Integrated Annual Report 2014 - PSV Holdings · 2014. 9. 12. · PSV Integrated Annual Report 2014...

Integrated Annual Report 2014

Contents

Scope of report 1Board responsibility statement 1

Group overview /6

New company structure 7

Group structure and operations 8

Vision, mission and goals 10

Achievements in 2014 11

Group directorate 12

Chairman’s report 14

CEO’s report 15

Operating context /17

Stakeholders 18

Sustainability report 20

Performance review /2

Value added statement 4

Analysis of corporate costs 4

Head offi ce services 5

Corporate governance /23

Board of Directors and Committees 23

Corporate governance report 24

Shareholders /29

Analysis of shareholders 29

JSE share information 31

Interaction with shareholders 31

Shareholders’ diary 31

Annual fi nancial report /32

Notice of Annual General Meeting 95

Form of proxy 101

Administration 103

Glossary of terms IBC

PSV Integrated Annual Report 2014 // 1

The directors of PSV are pleased to present the Company’s ninth report to shareholders.

This document contains the annual fi nancial reports of PSV and its divisions and covers

the fi nancial year from 1 March 2013 to 28 February 2014. The previous year’s report

was published in August 2013.

The report contains feedback from the Chairman and Chief Executive Offi cer. Activities

and the performance of PSV are discussed in conjunction with the manner in which

stakeholder communication is upheld.

External assurance for the annual fi nancial statements has been provided by our

external auditor, Certifi ed Master Auditors Inc, whose unmodifi ed audit opinion is

available for inspection at the registered offi ce of PSV. No accounting policies have

been changed. The results were reclassifi ed where it was necessary to clarify or

provide stakeholders with additional information regarding the performance of

the Company.

The fi nancial statements were prepared according to International Financial Reporting

Standards (“IFRS”), the requirements of the South African Companies Act, regulations

of the JSE Limited (“JSE”) and wherever possible recommendations of King III.

PSV is committed to sustainable practices across the Group as these pertain to the

environment, the economy, to our people through sustainable labour practices and

human rights, to the society in which we operate and the various financial

components of PSV. We are also committed to the production of quality products

which meet various accreditation standards in accordance with high levels of

manufacturing standards. See further details in the Sustainability Report on page 20

of this Integrated Annual Report.

PSV Holdings Limited (“PSV”) is a recognised provider of industrial engineering products and services throughout Africa. PSV comprises

two main areas of operations: Industrial Supplies and Specialised Services, where PSV owns 100% of all operating companies. A detailed

group structure can be found on page 7 of this Integrated Annual Report.

Scope of report

Any queries regarding this Integrated Annual Report or its contents should be directed to:

Corner Barbara and North Reef Roads

Henville Ext, Elandsfontein

South Africa

Email: [email protected]

Tony Dreisenstock

Chief Financial Offi cer

Tel: +27 11 657 6004

Fax: +27 11 822 8470

The PSV Board of Directors confi rms its responsibility for the integrity of the Integrated Annual Report, the content of which has been collectively assessed by the Directors who believe that all material issues have been addressed and fairly presented.

Ralph PatmoreChairman

7 July 2014

Board responsibility statement

2 // PSV Integrated Annual Report 20142 // PSV Integrated Annual Report 2014/

Performance review

0

2

4

6

8

‘14‘13

Profi t from continuing operations

(R million)

6.7

4.2

Great strides continue to be made to increase the footprint and activities in Africa

Revenue fl at at R391.1 million (2013: R381.1 million)

PSV Integrated Annual Report 2014 // 3PSV Integrated Annual Report 2014 // 3/

No industrial action took place during the year

Debt:equity ratio(net of cash) 10.15% (2013: 5.94%)

EPS: continuing operations (cents per share)

0

1

2

3

‘14’13

2.56

Internal auditor appointedBDO Spencer Steward

Zero material accidents or incidents for the third consecutive year

King III compliance matrix available at www.psvholdings.com

Performance review

Value added statement Analysis of corporate costs

2014

Employees

Providers of capital

Government*

Depreciation and amortisation

Retained income

32.6%

2.8%

(14.5)%

9.0%

70.1%

* Includes deferred tax asset

2014 20132013

4 // PSV Integrated Annual Report 2014

Compliance costs R2.9 millionCosts incurred by PSV in

order to comply with the

various relevant statutes

arising due to PSV being

a listed company.

Group costsR14.1 million Costs incurred by the

head office for and on

behal f o f under ly ing

subsidiaries. For example

IT-re la ted costs and

security. These are costs

that the subsidiar ies

would have normal ly

incurred themselves.

Head offi ce costs R10.2 millionCosts directly attributable

to runn ing the head

offi ce of the PSV Group

including, inter alia, the

cost to Company of the

CEO and CFO.

0

2 000 000

4 000 000

6 000 000

8 000 000

10 000 000

12 000 000

14 000 000

Compliance Group cost Head office cost

2.9

4.0

14.1

13.1

8.2

10.2

20132014

R’m


Head offi ce services

Information technology

Finance Administration Human resources

Strategic direction and guidance

ISO accreditationHealth and safety Group payroll

Group overview

During the course of the year, the Company

restructured its local business operations into

one operating company, PSV Industrial

Proprietary Limited. The restructuring should

facilitate economies of scale in several areas

of operation, but will also streamline treasury,

working capital and tax management. The tax

benefits are immediately apparent by the

creation of a substantial deferred tax asset at

year-end, whilst other economic benefits will

flow in the new financial year.

Group overview


New company structure

PSV Holdings PSV Treasury

100%

100%

100%

100%

100% 100%

100%

2013 company structure2013 company structure

Turbo Agencies Botswana

African Cryogenics

Turbo Agencies Zambia

Omnirapid EngineeredLinings

Turbo Agencies DRC

100% 100%

2014 company structure2014 company structure

100% 100%

100%EngineeredLinings Asset Co PSV Holdings PSV Treasury

100%

Turbo Agencies Botswana

African CryogenicsOmnirapid Engineered

Linings

Turbo Agencies DRC

Turbo Agencies Zambia


Divisions

PSV Industrial

This structure graphically represents the trading operations only.


Group overview

Group structure and operations

Divisional overview Geography Management

Industrial Supplies

Turbo Agencies has its head offi ce based in Gaborone, Botswana and has branch offi ces in Zambia and the DRC

Regional Director: Kevin Branch (Botswana)Regional Director: Sean Kennedy (Zambia)

Based in Gauteng it services clients countrywide as well as local buying offi ces of African-based companies

MD: Joanne da Silva

Specialised Services

Based in Johannesburg with a branch offi ce in Cape Town with work carried out across South Africa as well as in many African countries.

MD: Jonathan Sykes

A new state-of-the-art manufacturing and repair facility was moved into in April in Elandsfontein, Johannesburg.

MD: Allan SparrowMD: John Winterton

Industrial Supplies

Strong agency agreements and suppliers of steel, piping and industrial consumables

% of contribution to total revenue

PSV is an industrial engineering holding company, operating in

southern Africa and conducts business in two operating segments.

Industrial Supplies Specialised Services

Manufacture, support and supply of cryogenic and gas equipment and installation of geosynthetic linings

% of contribution to total revenue


Specialised Services Industrial Supplies


Operation StaffAchievements during

the year

Industrial Supplies

Turbo Agencies was established in 1986 and offers bespoke and turnkey solutions to companies in need of fully equipped workshops, computerised vehicle testing stations, overhead crane and forklift refurbishment and maintenance and general workshop equipment. Turbo Agencies also provides consultancy services on workshop requirements and is a one-stop solution for mining projects.

The company carries blue chip agencies such as Hilti Construction Equipment, Mining Equipment and Fasteners, Ravaglioli Automotive Equipment, Sykes Picavant, Facom Tools, Arndt Hand Tools, Ridgid Tooling, Orbis of Germany, Actia Muller (France), Kito Lifting, Lincoln Electric Welding, Captels Weighbridges, amongst others. 70 6

Transition from a family run business to a corporate business.

Omnirapid is an industrial supplier specialising in quick turnaround times, competitive pricing and service excellence.

Omnirapid is a supplier of inter alia steel, piping and Industrial consumables.

These products are provided to mining and industrial clients locally in South Africa as well as being exported to various African countries.

7 5

Production of another year of solid growth, profi tability and margin improvement.


Engineered Linings offers an array of geosynthetic and plastic lining solutions. These lining solutions are designed to assist mining operators for the purpose of seepage containment, corrosion and environmental protection.

46 8

Still being restructured and continues to fi nd operating conditions very diffi cult.

African Cryogenics manufactures and supplies gas and cryogenic equipment including road tankers and cryogenic storage vessels. The division services the hospital, welding workshop and food and beverage industries. It also offers a full repair and complete refurbishment service. 62 9

The division experienced its busiest year in its history. Its move into a state-of-the-art facility coupled with a material capex programme will enabled it to compete on an international scale.

A head offi ce structure supports the operating businesses

the year

14 15

Group overview

Vision, mission and goals

• To deliver a high-quality service and

product in each area of business.

• To increase shareholder value.

• To embrace Broad-Based Black

Economic Empowerment principles.

To be a recognised provider of

industrial engineering products and

services throughout Africa.

To continue developing as an

industrial engineering Group focused

on engineering linings, mining and

industrial supplies and cryogenics

through the provision of superior

customer service throughout Africa.

Mis

sion

Goal

s

Visi

on



Key strategic objectives for the year

Achievements in 2014

Focus and growth of consolidated cryogenics operation

This remains ongoing. Management is pleased with the most recent consolidation of the two businesses into one manufacturing and repair facility in Elandsfontein.

Continue downsizing and streamlining PSV by disposing or closing down non-profi table divisions

This process culminated in the sale of Mitech on 1 April 2013 for R7 million as PSV felt the company did not meet PSV’s return on investment criteria.

Implement a more effective operational model

During the year PSV restructured its local business operations into one operating company, PSV Industrial Proprietary Limited, to facilitate economies of scale in several areas of operation and to streamline treasury, working capital and tax management.

Further reductions in head offi ce and shared services costs

– Head offi ce costs have been fully reduced, where a further reduction will be detrimental to the business.

– PSV strives for continual improvement of the service offering by PSV to divisions of the Group.

– Vacant space at the PSV offi ce park has been sub-let to Mitech.

Bed down the current African footprint and then shift to a phase of expansion

– The African footprint is well established in South Africa, Botswana, Zambia (with the opening of a branch offi ce in Solwezi) and the DRC (with a branch offi ce in Lubumbashi being explored).

– Diversifi cation of the client base is ongoing.

Refocus PSV and concentrate on fundamentals, such as working capital and profi tability

Remains ongoing as certain divisions are impacted by economic conditions leading to extended payment terms putting additional cash fl ow pressure on the holding company.

The build up to 2013 and much of 2014 saw

the consolidation for PSV and a focus on

experience and skills of doing business in

Africa. PSV is pleased to report that progress

has been made in goals set, the details of

which are noted below.

Achievements in 2014


Group directorate

Group overview


Ralph Patmore (62)Independent Non-Executive Director

• Chairman of the Board• Member of the Audit and Risk Committee • Member of the Remuneration Committee

Ralph holds BCom and MBL degrees. He co-founded Iliad Africa in 1998 and was the Chief Executive Offi cer until 2008. He currently serves as a Non-Executive Director on the boards of various companies.

Anthony de la Rue (67)Independent Non-Executive Director

• Chairman of the Audit and Risk Committee • Chairman of the Remuneration Committee

Anthony is a chartered accountant who was previously the Chief Executive Offi cer for Ernst & Young Zimbabwe and served on their Global Practice Council prior to his retirement in 2004. He is currently a Non-Executive Director on the boards of various companies.

Eric Ratshikhopha (63)Independent Non-Executive Director

• Chairman of the Social and Ethics Committee• Member of the Audit and Risk Committee • Member of the Remuneration Committee

Eric currently holds a number of directorships on foundations and serves as a trustee on a number of trusts. His background includes vast work experience in the mining sector, having been involved in industrial relations, health and safety, strategic management and corporate social investment. Eric holds the following qualifi cations: BA (Hons) Sociology, University of the North, Developmental Programme in Labour Relations, University of South Africa Advanced Programme in Labour Relations, University of South Africa Master of Management, University of the Witwatersrand Senior Executive Programme and Harvard School of Business.

Abilio (Abie) JD da Silva (52)Chief Executive Offi cer

• Member of the Social and Ethics Committee

Abie is the co-founder of PSV and was appointed as the Chief Executive Officer upon listing. He has retained the position and steered the Company towards the objectives which it has achieved to date. He obtained a National Technical Certificate 5 from the Johannesburg Technical College and a Business Management Diploma from Damelin College.

Anthony (Tony) R Dreisenstock (53)Chief Financial Offi cer

• Member of the Social and Ethics Committee

Tony holds BCom and BAcc degrees obtained from the University of the Witwatersrand as well as an HDip Tax Law obtained at the University of Johannesburg. Tony is a qualifi ed chartered accountant. He successfully operated a strategic management consultancy practice until August 2005, when he was recruited by PSV to assist in listing the Company and to assume the role of Chief Financial Offi cer.

IndependentNon-Executive Directors

Executive Directorsectororss


Group overview

Chairman’s report

ReviewThe year saw the repositioning and consolidation of PSV continue. However, tough trading conditions, signifi cant operational management changes and the upheaval of preparing to relocate factories in the cryogenic business resulted in a poor set of trading results. The Group was restructured into divisions moving away from the cumbersome operationally ineffi cient stand-alone company structure. A side effect tax benefi t resulting from the restructure, to some extent, rescued the earnings per share performance for the year under review.

Mitech was sold off as part of the repositioning at the start of the year leaving four operating businesses, two in each division. We began the year confi dent that we could overcome the identifi ed shortcomings but a large contract undertaken by Engineered Linings proved the downfall of the Specialised Services Segment. Furthermore, they had major difficulty in collecting monies owed from a large contractor which affected cash fl ows and they were forced to increase their bad debt provision. The Segment expected to endure some operational discomfort in the Cryogenics business unit while the new factory was being built but the resultant ineffi ciency costs proved to be larger than anticipated.

The Industrial Supplies Segment also experienced severe disruption following the departure of the Turbo Agencies businesses vendors. It is always diffi cult to replace entrepreneurial management and this instance proved to be no exception. The turmoil lasted for most of the year under review but the business remained profi table. The operational shining light proved to be the Omnirapid business unit, despite tough economic conditions that placed pressure on revenues and gross margins.

The abovementioned issues have meant that the strong trading, strong cash generative base that we were hoping to create has been delayed. The Group remains cash strapped, which is a pressure that only strong operational performances from the divisions will change. This will remain the focus for the next fi nancial year.

ProspectsThe state of the economy is well publicised and we do not expect any change in the operating environment. For this reason we need to ensure

that we remain focused on the task at hand, fi ghting for every business opportunity to gain market share in every segment that we operate.

Africa continues to present geographic expansion opportunities for the Industrial Supplies Segment but we will exploit these cautiously so as not to unduly stretch our newly entrenched management and our tight cash resources. We are fully aware of the risks and will monitor them as such. Furthermore we will be looking to leverage the core competencies we have in Omnirapid. Real opportunities are available but we will need to be circumspect in view of our present fi nancial position.

In the Specialised Services Segment we will be looking to stabilise Engineered Linings and to maximise effi ciencies in the newly occupied cryogenics operation.

It remains a year of implementation.

AppreciationI would like to acknowledge my co-Directors, both Executive and Non-Executive, for the support and the effort that they have put in over the past year. We have had wonderful loyal support from the management, staff, customers and suppliers which has been truly appreciated.

Finally we feel that producing acceptable returns for our shareholders is no longer a distant dream and if a few balls bounce for us this year we believe we will place ourselves fi rmly back on the road to success.


7 July 2014

We need to ensure that we remain focused

on the task at hand, fi ghting for every business

opportunity to gain market share in every

segment that we operate.



CEO’s report

Introduction There is no doubt that the past few years have been diffi cult for PSV due

to tough market conditions and the need to restructure divisional

companies. Mitech was sold in 2013 as it did not meet the profi t criteria

of PSV.

Despite a slight increase in revenue for the current year, the business

experienced a diffi cult year with both gross margins and cash fl ow

coming under pressure. Reduced margins were principally caused by

increased competition in virtually all sectors of the business. The

reduction in cash flows arose primarily due to bad debts and a

substantial continued investment in infrastructure in African Cryogenics

and Turbo Agencies. Omnirapid remains a steady contributor. Turbo

Agencies has made strides towards better customer satisfaction and

service delivery and has endured a change from a family run business

to a corporate entity.

Overview of resultsTotal comprehensive income for the period settled at R1.9 million, an

improvement from the loss of R20.8 million in the 2013 year. Headline

earnings per share improved marginally from 2.43 cents per share

(“cps”) to 2.70 cps.

Cash fl ow from operating activities declined primarily due to loss making

contracts at Engineered Linings and continued infrastructural

development in Turbo Agencies and African Cryogenics. As a result, the

company’s debt:equity ratio (net of cash) decreased from 5.94% in

2013 to 10.15% in the current year. PSV ended the year with cash and

cash equivalents of R11.0 million, 34% less than in 2013 when the year

ended on R16.7 million.

The Company’s balance sheet remained stable, with marginal

improvements experienced in working capital ratios and the Company’s

net tangible asset per share increasing slightly from 22.09 cps in 2013

to 22.65 cps in 2014.

A new accounting system was implemented across the divisions which

puts in place a better foundation for fi nancial information into the future.

DividendsThe Group will continue to retain and utilise cash generated to fund

working capital requirements and as such, no dividends were declared

or proposed. The Board of Directors of PSV (“the Board”) reviews the

dividend policy annually.

Operational reviewIndustrial SuppliesThis segment contributed 55% (2013: 52%) to the Group’s consolidated

revenue at an average gross profi t margin of 23.6% (2013: 27.3%).

Omnirapid has again performed well and remains a highly profi table and

cash generative business.

Turbo Agencies underwent a major management restructure as a result

of the original owners departing. The Company continued to be

profitable despite this disruption. The Company has succeeded in

diversifying its customer base into large mining groups in Zambia,

refocusing its marketing and sales initiatives, particularly in Botswana,

and is in the process of bedding down substantial new crane

maintenance, refurbishment and spares contracts in the Democratic

Republic of Congo (“DRC”).

Specialised ServicesSpecialised Services contributed 45% (2013: 48%) to the Group’s

consolidated revenue at an average gross profit margin of 12.5%

(2013: 16.0%).

African Cryogenics is transforming itself from a small regional

equipment manufacturer into a global player operating out of a state-of-

the-art new manufacturing facility based in Elandsfontein, Germiston.

The business has budgeted for the acquisition of substantial capital

equipment in the coming year. The new factory combined with the new

equipment will enable African Cryogenics to substantially reduce

2014 was a year of consolidation for PSV. Cash

fl ow was channelled into growth areas, the

South African business operations were

restructured, whilst our foreign operations were

refocused, repositioned and diversifi ed into new

markets and customers.

Abilio (Abie) JD da SilvaChief Executive Offi cer


Group overview

CEO’s report (continued)

turnaround times, facilitate materials handling, enhance productivity

levels and cut production costs.

In the current year, the business invested a considerable amount into research and development into new road tanker designs with a specifi c focus to improve carrying capacity. These new tanker designs, coupled with the new factory, should enable African Cryogenics to start competing internationally within the next two years.

Engineered Linings, a contract driven business, experienced a year in which the business suffered due to a major customer going into business rescue, resulting in a substantial bad debt write off. In addition, unforeseen inclement weather conditions caused the Company to incur substantial losses on a major contract. These factors necessitated the restructuring of its business operations. This restructuring will manifest inter alia in a downsizing of the business, and a cut back in operating costs. With ongoing restructuring we expect the business to return to profi tability within the next two years.

ProspectsI believe that a good foundation for the year ahead has been put in place. Our businesses have been streamlined with focus being concentrated on ensuring manageable growth based on product knowledge and excellent client service.

External and diffi cult market conditions locally and in Africa have taken their toll on Engineered Linings and I foresee that this business will take longer to turn around than was initially expected. The Company is being closely monitored.

The extensive product range on offer in both Botswana, Zambia and the DRC remains in place and coupled with quality service, should see Turbo Agencies producing better results into the future. The opening of a branch offi ce in Solwezi in the North West province of Zambia will allow the Company to leverage off the current mining growth in the area.

The future for African Cryogenics is looking bright as the Company has evolved its product offering to include comprehensive cryogenic and gas systems.

Corporate actions and subsequent eventsOn 13 May 2013, PSV announced the disposal of the Mitech business. The rationale for the disposal was that Mitech did not meet PSV’s return on investment targets. Mitech was sold for a total consideration of R7.0 million in cash. The effective date of the disposal was 1 April 2013. PSV made a consolidated loss on the disposal of Mitech of under R5 million, of which R1.6 million was a cash loss incurred in writing off an inter-company loan. The balance represented a non-cash flow reversal of fi xed asset revaluation gains previously booked to income.

Litigation statementThe acquirer of Groupline Projects Proprietary Limited has declared a dispute on the basis of a supposed breach of warranties contained in the Sale of Shares Agreement. The Group has aggressively opposed this action. Consequently the parties have entered into arbitration to resolve the dispute. The arbitration hearing will be sometime in the new fi nancial year. After consultation with the Group’s auditors, no provision has been made in the Group accounts for any potential loss arising from this dispute.

Other than the above, there are no legal or arbitration proceedings, including any such proceedings that are pending or threatened, of which PSV is aware that may have, or have had during the 12 months preceding the date of the Integrated Annual Report, a material effect on the fi nancial position of the Group.

Sustainability and risk managementLast year was the first year PSV began reporting on sustainability measures. For a small Company this continues to be diffi cult. PSV continues to strive for improved sustainability measures and in this regard have included a Sustainability Report which is updated to the best of our ability to record the relevant data.

Our compliance with King III can be found in a matrix which is contained on our website at www.psvholdings.com.

In addition, PSV has appointed BDO Spencer Steward as Internal Auditor and the process has kicked off with a Risk Review which has been formulated into a managed Risk Register.

AppreciationI wish to thank my fellow Board members for their support and guidance over the year. To all divisional management, staff, customers, suppliers, shareholders and all other stakeholders, your dedication and contribution to PSV does not go unnoticed as it is this dedication that keeps us supplying products and solutions which keep our customers operational.

Abie da SilvaCEO

7 July 2014


PSV acknowledges and recognises the

importance of long-term relationships with all

stakeholders in order to support sustainability.

Stakeholder evaluation is undertaken at Group

as well as at divisional level and has evolved

over the past three years. Interaction,

feedback, review and communication with all

stakeholders is ongoing and PSV management

is cognisant that the level of interaction needs

to be sustained.

Engagement with stakeholders takes various

forms including informal calls, customer

meetings, staff meetings and newsletters to

formal meetings with regulators.

Operating context

Stakeholders


Operating context

Shareholders

Earnings, sustainability, dividend payments and cash management

Regular meetings and calls with strategic shareholders

Active website updated regularly

Dissemination of information through SENS and a defi ned contact list

Maintain a sustainable Company for the future which is profi table and returns value to shareholders

Staff

Awareness of rules and regulations within the workplace Training on the employee handbook

Abridged hard copy version of Company policies and procedures handed to all existing employees on commencement of employment

Training to all employees

Intention to improve the expected employee standard of performance for the position

Performance counselling After counselling ensure guidance, monitoring, training, evaluation over a time period are given to employees

Regulate discipline in the workplace through progressive disciplinary method

Industrial relations Conduct of disciplinary hearings is undertaken through a defi ned process. An external Chairman ensures objectivity and adherence to procedural and substantive issues. There is also involvement from LabourNet as and when required

Allow aggrieved employee to resolve issues through a fair process Grievance procedures Human Resources Division regulates to ensure fairness

EE representatives engage in meaningful discussions to eliminate barriers of the past

Employment Equity (“EE”) Forum Quarterly meetings

Bargaining best packages for employees, all decisions equal and fair as per South African legislation

Changes in employment conditions, retrenchments, etc The engagements are not infrequent

Trade unions

Competitive pricing structures Formalised business dealings, meetings, telephone conversations, credit checks and reviews

Conscious effort to meet expectations where applicable

Stakeholders (continued)

Details of PSV’s key stakeholders, the type of engagement, material issues raised and actions are provided in the table below:

What is important? How do we interact? What are our actions?


