhele Limited and tiger Brands Limited (“investment options”) as at 31 december 2013, as performed by Financial modelling agency (proprietary) Limited using Black scholes options pricing methodology;

– terms of all funding arrangements entered into by the Company, including the most recent account statements;

– publicly available information relating to Brimstone and its underlying investments, including market data, share price and volume data that we deemed to be relevant; and

– publicly available information relating to the industry in which Brimstone operates that we deemed relevant, including company announcements, analysts’ reports and media articles .

assumptionsWe have arrived at our opinion based on the following assumptions: – that the terms, conditions and structure of the specific

repurchase are legally enforceable; – that reliance can be placed on the historical financial infor-

mation of Brimstone and its underlying investments; – the current economic, regulatory and market conditions will

not change materially; – neither Brimstone, nor any of its group companies are

involved in any material legal proceedings; – Brimstone has no outstanding disputes with any regulatory

body, including the south african revenue service; – there are no undisclosed contingencies that could affect the

value of Brimstone;

– the structure of the specific repurchase will not give rise to any undisclosed tax liabilities or any other material expenses; and

– reliance can be placed on the representations made by Brimstone management and their advisors during the course of forming this opinion .

appropriateness and reasonableness of underly-ing information and assumptionsWe satisfied ourselves as to the appropriateness and reasona-bleness of the information and assumptions employed in arriving at our opinion by: – placing reliance on representations made by Brimstone man-

agement and their advisors during the course of forming this opinion;

– Considering the historical trends of such information and assumptions;

– Comparing and corroborating such information and assump-tions with external sources of information, if such information is available; and

– determining the extent to which representations from man-agement and other industry experts were confirmed by docu-mentary evidence as well as our understanding of Brimstone and the economic environment in which it operates .

proceduresin arriving at our opinion, we relied upon financial and other information, obtained from management together with industry-related and other information in the public domain . our con-clusion is dependent on such information being accurate in all material respects .

in arriving at our opinion we have, inter alia, undertaken the following procedures in evaluating the fair and reasonableness of the specific repurchase: – reviewed and analysed the audited financial results of

Brimstone for the years ended 31 december 2013 and 31 december 2012;

– reviewed and analysed the audited financial results of Brimstone’s listed investments for the past two years;

– reviewed the terms and conditions of the resolutions; – reviewed the reasonableness of the information made

available by and from discussions held with management, including directors of Brimstone such as, inter alia:

– reviewed the rationale for the specific repurchase; – reviewed the events leading up to the specific repurchase; – reviewed the Brimstone intrinsic net asset value valuation

as at 30 June 2013;– reviewed and analysed the Brimstone inav valuation as at

31 december 2013;– reviewed and analysed the valuations supplied for

Brimstone’s underlying investments as at 31 december 2013;




– reviewed and analysed the investment options valuations supplied for Brimstone’s underlying investments as at 31 december 2013;

– reviewed and analysed the forecasts supplied for underlying investments, where applicable, in determining value utilising a discounted Cash flow methodology;

– the current market conditions relating to Brimstone’s investment companies;

– such other matters as we considered necessary; – Where relevant, corroborated representations made by man-

agement to source documents; – reviewed certain publicly available information relating to

Brimstone that we have deemed relevant; – reviewed the specific repurchase Circular; – obtained letters of representation from management asserting

that we have been provided with all relevant information and that no material information was omitted and that all such information provided to us is accurate in all respects;

– Considered other relevant facts and information relevant to concluding this opinion; and

– Considered key external and internal value drivers . Key external value drivers identified were prevailing market and industry conditions . Key internal value drivers included, where relevant, the maintainable earnings and earnings margins of Brimstone’s investment companies . a sensitivity analysis was conducted, where practical, utilising key value drivers .

valuation approach in considering the specific repurchase, Bridge Capital performed an independent valuation of Brimstone and detail analysis of the specific repurchase to determine whether specific repurchase is fair to Brimstone and its shareholders .