Customers

Complaints One-on-one business dealings, presentations on product features, correspondence and factory visits, if required

Recorded, addressed and resolved

Record complaints Recorded, addressed and resolved

Suppliers

Database of suppliers kept and maintained Meetings, industry body representation and conference participation Oversee across PSV and updated accordingly

Delivery of products Timeous delivery is strived for

Transformation remains a key driver for PSV Developing new B-BBEE compliant structure

Government/municipalities/parastatals

Regulatory compliance Reporting, correspondence, formal meetings and feedback session PSV adheres to the Listings Requirements of the JSE, the Companies Act, and all other requirements for a public company

Financiers/regulators

Loan agreements and overdrafts to PSV Formal meetings, updated status meetings and feedback sessions PSV has kept its providers of fi nance informed of all developments within the Company pertaining to overdraft requirements and the process for settling debt

Help, support and assistance required Active CSI initiatives, meetings with representatives from organisations supported the Group has not participated in any CSI initiatives in the last fi nancial year.

Assistance in the form of money or physical requirements such as books, blankets, etc

PSV staff also give of their own personal time. The Group has not participated in any CSI initiatives in the last fi nancial year

What is important? How do we interact? What are our actions?


Operating context

Sustainability report

IntroductionAs a manufacturing Group in the industrial engineering sector, PSV has a responsibility to operate taking into consideration how its decisions and actions impact stakeholders, including people, the habitat and environment in which PSV operates. PSV recognises that sustainability is integrated within all facets of its business and is aligned to the Group’s objectives. As a result, PSV is committed to improving the management of risks and opportunities in the social, environmental and economic spheres to ensure PSV’s future success.

A consciousness to sustainability has a direct benefi t to PSV, to its stakeholders, and could assist the Group achieve its strategic goals.

Environmental performancePSV recognises that it has a responsibility to consider the effect our business activities have on the environment and we are committed to ensuring that we minimise the impact of our “carbon footprint” by adopting a policy aimed at achieving this outcome. The Group continues to refine and improve on its carbon reporting, to improve as an accountable corporation working with its customers and suppliers to minimise the impacts on the environment. PSV and its divisions are looking at the process of the implementation of the ISO 14001:2004 Environment system.

Indicator 2014

Fuel consumption diesel (litres) 60 524

Fuel consumption petrol (litres) 34 849

Electricity consumption (kwh) 486 727

Estimated business air travel (passenger km) 254 227

Health, safety and qualityOccupational safetyThe health of employees is a primary concern for PSV. The Group ensures that the necessary resources are available for health and safety

training and companies within the Group seek, as necessary, professional advice regarding the implementation of safety programmes. Training during the period has focused on refresher training and specifi c needs identifi ed by divisions (for example fi re fi ghting, fi rst aid, forklift and Health and Safety Representative training). Weekly and monthly toolbox talks and training programmes are held at various sites, and attaches great importance to protecting employees from workplace accidents. In the year under review, PSV Holdings implemented the Group’s Health and Safety Policy and Procedures.

Procedures have been drawn up in line with the legal framework covering all aspects of the Occupational Health and Safety Act 85 of 1993 across the PSV Group. We are committed to providing our employees with safe working conditions. We have effective management arrangements in place to ensure the well-being of staff and others who may be affected by our activities to minimise the adverse impact to individuals and the business. The Health and Safety Policy has been drawn up, standardised and uniformly implemented across all divisions. Surveillance checks are conducted timeously. Reviews and updates of the Health and Safety system is an ongoing process, to facilitate continuous improvement in health and safety performance. Every employee is accountable and has a personal responsibility towards health and safety.

Health and Safety CommitteeThe Health and Safety Committee comprises of representatives from each business unit.• The committee meets on a monthly basis, addressing the

requirements of the Occupational Health and Safety Act 85 of 1993.• Minutes are kept of all meetings and distributed accordingly.• Health and safety fi les for each division have been issued, reviews

and updates are been done timeously.

Work accidents and injuriesEfforts to prevent accidents at work are an essential part of PSV activities and require continuous motivation of employees by Health and

Safety Representatives and Line Managers. PSV is pleased to report that

there were no fatalities at any of its business units for the year under

review. PSV’s standardised reporting system ensures all business units

manage incidents effectively, leading to a safer and more sustainable

work environment. If and when incidents occur, they are reported to the

relevant Health and Safety Representative and corrective actions are

approved by the Health and Safety Committee, prior to implementation.

Quality-systemsPSV was granted an ISO 9001:2008 (Quality Management systems)

certifi cation on 29 October 2012.

The certifi cation follows an audit, undertaken, by TUV Rhineland South

Africa (Accreditation Body). The implementation and achievement of ISO

9001:2008 is in line with PSV’s vision of being an industrial engineering

Company able to compete on a local and global platform. Achieving the

ISO 9001:2008 certifi cation gives PSV a competitive edge, especially

when trading locally and abroad. We undertake to continually give of our

best to ensure that we retain this certifi cation.

Follow-up audits take place annually to ensure continued compliance

with and improvement regarding the ISO 9001:2008 standards and re-

certifi cation is required every three years.

Human resource managementThe human resources management responsibility is centralised at

PSV’s head offi ce, although the responsibility of direct management of

employees remains the responsibility of each division. PSV ensures

compliance with South African labour legislation and other legislation

which includes but is not limited to the Labour Relations Act, Basic

Conditions of Employment Act, the Employment Equity Act, the Skills

Development Act, the Unemployment Insurance Act, Broad-based

Black Economic Empowerment Act and the Occupational Health and

Safety Act. No incidents of non-compliance were noted in the period

under review.


Our demographic and male to female split is as follows:

2014 staff demographics

0

50

100

150

200

250

WhiteIndianColouredAfrican

FemaleMale

204

2912

2 3 1

55

23

2013 staff demographics

0

50

100

150

WhiteIndianColouredAfrican

FemaleMale

141

26

132 3 2

68

27

Fair and sustained employmentPSV treats all staff equitably and responsibly, in compliance with

applicable legislation, to ensure that their full potential is reached. The

Group is committed to the principles of employment equity as well as

achieving a productive and fair working environment that is free of

discrimination and offers equal opportunity to all. The Group

recognises the importance of employment equity and through

recruitment and training continuously strives to improve on previous

employment equity standings.

The Group makes every effort to remunerate staff and Directors fairly

and equitably. Permanent employees reap the benefi t of a basic salary,

retirement fund contributions, medical aid and other benefi ts. The

annual increases for non-union employees are recommended by the

Managing Director of each business unit and approved by the

Remuneration Committee. Increases for employees that fall within the

bargaining unit are negotiated with representative trade unions, except

in those instances where there are industry-wide bargaining

agreements. The Group will continue to respect these agreements.

The Group has a strategic HR business partner being LabourNet.

LabourNet specialises in ensuring that fair labour procedures and

practices are implemented in all aspects of the business. LabourNet

assists PSV from the employee’s date of employment, ensuring that both

parties in the employment relationship are treated fairly.

Codes and practices, policies and procedures that guide business and

employee conduct, non-discrimination, industrial relations, recruitment,

employment equity and grievance and dispute settlements are

communicated to staff through induction programmes, on notice

boards and in their employment contracts. PSV operates in an

environment of trust and respect towards all employees. Misconduct or

corruption by an employee is treated with appropriate disciplinary

action without delay and in most cases the employee is suspended on

full pay pending an investigation. Should an employee be found guilty

of misconduct or corruption, dismissal may follow. In matters of a

serious nature, legal action is taken against the employee. Corruption is

not tolerated within the Group.

Human rightsPSV is guided by human rights policies detailed in the South African

Constitution. South Africa’s endorsement of various International Labour

Organisation principles relating to child labour is also binding on the

Group. There were no contraventions of these principles for the period

under review.

Skills development and retentionAlthough PSV has no formal skills management and training policy, a key

initiative of the Group is to nurture and develop its skills base internally

to meet the current and future skills requirements. The Group

encourages training and skills development as and when required to

empower employees with skills to improve efficiency, safety and

progress within the Group.

During the year, R173 278 (2013: R352 823) was spent on training

373 employees across PSV. A total of 2 455 hours of training took place

during the year, compared to 2 624 hours in 2013. These measures

assist in determining future training objectives and needs.

Corporate social initiativesOver the past three years, PSV has worked very hard at assisting in the

donation of time and money to various causes close to its heart.

Unfortunately during 2014, tough economic conditions have limited the

level of corporate social investment activity.

During the year African Cryogenics donated money to FOMDP and

COMPASS. FOMDP commenced helping people in the Barcelona

settlement on the edge of Daveyton where the settlement generally has

no proper housing, roads or electricity. Families in the community are

adopted by donors who provide food parcels which FOMDP delivers to

recipient families each month. COMPASS is based in Edenvale and is a

282Total staff:

329Total staff:


Operating context

Sustainability report (continued)

centre which cares for the poor, homeless, unemployed and

uneducated communities. The centre offers various development

programmes to individuals in need and feeds hundreds of people on a

daily basis.

Economic performancePSV’s objective is to create sustainable business to create wealth for its stakeholders. The performance of the Group is discussed in the CEO’s report and is evidenced in the annual fi nancial statements.

PSV contributes to overall growth of the country through:• investing in skills development and training;• creating job opportunities;• supporting local and small business enterprises where possible; and• corporate social investment programmes.

PSV does not get fi nancial assistance from the Government.


Corporate governance

Board of Directors and Committees

The Board of Directors of PSV (“the Board”) is mindful and cognisant that

corporate governance is essential to protect the interests of

all stakeholders and remains committed to compliance with legal

requirements and sound corporate governance principles.

Committees

Ralph Patmore Ralph Patmore Abie da Silva Executive Director

Eric Ratshikhopha Eric Ratshikhopha Tony Dreisenstock Executive Director

Abie da Silva (by invitation)

Sagren SookanathanGroup SHEQ Manager

Tony Dreisenstock (by invitation)

Anthony de la Rue Chairman

Anthony de la Rue Chairman

Eric Ratshikhopha Chairman

Audit and Risk Committee Remuneration Committee Social and Ethics Committeemittee ReRemumuneneraratitionon CComommimitttteeee Soc

Executive Directors Independent Non-Executive Directors

Abie da Silva CEO

Ralph Patmore Chairman

Tony Dreisenstock CFO

Anthony de la Rue

Eric Ratshikhopha

Board of Directors

ecutivee DiDirerectctororss InIndedepependndenentt NoNonn Executive



Corporate governance report

Corporate governanceThe Board regards corporate governance as vitally important to the success of the business of the Group and is unreservedly committed to applying the principles necessary to ensure that good governance is practiced in all of its business dealings in respect of its shareholders and relevant stakeholders.

The content of this document is aimed to inform internal and external stakeholders of the Group transparently and honestly through fair and understandable disclosure. The Board firmly believes that good corporate governance is essentially about responsible leadership and the Board realises the importance of their function to act as custodians in this regard. In all dealings the Group strives to ensure that the interests of stakeholders are foremost in all decisions.

The Board is cognisant of its challenge in balancing the achievement of the Group’s performance objectives within a framework of sound corporate governance principles. The Board believes that the business will prosper in an environment of good and balanced corporate governance.

Statement of complianceThe Board confi rms that the Group has complied with the principles of King III, except where otherwise explained in the report. The Group will continue to improve corporate and operational practices to achieve sound corporate governance practices, through integrity and accountability. For ease of reference, the King III compliance matrix is available on the website www.psvholdings.com.

The Board also confi rms that the Group has complied with the provisions set out in the Listings Requirements of the JSE during the year under review.

Board of DirectorsThe leadership of the Group is provided by a unitary effective Board which at year-end comprised two Executive Directors and three independent Non-Executive Directors. The Independent Non-Executive Directors are high-merit objective individuals who collectively contribute

a wide range of skills and knowledge to the decision-making processes of the Board and also ensure proper deliberation of all matters requiring the Board’s attention. Independence of the Board is monitored annually in terms of the requirements of King III, when formal mandatory declarations of personal interests are made by each Director.

The Board is satisfi ed with the knowledge and skills level of the Board. All Directors are required to attend the AltX Directors Induction Programme, hosted by the Institute of Directors.

There is a clear differentiation between the running of the Board and the executive responsibility for the running of the Group’s day-to-day business. There is a division of responsibilities ensuring a balance of power and authority, such that no one individual has unfettered powers of decision-making.

ChairmanThe Chairman of the Board is Ralph Patmore, an Independent Non-Executive Director.

The Chairman provides leadership and guidance to the Board as a whole, and encourages proper deliberation of all matters requiring the Board’s attention, and obtains optimum input from the other Board members. He also takes responsibility for ensuring effective governance practices. The Chairman also represents the Company to stakeholders.

Chief Executive Offi cerThe Chief Executive Offi cer (“CEO”), Mr Abie da Silva, accepts full responsibility for the sound and effi cient operation of the business as well as the implementation of all strategies and policies adopted by the Board. Managing Directors of the various businesses in the Group assist him in this task. Board authority conferred on management is delegated through the CEO, in accordance with approved authority levels. Mr da Silva ensures the maintenance of good relations with all the shareholders of the Group.

There is a separation between the responsibilities of the Board and management. Mr da Silva communicates Board directives to executive

management ensuring that all strategic objectives of the Company are achieved. For this purpose he meets on a regular basis with his Executive Committee, which consists of strategic head office employees and Managing Directors of the business units in the Group. He ensures that the Group has an effective management team and actively participates in the development of management and succession planning.

Rotation of DirectorsOne-third of the Non-Executive Directors are subject, by rotation, to retirement and re-election at the Annual General Meeting in terms of the Company’s Memorandum of Incorporation.

Biographical details of each Director are set out on page 13 of this Integrated Annual Report.

Meeting attendanceThe Board meets at least quarterly, and more frequently if circumstances or decisions require. They furthermore confer through round robin deliberations when necessary. Meetings are conducted in accordance with formal agendas and annual work plans, ensuring that all substantive matters are properly addressed. Any Director may request that additional matters be added to the agenda. Copies of Board packs are circulated to the Directors well in advance of the meetings to ensure proper preparation to enhance constructive and informed deliberations.

Attendance by Directors at Board meetings is provided below:

Name of Director

23 May 2013

19 Jul 2013

25 Oct 2013

17 Mar2014

AJD da Silva Y Y Y Y

AR Dreisenstock Y Y Y Y

RB Patmore Y Y Y Y

A de la Rue Y Y Y Y

E Ratshikhopha Y Y Y N

A representative from the Company’s Designated Adviser attends the Board meetings as required in terms of the JSE Listings Requirements.


Board processesDirectors’ share dealingsThe Board has an approved trading policy in terms of which dealing in the Group’s shares by Directors and employees is prohibited during closed periods.

Directors may not deal in the Company’s shares without fi rst advising and obtaining clearance from the CEO and from the CFO. The CEO and CFO may not deal in the Company’s shares without fi rst advising and obtaining clearance from the Chairman of the Board. No Director or Executive Committee member may trade in PSV’s shares during closed periods, as defi ned in terms of the JSE Listings Requirements. The Board keeps the Company Secretary advised of all their dealings in securities. All dealings are announced on SENS within 48 hours.

Interest in contractsDuring the year ended 28 February 2014, none of the Directors had an interest in any contract or arrangement entered into by the Company or its business units, other than as disclosed in Note 24 to the annual fi nancial statements.

Directors are required to inform the Board timeously of confl icts or potential confl icts of interest they may have in relation to particular items of business. Directors are obliged to recuse themselves from discussions or decisions on matters in which they have a confl icting interest.

Board appointmentsIn terms of the approved appointments to the Board, all Board members are required to assist with the identifi cation and nomination of potential Board candidates. Appointments to the Board are conducted in a formal and transparent manner in terms of the Board policy.

The Board will from time to time assess the skills of the Board to ensure

that it consists of the required competency levels in order to be effi cient

and in order to provide strategic guidance to the Group. Should the

assessment indicate that there is a lack of competency in a certain area,

the Board will consider the appointment of a Director to fulfi l this need.

Closed periodsClosed periods are exercised from the date of the fi nancial year-end and interim period end until the Group’s results are published on SENS. Additional closed periods are enforced as required in terms of any corporate activity or when Directors are in possession of price-sensitive information.

Directors of the Company and its major business units, the Company Secretary, Senior Managers in the Group, their associates or members or immediate family are not allowed to deal directly or indirectly, at any time, in the securities of the Company on the basis of unpublished price-sensitive information regarding the Company’s business or affairs. These individuals are made aware of restricted or closed periods for dealings and the provision of insider trading legislation.

Self-evaluationUnder the leadership of the Chairman of the Board, self-evaluations of the Board members have been carried out. The Board continues to review processes in various areas, including its performance and strategic planning, Board composition, relationship with management and other stakeholders, and succession planning. Areas requiring improvement have been identifi ed, and are receiving attention.

Changes to the BoardDuring the 2014 fi nancial year, Peter Robinson resigned with effect from 4 June 2013.

Board charterThe purpose of the Board charter is to set out specifi c responsibilities that are to be discharged by the Board, and every member of the Board, in accordance with King III. The Board charter has been reviewed during the past financial year to align the content thereof with the recommendations of King III.

PSV is accountable to its shareholders and stakeholders by setting a charter for the Board, which regulates how business is conducted while adhering to best practice and the highest standard of business conduct.

The primary responsibilities of the Board include the regular review of

the strategic direction of investment decisions and performance against

approved plans, budgets and best practice standards. The Board retains

full and effective control of the Group and decisions on material matters

are reserved for the Board.

The objectives of the Board charter are to ensure that all Board

members acting on behalf of the Group are aware of their duties and

responsibilities as Board members and the various legislation and

regulations affecting their conduct and to ensure that the principles of

good corporate governance are applied in all their dealings in respect,

and on behalf, of the Group.

The Board charter is reviewed annually.

Board Committees While the Board remains accountable and responsible for the

performance and affairs of the Company, Board sub-committees assist

the Board in discharging its duties and responsibilities. However, the

sub-committees do not in any way mitigate or discharge the Board of its

duties and responsibilities.

Board Committees observe the same rules of conduct and procedures as

the Board unless the Board determines otherwise. Board Committees will

only speak to and act for the Board when so authorised. The authority

conferred on a Board Committee will not derogate from the authority

delegated to the CEO by the Board. Members of the Board Committees will

ensure transparency and full disclosure to the Board, except where the

Board Committees have been mandated otherwise by the Board.

In keeping with the recommendations of King III, Board Committees currently comprise of the following sub-committees, namely the Audit and Risk Committee, the Social and Ethics Committee and the Remuneration Committee. The sub-committees have formally determined terms of reference, clearly agreed upon reporting procedures and written scope of authority which are reviewed annually and approved by the



Corporate governance report (continued)

Board. The Chairman of each Board Committee is required to attend Annual General Meetings to answer questions raised by shareholders.

Audit and Risk CommitteeThe Audit and Risk Committee currently comprises three Independent Non-Executives, Anthony de la Rue (Chairman), Eric Ratshikhopha and Ralph Patmore. The Board is satisfi ed that the three members of the Audit and Risk Committee are highly qualifi ed individuals who on a collective basis have suffi cient qualifi cations and experience to fulfi l its duties. The members of the committee are also permitted by the Board to consult with specialists when required. The Board meets the requirement of King III in that there must be at least three Independent Non-Executive Directors fulfi lling the duty as members of the Audit and Risk Committee.

The CEO and CFO attend all the meetings by invitation. The JSE Designated Adviser attends all Audit and Risk Committee meetings in compliance with the JSE Listings Requirements. The external auditors attend all meetings and also have unrestricted access to the Chairman of the Audit and Risk Committee.

The Audit and Risk Committee met four times during the fi nancial year.

The attendance by members at the Audit and Risk Committee meetings is provided below:

Name of Director

16 May 2013

12 Jul2013

25 Oct 2013

17 Mar2014

RB Patmore Y Y Y Y

A de la Rue N Y Y Y

E Ratshikhopha Y N Y N

AJD da Silva(by invitation) Y Y Y Y

AR Dreisenstock(by invitation) Y Y Y Y

The Audit and Risk Committee operates in terms of a formal mandate which sets out the functions and duties of the committee. These

functions are based on the relevant provisions of the Companies Act, 2008 (Act 71 of 2008) (“the Companies Act”), as amended, as well as relevant corporate governance recommendations in terms of King III. These include, inter alia, to:• review the annual fi nancial statements to ensure that they present a

true, balanced and understandable assessment of the financial position and performance of the Company;

• ensure an effective internal control environment in the Company;• nominate the external auditor for appointment as the registered

independent auditor after satisfying itself through enquiry that the external audit fi rm and the designated audit partner are independent;

• determine the fees to be paid to the external auditor as well as its terms of engagement;

• ensure 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;

• evaluate the independence and effectiveness of the external auditors;• approve a non-audit service policy which determines the nature and

extent of any non-audit services which the external auditor may provide to the Company;

• pre-approve any proposed contract with the external auditor for the provision of non-audit services to the Company; and

• satisfy itself as to the appropriateness of the expertise and experience of the CFO.

During the course of the year the Company appointed BDO Spencer Steward to perform a gap analysis of the Group as well as the underlying business units’ intrinsic and residual risks. A comprehensive report was tabled to the Audit and Risk Committee. All gaps identifi ed are being vigorously addressed and mitigation strategies implemented by the Executive Board as well as senior management.

The Audit and Risk Committee pays particular attention to the adequacy of internal controls and the integrity of fi nancial reporting. In fulfi lling its function, the committee specifi cally oversees: fi nancial reporting risks, internal fi nancial controls, fraud risks and IT risks. The Audit and Risk

Committee will also oversee the integrated reporting process of the Company from the ensuing year.

The committee forms part of a unitary Board even though it has specifi c statutory responsibilities over and above the responsibilities assigned by the Board.

The committee assists the Board in fulfi lling its fi duciary responsibilities in respect of the governance of risk tolerance and risk appetite of the Company.

The committee has an independent role, operating as an overseer and maker of recommendations to the Board for consideration and fi nal approval.

PSV is exposed to certain risks, which are infl uenced by its specifi c choices and actions. The Board of PSV along with its Executive Committee and management recognise that risk management is a critical management tool to ensure that the Group achieves its objectives. The committee has been formulated with the specific objective of identifying those risks and implementing policies to combat and mitigate those risks.

The committee does not assume the function of management, which remains the role of the Executive Directors, offi cers and other senior management members. The role of the committee is to assist the Board to ensure that the Company has implemented effective policies and plans, including but not limited to plans for risk management that therefore enhances the Company’s ability to achieve strategic objectives, and ensures that the disclosure regarding risk is comprehensive, timely and relevant.

The committee oversees the development and annual review of the policies and plans for risk management in order to recommend same to the Board for approval.

The Group acknowledges the importance of risk management and corporate governance principles.


Risk is an intrinsic part of all activities undertaken by PSV.

The committee reviews the effectiveness of the system for monitoring compliance with laws and regulations and the results of management’s investigation and follow-up (including disciplinary action) of any fraudulent acts or non-compliance, obtains regular updates from management and Group’s legal counsel regarding compliance matters and ensures that all regulatory compliance matters have been considered in the preparation of the fi nancial statements.