For the purposes of our valuation of Brimstone, we applied the following to determine Brimstone’s intrinsic net asset value:– We applied the 30 day volume weighted average price as at

1 February 2014 on Brimstone’s listed underlying invest-ments;

– We reviewed and adjusted the unlisted underlying invest-ments valuations which were valued at 31 december 2013 considering any movements in peer’s market prices and pre-vailing conditions from the date of the valuation to the date of this report;

– We re-valued the investment options using Black scholes options pricing methodology using 1 February 2014 as the effective date; and

– We reviewed Brimstone’s share trading history, share trading liquidity, historical discount to intrinsic net asset value, share free float, analyst reports and confirmed that no indica-tions exist in the market of an anomaly in the Brimstone share price .

opinionthe outcome of our valuation resulted in a valuation range between r13 .41 to r13 .46 per Brimstone ordinary share, with a core value of r13 .30 per share . the valuation for the Brimstone “n” ordinary shares resulted in a valuation range between r12 .96 to r13 .28 per Brimstone “n” ordinary share, with a core value of r13 .12 . in considering the valuation listed above, Brimstone share-holders should take particular notice that the actual market value achieved in a specific transaction may be higher or lower than our estimate of the market value depending upon the circumstances of the transaction (for example strategic considerations of the purchaser), the nature of the business (for example the purchaser’s perception of potential synergies) . there will be no effect on the rights and interest of Brimstone shareholders due to the fact that the specific repurchase is done from wholly-owned subsidiaries of Brimstone, therefore Brimstone will be in a similar position pre and post the corporate action . the specific repurchase will not have any material adverse effect on the Brimstone or on the business and prospects of the Brimstone . subject to the aforegoing assumptions, based on our analysis and after taking into account all financial and non-financial con-siderations, we are of the opinion that the specific repurchase is fair and reasonable to the ordinary shareholders of Brimstone .

limiting conditions this opinion is provided to the Board in connection with and for the purpose of the specific repurchase for the sole purpose of assisting the Board in forming and expressing an opinion for the benefit of the Brimstone shareholders . this opinion is prepared solely for the Board and therefore should not be regarded as suitable for use by any other party or give rise to third party rights . the budgeted forecasts of Brimstone, and its underlying investments, relates to future events and is based on assumptions, which may not remain valid for the whole of the relevant period . Consequently this information cannot be relied upon to the same extent as that derived from audited financial statements for completed accounting periods . We express no opinion as to how closely actual results will correspond to the budget provided by Brimstone management . We relied upon the accuracy of the information used by us in deriving our opinion, albeit that, where practicable, we have cor-roborated the reasonableness of such information and assumptions through, amongst other things, reference to historic precedent and our knowledge and understanding . Whilst our work has involved an analysis of the annual financial statements and other infor-mation provided to us, our engagement does not constitute nor does it include an audit conducted in accordance with applicable auditing standards . accordingly we assume no responsibility and make no representations with respect to the accuracy or com-




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pleteness of any information provided to us in respect of the specific repurchase . the opinion expressed is necessarily based upon information available to us, the financial, regulatory, securities market and other conditions and circumstances existing and disclosed to us as at the date hereof . We have furthermore assumed that all condi-tions precedent, including any material regulatory and other approvals required in connection with the specific repurchase have been or will be properly fulfilled . subsequent developments may affect our opinion, however we are under no obligation to update, revise or re-affirm such .

sections 115 and 164 of the companies actsections 115 and 164 of the Companies act have been included as an annexure to the circular, to which this opinion forms part thereof .

Independence and additional regulatory disclosures We confirm that Bridge Capital holds no shares in Brimstone, directly or indirectly . We have no interest, direct or indirect, bene-ficial or non-beneficial, and we are not related to a person who has or has had such interest in Brimstone within the immediately preceding two years or in the outcome of the specific repurchase . the directors, partners, officers and employees of Bridge Capital allocated to this assignment have the necessary qualifications, expertise and competencies to:

(i) understand the specific repurchase; (ii) evaluate the consequences of the specific repurchase and(iii) assess the effect of the specific repurchase on the value of

the shares and on the rights and interests of the Brimstone shareholders, or a creditor of Brimstone and are able to express opinions, exercise judgement and make decisions impartially in carrying out this assignment .

Furthermore, we confirm that our professional fee for the opinion together is r125 000 (excluding vat), payable in cash, and is not contingent on the outcome of the specific repurchase .

consent We hereby consent to the inclusion of this opinion and references thereto, in whole or in part, in the form and context in which they appear to be included in any required regulatory announcement or documentation regarding the specific repurchase .

Yours faithfully

Jonathan fisherDirectorBridge Capital advisors (pty) Limited




annexure 3sections 115 and 164 as extracted from the companies act

1. “115. required approval for transactions contemplated in part

despite section 65, and any provision of a company’s memorandum of incorporation, or any resolution adopted by its board or holders of its securities, to the contrary, a company may not dispose of, or give effect to an agreement or series of agreements to dispose of, all or the greater part of its assets or undertaking, implement an amalgamation or a merger, or implement a scheme of arrangement, unless:

(a) the disposal, amalgamation or merger, or scheme of arrangement:

(i) has been approved in terms of this section; or (ii) is pursuant to or contemplated in an approved

business rescue plan for that company, in terms of Chapter 6; and

(b) to the extent that parts B and C of this Chapter, and the takeover regulations, apply to a company that proposes to:

(i) dispose of all or the greater part of its assets or undertaking;

(ii) amalgamate or merge with another company; or (iii) implement a scheme of arrangement, the panel has

issued a compliance certificate in respect of the transaction, in terms of section 119(4)(b), or exempted the transaction in terms of section 119(6) .

2. a proposed transaction contemplated in subsection (1) must be approved:

(a) by a special resolution adopted by persons entitled to exercise voting rights on such a matter, at a meeting called for that purpose and at which sufficient persons are present to exercise, in aggregate, at least 25% of all of the voting rights that are entitled to be exercised on that matter, or any higher percentage as may be required by the company’s memorandum of incorporation, as contemplated in section 64(2); and

(b) by a special resolution, also adopted in the manner required by paragraph (a), by the shareholders of the company’s holding company if any, if:

(i) the holding company is a company or an external company;

(ii) the proposed transaction concerns a disposal of all or the greater part of the assets or undertaking of the subsidiary; and

(iii) having regard to the consolidated financial state-ments of the holding company, the disposal by the subsidiary constitutes a disposal of all or the greater part of the assets or undertaking of the holding company; and

(c) by the court, to the extent required in the circumstances and manner contemplated in subsections (3) to (6) .

3. despite a resolution having been adopted as contem-plated in subsections (2) (a) and (b), a company may not proceed to implement that resolution without the approval of a court if:

(a) the resolution was opposed by at least 15% of the voting rights that were exercised on that resolution and, within five business days after the vote, any person who voted against the resolution requires the company to seek court approval; or

(b) the court, on an application within 10 business days after the vote by any person who voted against the resolution, grants that person leave, in terms of subsection (6), to apply to a court for a review of the transaction in accordance with subsection (7) .

4. for the purposes of subsections (2) and (3), any voting rights controlled by an acquiring party, a person related to an acquiring party, or a person acting in concert with either of them, must not be included in calculating the percentage of voting rights:

(a) required to be present, or actually present, in determining whether the applicable quorum requirements are satisfied; or

(b) required to be voted in support of a resolution, or actually voted in support of the resolution .

5. If a resolution requires approval by a court as contem-plated in terms of subsection (3) (a), the company must either:

(a) within 10 business days after the vote, apply to the court for approval, and bear the costs of that application; or

(b) treat the resolution as a nullity .

6. on an application contemplated in subsection (3)(b), the court may grant leave only if it is satisfied that the applicant:

(a) is acting in good faith; (b) appears prepared and able to sustain the proceedings;

and (c) has alleged facts which, if proved, would support an

order in terms of subsection (7) .

7. on reviewing a resolution that is the subject of an application in terms of subsection (5)(a), or after granting leave in terms of subsection (6), the court may set aside the resolution only if:

(a) the resolution is manifestly unfair to any class of holders of the company’s securities; or

(b) the vote was materially tainted by conflict of interest,




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inadequate disclosure, failure to comply with the act, the memorandum of incorporation or any applicable rules of the company, or other significant and material proce-dural irregularity .

8. the holder of any voting rights in a company is entitled to seek relief in terms of section 164 if that person:

(a) notified the company in advance of the intention to oppose a special resolution contemplated in this section; and

(b) was present at the meeting and voted against that special resolution .