Remuneration CommitteeA Remuneration Committee had been established in compliance with the requirements of King III. The Remuneration Committee met three times during the fi nancial year ended 28 February 2014. The attendance by members at the Remuneration Committee meetings is provided below:

Name of Director25 Oct

201324 Feb

2014

RB Patmore Y Y

A de la Rue Y Y

E Ratshikhopha Y Y

AJD da Silva Y Y

AR Dreisenstock Y Y

The Remuneration Committee comprises the three Independent Non-Executive Directors as members. The CEO and CFO attend the committee’s meetings by invitation only.

The role of the committee is to assist the Board in ensuring that the Company remunerates Directors and executives fairly and responsibly; and that the disclosure thereof is accurate, complete and transparent.

The committee performs, inter alia, the following functions:1. Oversee the establishment of a remuneration policy that will promote

the achievement of strategic objectives at all levels in the Group and encourage individual performance;

2. Ensure that the remuneration policy is put to a non-binding advisory vote at the general meeting of shareholders annually;

3. Review the outcomes of the implementation of the remuneration policy on an annual basis;

4. Ensure that the mix of fi xed and variable payments, in cash, shares and other elements, meets the Company’s needs and strategic objectives;

5. Satisfy itself as to the accuracy of recorded performance measures that govern the vesting of incentives;

6. Ensure that all benefits, including retirement benefits and other fi nancial arrangements, are justifi ed and correctly valued;

7. Consider the results of the evaluation of the performance of the CEO and other Executive Directors, both as Directors and as Executives in determining remuneration;

8. Regularly review incentive schemes to ensure continued contribution to shareholder value and that these are administered in terms of the rules; and

9. Advise on the remuneration of Non-Executive Directors.

Remuneration philosophyPSV is committed to its shareholders and therefore determines their remuneration policy and philosophy based on best practices within the market. The Group’s Directors are remunerated on a cost to company basis, which includes benefi ts such as medical aid, life insurance, death cover, disability, funeral cover and retirement. Increases are based on individual performance and measured against defi ned targets for the Group.

Remuneration of Non-Executive Directors

Type of fee

Approved annual fee for 2014

R

Proposed annual fee for 2015

R

Committee

Chairman 255 600 273 500

Member 255 600 273 500

The annual remuneration payable to any Non-Executive Director is R255 600 per annum (2014), notwithstanding the number of committees he/she is a member/Chairman of. The proposed fee for 2015 is R273 500 per annum.

Fees as set out above are subject to shareholder approval at the Annual General Meeting to be held on 21 August 2014.

Directors’ remuneration is set out in Note 25 of the annual fi nancial statements.

The three highest paid members of management (excluding Executive Directors) are set out below:

2014R

2013R

Employee 1 1 534 107 1 267 857

Employee 2 1 192 454 1 069 983

Employee 3 1 130 315 967 901

Total 3 856 876 3 305 741

Social and Ethics CommitteeThe Social and Ethics Committee has also been established in compliance with the requirements of King III and met three times during the year, under the chairmanship of Eric Ratshikhopha. Attendance of the meetings was as follows:

Name of Director16 May

201312 Nov

201323 May

2014

E Ratshikhopha Y Y Y

AR Dreisenstock Y N Y

AJD da Silva Y Y Y

S Sookanathan Y Y Y

The committee comprises four members including an Independent Non-Executive Director, who chairs the committee, two Executive Directors as well as the Group SHEQ Manager. Although the committee is newly established, over the year it has monitored:• social and economic development;• good corporate citizenship;• the environment, health and public safety;• consumer relationships; and • labour and employment.



Corporate governance report (continued)

Additional information relating to the points above can be found in the

Sustainability Report.

Company SecretaryThe appointment and removal of the Company Secretary is approved by

the Board. The Company Secretary advises the Board on the appropriate

procedures for the management of meetings and the implementation of

governance procedures, and is further responsible for providing the

Board collectively, and each Director individually, with guidance on the

discharge of their responsibilities in terms of the legislation and

regulatory requirements applicable to South Africa.

The Board is satisfi ed that there is an arm’s length relationship between

the Company Secretary and PSV as the Company Secretary is not a

Director of the Group and is itself a separate legal entity and at all times

maintains open lines of communication with the Board. The Board has

unlimited access to the Company Secretary, who advises the Board and

its committees on issues including compliance with Group policies and

procedures, statutory regulations and relevant governance principles

and recommendations. The Company Secretary attends Board and

Committee meetings to ensure that comprehensive minutes of meetings

are recorded.

Merchantec Capital was appointed in January 2011 as the Company

Secretary of PSV. The Board has considered and is satisfi ed that the

Company Secretary has the required qualifi cations, skills and knowledge

through their many years of experience. The Board is satisfi ed with the

considered advice received from the Company Secretary as well as the

level of service provided to PSV. Furthermore the skills, competence and

experience of the Company Secretary are verifi ed through the:

a. monitoring, guiding and advising the Board on matters relating to

governance, legislative and statutory requirements and their duties

and responsibilities as directors;

b. secretarial and administrative procedures are performed promptly

and effi ciently by the Company Secretary; and

c. the Company Secretary ensures that all directors have declared in

writing any confl icts of interests at every meeting.

Relations with shareholdersThe Group maintains dialogue with its key financial audiences, especially institutional shareholders and analysts. For further information, refer to page 31 of this Integrated Annual Report.

StakeholdersThe stakeholders of the Group include suppliers, employees, Government and quasi Government organisations, shareholders and customers. Each stakeholder is communicated with by either the holding company or the division directly, and feedback is also encouraged in writing, telephonically or via the website.

Fraud and illegal actsThe Group does not engage in nor tolerate any illegal acts in the conduct of its business. The Directors’ policy is to actively pursue and prosecute the perpetrators of fraudulent or other illegal activities, should they become aware of any such acts.

Insider tradingNo employee may deal, directly or indirectly, in PSV’s shares on the basis of unpublished price-sensitive information regarding the business or affairs of the Group.

Code of ConductThe Group is committed to the highest ethical standards of business conduct. The key pillars of the code include adherence to the legal framework and ensuring that the Group is not brought into disrepute, against the overriding background of transparency in all transactions, complying fully with all applicable laws and regulations, ensuring that a relationship of trust and shared values is built up with both employees and external stakeholders. The Directors, employees, employees of outsourced functions, as well as suppliers to PSV, are all expected to comply with these principles and act in terms of the Code of Conduct. The Directors believe that the ethical standards of the Group, as

stipulated in the Code of Conduct, are monitored and are being met. Where there is non-compliance with the Code of Conduct, the appropriate discipline is enforced with consistency as the Group responds to offences and prevents recurrences.


ShareholdersAnalysis of shareholders as at 28 February 2014

Size of HoldingsNumber of

shareholdings% of total

shareholdingsNumber of

shares% of shares

in issue

1 – 1 000 shares 260 34.81% 90 057 0.03%1001 – 10 000 shares 199 26.64% 991 606 0.36%10 001 – 100 000 shares 212 28.38% 8 240 505 3.02%100 001 – 1 000 000 shares 56 7.50% 19 080 581 7.00%1 000 001 shares and over 20 2.67% 244 144 950 89.59%

Total 747 100.00% 272 547 699 100.00%

Distribution of shareholdersRetail shareholders 648 86.75% 102 745 574 37.70%Hedge funds 1 0.13% 55 928 808 20.52%Scrip lending 1 0.13% 47 500 000 17.43%Private companies 18 2.41% 29 105 361 10.68%Managed funds 2 0.27% 13 370 347 4.91%Treasury 1 0.13% 11 061 495 4.06%Custodians 4 0.54% 5 054 928 1.85%Trusts 31 4.15% 4 692 186 1.72%Close corporations 23 3.08% 2 559 895 0.94%Investment partnerships 4 0.54% 507 780 0.19%Stockbrokers and nominees 7 0.94% 11 199 0.00%Share schemes 1 0.13% 7 575 0.00%Unclaimed scrip 3 0.40% 1 872 0.00%Foundations and charitable funds 2 0.27% 650 0.00%Public companies 1 0.13% 29 0.00%

Total 747 100.00% 272 547 699 100.00%

Shareholder typeNon-public shareholders 8 1.07% 174 952 578 64.19% Directors of the Company or its subsidiaries Directors and associates (direct holding) 2 58 454 700 21.45% Directors and associates (indirect holding) 2 2 000 000 0.73%Holders holding more than 10% (excluding Directors’ holding) Westbrooke Capital 1 55 928 808 20.52% Investec 1 47 500 000 17.43%Share trusts 1 7 575 0.00%Treasury (less Directors’ Interests) 1 11 061 495 4.06%

Public shareholders 739 98.93% 97 595 121 35.81%

Total 747 100.00% 272 547 699 100.00%


Shareholders

Analysis of shareholders (continued) as at 28 February 2014

Beneficial shareholders with a holding greater than 5% of the shares in issueNumber of

shareholdingsNumber of

shares% of shares

in issue

Westbrooke Capital 1 55 928 808 20.52%Mr AJD Da Silva 1 52 578 600 19.29%Investec 1 47 500 000 17.43%

Total 3 156 007 408 57.24%

Total number of shareholdings 747 – –

Total number of shares in issue 272 547 699 – –

Holding entity name (as per share register) DirectorDirect

holdingIndirect holding

Mr Abilio Jose Duarte da Silva Mr AJD da Silva 52 578 600 1 000 000Mr Anthony Robert Dreisenstock Mr AR Dreisenstock 5 876 100 1 000 000

Director holdings 58 454 700 2 000 000

There have been no changes in the directors interests since 28 February 2014 and the date on which the annual fi nancial statements were approved.


JSE share information

Share price performance

Opening price 1 March 2013 18c

Closing price 28 February 2014 17c

Closing high for the period (25 26 29 July 2013) 25c

Closing low for the period (8 May 2013) 15c

Number of shares in issue 272 547 699

Volume traded during period 16 419 611

Ratio of volume traded to shares in issue (%) 6.02

Total (R) value traded during the period R3 073 317

Interaction with shareholders The Group maintains dialogue with key fi nancial audiences, including institutional and private shareholders, analysts, fund and private client Managers. The Investor Relations team together with the CEO and CFO manages the dialogue and feedback with and to these respective audiences. The Group adopts a proactive stance in timely dissemination of appropriate information to stakeholders and shareholders through SENS as well as print and electronic news releases and the statutory publication of the Group’s fi nancial performance.

The Group’s website provides the latest and historical fi nancial and other information, including the fi nancial reports as well as information on the business units of the Company.

The Board encourages shareholders to attend its Annual General Meeting, notice of which is contained in this Integrated Annual Report, where shareholders will have the opportunity to put questions to the Board, including the Chairmen of the Board Committees.

Shareholders are able to provide feedback to PSV via the website in the “contact us” section, where an email is produced directly to the CEO’s offi ce. An investor relations consultancy has been appointed that further disseminates information to the market and shareholders are also encouraged to contact the consultancy should they require additional information.

Shareholders’ diary

Financial year-end 28 February 2014

Reports and profi t announcements

Final results publication May

Integrated Annual Report publication July/August

Interim results publication November

Annual General Meeting 21 August 2014


Audit and Risk Committee report 33

Directors’ responsibility statement 35

Certifi cation by Company Secretary 35

Directors’ report 36

Report of independent auditors 38

Consolidated statement of comprehensive income 39

Consolidated statement of fi nancial position 40

Consolidated statements of changes in equity 42

Consolidated statement of cash fl ows 44

Accounting policies 45

Notes to the annual fi nancial statements 56

Financial section

The annual fi nancial statements have been audited in compliance with Section 30 of the Companies Act of 2008. Tony Dreisenstock CA(SA) was responsible for the supervision of the preparation of the annual fi nancial statements. The annual fi nancial statements were published on 7 July 2014.

Annual fi nancial report


Audit and Risk Committee report for the year ended 28 February 2014

AppointmentThe Audit and Risk Committee is appointed at each Annual General Meeting as required by the new Companies Act 71 of 2008 (“the Act”) Part D, Section 94. This section requires the Audit and Risk Committee to prepare a report to be included in the annual fi nancial statements for that fi nancial year, specifying the matters set out below. The JSE Listings Requirements (AltX section paragraph 21.5) requires the issuer to appoint an Audit and Risk Committee that “must fulfi l the role as set out in the King Code”.

Constitution of the committeeThe committee was approved by the shareholders at the Special General Meeting held on 31 May 2012. It has three Independent Non-Executive Directors as required by the Act and the Board is satisfied that the qualifi cations, skill and experience of the committee members meet the requirements of the Act and enable it to fulfi l its mandate. The Chairman of the committee is a chartered accountant.

ResponsibilitiesThe Act requires the Audit Committee to prepare “a report” which covers the following matters:• describe how the committee carried out its functions;• state whether the committee is satisfi ed that the auditor was independent of the Company; and• comment as appropriate on the accounting practices and the internal fi nancial controls of the Company.

In addition the Act sets out the “duties” of the Audit Committee:• to nominate an independent auditor;• to determine the fees and terms of engagement of the auditor;• to ensure the appointment complies with the Act;• to determine the nature and extent of non-audit services that the auditor may or may not provide;• to pre-approve any proposed agreement for the auditor to provide non-audit services;• to deal with any concerns relating to accounting practices, internal audit, the content or auditing of the

Company’s fi nancial statements, internal fi nancial controls, or any related matter;• to make submissions to the Board on any matter concerning accounting policies, fi nancial control, records

and reporting; and• to perform any oversight function required by the Board.

Activities of the Audit Committee during the year:• held quarterly meetings of the committee;• reviewed management accounts and reports, budgets, budget variations, strategic, fi nancial and operational

risks, analysed the balance sheet and income statement, examined working capital management, assessed the performance of subsidiaries, examined funding structures and approved fi nancial restructuring of the Group, examined executive and staff remuneration, assessed the state of internal controls and areas of

weakness, examined the business model, examined the security and integrity of the IT environment, other related matters;

• approved the external audit plan and year-end programme for the year ended 28 February 2014;• examined the fi nal report of the external auditors, and held year-end meetings with the external auditors in

the absence of management, to cover matters in their fi nal report, and held discussions on the year-end audit adjustments;

• reviewed and approved accounting treatment of signifi cant matters;• reviewed and satisfi ed itself as to the independence and competence of the external auditor, having due

regard to the scope of additional services provided by them and that such services were properly authorised and have not impaired their independence;

• assessed and satisfi ed itself as to the competence of the CFO;• reviewed and approved shareholder announcements;• satisfi ed itself as to the compliance of the fi nal consolidated results for the year ended 28 February 2014

with the Act and International Financial Reporting Standards, reviewed and approved the results and recommended same to the Board for acceptance. The Board has subsequently approved the results for 2014 which will be open for discussion at the forthcoming Annual General Meeting;

• approved the fees of the external auditor, having given due consideration to additional work performed by the auditors at year-end;

• reviewed and approved divisionalisation of business units and the fi nancial implications thereof; and• reviewed updated Group business risks.

Key matters arising out of the work of the Audit and Risk Committee:• BDO Risk Advisory Services Proprietary Limited have been engaged to fulfi l an internal audit function and

will commence its risk-based work programme imminently.• Management has instituted better internal controls throughout the Group, and areas of weakness continue

to be addressed.• All companies in the Group moved to Pastel Evolution during the latter part of 2014 fi nancial year. • Scrutiny of the performance of subsidiaries is a continuing focus area and measures are taken to improve

results of those companies which are not meeting the targets for return on capital and assets. The policy is to divest of non-performing subsidiaries which cannot show a reasonable turnaround time.

• KPIs are used for all subsidiaries and executives.• Working capital management is a focus of the Group. The executive meets the management of subsidiaries

on a monthly basis to review performance against targets. There is continuing emphasis on this in all business units.

• Work has been ongoing to reduce head offi ce costs. This continues to be a work in progress.


Annual fi nancial statements

ConclusionNotwithstanding the ongoing initiatives and matters requiring attention noted above, the committee has satisfi ed itself that the internal control environment, disciplines and procedures are adequate to comply with the Act, to minimise the fi nancial risks of the Group, and to provide adequate information in a timeous manner to enable management and the Audit Committee to perform their responsibilities. The committee is of the opinion that its objectives were met during the year under review.

Anthony de la RueAudit Committee Chairman

7 July 2014

Audit and Risk Committee report (continued) for the year ended 28 February 2014


Directors’ responsibility statement

The Directors are responsible for the preparation and fair presentation of the consolidated and separate annual fi nancial statements of PSV Holdings Limited, comprising the statements of fi nancial position at 28 February 2014, and the statements of comprehensive income, changes in equity and cash fl ows for the year then ended, and the notes to the fi nancial statements which include a summary of signifi cant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa. In addition, the Directors are responsible for preparing the Directors’ report.

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

The Directors have made an assessment of the ability of the Company and its subsidiaries to continue as going concerns and have no reason to believe that the businesses will not be going concerns in the year ahead.

The auditor is responsible for reporting on whether the consolidated and separate annual fi nancial statements are fairly presented in accordance with the applicable fi nancial reporting framework.

Approval of consolidated and separate annual fi nancial statementsThe consolidated and separate annual fi nancial statements of PSV Holdings Limited, as identifi ed in the fi rst paragraph, were approved by the Board of Directors on 30 May 2014 and signed by:

AJD da Silva AR DreisenstockChief Executive Offi cer Chief Financial Offi cer

Certifi cation by Company Secretary

In terms of Section 88(2)(e) of the Companies Act, 2008 (Act 71 of 2008), as amended (“the Act”), I certify that, to the best of my knowledge and belief, the Group has, in respect of the fi nancial year reported upon, lodged with the Registrar of Companies all returns required of a public company in terms of the Act and that all such returns are true, correct and up to date.

Merchantec CapitalCompany Secretary

7 July 2014



Directors’ report

The Directors have pleasure in submitting their report together with the Company and Group annual fi nancial statements for the fi nancial year ended 28 February 2014.

Nature of businessPSV is a specialised industrial engineering group focused on engineering linings, industrial supplies and cryogenics to the mining, petrochemical, water and waste water management sectors in South Africa and Africa.

Financial statementsThe Company and Group’s results and fi nancial position are contained in the annual fi nancial statements on pages 39 to 94 of the report. The audited annual fi nancial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and their interpretation adopted by the International Accounting Standards Board (“IASB”), the Listings Requirements of the JSE Limited (“JSE”), the Companies Act, 2008 (as amended) and the Companies Regulations, and remain consistent with those applied to the provisional audited results announced on 30 May 2014.

Financial resultsThe improvement in earnings belies the pressure that all our trading operations experienced during the course of the year. Total comprehensive income for the period settled at R1.96 million, an improvement from the loss of R20.7 million in 2013. Headline earnings per share improved marginally from 2.43 cents per share (cps) to 2.70 cps.

Cash fl ow from operating activities declined principally due to loss making contracts at Engineered Linings and continued infrastructural development in Turbo Agencies and African Cryogenics. As a result, the Company’s debt:equity ratio (net of cash) decreased from 5.94% in 2013 to 10.12% in the current year. PSV ended the year with cash and cash equivalents of R11.0 million, 34% less than in 2013 when the year ended on R16.7 million.

The Company’s balance sheet remained stable, with marginal improvements experienced in working capital ratios and the Company’s net tangible asset per share increasing slightly from 22.09 cps in 2013 to 22.65 cps in 2014.

A new accounting system was implemented across the subsidiaries. The system puts in place a better foundation for fi nancial information into the future. In addition, PSV has appointed BDO Spencer Steward as Internal Auditor and the process has kicked off with a Risk Review which has been formulated into a managed Risk Register.

Disposal of the PSV Mitech BusinessShareholders voted in favour of the disposal of PSV Mitech Proprietary Limited for a total purchase consideration amounting to R7 million. The main purpose for the disposal was to settle debt and provide

working capital to the Group’s remaining subsidiaries. The results of the PSV Mitech Business operations have been refl ected as part of the loss from discontinued operations.

DividendsNo dividends were paid nor recommended to shareholders during the fi nancial year ended 28 February 2014 (2013: gross special dividend of 3.6 cents per share, following the disposal of the Pump Business).

Property, plant and equipmentDuring the year the Group invested R6.7 million in new property, plant and equipment in order to expand its operations. Details of property, plant and equipment are contained in Note 9 of the annual fi nancial statements.

Borrowing powersIn terms of the Company’s Memorandum of Incorporation, its borrowing powers are unlimited. The borrowing powers of the Group’s wholly owned operating subsidiaries may in terms of its Articles of Association be limited by the Company.

Certifi cation by the Company SecretaryRefer to page 35 for the certifi cation by the Company Secretary.

LitigationThe acquirer of Groupline Projects Proprietary Limited has declared a dispute on the basis of a supposed breach of warranties contained in the Sale of Shares Agreement. The Group has aggressively opposed this action. Consequently the parties have entered into arbitration to resolve the dispute. The arbitration hearing date is still to be set. After consultation with the Group’s auditors, no provision has been made in the Group accounts for any potential loss arising from this dispute. Other than the above, there are no legal or arbitration proceedings, including any such proceedings that are pending or threatened, of which PSV is aware that may have, or have had during the 12 months preceding the date of the Integrated Annual Report, a material effect on the fi nancial position of the Group.

Independent auditorsIn 2013, the Group appointed Certifi ed Master Auditors Inc as independent auditors and they undertook the audit for 2014.

Stated capitalDetails of the authorised and issued stated capital of the Company and the movements during the period are contained in Note 16 of the annual fi nancial statements.

Directors and secretaryThe names of the Directors in offi ce are set out on page 13. The interests of Directors in the issued share capital of the Company are provided on page 30 of the Integrated Annual Report.


During the year under review, the following changes were made to the Board:• Peter Robinson resigned as Non-Executive Director with effect from 4 June 2013.

In accordance with the requirements of the JSE Limited, a detailed report on Directors’ remuneration appears in Note 25.

Details of the top earners, other than Directors, is provided on page 27

Signifi cant shareholdersDetails of signifi cant shareholders are included on page 29 of this Integrated Annual Report.

Business unitsDetails of the Company’s business units appear in Note 12 to the annual fi nancial statements.

Special Resolutions by business unitsThe authority of the wholly owned business units to purchase their own and the Company’s shares, subject to the relevant provisions of the Act and the Listings Requirements of the JSE, will be proposed to shareholders on 21 August 2014 and if successful, fi led with CIPC. No other Special Resolutions were passed by business units during the period under review, or between the reporting date and the date of this report.

Approval of annual fi nancial statements

The consolidated and separate annual fi nancial statements of PSV Holdings Limited and its business units were approved by the Board of Directors on 30 May 2014 and are signed on its behalf by:

AJD da Silva AR DreisenstockChief Executive Offi cer Chief Financial Offi cer



Report of independent auditors

To the shareholders of PSV Holdings LimitedWe have audited the fi nancial statements of PSV Holdings Limited, as set out on pages 39 to 94, which comprise the statement of fi nancial position as at 28 February 2014, and the statement of comprehensive income, statement of changes in equity and statement of cash fl ows for the year then ended, and the notes, comprising a summary of signifi cant accounting policies and other explanatory information.

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

Auditors’ responsibilityOur responsibility is to express an opinion on these fi nancial 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 fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the fi nancial 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 fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the fi nancial statements.

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

OpinionIn our opinion, the fi nancial statements present fairly, in all material respects, the fi nancial position of PSV Holdings Limited as at 28 February 2014, and its fi nancial performance and its cash fl ows for the year then ended in accordance with International Financial Reporting Standards, and the requirements of the Companies Act 71 of 2008.