9. If a transaction contemplated in this part has been approved, any person to whom assets are, or an under-taking is, to be transferred, may apply to a court for an order to effect:

(a) the transfer of the whole or any part of the undertaking, assets and liabilities of a company contemplated in that transaction;

(b) the allotment and appropriation of any shares or similar interests to be allotted or appropriated as a consequence of the transaction;

(c) the transfer of shares from one person to another; (d) the dissolution, without winding-up, of a company, as

contemplated in the transaction; (e) incidental, consequential and supplemental matters that

are necessary for the effectiveness and completion of the transaction; or

(f) any other relief that may be necessary or appropriate to give effect to, and properly implement, the amalgamation or merger .”

1. “164. dissenting shareholders’ appraisal rights this section does not apply in any circumstances relating to a

transaction, agreement or offer pursuant to a business rescue plan that was approved by shareholders of a company, in terms of section 152 .

2. If a company has given notice to shareholders of a meet-ing to consider adopting a resolution to:

(a) amend its memorandum of incorporation by altering the preferences, rights, limitations or other terms of any class of its shares in any manner materially adverse to the rights or interests of holders of that class of shares, as contemplated in section 37(8); or

(b) enter into a transaction contemplated in section 112, 113 or 114, that notice must include a statement informing shareholders of their rights under this section .

3. at any time before a resolution referred to in subsection (2) is to be voted on, a dissenting shareholder may give the company a written notice objecting to the resolution.

4. within 10 business days after a company has adopted a resolution contemplated in this section, the company must send a notice that the resolution has been adopted to each shareholder who:

(a) gave the company a written notice of objection in terms of subsection (3); and

(b) has neither: (i) withdrawn that notice; nor (ii) voted in support of the resolution .

5. a shareholder may demand that the company pay the shareholder the fair value for all of the shares of the company held by that person if:

(a) the shareholder: (i) sent the company a notice of objection, subject to

subsection (6); and (ii) in the case of an amendment to the company’s

memorandum of incorporation, holds shares of a class that is materially and adversely affected by the amendment;

(b) the company has adopted the resolution contemplated in subsection (2); and

(c) the shareholder: (i) voted against that resolution; and (ii) has complied with all of the procedural require-

ments of this section .

6. the requirement of subsection (5)(a)(i) does not apply if the company failed to give notice of the meeting, or failed to include in that notice a statement of the share-holders rights under this section.

7. a shareholder who satisfies the requirements of sub-section (5) may make a demand contemplated in that subsection by delivering a written notice to the company within:

(a) 20 business days after receiving a notice under sub-section (4); or

(b) if the shareholder does not receive a notice under sub-section (4), within 20 business days after learning that the resolution has been adopted .

8. a demand delivered in terms of subsections (5) to (7) must also be delivered to the panel, and must state:

(a) the shareholder’s name and address; (b) the number and class of shares in respect of which the

shareholder seeks payment; and (c) a demand for payment of the fair value of those shares .




9. a shareholder who has sent a demand in terms of subsections (5) to (8) has no further rights in respect of those shares, other than to be paid their fair value, unless:

(a) the shareholder withdraws that demand before the company makes an offer under subsection (11), or allows an offer made by the company to lapse, as contemplated in subsection (12)(b);

(b) the company fails to make an offer in accordance with subsection (11) and the shareholder withdraws the demand; or

(c) the company, by a subsequent special resolution, revokes the adopted resolution that gave rise to the shareholder’s rights under this section .

10. If any of the events contemplated in subsection (9) occur, all of the shareholder’s rights in respect of the shares are reinstated without interruption.

11. within five business days after the later of: (a) the day on which the action approved by the resolution

is effective; (b) the last day for the receipt of demands in terms of sub-

section (7)(a); or (c) the day the company received a demand as contemplated

in subsection (7)(b), if applicable, the company must send to each shareholder who has sent such a demand a written offer to pay an amount considered by the company’s directors to be the fair value of the relevant shares, subject to subsection (16), accompanied by a statement showing how that value was determined .

12. every offer made under subsection (11): (a) in respect of shares of the same class or series must be on

the same terms; and (b) lapses if it has not been accepted within 30 business days

after it was made .

13 If a shareholder accepts an offer made under subsection (12):

(a) the shareholder must either in the case of: (i) shares evidenced by certificates, tender the relevant

share certificates to the company or the company’s transfer agent; or

(ii) uncertificated shares, take the steps required in terms of section 53 to direct the transfer of those shares to the company or the company’s transfer agent; and

(b) the company must pay that shareholder the agreed amount within 10 business days after the shareholder accepted the offer and:

(i) tendered the share certificates; or

(ii) directed the transfer to the company of uncertifi-cated shares .