Other reports required by the Companies ActAs part of our audit of the fi nancial statements for the year ended 28 February 2014, we have read the Directors’ Report and the Audit Committee’s Report for the purpose of identifying whether there are material inconsistencies between these reports and the audited financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports we have not identifi ed material inconsistencies between these reports and the audited fi nancial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

Certifi ed Master Auditors Inc. CMA Offi ce & Conference ParkNo. 1 2nd RoadHalfway HouseMidrand1685

Raymond BaardRegistered Auditors

30 May 2014


Consolidated statement of comprehensive income for the year ended 28 February 2014

Group Company

2014 2013 2014 2013Notes R R R R

Revenue 4A 391 121 145 381 109 304 29 431 437 16 523 499 Cost of sales (318 935 498) (297 767 130) (908 071) –

Gross profit 72 185 647 83 342 174 28 523 366 16 523 499 Other income 6 938 649 1 563 627 34 443 244 82 214 224 Other expenses (81 661 866) (71 169 895) (30 341 168) (47 351 217)

Results from operating activities 2 (2 537 570) 13 735 906 32 625 442 51 386 506

Finance income 4B 441 927 2 035 634 275 116 1 175 234 Finance costs 4B (2 672 161) (5 765 951) (1 549 238) (5 967 223)

Net finance costs (2 230 234) (3 730 317) (1 274 122) (4 791 989)

(Loss)/profit before income tax (4 767 804) 10 005 589 31 351 320 46 594 517 Income tax 5 11 457 532 (5 772 703) – –

Profit for the year from continuing operations 6 689 728 4 232 886 31 351 320 46 594 517

Loss from discontinued operations 6 (121 249) (877 981) – –Loss on sale of discontinued operations 6 (4 715 826) (27 136 736) – –

Profit/(loss) for the year attributable to ordinary shareholders 1 852 653 (23 781 831) 31 351 320 46 594 517

Other comprehensive incomeReclassification of FCTR on disposal of foreign operation 7 – 3 099 444 – –The amount below does not attract any tax and may be subsequently reclassified to profit or lossForeign currency translation reserve 7 111 823 (90 981) – –

Total comprehensive income/(loss) for the year 1 964 476 (20 773 368) 31 351 320 46 594 517

Earnings/(loss) per shareBasic earnings per share (cents) 8 0.71 (9.36) – –Diluted earnings per share (cents) 8 0.71 (9.33) – –Basic earnings per share (cents) – continuing operations 8 2.56 1.67 – –Diluted earnings per share (cents) – continuing operations 8 2.55 1.66 – –



Consolidated statement of fi nancial position as at 28 February 2014

Group Company

2014 2013 2014 2013Notes R R R R

ASSETS Non-current assets Property, plant and equipment 9 21 061 114 21 212 730 3 239 992 3 563 350 Intangible assets 10 10 610 210 11 750 851 315 430 – Goodwill 11 29 186 265 29 186 265 – – Investment in subsidiaries 12 – – 85 422 147 85 422 267 Deferred taxation assets 18 12 199 448 2 171 068 – –

Total non-current assets 73 057 037 64 320 914 88 977 569 88 985 617

Current assets Inventories 13 29 358 229 33 953 769 2 869 932 3 231 032 Loans to Group companies 12 – – 59 141 148 25 982 988 Trade and other receivables 14 58 032 277 70 570 850 8 752 907 5 637 492 Taxation receivable 894 473 – – – Cash and cash equivalents 15 27 710 873 23 029 914 5 591 799 11 300 592

Total current assets 115 995 852 127 554 533 76 355 786 46 152 104

Non-current assets held-for-sale 6 – 21 843 562

Total assets 189 052 889 213 719 009 165 333 355 135 137 721

EQUITY – Share capital 16 273 136 360 273 059 364 274 494 010 274 494 010 Share based payment reserve 3 41 594 141 842 41 594 15 068 Foreign currency translation reserve 7 (75 337) (187 160) – – Retained loss (174 102 672) (175 955 326) (132 317 773) (163 669 094)

Total equity attributable to equity holders of the Company 98 999 945 97 058 720 142 217 831 110 839 984


Group Company

2014 2013 2014 2013Notes R R R R

LIABILITIES Non-current liabilities Deferred purchase consideration 17 4 659 206 7 578 457 4 659 206 7 578 457 Deferred taxation liabilities 18 3 740 557 4 873 649 – – Loans and borrowings 19 6 966 779 5 642 916 442 877 390 289

Total non-current liabilities 15 366 542 18 095 022 5 102 083 7 968 746

Current liabilities Loans from Group companies 12 – – – 3 339 363 Trade and other payables 20 45 406 737 67 868 525 7 854 563 5 734 860 Taxation payable 3 171 195 4 779 574 – – Current portion of deferred purchase consideration 17 6 599 229 7 133 970 6 599 229 7 133 970 Bank overdraft 15 16 672 996 6 280 851 3 387 685 – Current portion of loans and borrowings 19 2 836 245 2 161 107 171 964 120 798

Total current liabilities 74 686 402 88 224 027 18 013 441 16 328 991

Non-current liabilities held-for-sale 6 – 10 341 240 – –

Total liabilities 90 052 944 116 660 289 23 115 524 24 297 737

Total equity and liabilities 189 052 889 213 719 009 165 333 355 135 137 721



Statements of changes in equity for the year ended 28 February 2014

Share capital

Share-based payment reserve

Foreign currency translation (deficit)/reserve translation

reserve Accumulated

loss Total R R R R R

Group Balance at 29 February 2012 271 606 106 205 782 (3 195 623) (142 844 627) 125 771 638 Reclassification of FCTR on disposal of foreign operation – – 3 099 444 – 3 099 444 Loss for the year – – (90 981) (23 781 831) (23 872 812)

Total comprehensive loss for the year – – 3 008 463 (23 781 831) (20 773 368)

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Shares vested during the year 1 453 258 (1 453 258) – – – Share-based payment cost – 1 389 318 – – 1 389 318

Dividends paid – – – (9 328 872) (9 328 872)

1 453 258 (63 940) – (9 328 872) (7 939 554)

Balance at 28 February 2013 273 059 364 141 842 (187 160) (175 955 326) 97 058 720

Total comprehensive income for the year Profit for the year – – 111 823 1 852 653 1 964 476

Total comprehensive income for the year – – 111 823 1 852 653 1 964 476

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Issue of shares – – – – – Shares vested during the year 76 996 (76 996) – – – Share-based payment cost – (23 252) – – (23 252)

76 996 (100 248) – – (23 252)

Balance at 28 February 2014 273 136 360 41 594 (75 337) (174 102 672) 98 999 945


Share capital

Share-based payment reserve

Foreign currency translation (deficit)/reserve translation

reserve Accumulated

loss Total R R R R R

Company Balance at 29 February 2012 274 494 010 395 243 – (200 934 739) 73 954 514 Total comprehensive income for the year Profit for the year – – – 46 594 517 46 594 517 Transactions with owners, recorded directly in equity Contributions by and distributions to owners Dividends paid – – – (9 328 872) (9 328 872)Shares vested during the year – (817 209) – – (817 209)Share-based payment cost – 437 034 – – 437 034

– (380 175) – (9 328 872) (9 709 047)

Balance at 28 February 2013 274 494 010 15 068 – (163 669 094) 110 839 984

Total comprehensive income for the year Profit for the year – – – 31 351 320 31 351 320 Transactions with owners, recorded directly in equity Contributions by and distributions to owners Issue of shares – – – – – Share-based payment cost – 26 526 – – 26 526

– 26 526 – – 26 526

Balance at 28 February 2014 274 494 010 41 594 – (132 317 773) 142 217 831



Consolidated statement of cash fl ows for the year ended 28 February 2014

Group Company

2014 2013 2014 2013Notes R R R R

Cash flows from operating activities 22A (970 457) 8 989 683 32 896 036 (3 103 537)Taxation paid 22B (2 169 755) (5 322 694) – –

Net cash (used in)/from operating activities (3 140 212) 3 666 989 32 896 036 (3 103 537)

Cash flows from investing activitiesAdditions to property, plant and equipment to expand operations (3 937 410) (8 416 993) (244 434) – Additions to intangibles to expand operations (449 009) – (425 046) –Proceeds from disposal of property, plant and equipment 1 454 187 7 921 201 – 4 308 059 Proceeds on sale of subsidiaries 6 810 204 46 406 906 120 45 246 700 Dividends received – – – 41 534 651 Financial income arising on investments 441 927 2 035 634 275 116 1 175 234

Net cash from/(used in) investing activities 4 319 899 47 946 748 (394 244) 92 264 644

Cash flows from financing activities Loans repaid/(granted) to previous vendors – 1 688 060 – – Loans repaid 17 (2 683 911) (2 057 653) (2 683 911) –Settlement of deferred purchase consideration 17 (1 415 715) (7 367 288) (1 415 715) (9 424 942)Loans and borrowings (repaid)/granted (764 720) (22 515 811) (97 518) (22 411 806)Loan to Group companies – – (36 497 522) (24 031 456)Financial costs on interest-bearing debt (2 026 527) (4 085 768) (903 604) (4 287 041)Dividends paid – (9 328 872) – (9 328 872)Loans from directors – (1 600 000) – (1 600 000)

Net cash used in financing activities (6 890 873) (45 267 332) (41 598 270) (71 084 117)

Net increase in cash and cash equivalents (5 711 186) 6 346 405 (9 096 478) 18 076 990 Cash transferred to assets held-for-sale 6 – 1 233 513 – – Cash and cash equivalents at the beginning of the year 16 749 063 9 169 145 11 300 592 (6 776 398)

Cash and cash equivalents at the end of the year 15 11 037 877 16 749 063 2 204 114 11 300 592

For cash flow effects of discontinuing operations refer to Note 6.


Accounting policies for the year ended 28 February 2014

PSV Holdings Limited (“the Company”) is a company domiciled in South Africa. The consolidated fi nancial statements at 28 February 2014 comprise the Company and its business units (together referred to as “the Group”).

The principal accounting policies adopted in the preparation of the fi nancial statements are set out below.

Statement of complianceThe Company and Group’s annual fi nancial statements have been prepared in accordance with and comply with International Financial Reporting Standards (“IFRS”) and its interpretations adopted by the International Accounting Standards Board (“IASB”) and the requirements of the Companies Act of South Africa and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council.

Basis of preparationThe audited condensed consolidated fi nancial statements (“the fi nancial statements”) for the year ended 28 February 2014 (“the year”) have been prepared in accordance with the framework concepts, the recognition and measurement requirements of International Financial Reporting Standards (“IFRS”), the disclosure and presentation requirements of “IAS 34: Interim Financial Reporting”, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the Listings Requirements of the JSE Limited and the South African Companies Act, 2008 (Act 71 of 2008), as amended. The accounting policies and method of computation applied in preparation of these fi nancial statements are in accordance with IFRS and are consistent with those applied in the annual fi nancial statements for the 12 months ended 28 February 2013.

Accounting for business combinationsThe Group has applied IFRS 3 – Business Combinations (2008) in Business units.

For acquisitions on or after 1 March 2010, the Group measures goodwill at the acquisition date as:• the fair value of consideration transferred, plus• the recognised amount of any non-controlling interests in the acquiree, plus• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree,

less• the net recognised amount (generally fair value) of the identifi able assets acquired and liabilities assumed.

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

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

Costs related to the acquisition, other than those associated, with the issue of debt or equity securities, that the Group incurs in connection with the business combination are expensed as incurred.

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

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

In particular, information about areas of estimation and critical judgements in applying accounting policies that have the most signifi cant effect on the amount recognised in the fi nancial statements are described in the following notes:

• Note 10 useful lives and impairment tests on intangible assets.• Note 11 impairment test on goodwill.• Note 18 impairment of deferred tax assets.

The accounting policies set out below have been applied consistently to all periods presented.

Functional and presentation currencyThe fi nancial statements are presented in Rand, which is the Company’s functional currency, and all values are rounded to the nearest Rand except when otherwise indicated.

Basis of consolidationBusiness unitsThe Group fi nancial statements include the fi nancial statements of the Company and its business units. Where an investment in a business unit was acquired during the fi nancial year its results are included from the date control commences.

Business units are those entities over whose fi nancial and operating policies the Group has the power to exercise control, so as to obtain benefi ts from their activities. In assessing when an investor controls an investee, consideration is given to when the entity is exposed, or has rights, to variable returns from its involvement with the investee and whether it has the ability to effect those returns through its power over



Accounting policies (continued) for the year ended 28 February 2014

the investee. An investor controls an investee when it has: power over the investee; exposure or rights to variable returns from its involvement with the Investee; and the ability to use its power to effect the amount of the investor’s returns.

New acquisitions are included in the Group fi nancial statements using the purchase method whereby the assets and liabilities are measured at their fair value. The purchase consideration is allocated on the basis of the fair values on the dates of acquisition.

All intra-group transactions and balances arising are eliminated in preparing the consolidated fi nancial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

All companies in the Group maintain consistent accounting policies and have the same year-end.

Common control transactionsBusiness combinations in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination (and where that control is not transitory) are referred to as common control transactions. The accounting policy for the acquiring entity would be to account for the transaction at book value in its consolidated fi nancial statements. The book value of the acquired entity is the consolidated book value as refl ected in the consolidated fi nancial statements of the selling entity. The excess of the cost of the transaction over the acquirer’s proportionate share of the net asset value acquired in common control transactions, will be allocated to the common control reserve in equity. The fi nancial statements of the purchaser incorporate the combined companies’ results and cash fl ows as if the companies have always been combined, including the re-presentation of the comparative fi gures.

Loss of controlOn the loss of control, the Group derecognises the assets and liabilities of the business unit, any non-controlling interests and the other components of equity related to the business unit, on the date the investor ceases to have control over the investee. Any surplus or defi cit arising on the loss of control is recognised in profi t or loss. If the Group retains any interest in the previous business unit, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale fi nancial asset depending on the level of infl uence retained.

Foreign currenciesForeign currency transactionsForeign currency transactions are translated at the rates of exchange ruling at the dates of the transactions. Balances on monetary assets and liabilities outstanding on foreign transactions at the end of the fi nancial year are translated to Rand at the rates ruling at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period,

adjusted for effective interest and prepayments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period. Gains or losses on translation are recognised in profi t or loss.

Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Rand at the foreign exchange rates ruling at the dates the fair value was determined.

Foreign business unitsThe assets and liabilities of foreign business units, including goodwill and fair value adjustments arising on acquisition, whose functional currencies are not Rand, are translated into Rand at rates of exchange ruling at the end of the fi nancial year and the results of operations and cash fl ow items are translated at an appropriate weighted average rate of exchange for the year. Gains and losses on translation of foreign subsidiaries are recognised in other comprehensive Income as a foreign currency translation reserve.

Where loans to the foreign business units are long-term in nature and its settlement is neither planned nor likely in the foreseeable future, it forms part of the Company’s net investment in the foreign business unit, the translation gains or losses arising on converting the loans to the rates of exchange ruling at the end of the fi nancial year are taken directly to a foreign currency translation reserve in shareholders’ equity in the Group fi nancial statements and to the profi t and loss for the Company. On disposal of the net investment, the translation gains or losses are recognised in profi t and loss.

Revenue recognitionRevenue is recognised only when it is probable that the economic benefi ts associated with a transaction will fl ow to the Group and Company and the amount of revenue can be measured reliably. If there are signifi cant uncertainties regarding the recovery of the consideration due or associated costs for the possible return of goods, revenue is recognised to the extent of costs being recoverable.

GoodsRevenue arising from the sale of goods is measured at the fair value of the consideration received, or receivable net of returns and allowances, trade discounts, volume rebates and value added taxes. Revenue is recognised when the signifi cant risks and rewards of ownership of the goods have passed to the buyer, recovery of the consideration is probable, the associated costs and possible return of the goods can be estimated reliably, and there is no continuing management involvement with the goods.

ServicesWhere the Group provided services, the percentage of completion method is used to recognise revenue. The stage of completion is based on labour hours worked for cryogenic vessel manufacture, and square metres laid for lining installations.


Financial incomeInterestInterest income is recognised in profi t and loss as it accrues using the effective interest method.

Exchange gainsGains on foreign currency transactions are included in fi nance income.

Financial expensesFinance expenses comprise interest payable on borrowings and the unwinding of discounts arising on

deferred purchase considerations owing to vendors on investments acquired; calculated on the principal

outstanding using the effective interest method. Losses on foreign currency transactions are also included

in fi nancial expenses.

TaxationIncome tax expense comprises current and deferred tax. Income tax expense is recognised in profi t and loss

except to the extent that it relates to a business combination or items recognised directly in equity, in which

case it is recognised directly in equity.

Current taxation comprises taxation payable calculated on the basis of the expected taxable income for the

year, using the taxation rates enacted or substantively enacted at the reporting date, and any adjustments of

taxation payable for previous years. Deferred taxation is recognised in respect of temporary differences.

Temporary differences are differences between the carrying amounts of assets and liabilities for fi nancial

reporting purposes and their tax base.

Deferred taxation is not recognised for the following temporary differences:

• the initial recognition of goodwill;

• the initial recognition of assets and liabilities in a transaction that is not a business combination and that

affects neither accounting nor taxable profi t; and

• differences relating to investments in business units to the extent that the timing of the reversal is controlled

by the Company and it is probable that they will not reverse in the foreseeable future.

Deferred taxation is recognised in profi t and loss except to the extent that it relates to a transaction that is

recognised in Other Comprehensive Income or directly in equity, which is recognised where the transaction

was recorded respectively. The amount of deferred taxation provided is based on the expected manner of the

realisation or settlement of the carrying amount of assets and liabilities using taxation rates enacted or

substantively enacted at the reporting date. A deferred taxation asset is recognised to the extent that it is

probable that future taxable profi ts will be available against which the associated unutilised taxation losses and

deductible temporary differences can be utilised. Deferred taxation assets are reduced to the extent that it is no longer probable that the related taxation benefi t will be realised.

The carrying value of a deferred tax asset is reviewed at the end of each reporting period.

Property, plant and equipmentProperty, plant and equipment are recorded at cost, less accumulated depreciation and impairment losses. All assets except for land are depreciated on the straight-line method over their expected useful lives to an estimated residual value. The estimated useful lives are currently:• Buildings 50 years• Plant and machinery 5 to 10 years• Motor vehicles 5 years• Furniture and offi ce equipment 6 years• Computer equipment 3 years• Patterns and dies 3 to 20 years• Leasehold improvements Shorter of useful lives or lease term

Cost includes expenditure that is directly attributable to the acquisition of the asset.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. Depreciation methods, residual values and useful lives are reassessed annually. Depreciation of an item of property, plant and equipment begins when it is available for the use and ceases at the earlier of the date it is classifi ed as held-for-sale or the date it is derecognised.

Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are taken to profi t and loss.

Subsequent costsThe cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefi ts embodied within the part will fl ow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profi t or loss as incurred.

Lease assetsFinance leasesLeases in terms of which the Group assumes substantially all the risks and rewards of ownership are classifi ed as fi nance leases. Property, plant and equipment subject to fi nance lease agreements are capitalised initially at the lesser of their fair value and the present value of the minimum lease payments and the corresponding liability to the lessor is raised. Lease payments are allocated to each period during the




lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability, which is charged against operating profi t, and the capital repayment, which reduces the liability to the lessor. These assets are treated on the same basis as the property, plant and equipment owned by the Group and are subject to impairment testing.

Operating leasesOther leases that do not transfer substantially all the risks and rewards of ownership, are treated as operating leases with lease payments charged against operating profi t. Payments made under operating leases are charged against income on a straight-line basis over the period of the lease.

Intangible assetsIntangible assets are stated at cost less accumulated amortisation and impairment losses. The current estimated useful lives are:• Market relationships 10 to 20 years• Customer relationships 1 to 7 years• Technology relationships 10 years

The amortisation methods, useful lives and residual values are reviewed at each fi nancial year-end.

Amortisation is recognised in profi t and loss on the straight-line basis over the estimated useful lives or intangible assets, other than goodwill, from the date they are available for use, since this most closely refl ects the expected portion of consumptions of the future economic benefi ts embodied in the asset.

Intangible assets are reviewed annually for impairment by management and with the assistance of independent valuers.

GoodwillAll business combinations are accounted for by applying the purchase method, any differences between the fair value of consideration transferred and the fair value of the identifi able assets, liabilities and contingent liabilities acquired is recognised as goodwill.

Where the excess is negative, it is recognised immediately in profi t and loss as a gain made on acquisition of business combinations.

Goodwill is tested annually for impairment losses. Impairment losses recorded are not subsequently reversed. Gains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash generating units for the purpose of impairment testing.

Payment in advancePayments in advance are capitalised and are released to profi t and loss in the period they are legally due.

Impairment of assetsThe carrying amount of the Group’s assets, other than inventories, receivables and deferred tax assets, which are separately assessed, are reviewed at each balance date to determine whether there is an indication of impairment and at any time when there is an indication of impairment. If there is any indication that an asset may be impaired, its recoverable amount is estimated. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specifi c to the asset of CGU. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit (“CGU”) exceeds its recoverable amount.

A previously recognised impairment loss, other than for goodwill, is reversed if the recoverable amount increases as a result of a change in the estimates and market conditions used to determine the recoverable amount, but not to an amount higher than the carrying amount that would have been determined (net of depreciation and amortisation) had no impairment loss been recognised in previous years.

A CGU is the smallest identifi able asset group that generates cash fl ows that are largely independent from other assets and groups. Impairment losses recognised in respect of CGUs are allocated fi rst to reduce the carrying amount of goodwill allocated to the CGU and then to reduce the carrying amount to the other assets in the unit on a pro rata basis.

InventoriesInventories are stated at the lower of cost or net realisable value. Cost is determined using weighted average cost. These are regularly reviewed and updated to refl ect input cost of raw materials, direct labour, other direct costs and related normal production overheads. Slow-moving goods and obsolete inventories are written down to their estimated net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses.

Stated capitalOrdinary sharesOrdinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity.

Repurchase of share capitalWhen share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from equity. Repurchased shares by business units are classifi ed as treasury shares and are presented as a deduction from total equity. Shares repurchased by the


Company are treated as treasury shares until cancelled or reissued. Where such ordinary shares are

subsequently reissued, any consideration received, net of any directly attributable incremental costs and

related income tax effects, is included in equity attributable to the Company’s equity holders.

Employee benefi tsShort-term employee benefi tsThe cost of all short-term employee benefi ts is recognised during the period in which the employee renders

the related service.

An accrual is made for the estimated liability for annual leave and performance bonuses as a result of services

rendered by employees up to the date of the Statement of Financial Position.

Defi ned contribution plansCertain business units in the Group contribute to a defi ned contribution fund for employees. A defi ned

contribution plan is a post-employment benefi t plan under which an entity pays fi xed contributions into a

separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for

contributions to defi ned contribution pension plans are recognised as an employee benefi t expense in the profi t

or loss when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund

or a reduction in future payments is available.

Financial instrumentsNon-derivative fi nancial instrumentsNon-derivative fi nancial instruments comprise investments in equity and debt securities, trade and other

receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative fi nancial instruments are recognised initially at fair value plus, for instruments not at fair value

through profi t or loss, any directly attributable transaction costs. Subsequent to initial recognition non-

derivative fi nancial instrument are measured at amortised cost using the effective interest method less any

impairment losses.

A financial instrument is recognised if the Group becomes a party to the contractual provisions of

the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash fl ows from

the fi nancial assets expire or if the Group transfers the fi nancial asset to another party without retaining

control or substantially all risks and rewards of the asset. Regular way purchases and sales of fi nancial

assets are accounted for at trade date, ie the date that the Group commits itself to purchase or sell the

asset. Financial liabilities are derecognised if the Group’s obligations specifi ed in the contract expire or are

discharged or cancelled.

Trade and other receivablesTrade and other receivables are initially measured at fair value. Subsequent measurement of trade and other

receivables is at amortised cost. Trade and other receivables are classifi ed as loan and other receivables.

Cash and cash equivalentsCash and cash equivalents comprise cash balances and call deposits. Bank overdrafts and cash and cash

equivalents are initially at cost and thereafter at fair value.

Impairment of fi nancial assetsA fi nancial asset is assessed at each reporting date to determine whether there is any objective evidence that

it is impaired. A fi nancial asset is considered to be impaired if objective evidence indicates that one or more

events have had a negative effect on the estimated future cash fl ows of the asset.

Individually signifi cant fi nancial assets are tested for impairment on an individual basis. The remaining fi nancial

assets are assessed collectively in groups that share similar credit risk characteristics.

An impairment loss in respect of a fi nancial asset measured at amortised cost is calculated as the difference

between its carrying amount and the present value of the estimated future cash fl ows discounted at the

original effective interest rate. For trade receivables, impairments are recognised based on whether the

debtors are experiencing fi nancial diffi culty, the probability the debtor will enter bankruptcy or fi nancial re-

organisation. Local and foreign trade debtors are considered for impairment when they have exceeded their

credit terms of 90 and 120 days respectively, or when the credit terms of their contract have been exceeded.

All impairment losses are recognised in profi t or loss.

OffsetFinancial assets and liabilities are offset and the net amount presented in the statement of fi nancial position

when, and only when, the Group has a legal right to offset the amount, and intends either to settle on a net

basis or to realise the assets and settle the liability simultaneously.

Earnings per shareThe Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is

calculated by dividing the profi t or loss attributable to ordinary shareholders of the Company by the weighted

average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the

profi t or loss attributable to ordinary shareholders and the weighted average number of ordinary shares

outstanding for the effects of all dilutive potential ordinary shares, which comprise deferred equity purchase

considerations and share awards granted to employees.




Headline earnings per shareHeadline earnings per share is calculated using the weighted average number of ordinary shares in issue during the period and is based on the earnings attributable to ordinary shareholders after excluding those items as required by Circular 2/2013 issued by the South African Institute of Chartered Accountants (“SAICA”).

Non-current assets held-for-sale and discontinued operationsNon-current assets are classifi ed as held-for-sale if their carrying amount will be recovered principally through a sale transaction, not through continuing use. These assets may be a component of an entity, a disposal group or an individual non-current asset. Upon initial classifi cation as held-for-sale, non-current assets and disposal groups are recognised at the lower of carrying amount and fair value less costs to sell. Any impairment losses arising are recognised in profi t or loss as capital items.

A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations or a business unit acquired exclusively with a view to resale. Classifi cation as a discontinued operation occurs upon the earlier of disposal or when the operation meets the criteria to be classifi ed as held-for-sale. When an operation is classifi ed as a discontinued operation, the comparative statement of comprehensive income and statement of cash fl ows are restated as if the operation has been discontinued from the start of the comparative period.

Operating segmentsAn operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. The Group determines and presents operating segments based on a the information that is internally provided to the Group’s Chief Executive Offi cer (“CEO”), who is the Group’s Chief Operating decision-maker.

An operating segment’s operating results are reviewed regularly by the CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete fi nancial information is available. Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Share-based payment transactionsEquity settledThe fair value of share options and deferred delivery shares granted to selected employees, including Directors, is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and expensed over the period during which the employees are required to provide services in order to become unconditionally entitled to the equity instruments. The fair value of the instruments

granted is determined by using a binomial option-pricing model. In valuing the share options, no account is taken of any performance conditions, other than conditions linked to the price of the shares of the Company.

The cost of the share options is recognised, together with a corresponding increase in shareholders’ equity, over the vesting period ending on that date on which the employees become fully entitled to take up the share options. The cumulative expense recognised for share options granted at each reporting date until the vesting date refl ects the extent to which the vesting period has expired and the number of share option grants that will ultimately vest in the opinion of the Directors of the Company, at that date. This is based on the best available estimate of the number of share options that will ultimately vest. No expense is recognised for share options that do not ultimately vest, except for where forfeiture is only due to share prices not achieving the threshold for vesting.

Where the terms of the share options are modifi ed, as a minimum, an expense is recognised as if the terms had not been modifi ed. In addition, an expense is recognised for any increase in the value of the options, as a result of the modifi cation, as measured at the date of modifi cation.

Where an unvested share option is cancelled, the unrecognised cost is charged to profi t or loss. However, if a new share option is substituted for the cancelled share option and designated as a replacement share option on the date that it is granted, the cancelled and new share option grant are treated as if they were a modifi cation of the original grant, as described above.

Group share-based payment transactionsTransactions in which a parent grants rights to its equity instruments directly to the employees of its business units are classifi ed as equity settled in the fi nancial statements of the subsidiary, provided the share-based payment is classifi ed as equity settled in the consolidated fi nancial statements of the parent.

The business unit recognises the services acquired with the share-based payment as an expense and recognises a corresponding increase in equity for a capital contribution from the parent for those services acquired. The parent recognises in equity the equity-settled share-based payment and recognises a corresponding increase in the investment in business unit.

A recharge arrangement exists whereby the business unit is required to fund the difference between the exercise price on the share options and the market price of the share at the time of exercising the option. The recharge arrangement is accounted for separately from the underlying equity-settled share-based payment upon initial recognition, as follows:

The business unit recognises a recharge liability and a corresponding adjustment against equity for the capital contribution recognised in respect of the share-based payment.


The parent recognises a recharge asset and a corresponding adjustment to the carrying amount of the

investment in the business unit.

Subsequent to initial recognition the recharge arrangement is remeasured at fair value at each subsequent

reporting date until settlement date to the extent vested. Where the recharge amount recognised is greater

than the initial capital contribution recognised by the business unit in respect of the share-based payment, the

excess is recognised as a net capital distribution to the parent. The amount of the recharge in excess of the

capital contribution recognised as an increase in the investment in business unit is deferred and recognised

as dividend income by the parent when settled by the business unit.

Cash-settled share-based paymentsThe Company and Group have a Share Appreciation Rights Scheme which is treated as a cash-settled share

based payment transaction. If the share-based payment grated has a specifi ed duration of service the expense

is recognised in profi t or loss over the duration of the service. Where no service duration is applicable the

expense is recognised Immediately in profi t and loss. The liability for the settlement of the share appreciation

rights is recorded in the statement of fi nancial position and measured annually with the corresponding amount

being recognised in profi t and loss.

Standards and interpretationsDuring the year the Company and Group adopted the following standards and interpretations that

became effective:

IFRS 7 – Financial Instruments: DisclosuresAmendments require entities to disclose gross amounts subject to rights of set-off, amounts set off in

accordance with the accounting standards followed, and the related net credit exposure. This information will

help investors understand the extent to which an entity has set off in its statement of fi nancial position and the

effects of rights of set-off on the entity’s rights and obligations.

This amendment did not have a material impact on the Company or Group.

Amendment to IAS 19 – Employee Benefi ts: Defi ned benefi t plansThe amendments to IAS 19 were adopted by the Group for the fi rst time for its fi nancial reporting period ended

28 February 2014.

In terms of the amendments, the following key changes will have an impact on the Group:

• the defi nitions of short-term and other long-term employee benefi ts have been amended and the distinction

between the two depends on when the entity expects the benefi t to be settled;

• additional disclosures required for defi ned benefi t plans; and

• possible changes to the timing of the recognition of termination benefi ts.

This amendment did not have a material impact on the Company or Group as the Company and Group only have defi ned contribution plans.

IFRS 10 – Consolidated Financial Statements supersedes IAS 27 – Consolidated and Separate Financial Statements and SIC-12 Consolidation – Special Purpose Entities and was effective for the Group for the year ending 28 February 2014. IFRS 10 provides a single model to be applied in the control analysis for all investees, including entities that currently are defi ned as special purpose entities in the scope of SIC-12. The consolidation procedures are carried forward from IAS 27 (2008) and remain unchanged. An investor controls an investee when:• it is exposed to or has rights to variable returns from its involvement with that investee;• has the ability to affect those returns through its power over that investee; and• there is a link between power and returns.

The exposure to risks and rewards of an investee does not, on its own, determine that the investor has control over an investee. It is one of the factors of the control analysis.

In assessing control over an investee, the investor considers:• the purpose and design of the investee so as to identify the investee’s relevant activities;• how decisions about such activities are made;• who has the current ability to direct those activities; and• who receives returns therefrom.

IFRS 10 states that there must be both power and returns and a linkage between the two in order to have control. The defi nition also includes the concept of de facto control, which may result in the consolidation of entities in which less than 50% voting rights are held.

If there is a change in control conclusion between IAS 27/SIC-12 and IFRS 10, retrospective application will be required. IFRS 10 may result in additional entities that were not consolidated previously being consolidated. Alternatively, existing business units or special purpose entities may no longer meet the consolidation criteria. The adoption of IFRS 10 did not have a material impact on the Company or Group.

IFRS 11 – Joint ArrangementsThe standard deals with the accounting for joint arrangements and focuses on the rights and obligations of the arrangement, rather than its legal form and requires a single method for accounting for interests in jointly controlled entities.




Amendments to the transition guidance of IFRS 10 – Consolidated Financial Statements, IFRS 11 – Joint Arrangements and IFRS 12 – Disclosure of Interests in Other Entities. Limiting the requirements to provide adjusted comparative information.

The Company adopted these amendments but with no impact in the current year.

IFRS 12 – Disclosure of Interests in Other EntitiesIFRS 12 combines, in a single standard, the disclosure requirements for subsidiaries, associates and joint arrangements, as well as unconsolidated structured entities. The standard is effective for the Group for the year ended 28 February 2014.

The required disclosures aim to provide information to enable users to evaluate:• the nature of, and risks associated with, an entity’s interests in other entities, and• the effects of those interests on the entity’s fi nancial position, fi nancial performance and cash fl ows.

The following specifi c disclosure areas are addressed in IFRS 12:• signifi cant judgements and assumptions made in determining the nature of interests in an entity or

arrangement;• interests in business units;• interests in joint arrangements and associates; and• interests in unconsolidated structured entities, even if an entity concludes that a structured entity should not

be consolidated.

IFRS 12 did not result in additional disclosures for the Group in respect of the affected entities.

IFRS 13 – Fair Value Measurement IFRS 13 – Fair Value Measurement was adopted by the Company and the Group for the year ended28 February 2014. It will be applied prospectively and comparatives were not restated.

IFRS 13 replaces the fair value measurement guidance contained in individual IFRS with a single source of fair value measurement guidance. It defi nes fair value, establishes a framework for measuring fair value and sets out disclosure requirements for fair value measurements for both non-fi nancial and fi nancial items. IFRS 13 does not introduce new requirements to measure assets and liabilities at fair value, nor does it eliminate the practicability exceptions to fair value measurement that currently exist in certain standards.

IFRS 13 defi nes fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, ie an exit price.

A fair value measurement requires an entity to determine:• the particular asset or liability that is the subject of the measurement;

• for a non-fi nancial asset, the asset’s highest and best use and whether the asset would be used by a market participant on a stand-alone basis or in combination with other assets;

• the principal (or most advantageous market) for the asset or liability; and• when market prices for the asset, liability or equity instrument are not available, the valuation technique(s)

appropriate for the measurement, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. In respect of a non-fi nancial asset, a fair value measurement considers a market participant’s ability to generate economic benefi t by using the asset or by selling it to another market participant who will use the asset in its highest and best use.

If an entity manages a group of fi nancial assets and liabilities that are measured at fair value on the basis of its net exposure to market or credit risks, it is permitted to measure the fair value of the Group on the basis of its net exposures to particular risks if this is in accordance with its documented strategy and information is reported on this basis to its key management personnel.

The fair value of a liability or an entity’s own equity instrument is measured using quoted prices for the transfer of identical instruments. When such prices are not available, an entity measures fair value from the perspective of a market participant holding the identical item as an asset. If quoted prices in an active market for the corresponding asset are also not available, then other observable inputs are used, such as prices in an inactive market for the asset. Otherwise, an entity uses another valuation technique(s), such as a present value measurement or the pricing of a similar liability or instrument.

IFRS 13 requires disclosure of the fair value hierarchy, which was introduced by IFRS 7, to be applied to all fair value measurements. The fair value hierarchy gives highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. Where an entity has assets and liabilities (including non-fi nancial assets and liabilities) which were disclosed as Level 3 on the fair value hierarchy, the following disclosure is required:• its valuation policies and procedures;• analysis of changes in fair value measurements from period to period; and• narrative description of the sensitivity of these assets and liabilities measurements to changes in

unobservable inputs, including the effect of any interrelationships between unobservable inputs as well as quantitative information on signifi cant unobservable inputs used in measuring fair value.

The Group is already required to recognise its fi nancial instruments initially at fair value and to provide fair value disclosures relating to its fi nancial instruments in terms of IFRS 7, as a result the adoption had no material impact.

Amendment to IAS 1 – Presentation of Financial StatementsThe amendment to IAS 1 was adopted by the Group for the fi rst time for its fi nancial reporting period ended 28 February 2014.


The Company has presented those items of other comprehensive income that may be reclassifi ed to profi t or loss in the future separately from those that would never be reclassifi ed to profi t or loss. The related tax effects for the two sub-categories has been shown separately. This is a change in presentation and did not have an impact on the recognition or measurement of items in the fi nancial statements.

IAS 16 – Property, Plant and EquipmentThe amendment to IAS 16 was adopted by the Group for the fi rst time for its fi nancial reporting period ended 28 February 2014. Annual Improvements 2009 – 2011 Cycle: Amendments to the recognition and classifi cation of servicing equipment. The amendments had no impact on the Company or the Group.

IAS 27 – Separate Financial StatementsThe IAS 27 consequential amendments to IFRS 10,11 and 12 were effective for the Company for the year ending 28 February 2014. The adoption of amendments did not have a signifi cant impact on the Company’s separate fi nancial statements.

IAS 28 – Investments in AssociatesThe IAS 28 consequential amendments to IFRS 10, 11 and 12 were effective for the year ended 28 February 2014. The adoption of amendments did not have a signifi cant impact on the results of the Company.

IAS 32 – Financial Statement PresentationAn amendment effective for the year ended 28 February 2014, requiring entities to disclose the gross amounts subject to rights of set-off, amounts set off in accordance with the accounting standards followed, and the related net credit exposure, was adopted. The adoption of amendment resulted in certain additional disclosures being presented.

IAS 34 – Interim Financial ReportingAn amendment effective for the year ended 28 February 2014, requiring entities to improve the disclosures for interim fi nancial reporting and segment information for total assets and liabilities was adopted. The adoption of amendment resulted in certain additional disclosures being presented in the operating segmental information for the interim period presented.

The following standards and interpretations issued and not yet effective will be adopted by the Company and the Group in future accounting periods when preparing the annual fi nancial statements.

IFRS 2 – Share-based PaymentsAnnual Improvements 2010 – 2012 Cycle: Amendments added the defi nitions of performance conditions and service conditions and amended the defi nitions of vesting conditions and market conditions.

The amendments are unlikely to have a material impact on the results of the Group and will be adopted for the year ended 28 February 2015.

IFRS 3 – Business CombinationsAnnual Improvements 2010 – 2012 Cycle: Amendments to the measurement requirements for all contingent consideration assets and liabilities including those accounted for under IFRS 9.

Annual Improvements 2011–2013 Cycle: Amendments to the scope paragraph for the formation of a joint arrangement.

The amendments are unlikely to have a material impact on the results of the Group and will be adopted for the year ending 28 February 2015.

IFRS 8 – Operating SegmentsAnnual Improvements 2010–2012 Cycle: Amendments to some disclosure requirements regarding the judgements made by management in applying the aggregation criteria, as well as those to certain reconciliations.

The amendment is unlikely to have a material impact on the results of the Group and will be adopted for the year ending 28 February 2015.

IFRS 9 – Financial InstrumentsThe revised statement will be effective for the Group for the period to be advised by the IASB, with restatement of comparatives required, subject to transitional provisions.

IFRS 9 addresses the initial measurement and classifi cation of fi nancial assets and will replace the relevant sections of IAS 39. Under IFRS 9, there are two options in respect of classifi cation of fi nancial assets, namely, fi nancial assets measured at amortised cost or at fair value. Financial assets are measured at amortised cost when the business model is to hold assets in order to collect contractual cash fl ows and when they give rise to cash fl ows that are solely payments of principal and interest on the principal outstanding. All other fi nancial assets are measured at fair value. Embedded derivatives are no longer separated from hybrid contracts that have a fi nancial asset host. The amendment may have an impact on the Group’s results as a consequence of the new classifi cation requirements on fi nancial assets if instruments classifi ed as loans and receivables do not meet the criteria for measurement at amortised cost. Subject to a detailed analysis of the loans and receivables, management expects that most of the Group’s receivables would qualify for measurement at amortised cost and accordingly it is not expected to signifi cantly impact the Group’s results.

In respect of the embedded derivative amendment, the Group has not historically concluded contracts that contain embedded derivatives. However, management will continuously review this position in order to ensure that the relevant requirements are appropriately applied should the Group enter into embedded derivatives contracts in future.




IFRS 9 (2010) addresses both fi nancial assets and fi nancial liabilities and is effective for the Group for the year ending 29 February 2016, with restatement of comparatives required subject to transitional provisions.

IFRS 9 (2010) incorporates the guidance in IAS 39 dealing with fair value measurement, derivatives embedded in host contracts that are not fi nancial assets, and the requirements of IFRIC 9 – Reassessment of Embedded Derivatives. Under IFRS 9 (2010), the classifi cation and measurement requirements of fi nancial liabilities are the same as per IAS 39, barring the following two aspects:

The fair value optionFair value changes for fi nancial liabilities (other than fi nancial guarantees and loan commitments) designated at fair value through profi t or loss, attributable to the changes in the credit risk of the liability will be presented in other comprehensive income. The remaining change is recognised in profi t or loss. However, if the requirement creates or enlarges an accounting mismatch in profi t or loss, then the whole fair value change is presented in profi t or loss. The determination as to whether such presentation would create or enlarge an accounting mismatch is made on initial recognition and is not subsequently reassessed.

IFRS 10 Consolidated Financial Statements. An exception to the principle that all business units must be consolidated. Entities meeting the defi nition of “Investment Entities” must account for investments in business units at fair value under IFRS 9 – Financial Instruments, or IAS 39 – Financial Instruments: Recognition and Measurement. The Company and Group expect to adopt this standard for the period ending 28 February 2015 and it is not expected to have a material impact.

IAS 16 – Property, Plant and EquipmentThe amendment to IAS 16 will be adopted by the Company and Group for the fi rst time for its fi nancial reporting period ending 28 February 2015. As a result of the Annual Improvements 2010 – 2012 Cycle: Amendments to the revaluation method, proportionate restatement of accumulated depreciation was introduced. The effect of adopting the improvements is not expected to have a material impact.

IAS 19 – Employee Benefi tsThe amendment to IAS 19 will be adopted by the Company and Group for the fi rst time for its fi nancial reporting period ending 28 February 2015. Amendments to Defi ned Benefi t Plans: Employee Contributions whereby the requirements in IAS 19 for contributions from employees or third parties that are linked to service will be amortised. The effect of adopting the improvements is not expected to have a material impact.

IAS 24 – Related Party DisclosuresThe amendment to IAS 19 will be adopted by the Company and Group for the fi rst time for its fi nancial reporting period ending 28 February 2015. Annual Improvements 2010 – 2012 Cycle: Amendments to the defi nitions and disclosure requirements for key management personnel were made. The effect of adopting the improvements is not expected to have a material impact other than to disclosure.

IAS 27 – Separate Financial StatementsThe amendment is effective for the Company for the year ending 28 February 2015. Requirement to account

for interests in “Investment Entities” at fair value under IFRS 9 – Financial Instruments, or IAS 39 – Financial

Instruments: Recognition and Measurement, in the separate fi nancial statements of a parent. The adoption of

the amendment will not have a signifi cant impact on the Company’s separate fi nancial statements.

Amendment to IAS 32 and IFRS 7 – Offsetting of fi nancial assets and fi nancial liabilitiesIFRS 7 disclosure requirements have been amended so that the IASB and the US Financial Accounting

Standards Board can have common disclosure requirements. New disclosures are required for fi nancial assets

and liabilities that are:

• offset in the statement of fi nancial position; or

• subject to master netting arrangements or similar arrangements.

The amendment will be adopted by the Group for the year ending 20 February 2015.

Management will assess the impact of the amendment on any possible offsetting arrangements.

IAS 38 – Intangible AssetsThe amendment to IAS 38 will be adopted by the Company and Group for the fi rst time for its fi nancial

reporting period ending 28 February 2015. As a result of the Annual Improvements 2010 – 2012 Cycle:

Amendments to the revaluation method, proportionate restatement of accumulated depreciation was

introduced. The effect of adopting the improvements is not expected to have a material impact.

IAS 40 – Investment PropertyThe amendment to IAS 40 will be adopted by the Company and Group for the fi rst time for its fi nancial

reporting period ending 28 February 2016. As a result of the Annual Improvements 2011 – 2013 Cycle:

the interrelationship between IFRS 3 and IAS 40 when classifying property as investment property or

owner-occupied property was clarifi ed. The effect of adopting the improvements is not expected to have a

material impact.

Non-applicable standards, amendments and interpretationsThe other remaining standards, amendments and interpretations issued but not yet effective have been

assessed for applicability to the Company and Group and management has concluded that they are not

applicable to the business of the Group and will therefore have no impact on future fi nancial statements.

IFRS 1 – First-time Adoption of International Financial Reporting Standard, including amendments resulting

from the annual improvement projects.


IFRS 13 – Fair Value Measurement resulting from the annual improvements project will be effective for the

Company and Group for the year ending 28 February 2016. The Amendments clarify that the portfolio

exception applies to all contracts within the scope of, and accounted for in accordance with, IAS 39 or IFRS 9.

Determination of fair valuesA number of the Group’s accounting policies and disclosures require the determination of fair value, for both fi nancial and non-fi nancial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specifi c to that asset or liability.

Property, plant and equipmentThe fair value of property, plant and equipment recognised as a result of a business combination is the estimated amount for which a property could be exchanged on the date of acquisition between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably. The fair value of items of plant, equipment, fi xtures and fi ttings is based on the market approach and cost approaches using quoted market prices for similar items when available and depreciated replacement cost when appropriate. Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence.

Intangible assetsThe fair value of patents and trademarks acquired in a business combination is based on the discounted estimated royalty payments that have been avoided as a result of the patent or trademark being owned. The fair value of customer relationships acquired in a business combination is determined using the multi-period excess earnings method, whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related cash fl ows.

The fair value of other intangible assets is based on the discounted cash fl ows expected to be derived from the use and eventual sale of the assets.

InventoriesThe fair value of inventories acquired in a business combination is determined based on the estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profi t margin based on the effort required to complete and sell the inventories.

Trade and other receivablesThe fair value of trade and other receivables is estimated at the present value of future cash fl ows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes or when such assets are acquired in a business combination.

Other non-derivative fi nancial liabilitiesFair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash fl ows, discounted at the market rate of interest at the reporting date. In respect of the liability component of convertible notes, the market rate of interest is determined by reference to similar liabilities that do not have a conversion option. For fi nance leases the market rate of interest is determined by reference to similar lease agreements.

Deferred purchase considerationThe fair value of deferred consideration arising in a business combination is the total consideration payable discounted to present value using market rates at the acquisition date.



Notes to the annual fi nancial statements for the year ended 28 February 2014

1. Segmental informationThe Group’s Chief Operating Officer (“CEO”) is the Group’s chief operating decision maker. The CEO has determined the operating segments based upon the information reviewed by the him for the purposes of allocating resources and assessing performance. The CEO considers the business from a product and geographical perspective. The CEO assesses the performance of the operating segments based upon profit before tax. This measurement basis excludes discontinued operations and the effects of non-recurring expenditure from the operating segments such as goodwill impairments where such impairment arises from an isolated, non-recurring event. The measure includes the effects of equity-settled share-based payments and unrealised exchange gains and losses arising normal trading operations. The CEO reviews internal management reports every month.