14. a shareholder who has made a demand in terms of sub-sections (5) to (8) may apply to a court to determine a fair value in respect of the shares that were the subject of that demand, and an order requiring the company to pay the shareholder the fair value so determined, if the company has:

(a) failed to make an offer under subsection (11); or (b) made an offer that the shareholder considers to be inade-

quate, and that offer has not lapsed .

15. on an application to the court under subsection (14): (a) all dissenting shareholders who have not accepted an

offer from the company as at the date of the application must be joined as parties and are bound by the decision of the court;

(b) the company must notify each affected dissenting share-holder of the date, place and consequences of the appli-cation and of their right to participate in the court pro-ceedings; and

(c) the court: (i) may determine whether any other person is a dis-

senting shareholder who should be joined as a party;

(ii) must determine a fair value in respect of the shares of all dissenting shareholders, subject to subsection (16);

(iii) in its discretion may: (aa) appoint one or more appraisers to assist it in

determining the fair value in respect of the shares; or

(bb) allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the reso-lution is effective, until the date of payment;

(iv) may make an appropriate order of costs, having regard to any offer made by the company, and the final determination of the fair value by the court; and

(v) must make an order requiring: (aa) the dissenting shareholders to either withdraw

their respective demands or to comply with subsection (13)(a); and

(bb) the company to pay the fair value in respect of their shares to each dissenting shareholder who complies with subsection (13)(a), subject to any conditions the court considers necessary to ensure that the company fulfils its obligations under this section .




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15a at any time before the court has made an order contem-plated in subsection (15)(c)(v), a dissenting shareholder may accept the offer made by the company in terms of subsection (11), in which case:

(a) that shareholder must comply with the requirements of subsection 13(a); and

(b) the company must comply with the requirements of sub-section 13(b) .

16. the fair value in respect of any shares must be deter-mined as at the date on which, and time immediately before, the company adopted the resolution that gave rise to a shareholder’s rights under this section.

17. If there are reasonable grounds to believe that compli-ance by a company with subsection (13)(b), or with a court order in terms of subsection (15)(c)(v)(bb), would result in the company being unable to pays its debts as they fall due and payable for the ensuing 12 months:

(a) the company may apply to a court for an order varying the company’s obligations in terms of the relevant sub-section; and

(b) the court may make an order that: (i) is just and equitable, having regard to the financial

circumstances of the company; and (ii) ensures that the person to whom the company owes

money in terms of this section is paid at the earliest possible date compatible with the company satis-fying its other financial obligations as they fall due and payable .

18. If the resolution that gave rise to a shareholder’s rights under this section authorised the company to amalgam-ate or merge with one or more other companies, such that the company whose shares are the subject of a demand in terms of this section has ceased to exist, the obligations of that company under this section are obli-gations of the successor to that company resulting from the amalgamation or merger.

19. for greater certainty, the making of a demand, tender-ing of shares and payment by a company to a share-holder in terms of this section do not constitute a dis-tribution by the company, or an acquisition of its shares by the company within the meaning of section 48, and therefore are not subject to:

(a) the provisions of that section; or (b) the application by the company of the solvency and

liquidity test set out in section 4 .

20. except to the extent: (a) expressly provided in this section; or (b) that the panel rules otherwise in a particular case, a

payment by a company to a shareholder in terms of this section does not obligate any person to make a compa-rable offer under section 125 to any other person .”




currIculum vItae

frederick robertson executive chairman and co-founder of Brimstone, Fred robertson is a leading figure in the south african business community, gaining experience on the national and international business stage through his directorships of remgro Limited, aon re africa (pty) Limited, old mutual Life assurance Company (south africa) Limited, chairmanships of Lion of africa Life assurance Company Limited, Lion of africa insurance Company Limited, sea Harvest Corporation (pty) Limited, and House of monatic (pty) Limited .

mustaq ahmed enus-breyCo-founder and chief executive officer of Brimstone, mustaq Brey is a Chartered accountant by profession . He currently serves as non-executive chairman of oceana Group Limited and Life Healthcare Group Holdings Limited, as well as on the boards of nedbank Limited, aon re africa (pty) Limited, Lion of africa insurance Company Limited, the scientific Group (pty) Limited and interfront soC Ltd .