The following summary describes the operations in each of the Group’s reportable segments:• Industrial Supplies includes the purchasing and distribution of general industrial and automotive supplies as well as the provision of crane and forklift maintenance;• Specialised Services includes the manufacture and distribution of cryogenic vessels and heat exchangers, the supply and installation of geosynthetic linings and the provision of specialised cryogenic-based solutions

for industrial applications; and• Shared Services and Other includes direct head office costs, Segmental operating costs not recovered from the operating segments and discontinued operations.

RevenueSales between segments are carried at arm’s length. The revenue from external parties reported to the CEO is measured in a manner consistent with that in the statement of profit and loss.

Reportable segmental assetsSegment assets consist primarily of:• property, plant and equipment;• payments in advance;• inventories;• receivables; and • cash.

Reportable segmental liabilitiesSegment liabilities consist primarily of:• borrowings; and• payables.


2014

Industrial Supplies


Shared Services and Other Total

R R R R

1. Segmental information (continued)Total segment revenue 226 701 276 175 023 809 – 401 725 085 Inter-segmental revenue (10 603 940) – – (10 603 940)Reportable segment revenue 216 097 336 175 023 809 – 391 121 145 Gross profit/(loss) 51 046 882 21 917 352 (778 587) 72 185 647 Depreciation and amortisation 2 764 125 2 000 223 2 350 587 7 114 935 Other operating expenses 29 488 840 17 940 563 27 117 528 74 546 931 Profit/(loss) before tax from continuing operations 2 616 939 (8 582 711) 1 197 968 (4 767 804) Profit/(loss) before tax and shared services costs from continuing operations 19 395 045 3 278 473 27 441 322 (4 767 804)Loss before tax from discontinued operations (181 993) – – (181 993)Capital expenditure 3 598 312 2 657 103 445 716 6 701 131 Gross assets 76 698 040 64 921 455 47 433 394 189 052 889 Gross liabilities 62 447 008 58 234 217 (30 628 281) 90 052 944 Revenue per major customer 83 332 463 – – 83 332 463

South Africa Botswana Zambia DRC Namibia TotalR R R R R R

Segmental information by geographical regionRevenue (external) 276 959 750 46 588 939 39 885 009 10 542 521 17 144 926 391 121 145 Non-current assets 59 083 066 9 606 787 3 310 142 1 057 042 – 73 057 037

2013

Industrial Supplies


Shared Services and Other Total

R R R R

Total segment revenue 201 916 452 181 675 347 – 383 591 799 Inter-segmental revenue (2 482 495) – – (2 482 495)

Reportable segment revenue 199 433 957 181 675 347 – 381 109 304

Gross profit 54 349 321 28 992 853 – 83 342 174 Depreciation and amortisation 1 984 380 1 660 136 2 988 407 6 632 923 Other operating expenses 29 733 839 16 667 078 18 136 055 64 536 972 Profit/(loss) before tax from continuing operations 15 187 917 3 519 341 (8 701 669) 10 005 589 Profit/(loss) before tax and shared services costs from continuing operations 23 678 622 12 135 496 (25 808 529) 10 005 589Capital expenditure 7 517 392 2 292 851 1 813 606 11 623 849 Gross assets 70 056 718 70 819 524 72 842 767 213 719 009 Gross liabilities 54 575 664 43 595 110 18 489 515 116 660 289



Notes to the annual fi nancial statements (continued) for the year ended 28 February 2014

South Africa Botswana Zambia DRC Namibia TotalR R R R R R

1. Segmental information (continued)Segmental information by geographical regionRevenue (external) 287 787 687 49 290 432 27 136 415 9 524 169 7 370 601 381 109 304 Non-current assets 49 277 202 11 124 690 2 666 519 1 252 503 – 64 320 914

Group Company

2014 2013 2014 2013R R R R

2. Results from operating activities The following items have been charged/(credited) in arriving at results from operating activities:Amortisation of intangible assets 1 589 650 1 471 906 109 616 – Auditors’ remuneration Audit fee – current year 862 719 1 351 813 278 273 1 351 813 Depreciation 5 525 285 5 173 439 769 062 1 516 502 Directors’ remuneration 5 356 033 5 816 079 5 356 033 5 816 079 Fees paid for Secretarial services 379 901 381 762 379 901 381 762 Foreign exchange gain/(loss) 2 541 125 3 195 463 184 427 3 423 113 Loss/(profit) on sale of subsidiary – – 1 607 453 (34 499 344)Impairment of related party loans – – – 1 624 612 Impairment of investments – – – 14 920 152 Loss/(profit) on sale of property, plant and equipment 188 267 (54 504) – (60 170)Operating lease charges in respect of buildings 7 015 029 6 301 411 5 199 300 5 649 575 Impairment/(reversal) of trade receivables (Note 14) 1 698 924 (1 198 711) – 492 642 Impairment of goodwill – 2 870 573 – – Impairment of property, plant and equipment 351 723 – – – Retirement fund contributions 1 445 465 2 146 469 – 728 438 Salaries and wages 25 789 899 34 905 847 5 554 359 6 662 046 Share-based payment expense 165 117 1 389 318 26 526 437 034 Dividends received – – 30 356 409 41 534 651


3. Share Incentive SchemeAt 28 February 2014 the Group has the following share-based payment arrangements:

Share option programme (equity-settled)On 21 June 2009 the Group established a share option programme whereby share awards were granted to employees.

Further grants on similar terms were offered to employees on 10 December 2009, 27 January 2010 and 10 February 2010.

There is no consideration payable for these share options and the strike price is zero cents.

Terms and conditions of share option programmeShare options are granted to all permanent employees who have been in the employ of the Group for at least one year (of unbroken employment service), and must remain in the employ of the Group for a further two years at which time the share options vest.

In addition, shares may be awarded in special circumstances to deserving employees for exceptional performance or as a retention mechanism.

All options are settled by physical delivery of shares.

Group

2014 2013

The movements in the number of shares allocated to eligible participants are as follows:Balance brought forward 2 577 266 4 651 200 New grant allocations during the year 621 182 2 086 341 Resignations (205 750) (4 160 275)Grants vested during the year (490 925) –

As at year-end 2 501 773 2 577 266

The outstanding grants will vest on the following dates:By 28 February 2015 1 880 591 1 416 050 After 28 February 2015 621 182 1 161 216

2 501 773 2 577 266

Vesting periodsEmployees of subsidiaries acquired:• Shares will vest three years from the date of acquisition for employees already in service when the Company was acquired.• Employees joining after the acquisition date, 100% will vest three years from the date of employment.




3. Share Incentive Scheme (continued)Vesting periods (continued)Employees of existing business units• Shares will vest three years after commencement of service.

Grant letters are issued to qualifying employees one year after commencement of service or the effective date a new business unit is acquired.

In special circumstances, the performance conditions embodied in grant letters may vary the vesting date terms.

2014

Reconciliation of reserveOpening balance (141 842)Resignations during the year 58 957 Shares vested during the year 76 996 Share-based payment expense (224 074)

(229 963)

Share Appreciation Rights SchemeDuring the period the Board of Directors approved a share appreciation rights (SARs) scheme for Directors of the Company. An annual allotment of SARs was made to the Chief Executive Officer and Financial Director. The CEO is allotted the number of SARs equal to four times his annual salary. The Financial Director’s allotment is calculated as 75% of the CEO’s entitlement. A third of the share appreciation rights vest on the anniversary of the grant date commencing 1 September 2014. The exercise price of each allotment is calculated at CPI plus a 2% premium above the share price on the last day of February each year.

1 September2014

1 September2015

1 September2016 Total

Reconciliation of SARs allotted and vesting periodsNumber of share appreciation rights 4 956 802 4 956 802 4 956 801 14 870 405 Black Scholes assumptions and inputsFixed exercise price (cents) 19.33 Share price at date of grant (cents) 18.00 Expected volatility 142.65%Standard deviation 6.65%Option life No expiryExpected dividends NilCPI 6%Risk-free rate 7.11%Any other inputsIFRS 2 share-based payment expense 14 767


Group Company

2014 2013 2014 2013R R R R

4A. RevenueSale of goods 374 314 188 343 145 263 976 126 –Rendering of services 16 806 957 37 964 041 28 455 311 16 523 499

391 121 145 381 109 304 29 431 437 16 523 499

4B. Finance income and fi nance costsRecognised in profit or lossInterest income on loans and receivables – – 177 877 863 628 Interest income on bank deposits 438 156 2 248 367 97 239 311 606 Interest income from SARS 3 771 143 231 – – Transfer to discontinued operations (Note 6) – (355 964) – –

Finance income 441 927 2 035 634 275 116 1 175 234

Interest expense on bank overdrafts and loans 343 227 1 871 138 328 845 1 269 530 Interest expense on finance leases 1 305 731 3 567 169 46 523 3 017 511 Interest paid – South African Revenue Service 187 – – – Unwinding of interest on deferred purchase considerations 645 634 1 680 182 645 634 1 680 182 Interest paid – other 422 531 4 570 528 236 – Transfer to discontinued operations (Note 6) (45 149) (1 357 108) – –

Finance costs 2 672 161 5 765 951 1 549 238 5 967 223

Net finance costs recognised in profit or loss (2 230 234) (3 730 317) (1 274 122) (4 791 989)




Group Company

2014 2013 2014 2013R R R R

5. Income tax expenseSouth African normal taxation

Current tax expense (333 097) 8 463 977 – –

– current year (333 097) 8 463 977 – – – prior year underprovision – – – –

Deferred tax (credit)/expense (11 185 179) (29 846) – –

– current year (3 466 091) (272 001) – – – prior year overprovision – 242 155 – – – recognition of assessed tax loss (7 719 088) – – –

Total normal taxation (11 518 276) 8 434 131 – –

Transfer to discontinued operations 60 744 (2 661 428) – –

Total taxation charge (11 457 532) 5 772 703 – –

The effective rate of taxation differs from the standard rate of taxation as follows: Base rate 28.00 28.00 0.00 0.00Non-deductibles (12.63) 63.60 0.00 0.00Reduced CGT rate 9.89 (32.16) 0.00 0.00Prior year current tax 0.00 0.51 0.00 0.00Deferred tax on prior year assessed loss 161.89 2.42 0.00 0.00Foreign taxes 36.20 4.83 0.00 0.00Impairment of deferred tax 0.00 0.00 0.00 0.00Deferred tax current not recognised 16.96 (9.51) 0.00 0.00

Effective rate of taxation 240.31 57.69 0.00 0.00


2013

PetrologicR

MitechR

TotalR

6. Discontinued operations and non-current assets and liabilities held-for-saleThe following has been reclassified as held-for-sale in the prior year:ASSETS Non-current assets Property, plant and equipment – 7 928 790 7 928 790

Total non-current assets – 7 928 790 7 928 790

Current assets Inventories – 8 870 763 8 870 763 Trade and other receivables 504 119 4 089 488 4 593 607 Cash and cash equivalents 442 817 7 585 450 402

Total current assets 946 936 12 967 836 13 914 772

Total assets 946 936 20 896 626 21 843 562

LIABILITIES Non-current liabilities Deferred taxation liabilities – 348 970 348 970 Loans and borrowings – 2 227 802 2 227 802

Total non-current liabilities – 2 576 772 2 576 772

Current liabilities Provisions – 425 244 425 244 Trade and other payables 1 440 169 1 966 268 3 406 437 Bank overdraft – 1 683 915 1 683 915 Current portion of loans and borrowings – 2 248 872 2 248 872

Total current liabilities 1 440 169 5 899 055 7 764 468

Total liabilities 1 440 169 8 475 827 10 341 240




Group

2014R

2013R

6. Discontinued operations and non-current assets and liabilities held-for-sale (continued)Discontinued operations’ trading results for the periodRevenue 2 645 443 102 908 393 Cost of sales (1 758 506) (63 790 400)

Gross profit 886 937 39 117 993 Other income 2 404 2 516 558 Other expenses (1 026 185) (38 849 960)

Results from operating activities (136 844) 2 784 591

Finance income – 355 964 Finance costs (45 149) (1 357 108)

Net finance costs (45 149) (1 001 144)

Impairment of property

Profit before income tax (181 993) 1 783 447 Income tax 60 744 (2 661 428)

Loss for the year from discontinued operations (121 249) (877 981)

Loss on sale of discontinued operation (4 715 826) (27 136 736)

Loss for the year (4 837 075) (28 014 717)

Cash flow effects of discontinued operationsCash flows (utilised)/from operating activities (1 607) 2 014 241 Cash flows from/(to) investing activities 1 214 597 (2 156 173)Cash flows from financing activities 400 597 –

The Pump Segment has been sold for a purchase consideration of R54 million. The sale was approved by shareholders in a shareholders’ meeting held on 31 May 2012.

The effective date of the sale was 13 June 2012.

The business and assets of Petrologic Proprietary Limited were sold with effect 30 September 2012. The business of Petrologic was previously incorporated into the Specialised Services Segment.

The shares and claims in PSV Mitech Proprietary Limited were sold with effect from 1 April 2013 for a purchase consideration of R7 000 100. PSV Mitech (Pty) Limited was previously disclosed as forming part of the Valve and Industrial Supply Segment.

PSV Holdings Limited has a substantial assessed tax loss, and as a result no taxes are due on the sale of the discontinued operation. The pre and post-tax effects on the gain on disposal of discontinued operation are the same. Refer to Note 17 for deferred tax policy on assessed losses.


Group

2014 2013R R

7. Foreign currency translation reserveBreakdown of FCTR movement Opening balance (187 160) (3 195 623)Pre-tax effect of re-classification on disposal of foreign subsidiary – 3 099 444 Foreign currency translation reserve 111 823 (90 981)Tax effect – –

(75 337) (187 160)

8. Earnings per shareProfit/(loss) attributable to ordinary shareholders 1 852 653 (23 781 831)Profit attributable to ordinary shareholders – continuing operations 6 689 728 4 232 886 Weighted average number of ordinary shares in issue 261 378 069 254 066 206 Basic profit/(loss) per share (cents) 0.71 (9.36)

Basic profit per share (cents) – continuing operations 2.56 1.67

Basic loss per share (cents) – discontinued operations (1.85) (11.03)

Basic profit/loss per share is calculated by dividing the net profit/loss attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year.Reconciliation of weighted average number of sharesShares in issue 272 547 699 272 547 699 Treasury shares not issued to third parties (held by PSV Treasury Proprietary Limited) (11 169 630) (18 481 493)

261 378 069 254 066 206

Effect of weighting of shares issued – –

Weighted average number of shares 261 378 069 254 066 206




Group

2014 2013R R

8. Earnings per share (continued)Reconciliation of headline profit/(loss)Profit/(loss) attributable to ordinary shareholders 1 852 653 (23 781 831)Loss/(profit) on disposal of property, plant and equipment 188 267 (54 504)(Profit)/loss on disposal of discontinued operations 4 715 826 27 136 736 Impairment of tangible assets 351 723 – Impairment of intangible assets – –Impairment of goodwill – 2 870 573 Deferred tax on impairment of intangibles – –Reversal of foreign currency translation reserve on sale of PSV Zambia Limited – – Tax effect of above adjustments (52 715) 15 261

Headline profit 7 055 754 6 186 235

Headline profit – continuing operations 7 177 003 7 064 216

Headline profit per share (cents) 2.70 2.43

Headline profit per share (cents) – continuing operations 2.75 2.78

Headline loss per share (cents) – discontinued operations (0.05) (0.35)

Headline profit/loss per share is calculated by dividing the headline earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year.


Group

2014 2013R R

8. Earnings per share (continued)Dilutive effectThe calculation of diluted profit/loss per share and diluted headline profit/loss per share are based on:Weighted average number of shares in issue for basic and headline profit/loss per share 261 378 069 254 066 206 Potentially dilutive share grants 1 351 959 877 931

Number of shares for diluted profit/loss per share 262 730 028 254 944 137 The dilutive share grants relate to the share incentive scheme referred to in Note 3.

Diluted profit/(loss) per share (cents) 0.71 (9.33)

Diluted profit per share (cents) – continuing operations 2.55 1.66

Diluted loss per share (cents) – discontinued operations (1.84) (10.99)

Diluted loss per share is calculated by dividing the net loss attributable to ordinary shareholders by the diluted weighted average number of ordinary shares in issue during the year

Diluted headline profit per share (cents) 2.69 2.43

Diluted headline profit per share (cents) – continuing operations 2.73 2.77

Diluted loss per share (cents) – discontinued operations (0.04) (0.34)

Diluted headline profit per share is calculated by dividing the headline earnings attributable to ordinary shareholders by the diluted weighted average number of ordinary shares in issue during the yearNet asset value per share Net asset value per share (cents) 37.88 38.20 Net tangible asset value per share (cents) 22.65 22.09




Cost Accumulated

depreciation Carrying amount

R R R

9A. Property, plant and equipment 2014 Group – owned Computer equipment and software 3 390 880 (2 536 556) 854 324 Furniture and fittings 2 014 761 (1 329 022) 685 739 Land and buildings 3 505 919 (128 185) 3 377 734 Leasehold improvements 2 851 662 (609 828) 2 241 834 Motor vehicles 6 912 607 (4 099 019) 2 813 588 Office equipment 500 475 (330 627) 169 848 Patterns and dies 47 908 (47 908) – Plant and machinery 8 942 377 (5 825 726) 3 116 651

28 166 589 (14 906 871) 13 259 718

Group – leased Computer equipment and software 306 603 (306 603) –Furniture and fittings 451 485 (247 448) 204 037 Motor vehicles 12 193 326 (5 757 232) 6 436 094 Plant and machinery 1 589 561 (428 295) 1 161 266

14 540 975 (6 739 578) 7 801 397

Total 42 707 564 (21 646 449) 21 061 114

Company – owned Computer equipment and software 1 590 934 (1 500 476) 90 458 Furniture and fittings 1 081 003 (838 611) 242 392 Leasehold improvements 2 453 723 (476 142) 1 977 581

5 125 660 (2 815 229) 2 310 431

Company – leasedComputer equipment and software 167 546 (167 545) 1 Furniture and fittings 451 485 (247 448) 204 037 Motor vehicles 557 753 (147 494) 410 259 Plant and machinery 454 175 (138 911) 315 264

1 630 959 (701 398) 929 561

Total 6 756 619 (3 516 627) 3 239 992


Cost Accumulated

depreciation Carrying amount

R R R

9A. Property, plant and equipment (continued)2013 Group – owned Computer equipment and software 2 747 682 (2 222 940) 524 742 Furniture and fittings 1 822 410 (1 056 364) 766 046 Land and buildings 3 024 799 (108 651) 2 916 148 Leasehold improvements 2 610 840 (257 083) 2 353 757 Motor vehicles 4 794 579 (2 807 536) 1 987 043 Office equipment 491 468 (280 372) 211 096 Patterns and dies 37 408 (37 408) – Plant and machinery 8 981 595 (5 684 801) 3 296 794

24 510 781 (12 455 155) 12 055 626

Group – leased Computer equipment and software 306 603 (306 135) 468 Furniture and fittings 451 485 (172 185) 279 300 Motor vehicles 12 167 795 (3 859 073) 8 308 722 Plant and machinery 793 273 (224 659) 568 614

13 719 156 (4 562 052) 9 157 104

Total 38 229 937 (17 017 207) 21 212 730

Company – owned Computer equipment and software 1 541 502 (1 391 003) 150 499 Furniture and fittings 1 081 003 (682 832) 398 171 Leasehold improvements 2 258 723 (219 579) 2 039 144

4 881 228 (2 293 414) 2 587 814

Company – leased Computer equipment and software 167 546 (167 545) 1 Furniture and fittings 451 485 (172 185) 279 300 Motor vehicles 362 766 (65 191) 297 575 Plant and machinery 447 887 (49 227) 398 660

1 429 684 (454 148) 975 536

Total 6 310 912 (2 747 562) 3 563 350




Opening carrying

valueR

AdditionsR

Reclassi-fication

InR

Acquisition of business

RDisposals

R

Reclassi-fication

outR

Transferred to assets held-for-

saleR

Impair-ment

R

Depre-ciation

R

FCTR movement

RTotal

R

9B. Property, plant and equipment Reconciliation of the carrying amount2014Group – ownedComputer equipment and software 524 742 864 866 – – (35 312) – – – (510 807) 10 835 854 324 Furniture and fittings 766 046 122 822 – – (231) – – – (265 302) 62 404 685 739 Land and buildings 2 916 148 476 759 – – – – – – (19 450) 4 277 3 377 734 Leasehold improvements 2 353 757 231 902 – – – – – – (351 796) 7 970 2 241 833 Motor vehicles 1 987 043 835 178 674 821 – (241 782) – – – (764 038) 322 366 2 813 588 Office equipment 211 096 40 721 – – (41 524) – – – (49 705) 9 260 169 848 Patterns and dies – – – – – – – – – – – Plant and equipment 3 296 794 1 365 162 (589 229) – (22 797) (56 330) – – (1 221 941) 344 992 3 116 651

12 055 626 3 937 410 85 592 – (341 646) (56 330) – – (3 183 039) 762 104 13 259 717

Group – leasedComputer equipment and software 468 – – – – – – – (468) – – Furniture and fittings 279 300 – – – – – – – (75 263) – 204 037 Motor vehicles 8 308 722 1 610 833 (4 262) – (1 261 147) – – (351 723) (2 078 975) 212 646 6 436 094 Office equipment – – – – – – – – – – – Plant and machinery 568 614 1 152 888 (81 330) – (39 661) 56 330 – – (187 540) (308 035) 1 161 266

9 157 104 2 763 721 (85 592) – (1 300 808) 56 330 – (351 723) (2 342 246) (95 389) 7 801 397

Total 21 212 730 6 701 131 – – (1 642 454) – – (351 723) (5 525 285) 666 715 21 061 114

Company – owned Computer equipment and software 150 499 49 432 – – – – – – (109 473) – 90 458 Furniture and fittings 398 171 – – – – – – – (155 779) – 242 392 Land and buildings – – – – – – – – – – – Leasehold improvements 2 039 143 195 000 – – – – – – (256 562) – 1 977 581 Motor vehicles – – – – – – – – – – – Office equipment – – – – – – – – – – – Patterns and dies – – – – – – – – – – – Plant and machinery – – – – – – – – – – –

2 587 813 244 432 – – – – – – (521 814) – 2 310 431


Opening carrying

valueR

AdditionsR

Reclassi-fication

InR


RDisposals

R

Reclassi-fication

outR


saleR

Impair-ment

R

Depre-ciation

R

FCTR movement

RTotal

R

9B. Property, plant and equipment (continued) Company – leasedComputer equipment and software 1 – – – – – – – – – 1 Furniture and fittings 279 300 – – – – – – – (75 263) – 204 037 Motor vehicles 297 575 194 987 – – – – – – (82 303) – 410 259 Office equipment – – – – – – – – – – – Plant and machinery 398 660 6 286 – – – – – – (89 682) – 315 264

975 536 201 273 – – – – – – (247 248) – 929 561

3 563 349 445 705 – – – – – – (769 062) – 3 239 992

Reconciliation of the carrying amount2013Group – ownedComputer equipment and software 793 663 393 906 101 381 – (2 968) (116 927) (86 942) (114 101) (477 140) 33 870 524 742 Furniture and fittings 1 140 953 159 143 41 022 – (4 317) (19 138) (88 930) (202 213) (313 056) 52 582 766 046 Land and buildings 2 894 654 – – – – – – – (19 313) 40 807 2 916 148 Leasehold improvements 2 010 364 1 519 449 – – (944 062) – – – (283 231) 51 236 2 353 756 Motor vehicles 1 752 733 488 750 107 460 – (238 708) (220 783) (121 894) – (532 302) 751 787 1 987 043 Office equipment 254 149 23 583 37 069 – 13 071 (58 953) (16 609) – (46 145) 4 931 211 096 Patterns and dies 680 638 74 928 – – – – (594 838) – (160 728) – – Plant and equipment 7 092 650 5 757 234 799 309 – (282 418) (799 309) (7 019 577) (460 283) (1 848 574) 57 763 3 296 795

16 619 804 8 416 993 1 086 241 – (1 459 402) (1 215 110) (7 928 790) (776 597) (3 680 489) 992 976 12 055 626




Opening carrying

value R

Additions R

Reclassi-fication In

R


R Disposals

R

Reclassi-fication out

R


sale R

Impair-ment

R

Depre-ciation

R

FCTR movement

R Total

R

9B. Property, plant and equipment (continued)Group – leasedComputer equipment and software 57 516 – – – – – – – (57 048) – 468 Furniture and fittings 354 563 – – – – – – – (75 263) – 279 300 Motor vehicles 9 477 669 2 788 808 113 323 – (2 281 049) 15 546 – (161 241) (2 207 577) 563 243 8 308 722 Office equipment – – – – – – – – – – – Plant and machinery 5 350 575 418 048 – – (4 235 254) – – – (964 755) – 568 614

15 240 323 3 206 856 113 323 – (6 516 303) 15 546 – (161 241) (3 304 643) 563 243 9 157 104

Total 31 860 127 11 623 849 1 199 564 – (7 975 705) (1 199 564) (7 928 790) (937 838) (6 985 132) 1 556 219 21 212 730

Company – owned Computer equipment and software 253 819 47 027 – – – – – – (150 347) – 150 499 Furniture and fittings 489 299 54 070 21 884 – – – – – (167 082) – 398 171 Land and buildings – – – – – – – – – – – Leasehold improvements 950 677 1 223 239 – – – – – – (134 772) – 2 039 144 Motor vehicles – – – – – – – – – – – Office equipment 21 884 – – – – (21 884) – – – – – Patterns and dies – – – – – – – – – – – Plant and machinery – – – – – – – – – – –

1 715 679 1 324 336 21 884 – – (21 884) – – (452 201) – 2 587 814

Company – leasedComputer equipment and software 10 696 – – – 1 – – – (10 696) – 1 Furniture and fittings 354 563 – – – – – – – (75 263) – 279 300 Motor vehicles 325 525 187 690 – – (132 976) – – – (82 664) – 297 575 Office equipment – – – – – – – – – – – Plant and machinery 5 228 019 301 572 – – (4 235 253) – – – (895 678) – 398 660

5 918 803 489 262 – – (4 368 228) – – – (1 064 301) – 975 536

7 634 482 1 813 598 21 884 – (4 368 228) (21 884) – – (1 516 502) – 3 563 350

The reclassifications relate to transfers between different categories of property, plant and equipment.


Group Company

2014 2013 2014 2013R R R R

9B. Property, plant and equipment (continued)SecurityGroup and Company assets leased are subject to instalment sale agreements. The amount outstanding is as follows:Please refer to Note 19 for additional information 9 803 024 7 804 024 614 841 511 087

Group

2014 2013

Accumulated Accumulated depreciation Carrying depreciation Carrying

Cost and impairment value Cost and impairment valueR R R R R R

10. Intangible assetsMarket relationships 7 176 120 (2 790 892) 4 385 228 7 176 120 (2 391 956) 4 784 164 Customer relationships 7 284 742 (3 707 042) 3 577 700 7 284 742 (3 195 942) 4 088 800 Technology relationships 5 618 708 (3 302 691) 2 316 017 5 618 708 (2 740 821) 2 877 887 Software 589 788 (258 523) 331 265 – – –

20 669 358 (10 059 148) 10 610 210 20 079 570 (8 328 719) 11 750 851

Group

Opening value Additions Amortisation Impairment Closing valueR R R R R

Carrying value reconciliation – 2014Market relationships 4 784 163 – (398 936) – 4 385 227 Customer relationships 4 088 800 – (511 100) – 3 577 700 Technology relationships 2 877 888 – (561 871) – 2 316 017 Software – 449 007 (117 743) – 331 264

11 750 851 449 007 (1 589 650) – 10 610 210




Group

Opening value Amortisation Impairment Closing valueR R R R

10. Intangible assets (continued)Carrying value reconciliation – 2013Market relationships 5 183 099 (398 936) – 4 784 163 Customer relationships 4 599 900 (511 100) – 4 088 800 Technology relationships 5 570 435 (764 418) (1 928 129) 2 877 888

15 353 434 (1 674 454) (1 928 129) 11 750 851

Company

2014 2013

Accumulated Accumulated depreciation Carrying depreciation Carrying

Cost and impairment value Cost and impairment valueR R R R R R

Software 425 046 (109 616) 315 430 – – –

425 046 (109 616) 315 430 – – –

Company

Opening value Additions Amortisation Impairment Closing valueR R R R R

Carrying value reconciliation – 2014Software – 425 046 (109 616) – 315 430

– 425 046 (109 616) – 315 430


Group Company

2014 2013 2014 2013R R R R

11. GoodwillOpening balance 29 186 265 32 056 838 – – Impairment of goodwill – (2 870 573) – –

Closing balance 29 186 265 29 186 265 – –

For the purpose of impairment testing, goodwill is allocated to the Group’s individual operating subsidiaries or cash generating units (“CGU”).

These represent the lowest level within the Group at which goodwill is monitored for internal management purposes.

2014 2013

Carrying Recoverable Carrying Recoverablevalue amount value amount

R R R R

The aggregate carrying and calculated recoverable amounts of goodwill allocated to each of the units is as follows:Omnirapid Mining and Industrial Supplies 17 606 734 69 656 313 17 606 734 64 456 385 African Cryogenics Proprietary Limited 4 345 000 32 106 585 4 345 000 26 506 463 Turbo Agencies Proprietary Limited 7 234 531 40 738 788 7 234 531 68 245 145

29 186 265 142 501 686 29 186 265 159 207 993

The recoverable amounts of the operating business units were based on their value in use and were assessed by management.

The value in use for the cash generating units was determined by discounting the future cash flows from the continuing use of the CGU, and is based on the following key assumptions:• cash flows were based on actual operating results and a five-year forecast business plan.

Operating expenses in the historical and forecast periods includes management fees attributable to value added services.

In order to value each CGU on a stand-alone maintainable basis, a fee has been included in operating expenses to compensate for additional costs that would be incurred for services performed on behalf of the CGUs by head office and to include market-related expenses instead of benefiting from being part of the larger group.• cash flows include maintainable capex but exclude expandable capex items and reflect the ongoing operating cash flows of the CGUs;• a terminal growth rate of 5,5% (2013: 5.5%) was used thereafter. This rate is considered reasonable given current CPIX forecasts;• revenue and operating costs were projected to grow by between 5% and 10% for the years 2015 to 2019; and• the weighted average cost of capital (“WACC”) is a calculation of the Company’s cost of capital in which each category of capital is proportionately weighted.

The forecast cash flows of the PSV Holdings Limited CGUs are discounted using their respective WACCs.




11. Goodwill (continued)The WACCs used in performing the valuations for each CGU are as follows:

CGU – WACC (%) 2014 2013

Omnirapid 20.03 20.26African Cryogenics 20.03 20.26Turbo Agency Group of Companies 21.84 19.53

Based upon our evaluation of the value in use of the abovementioned CGUs, no impairment of goodwill was considered necessary.

Impairment of CGU• When assessing the carrying amount of the CGUs in relation to their value in use, it was found that the Engineered Linings CGU’s value in use was less than the carrying amount.• Considering the CGU made sustained losses for three years historically, it was felt prudent to impair the remaining goodwill particularly as the CGU is not achieving the requisite return on investment required by

the Group.• The Engineered Linings CGU is classified as a business operation and is included in the Specialised Services Operating Segment for reporting purposes.• The CGU was impaired by R2 870 573. The value in use of this CGU was calculated based upon a WACC of (2013: 20.26%) using a terminal rate (2013: 5.5%).• The impairment arose notwithstanding the CGU’s forecasted return to profitability in future years.

However, future forecast profitability mitigated the need for further impairment of specific intangibles and non-current assets.

Percentage holding Cost of shares Loans to/(from)

Issued share capital

2014 2013 2014 2013 2014 2013% %

12. Investment in business unitsHeld by PSV Holdings LimitedOperating companiesPSV Thuthuka Proprietary Limited 200 100 100 200 200 – – Omnirapid Mining & Industrial Supplies Proprietary Limited 100 100 100 100 19 967 589 – – PSV Industrial Proprietary Limited 258 100 100 75 922 355 – 39 164 018 – Umzantsi Africa Pumps & Valves Proprietary Limited 120 – 100 – 120 – – Engineered Linings Proprietary Limited 100 100 100 100 32 640 547 – – PSV Mitech Control Valves Proprietary Limited 100 100 – 100 – 4 804 005 Abiton Manufacturing Proprietary Limited 100 100 100 100 100 – – African Cryogenics Proprietary Limited 3 876 100 100 3 876 23 318 395 – (3 339 363)Cryoshield Proprietary Limited 100 100 100 100 100 – –


Percentage holding Cost of shares Loans to/(from)

Issued share capital

2014 2013 2014 2013 2014 2013% %

12. Investment in business units (continued)Turbo Agencies Proprietary Limited 47 590 100 100 9 495 116 9 495 116 17 111 212 18 674 948 PSV Treasury Proprietary Limited 100 100 100 100 100 2 504 991 2 504 035 TASA Mining Proprietary Limited 100 100 100 100 100 360 927 –

– – 85 422 147 85 422 267 59 141 148 22 643 625

Total owing by subsidiaries – – – – 59 141 148 25 982 988 Total owing to subsidiaries – – – – – (3 339 363)

– – – – 59 141 148 22 643 625

The loans are unsecured, interest-free and have no fixed payment terms.

Due to the short-term nature of the loans to subsidiaries, the directors believe their carrying value approximates their fair value.

No provisions for impairment have been raised against any loans.

The investment cost of Engineered Linings, African Cryogenics and Omnirapid have all been moved to PSV Industrial in terms of the restructure conducted during the year.

The investment cost of these companies now represent the remaining share capital.

Group Company

2014 2013 2014 2013R R R R

13. InventoriesRaw materials and consumables 17 826 708 29 738 766 – – Work in progress 5 109 023 11 092 483 – – Finished goods and merchandise 6 422 498 1 993 283 2 869 932 3 231 032 Transferred to assets held-for-sale (Note 6) – (8 870 763) – –

29 358 229 33 953 769 2 869 932 3 231 032




Group Company

2014 2013 2014 2013R R R R

13. Inventories (continued)The amount of inventory included in cost of sales is R278 582 374 (2013: R260 092 321)Work in progress has been written down to net realisable value based on the terms of the contract.Provision for obsolete stockOpening balance 3 712 331 4 785 373 – – Provisions raised during the year 202 579 856 268 – –Provisions utilised during the year (1 122 549) (1 929 310) – –

Closing balance 2 792 361 3 712 331 – –

14. Trade and other receivablesTrade receivables 50 090 297 66 315 512 7 974 781 4 909 852 Prepayments 751 760 2 691 132 649 104 – Deposits 232 840 395 100 58 894 328 483 VAT 3 465 410 1 921 863 – 399 157 Accrued revenue and retentions 2 371 848 3 818 199 Other 1 120 122 22 651 70 128 – Transferred to assets held-for-sale – (4 593 607) – –

58 032 277 70 570 850 8 752 907 5 637 492

Trade receivables are non-interest bearing and are generally on 30-day terms.Provision for doubtful debtsOpening balance 2 976 418 4 175 129 – –Bad debts written off (1 361 960) – – –Debtors previously provided and now recovered 305 491 (1 550 601) – –New provisions 1 393 433 351 890 – –

Closing balance 3 313 382 2 976 418 – –

For terms and conditions relating to related-party receivables, refer to Note 25.

The Group’s exposure to credit and currency risks, and impairment losses related to trade and other receivables is disclosed in Note 21.

A cession of the trade debtors with a carrying value of R30 259 249 (2013: R38 197 697) has been given as security for the banking facilities provided by Standard Bank.


Group Company

2014 2013 2014 2013R R R R

15. Cash and cash equivalentsBank and cash balances 27 710 873 21 796 401 5 591 799 11 300 592 Bank overdraft (16 672 996) (6 280 851) (3 387 685) – Transferred to assets held-for-sale (Note 6) – 1 233 513 – –

Cash and cash equivalents in the statement of cash flow 11 037 876 16 749 063 2 204 114 11 300 592

The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities is disclosed in Note 21.3.

16. Share capitalAuthorised1 000 000 000 ordinary shares of no par valueIssued272 547 699 (2013: 272 547 699) ordinary shares of no par value 273 136 360 273 059 364 274 494 010 274 494 010

Number of shares issued to external parties:Total shares in issue 272 547 699 272 547 699 272 547 699 272 547 699 Treasury shares held by Company/business unit (11 169 630) (18 481 493) (11 169 630) (18 481 493)

Net shares held by external parties 261 378 069 254 066 206 261 378 069 254 066 206

Treasury shares are held in terms of the Group’s share incentive scheme. For details refer to Note 3.

The increase in the value of the ordinary shares issued is as a result of the vesting of shares taken up by employees.




Turbo Agencies Vendor 1 –

Parry

Turbo Agencies Vendor 2 – Earthwise Total

R R R

17. Purchase consideration payableBalance owing at 29 February 2012 10 457 186 12 000 000 22 457 186

Long-term portion 10 457 186 10 046 748 20 503 934 Current portion – 1 953 252 1 953 252

Unwinding of interest 2013 1 680 182 1 185 856 2 866 038 SettlementsCash (7 367 287) (3 243 510) (10 610 797)Balance owing at 28 February 2013 4 770 081 9 942 346 14 712 427

Long-term portion – 7 578 457 7 578 457 Current portion 4 770 081 2 363 889 7 133 970

Actual repayments (1 415 715) (2 683 911) (4 099 626)

Unwinding of interest 2014 645 634 559 599 1 205 233 SettlementsCash (1 415 715) (3 243 510) (4 659 225)

Balance owing at 28 February 2014 4 000 000 7 258 435 11 258 435

Long-term portion – 4 659 206 4 659 206 Current portion 4 000 000 2 599 229 6 599 229

* The interest on the amount due to the Parry’s is an imputed interest and not actual cash flow.

– The Earthwise vendor is repayable in monthly instalments of R270 293, with the last instalment due on 1 March 2016. The outstanding balance attracts interest at prime plus 1%. On 1 March 2016 R2 million shall be paid in full and final settlement of the purchase price.

– The deferred purchase consideration payable to the Parrys is due to be settled by 28 February 2015.


Group Company

2014 2013 2014 2013R R R R

18. Deferred taxationThe movement on the deferred taxation account is as follows:Balance at the beginning of the year (2 702 581) (3 285 573) – – Profit and loss charge 11 185 179 29 846 – –

– current year 3 466 091 272 001 – – – prior year under provision – (242 155) – – – recognition of prior year asset in PSV Industrial Proprietary Limited 7 719 088 – –

Statement of financial position credit (23 708) 553 146 – –

– business units sold during the year – 204 176 – – – transferred to held-for-sale (23 708) 348 970 – –

Balance at the end of the year 8 458 891 (2 702 581) – –

Balance at the end of the year is made up of:Deferred taxation assets 12 199 448 2 171 068 – – Deferred taxation liabilities (3 740 557) (4 873 649) – –

8 458 891 (2 702 581) – –

Comprising: Capital allowances (345 953) (613 069) – – Provisions 789 745 850 947 – – Intangibles (2 878 104) (3 290 238) – – Advance receipts (2 213 196) (1 914 869) – – Prepayments (154 725) (47 908) – – Estimated taxation losses 13 261 124 2 312 556 – –

8 458 891 (2 702 581) – –




18. Deferred taxation (continued)The computed tax losses in respect of which a deferred tax asset has not been raised amounts to R22 554 803 and R27 292 210 in 2013.

The computed capital gains tax loss in respect of which a deferred tax asset has not been raised is R2 435 336 and RNil (2013).

A deferred tax asset has been raised in PSV Industrial Proprietary Limited, Engineered Linings Proprietary Limited and Tasa Mining Proprietary Limited due to the internal group restructure which will result in economies of scale and removal of duplicated administrative costs.

On assessing the three-year profitability forecasts of these entities, sufficient taxable income should be generated to fully utilise the deferred tax assets so provided for.

No deferred tax asset has been raised in PSV Holdings Limited as the Company is not expected to make any taxable income in the foreseeable future.

Group Company

2014 2013 2014 2013R R R R

19. BorrowingsLocalSecuredInstalment sale and finance lease agreements for motor vehicles and equipment payable over periods from two to five years at interest rates between 7.75% and 10% 9 803 024 10 031 826 614 841 511 087 Portion classified as held-for-sale in the current year (refer to Note 6 for details) – (2 227 802) – – Total borrowings 9 803 024 7 804 024 614 841 511 087 Less: Current portion (2 836 245) (2 161 108) (171 964) (120 798)

6 966 779 5 642 916 442 877 390 289

The carrying value of interest-bearing liabilities approximates their fair value.The carrying amount of leased assets is reflected in Note 9.

20. Trade and other payablesTrade payables 29 728 752 55 841 121 377 602 608 306 Accruals 11 046 274 11 322 323 5 115 918 4 451 258 Share-based payment 188 369 – – – FEC liability – – – – Vat payable 1 669 749 645 315 1 521 805 – Payroll accruals 2 570 165 3 344 909 839 238 675 296 Other payables 203 428 121 294 – – Transferred to liabilities held-for-sale (Note 6) – (3 406 437) – –

45 406 737 67 868 525 7 854 563 5 734 860


20. Trade and other payables (continued)Trade payables are non-interest bearing and are normally settled on 30-day terms. Accruals are non-interest bearing and, other than employee benefit accruals, have an average term accruals, have an average term

of 30 days.

For terms and conditions relating to related-party payables, refer to Note 25.

The Group’s exposure to liquidity and currency risk related to trade and other payables is disclosed in Note 21.2 and 21.3.

21. Financial risk management overviewThe Group has exposure to the following risks from its use of financial instruments:• credit risk;• liquidity risk; and• market risk.

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Further

quantitative disclosures are included throughout these financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.

The Board of Directors is also responsible for analysing the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.

21.1 Credit riskCredit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The demographics of the Group’s customer base, including the default risk of the industry and country in which customers operate, has less of an influence on credit risk.

The Group has established a credit process under which each new customer is evaluated individually for creditworthiness before the Group’s standard payment terms and conditions are offered.

The Group’s review includes external ratings, where available, and in some cases bank references.

Exposure limits are established for each customer, in accordance with the approval framework. All new clients are required to complete a credit application.

More than 50% of the Group’s customers have been transacting with the Group for over five years, and losses have occurred infrequently.

In monitoring customer credit risk, customers are grouped according to their credit characteristics, including geographic location, industry, ageing profile, maturity and existence of previous financial difficulties.

The Group’s major customer adhered to extended credit terms of between 30 and 90 days. The dependence on the major customer related to a significant project undertaken that has now come to an end.

The Group does not require collateral in respect of trade and other receivables, as it mainly renders services to major companies in the industries in which they operate and the exposure to credit risk is monitored

on an ongoing basis.

The Group is in the process of assessing the feasibility of credit guarantee insurance.




21. Financial risk management overview (continued)21.1 Credit risk (continued)

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables.

The key components of this allowance is a specific loss component that relates to individually significant exposures in respect of losses that have been incurred but not yet identified.

At statement of financial position date there was an allowance for impairment based on the above process.

Exposure to credit riskThe carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

2014 2013

R R

Trade and other receivables – excludes prepayments and VAT 53 815 108 65 957 855

The maximum exposure to credit risk reflected by extent of trading activities for the year by significant customer, was:Customer A 1 281 678 5 529 466 Customer B – 2 279 302 Customer C – 9 637 842 Customer D 3 636 368 – Customer E 3 775 897 – Customer F 1 473 251 3 050 160 Customer G 4 391 787 3 051 683 Customer H 2 297 174 –

Impairment lossesThe ageing of trade and other receivables as at reporting date was:

2014 2013

Gross Impairment Gross Impairment R R R R

Not past due 38 791 122 – 54 047 765 – Past due 11 299 175 3 313 382 12 267 747 2 976 418

50 090 297 3 313 382 66 315 512 2 976 418


2014 2013

Gross Impairment Gross Impairment R R R R

21. Financial risk management overview (continued)21.1 Credit risk (continued)

The ageing of the past due and not impaired trade receivables at the reporting date was:90 days 4 734 874 – 5 698 364 –120 days 3 250 919 – 3 592 965 –

The Company defines “past due” as invoices which are more than 60 days past due.

The movement in the allowance for impairment in respect of trade receivables during the year was as follows:

2014R

2013R

Balance at the beginning of the year 2 976 418 4 175 129 Impairment loss processed through profit and loss 1 698 924 (1 198 711)

3 313 382 2 976 418

21.2 Liquidity riskLiquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due under normal conditions. As a result of the internal restructure the Group is expected to manage liquidity as it returns to profitability through better utilisation of better working capital.

The Group manages its working capital requirements stringently and ensures that it has sufficient cash on demand to meet expected operational expenses for the term, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted such as natural disasters.

In addition, the Group maintains the following lines of credit:• R21 million overdraft facility with Standard Bank Limited (of which R16 672 996 was utilised at year-end).

Interest on the above is variable with the prime overdraft rate.

Where acquisitions are made, transactions are structured in such a way so as to settle the purchase price over a period.




Carrying Contractual 12 months More than amount cash flows or less 12 months

R R R R

21. Financial risk management overview (continued)21.2 Liquidity risk (continued)

The following are the contractual maturities of financial liabilities:Non-derivative financial liabilities2014Deferred purchase consideration 11 258 435 12 264 999 6 599 229 5 665 770 Trade and other payables 45 406 737 45 406 737 45 406 737 – Loans and borrowings 9 803 024 4 528 913 2 836 245 1 692 668 Bank overdraft 16 672 996 16 672 996 16 672 996 –

Total 83 141 192 78 873 645 71 515 207 7 358 438

2013Deferred purchase consideration 14 712 427 16 840 390 7 133 970 9 706 420 Trade and other payables 67 868 525 67 868 525 67 868 525 – Loans and borrowings 7 804 023 8 826 149 2 161 107 6 665 042 Bank overdraft 6 280 851 6 280 851 6 280 851 –

Total 96 665 826 99 815 915 83 444 453 16 371 462

21.3 Market riskMarket risk is the risk that changes in market prices, such as foreign currency exchange rates, may cause a decrease in fair values of future cash flows of financial instruments and consequently result in a financial loss for the Group.21.3.1 Currency risk

The Group is exposed to currency risk on certain Group creditors that are denominated in a currency other than the functional currency of the Group, the South African Rand.

The currency in which these transactions primarily are denominated is Euros, US Dollars and Botswana Pulas.

The Group policy is not to actively manage foreign exchange risk by means of FECs, or other hedging instruments.