mzwandile John terrold hewumzwandile Hewu is currently working as the Chief director for service delivery management within the Western Cape department of social development . He worked as the Head of ministry in the same department for five years . He was the former General manager of the ruling party (anC) in the parliament of republic of south africa . Having worked as a Head master in two different schools he has expertise in people and broader strategic management . He served as the provincial Head of the biggest teacher’s Union in the country, sadtU, where he managed to build a number of value adding networks . His directorships include: amahlathi Logistics, Khayamnandi investments, sharp move trading (pty) Ltd, southern ambitions and onyx Financial services . He holds a BCom (Hons) degree from Unisa and a Bphil from the University of stellenbosch .

felicia dawn roman over a period of 10 years Felicia roman’s employment record includes being the head of the regional office of the Friedrich ebert Foundation, the co-ordinator of the provincial development Council, the provincial director of the national Business initiative and the deputy Ceo of WesGro . she joined Kfm radio (pty) Ltd in may 2001 as managing director . in July 2006, Felicia joined sun international (pty) Ltd as the general manager of the Golden valley Casino in Worcester and was promoted to senior management in Johannesburg . since leaving sun international at the end of 2012, Felicia has acquired 100% equity in Umlingo (pty) Ltd, a supplier to the casino industry and is the managing director .

Keneilwe rachel molokoKeneilwe is a Chartered accountant and a Quantity surveyor . she has expertise in the built environment, auditing and investment management . Keneilwe started her career as a Quantity surveyor with Grinaker Building, dawson & Frazer and Cp de Leeuw Quantity surveyors . after a period of six years in the construction industry, she went back to study to become a Chartered accountant . on completion of her articles at KpmG working in the financial services and tax divisions, she took up the position of development executive at spearhead properties . thereafter, she joined Coronation Fund managers as a Fixed interest credit analyst and a member of the Coronation Credit Committee . Keneilwe currently serves on the KWv Holdings, prescient Holdings and Fairvest property Holdings boards as an independent non-executive director . she is also on the board of ikamva Labantu Charitable trust, and is a trustee of ikamva Labantu investment trust .



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For use only by Brimstone ordinary and “n” ordinary certificated shareholders or ordinary and “n” ordinary dematerialised shareholders with “own name” registration, at the annual general meeting of the Company, to be held at old mutual Business school, presentation room, West Campus Building, Jan smuts drive, pinelands, Cape town at 18h30 on Wednesday, 21 may 2014 and at any adjournment thereof . dematerialised ordinary and “n” ordinary shareholders holding shares other than with “own name” registration, must inform their Csdp or broker of their intention to attend the annual general meeting and request their Csdp or broker to issue them with the necessary Letter of representation to attend the annual general meeting in person and vote or provide their Csdp or broker with their voting instructions should they not wish to attend the annual general meeting in person, but who wish to be represented thereat . these share-holders must not use this form of proxy .

i/We . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(name/s in block letters)

of (address) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

being a shareholder/shareholders of Brimstone and holding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ordinary shares in the Company,

being a shareholder/shareholders of Brimstone and holding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “n” ordinary shares in the Company, do hereby appoint

1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or failing him/her

2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or failing him/her

3 . the chairman of the annual general meeting,as my/our proxy to act for me/us and on my/our behalf at the annual general meeting which will be held for the purpose of considering and, if deemed fit, passing, with or without modification, the special and ordinary resolutions to be proposed thereat and at any adjournment thereof; and to vote for and/or against the special and ordinary resolutions and/or abstain from voting in respect of the Brimstone ordinary shares and “n” ordinary shares registered in my/our name(s), in accordance with the following instructions:

number of ordinary shares*

number of “n” ordinary shares*

For against abstain For against abstain

1 . to receive, consider and adopt the consolidated and separate annual financial statements, the directors’ report, audit & risk Committee report and social and ethics Committee report for the year ended 31 december 2013

2 . to confirm annual dividend number 13 and the special dividend

3 . ordinary resolution number 1: re-election of directors

3 .1 ma Brey

3 .2 mJt Hewu

3 .3 F robertson

3 .4 Fd roman

4 . ordinary resolution number 2: election of newly appointed director, mrs Kr moloko

5 . ordinary resolution number 3: appointment of members of the audit & risk Committee

5 .1 n Khan (Chairman)

5 .2 pL Campher

5 .3 Kr moloko

5 .4 La parker

5 .5 Fd roman

6 . non-binding resolution 4: remuneration policy

7 . ordinary resolution number 5: re-appointment of auditors

8 . ordinary resolution number 6: to place the unissued shares under the directors’ control

9 . ordinary resolution number 7: approval to issue shares for cash

10 . special resolution number 1: non-executive directors fees

11 . special resolution number 2: approval to repurchase ordinary and “n” ordinary shares

12 . special resolution number 3: specific repurchase of ordinary and ‘’n’’ ordinary shares

* Please indicate with an “X” in the appropriate spaces above how you wish your votes to be cast. Unless otherwise instructed, my/our proxy may vote as he/she thinks fit.

signed at (place) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (on date) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014

please read the notes on the reverse side hereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . shareholder’s signature

proxy form



Important notes about the annual general meeting:1 . the annual general meeting will start promptly at 18h30 . shareholders wishing to attend are advised to be in the presentation

room no later than 18h20 . the campus courtyard area will be open from 17h45, from which time refreshments will be served . 2 . shareholders and others attending the annual general meeting are asked to register at the registration desk at the entrance of the

campus courtyard area from 17h45 onwards . registration of shareholders will close at 18h30 . 3 . this form of proxy must only be used by certificated ordinary and “n” ordinary shareholders or dematerialised ordinary and

“n” ordinary shareholders who hold dematerialised ordinary and “n” ordinary shares with “own name” registration .4 . dematerialised ordinary and “n” ordinary shareholders are reminded that the onus is on them to communicate with their Csdp or

broker .5 . each shareholder is entitled to appoint one or more proxies (who need not be a shareholder(s) of the Company) to attend, speak and,

on a poll, vote in place of that shareholder at the annual general meeting .6 . a shareholder may insert the name of a proxy or the names of two alternative proxies of the shareholder’s choice in the space provided,

with or without deleting “the chairman of the annual general meeting” . the person whose name stands first on the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of those whose names follow .

7 . a shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that share-holder in the appropriate box(es) provided . Failure to comply with the above will be deemed to authorise the chairman of the annual general meeting, if the chairman is the authorised proxy, to vote in favour of the ordinary and special resolutions at the annual general meeting, or any other proxy to vote or to abstain from voting at the annual general meeting as he/she deems fit, in respect of all the shareholder’s votes exercisable thereat .

8 . documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy, unless previously recorded by the Company’s transfer office or waived by the chairman of the annual general meeting .

9 . the chairman of the annual general meeting may reject or accept any form of proxy which is completed and/or received other than in accordance with these instructions, provided that he is satisfied as to the manner in which a shareholder wishes to vote .

10 . any alterations or corrections to this form of proxy must be initialled by the signatory(ies) .11 . the completion and lodging of this form of proxy will not preclude the relevant shareholder from attending the annual general meeting

and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such shareholder wish to do so .12 . a minor must be assisted by his/her parent guardian unless the relevant documents establishing his/her legal capacity are produced or

have been registered by the Company .13 . Where there are joint holders of any shares: – any one holder may sign this form of proxy; – the vote(s) of the senior shareholders (for that purpose seniority will be determined by the order in which the names of share-

holders appear in the Company’s register of shareholders) who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint shareholder(s) .

14 . section 63 (1) of the Companies act requires that a person wishing to participate in the annual general meeting (including any repre-sentative or proxy) must provide reasonably satisfactory identification before they may attend or participate at such annual general meeting .

Forms of proxy should be lodged with or mailed to Computershare investor services (pty) Ltd:

Hand deliveries to: postal deliveries to:Ground Floor po Box 6105170 marshall street marshalltown 2107Johannesburg 2001

to be received no later than 17h00 on monday, 19 may 2014 .

proxy form (contInued)



notes

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S i x t y p e r C e n t S u g a r C a n e F i B r e . C h L o r i n e F r e e . S u S ta i n a B L e a F F o r e S tat i o n .

C o n t e n t p r i n t e d o n

Boundary terraces, 1 Mariendahl Lane,

newlands 7700, po Box 44580, Claremont 7735

www.brimstone.co.za

Profitable. Empowering. Making a difference.

integrated report 2013 - jse · susta inab l ty integrated sustainability report ... member: audit...

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