21. Financial risk management overview (continued)21.3 Market risk (continued)

21.3.1 Currency risk (continued)The table below presents the Rand equivalent of the foreign currency exposure:

2014 2013

USD GBP Euro ZMK BWP USD GBP Euro BWP

Trade receivables 3 754 360 – – 6 239 522 6 582 632 13 953 293 – – 13 951 210 Cash and cash equivalents 2 854 456 – – 1 525 273 1 011 542 159 512 – – 2 475 887 Trade payables (9 620 781) – (2 649 856) (3 644 291) (1 274 951) (17 508 362) (419 373) (2 753 600) (9 783 237)

Gross/Net exposure (3 011 965) – (2 649 856) 4 120 504 6 319 223 (3 395 557) (419 373) (2 753 600) 6 643 860

Reporting date spot rate Average rate

2014 2013 2014 2013

The following significant exchange rates applied at year-end. USD 10.79 8.84 9.97 8.38 GBP 17.98 13.37 15.74 13.29 Euro 14.75 11.57 13.29 10.82 BWP 1.20 1.08 1.15 1.10 ZMK 0.0020 0.0017 0.0019 0.0017

Sensitivity analysisA 20% (2013: 20%) strengthening in the Rand against the following currency would have increased/(decreased) profit or loss by the amounts shown below:

2014 2013

20% 20%

USD (6 499 820) (6 003 345)GBP – (1 121 403)Euro (7 817 075) (6 371 830)BWP 1 516 614 1 435 074 ZMK 1 648 –





21.3.1 Currency risk (continued)A 20% weakening in the Rand against the above currencies at 28 February 2014 would have an equal and opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

21.3.2 Cash fl ow Interest rate riskBorrowings are generally at a rate linked to the prime bank overdraft rate.

The Group had group interest-bearing borrowings at year-end as well as instalment sale liabilities and finance leases.

2014R

2013R

At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was as follows:Variable rate instruments Financial liabilities Bank overdraft 16 672 996 6 280 851 Instalment sale liabilities, leases and bonds 9 803 023 10 031 826

26 476 019 16 312 677

A change of 1% basis points in interest rates would have increased/(reduced) profits by the amounts shown below based on year-end balances:

2014 2013

1% decrease 1% increase 1% decrease 1% increaseR R R R

Variable rate instruments 264 760 (264 760) 163 127 (163 127)

21.3.3 Fair value interest rate risk

Notes2014

R2013

R

Fixed rate instrumentsVendor loans 17 (4 000 000) (4 770 081)Loans receivable from subsidiaries 12 59 141 148 25 982 988 Loans payable to subsidiaries 12 – (3 339 363)

55 141 148 17 873 544



21.3.3 Fair value interest rate risk (continued)A change of one percent basis points in interest rates will not have an effect on the fair values of fixed rate financial instruments as all interest-free financial instruments are short term in nature.

21.4 Capital managementCapital is defined as total equity as reflected on the statement of financial position.

The Board’s policy is to maintain a strong capital base to sustain future development of the business and maintain creditor and market confidence.

There were no changes in the Company’s approach to capital management during the year.

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including “current and non-current borrowings” as shown in the consolidated statement of financial position) less cash and cash equivalents. Total capital is calculated as “equity” as shown in the consolidated statement of financial position plus net debt.

2014R

2013R

Reconciliation of capitalOpening balance 97 058 720 125 771 638 Profit/(loss) for the year 1 852 653 (23 781 831)Dividend paid – (9 328 872)Foreign currency translation reserve 111 823 3 008 463 Share-based payment reserve (23 252) (63 940)Shares issued during the year – 1 453 258

98 999 945 97 058 720




21. Financial risk management overview (continued)21.5 Fair values of fi nancial instruments

The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:

Group Company

2014 2013 2014 2013

Loans and Loans and Loans and Loans and receivable/ receivable/ receivable/ receivable/ liabilities at liabilities at liabilities at liabilities at

amortised cost

Fair value

amortised cost

Fair value

amortised cost

Fair value

amortised cost

Fair value

R R R R R R R R

Financial assets Trade and other receivables 58 032 277 58 032 277 70 570 850 70 570 850 8 752 907 8 752 907 5 637 492 5 637 492 Cash and bank balances 27 710 873 27 710 873 21 796 401 21 796 401 5 591 799 5 591 799 11 300 592 11 300 592 Loans receivable – – – – 59 141 148 59 141 148 25 982 988 25 982 988

85 743 150 85 743 150 92 367 251 92 367 251 73 485 854 73 485 854 42 921 072 42 921 072

Financial liabilities Loans and borrowings 9 803 024 9 803 024 10 031 826 10 031 826 614 841 614 841 3 850 450 3 850 450 Trade and other payables (excluding VAT) 43 736 988 43 736 988 67 223 207 67 223 207 6 332 758 6 332 758 5 734 860 5 734 860 Bank overdraft 16 672 996 16 672 996 6 280 851 6 280 851 3 387 685 3 387 685 – – Deferred purchase consideration 11 258 435 11 258 435 14 712 427 14 712 427 11 258 435 11 258 435 14 712 427 14 712 427

81 471 443 81 471 443 98 248 311 98 248 311 21 593 719 21 593 719 24 297 737 24 297 737


Group Company

2014 2013 2014 2013R R R R

22. Cash fl ow informationA. Cash generated by/(utilised in) operations(Loss)/profit before taxation including discontinued operations (9 665 624) 11 789 036 31 351 320 14 904 923 Adjustments for:Profit from sale of discontinued operations 4 715 826 – – –Finance income (441 927) (2 035 634) (275 116) (1 175 234)Finance expenses 2 026 527 4 085 769 903 604 4 287 041 Interest on deferred purchase consideration 645 634 1 680 182 645 634 1 680 182 Share-based payment expense (23 252) 1 389 318 26 526 437 034 Depreciation 5 525 285 6 985 132 769 066 1 516 500 Amortisation of intangibles 1 589 650 1 674 454 109 616 –Impairment of intangibles – – – – Impairment of goodwill – 2 870 573 – –Movement in provisions – – – –IFRS lease straight lining 1 070 403 1 409 679 1 070 473 1 409 679 Impairment of property, plant and equipment 351 723 – – –Loss on disposal of property, plant and equipment 188 267 54 504 – 60 170 Movement in foreign currency translation reserve (554 892) – – – Impairment of investments – – – 14 920 152 Dividend received from subsidiaries – – – (41 534 651)

5 427 620 29 903 013 34 601 123 (3 494 204)

Changes in working capitalDecrease/(increase) in inventories 4 595 540 (16 920 489) 361 100 (3 231 032)Decrease/(increase) in trade and other receivables 12 538 573 (16 897 378) (3 115 414) 6 966 073 Decrease/(increase) in trade and other payables (23 532 190) 12 904 537 1 049 227 (3 344 374)

(970 457) 8 989 683 32 896 036 (3 103 537)




Group Company

2014 2013 2014 2013R R R R

22. Cash fl ow information (continued)B. Taxation paidBalance receivable at the beginning of the year 4 779 574 1 638 291 – – Charge to profit and loss (333 097) 8 463 977 – – Transferred to discontinued operations – – – – Balance payable at the end of the year (2 276 722) (4 779 574) – –

2 169 755 5 322 694 – –

23. Defi ned contribution benefi t informationEmployees of the Group contribute to the Sanlam Umbrella provident fund.

Those employed before 1 September 2010 may elect to contribute 10%, 12% or 19% of their pensionable salary to the fund.

Those employed after 1 September 2010 contribute 10% of their pensionable salary to the fund. All permanent salaried staff are required to join the fund.

At year-end the total number of employees in the Company belonging to the fund was 98 (2013: 98).

24. Related-party transactionsThe Company has no holding company. All related-party transactions, except for related-party loans which are interest-free, are concluded under terms that are no less favourable than those arranged with third parties. Outstanding trading balances at year-end are unsecured, interest-free and settlement is in cash. Outstanding loan balances at year-end are unsecured, bear interest at the prime interest rate and are repayable on demand.

Management feesAll management fees are intra-group and have been eliminated on consolidation.

Directors’ remuneration and share optionsDetailed disclosure of directors’ remuneration is made in Note 25.

Group companiesDetails of subsidiary companies are given in Note 12.

Transactions with related partiesDetails of revenue from related parties is disclosed in Note 1.

Management fees paid by subsidiaries are R28 455 311 (2013: R16 523 499).


24. Related-party transactions (continued)Recovery costs are R3 914 484 (2013: R7 921 745).

Dividends received from subsidiaries R30 356 409 (2013: R41 534 651).

Basic remuneration

Other benefits

Retirement and medical

Incentives and bonuses

Directors’ fees

Share grants Total

R R R R R R R

25. Directors’ remuneration Directors’ remuneration in respect of the financial year ended 28 February 2014 was as follows:2014Executive AJD da Silva 1 803 794 – 320 549 177 029 – – 2 301 372 AR Dreisenstock 1 772 001 – 286 471 171 539 – – 2 230 011 Non-executiveE Ratshikhopha – – – – 249 100 – 249 100 P Robinson (resigned 4 June 2013) – – – – 80 000 – 80 000 A de la Rue – – – – 249 100 – 249 100 R Patmore – – – – 246 450 – 246 450

3 575 795 – 607 020 348 568 824 650 – 5 356 033

2013Executive AJD da Silva 1 648 351 – 87 339 321 234 – – 2 056 924 AR Dreisenstock 1 663 240 – 72 450 321 234 – – 2 056 924 P Robinson (resigned 4 June 2013) 397 189 37 500 – 500 000 – – 934 689 Non-executiveDJ Kelly (resigned 30 August 2012) – – – – 116 665 – 116 665 E Ratshikhopha – – – – 80 000 – 80 000 P Robinson – – – – 160 000 – 160 000 A de la Rue – – – – 214 210 – 214 210 R Patmore – – – – 196 667 – 196 667

3 708 780 37 500 159 789 1 142 468 767 542 – 5 816 079

PSV Holdings Limited Executive and Non-Executive remuneration is approved annually by the Remuneration Committee.




26. Internal reorganisationDuring the course of the year, the Group restructured its local business operations into one operating company, PSV Industrial Proprietary Limited. The restructuring should facilitate substantial economies of scale in several areas of operation, including, inter alia, treasury, working capital and tax management.

27. Contingent liabilitiesThe acquirer of Groupline Projects Proprietary Limited, a CGU disposed of in 2013, has declared a dispute on the basis of a supposed breach of warranties contained in the sale of shares agreement. The Group has aggressively opposed this action, and the parties have entered into arbitration.

Group Company

2014 2013 2014 2013R R R R

28. CommitmentsThe Group has entered into operating leases for premises which is expected to result in the following outflows:Within 1 year 4 945 629 4 579 286 4 945 629 4 579 286 2 to 5 years 24 068 404 22 285 560 24 068 404 22 285 560 More than 5 years 14 413 194 21 141 668 14 413 194 21 141 668

43 427 227 48 006 514 43 427 227 48 006 514

29. Going concernThe annual financial statements have been prepared on the going concern basis as the directors have every reason to believe that the Group has adequate resources to continue in operation for the foreseeable future.


Notice of Annual General Meeting

PSV Holdings LimitedIncorporated in the Republic of South Africa

(Registration number: 1998/004365/06)

Share code: PSV

ISIN: ZAE000078705

(“PSV” or “the Company” or “the Group”)

If you are in any doubt as to what action you should take in respect of the following Resolutions, please consult your Central Securities Depository Participant (“CSDP”), broker, banker, attorney, accountant or other professional adviser immediately.

Notice is hereby given of the Annual General Meeting (“Annual General Meeting”) of shareholders of PSV which

will be held at 10:00 on Thursday, 21 August 2014 at the corner of Barbara and North Reef Roads, Henville

Extension, Elandsfontein, Johannesburg, for the purpose of considering, and, if deemed fi t, passing, with or

without modifi cation, the Resolutions set out hereafter.

The Board of Directors of the Company (“the Board”) has determined that, in terms of Section 62(3)(a), as read

with Section 59 of the Companies Act, 2008 (Act 71 of 2008), as amended, the record date for the purposes

of determining which shareholders of the Company are entitled to participate in and vote at the Annual General

Meeting is Friday, 15 August 2014. Accordingly, the last day to trade PSV’s shares in order to be recorded in

the register to be entitled to vote will be Friday, 8 August 2014.

1. To receive, consider and adopt the annual fi nancial statements of the Company and the Group for the

fi nancial year ended 28 February 2014, including the reports of the auditors, Directors and the Audit and

Risk Committee.

2. To re-elect Anthony de la Rue who, in terms of Article 24 of the Company’s Memorandum of Incorporation,

retires by rotation at this Annual General Meeting but, being eligible to do so, offers himself for re-election.

An abbreviated curriculum vitae in respect of each Director offering himself for re-election appears on page 13

of the Integrated Annual Report to which this notice is attached.

3. To appoint Anthony de la Rue as a member and Chairman of the PSV Holdings Limited Independent Audit

and Risk Committee.

4. To appoint Eric Ratshikhopha as a member of the PSV Holdings Limited Independent Audit and Risk

Committee.

5. To appoint Ralph Patmore as a member of the PSV Holdings Limited Independent Audit and Risk

Committee.

An abbreviated curriculum vitae in respect of each member of the Independent Audit Committee appears on page 13 of the Integrated Annual Report.

6. To confi rm the appointment of Certifi ed Master Auditors Inc as independent auditors of the Company with Raymond Baard, being the individual registered auditor who has undertaken the audit of the Company for the ensuing fi nancial year and to authorise the Directors to determine the auditors’ remuneration.

The minimum percentage of voting rights required for each of the Resolutions set out in item numbers 1 to 6 above to be adopted is more than 50% (fi fty percent) of the voting rights exercised on each of the Resolutions by shareholders present or represented by proxy at the Annual General Meeting.

As special business, to consider and, if deemed fi t, to pass, with or without modifi cation, the following Resolutions:

7. Special Resolution number 1Non-Executive Directors’ remuneration“Resolved that, in terms of the provisions of Section 66(9) of the Companies Act, 2008 (Act 71 of 2008), as amended, the annual remuneration payable to the Non-Executive Directors of PSV Holdings Limited (“the Company”), as amended, for their services as Directors of the Company for the fi nancial year ending 28 February 2015, be and is hereby approved as follows:

Approved annual Proposed annualType of fee fee for 2014 fee for 2015

CommitteeChairman R255 600 R273 500Member R255 600 R273 500

Explanatory noteIn terms of Section 66(9) of the Companies Act, a company is required to pre-approve the payment of remuneration to Non-Executive Directors for their services as Directors for the ensuing fi nancial year by means of a Special Resolution passed by shareholders of the company within the previous two years.

The annual remuneration payable to any Non-Executive Director is R255 600 per annum (2014), notwithstanding the number of committees he/she is a member/Chairman of. The proposed fee for 2015 is R273 500 per annum.

Special Resolutions to be adopted at this Annual General Meeting require approval from at least 75% (seventy fi ve percent) of the votes exercised on such Resolutions by shareholders present or represented by proxy at the meeting.



Notice of Annual General Meeting (continued)

8. Special Resolution number 2General approval to acquire shares“Resolved, by way of a general approval that PSV Holdings Limited (“the Company”) and/or any of its business units from time to time be and are hereby authorised to acquire ordinary shares in the Company in terms of Sections 46 and 48 of the Companies Act, 2008 (Act 71 of 2008), as amended, the Memorandum of Incorporation of the Company and its business units and the Listings Requirements of JSE Limited (“the JSE”), as amended from time to time.

The JSE Listings Requirements currently provide, inter alia, that: • the acquisition of the ordinary shares must be effected through the order book operated by the JSE

trading system and done without any prior understanding or arrangement between the Company and the counter party;

• this general authority shall only be valid until the earlier of the Company’s next Annual General Meeting or the expiry of a period of 15 (fi fteen) months from the date of passing of this Special Resolution;

• in determining the price at which the Company’s ordinary shares are acquired in terms of this general authority, the maximum premium at which such ordinary shares may be acquired will be 10% (ten percent) of the weighted average of the market value at which such ordinary shares are traded on the JSE, as determined over the 5 (fi ve) business days immediately preceding the date on which the transaction is effected;

• at any point in time, the Company may only appoint one agent to effect any acquisition/s on its behalf.• the acquisitions of ordinary shares in the aggregate in any one fi nancial year may not exceed 20%

(twenty percent) of the Company’s issued ordinary share capital;• the Company may only effect the repurchase once a Resolution has been passed by the Board of

Directors of the Company (“the Board”) confi rming that the Board has authorised the repurchase, that the Company has passed the solvency and liquidity test (“test”) and that since the test was done there have been no material changes to the fi nancial position of the Group;

• the Company or its business unit’s may not acquire ordinary shares during a prohibited period as defi ned in paragraph 3.67 of the JSE Listings Requirements; and

• an announcement will be published once the Company has cumulatively repurchased 3% (three percent) of the number of the ordinary shares in issue at the time this general authority is granted (“initial number”), and for each 3% (three percent) in aggregate of the initial number acquired thereafter.”

Explanatory noteThe purpose of this Special Resolution number 2 is to obtain an authority for, and to authorise, the Company and the Company’s business units, by way of a general authority, to acquire the Company’s issued ordinary shares.

It is the intention of the Directors of the Company to use such authority should prevailing circumstances (including tax dispensations and market conditions) in their opinion warrant it.


Other disclosure in terms of Section 11.26 of the JSE Listings RequirementsThe JSE Listings Requirements require the following disclosure, which are contained in the Integrated Annual Report of which this notice forms part:• Directors and management – pages 12 and 13;• Major shareholders of the Company – pages 29 and 30;• Directors’ interests in securities – page 30; and• Share capital of the Company – page 79.

Material changeThere have been no material changes in the affairs or fi nancial position of the Company and its business units since the Company’s fi nancial year-end and the date of this notice.

Directors’ responsibility statementThe Directors, whose names are given on page 12 of the Integrated Annual Report of which this notice forms part, collectively and individually accept full responsibility 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 in relation to Special Resolution number 2 that have been omitted which would make any statement in relation to Special Resolution number 2 false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that Special Resolution number 2 together with this notice contains all information required by law and the JSE Listings Requirements in relation to Special Resolution number 2.

Adequacy of working capitalAt the time that the contemplated repurchase is to take place, the Directors of the Company will ensure that, after considering the effect of the maximum repurchase and for a period of 12 months thereafter:• the Company and its business units will be able to pay their debts as they become due in the ordinary

course of business;• the consolidated assets of the Company and its business units, fairly valued in accordance with

International Financial Reporting Standards, will be in excess of the consolidated liabilities of the Company and its business units;

• the issued share capital and reserves of the Company and its business units will be adequate for the

purpose of the ordinary business of the Company and its business units; and


• the working capital available to the Company and its business units will be sufficient for the Group’s requirements.

The Company may not enter the market to proceed with the repurchase until its designated adviser, Merchantec Proprietary Limited, has discharged of all of its responsibilities in terms of the JSE Listings Requirements insofar as they apply to working capital statements for the purposes of undertaking an acquisition of its issued ordinary shares.

9. Special Resolution number 3 Financial assistance for subscription of securities “Resolved that, as a Special Resolution, in terms of Section 44 of the Companies Act, 2008 (Act 71 of 2008), as amended (“Companies Act”), the shareholders of PSV Holdings Limited (“the Company”) hereby approve of the Company providing, at any time and from time to time during the period of two years commencing on the date of this Special Resolution number 3, fi nancial assistance by way of a loan, guarantee, the provision of security or otherwise, as contemplated in Section 44 of the Companies Act, to any person for the purpose of, or in connection with, the subscription for any option, or any securities, issued or to be issued by the Company or a related or inter-related company, or for the purchase of any securities of the Company or a related or inter-related company, provided that:(a) the Board of Directors of the Company (“the Board”), from time to time, determines:

(i) the specifi c recipient, or general category of potential recipients of such fi nancial assistance; (ii) the form, nature and extent of such fi nancial assistance; and(iii) the terms and conditions under which such fi nancial assistance is provided; and

(b) the Board may not authorise the Company to provide any fi nancial assistance pursuant to this Special Resolution number 3 unless the Board meets all those requirements of Section 44 of the Companies Act which it is required to meet in order to authorise the Company to provide such fi nancial assistance.”

Explanatory noteReason for and effect of Special Resolution number 3The purpose for and effect of this Special Resolution number 3 is to grant the Board the authority to authorise the Company to provide fi nancial assistance to any person for the purpose of, or in connection with, the subscription for any option or securities issued or to be issued by the Company or a related or inter-related company.


10. Special Resolution number 4 Loans or other fi nancial assistance to inter-related companies “Resolved that, as a Special Resolution, in terms of Section 45 of the Companies Act, 2008 (Act 71 of 2008), as amended (“Companies Act”), the shareholders of PSV Holdings Limited (“the Company”) hereby approve of the Company providing, at any time and from time to time during the period of two years commencing on the date of this Special Resolution number 4, any direct or indirect fi nancial assistance (which includes lending money, guaranteeing a loan or other obligation, and securing any debt or obligation) as contemplated in Section 45 of the Companies Act to a Director or prescribed offi cer of the Company, or to a related or inter-related company or corporation or to a member of any such related or inter-related corporation or to a person related to any such company, corporation, Director, prescribed offi cer or member provided that:(a) the Board of Directors of the Company (“the Board”), from time to time, determines:

(i) the specifi c recipient or general category of potential recipients of such fi nancial assistance; (ii) the form, nature and extent of such fi nancial assistance; and(iii) the terms and conditions under which such fi nancial assistance is provided, and

(b) the Board may not authorise the Company to provide any fi nancial assistance pursuant to this Special Resolution number 4 unless the Board meets all those requirements of Section 45 of the Companies Act which it is required to meet in order to authorise the Company to provide such fi nancial assistance.”

Explanatory noteReason for and effect of Special Resolution number 4The reason for and purpose of this Special Resolution number 4 is to grant the Board the authority to authorise the Company to provide fi nancial assistance as contemplated in Section 45 of the Companies Act to a Director or prescribed offi cer of the Company, or to a related or inter-related company or corporation, or to a member of a related or inter-related corporation, or to a person related to any such company, corporation, Director, prescribed offi cer or member.

Notice given to shareholders of the Company in terms of Section 45(5) of the Companies Act of a Resolution adopted by the Board authorising the Company to provide such direct or indirect fi nancial assistance in respect of Special Resolution number 4:(a) by the time that this notice of Annual General Meeting is delivered to shareholders of the Company,

the Board will have adopted a Resolution (“Section 45 Board Resolution”) authorising the Company to provide, at any time and from time to time during the period of two years commencing on the date on which Special Resolution number 4 is adopted, any direct or indirect financial assistance as



Notice of Annual General Meeting (continued)

contemplated in Section 45 of the Companies Act (which includes lending money, guaranteeing a loan or other obligation, and securing any debt or obligation) to a Director or prescribed offi cer of the Company or of a related or inter-related company, or to a related or inter-related company or corporation, or to a member of any such related or inter-related corporation, or to a person related to any such company, corporation, Director, prescribed offi cer or a member;

(b) the Section 45 Board Resolution will be effective only if and to the extent that Special Resolution number 4 is adopted by the shareholders of the Company, and the provision of any such direct or indirect fi nancial assistance by the Company, pursuant to such Resolution, will always be subject to the Board being satisfi ed that: (i) immediately after providing such fi nancial assistance, the Company will satisfy the solvency and

liquidity test as referred to in Section 45(3)(b)(i) of the Companies Act; and (ii) the terms under which such fi nancial assistance is to be given are fair and reasonable to the Company as referred to in Section 45(3)(b)(ii) of the Companies Act; and

(c) in as much as the Section 45 Board Resolution contemplates that such fi nancial assistance will in the aggregate exceed one-tenth of one percent of the Company’s net worth at the date of adoption of such Resolution, the Company hereby provides notice of the Section 45 Board Resolution to shareholders of the Company. Such notice will also be provided to any trade union representing any employees of the Company.

11. Ordinary Resolution number 1Approval of remuneration policy“Resolved that the remuneration policy of the Directors of PSV Holdings Limited (“the Company”), as set out on page 27 of the Integrated Annual Report, be and is hereby approved as a non-binding advisory vote of shareholders of the Company in terms of the King III Report on Corporate Governance.”

12. Ordinary Resolution number 2Control of authorised but unissued ordinary shares“Resolved that the authorised but unissued ordinary shares in the capital of PSV Holdings Limited (“the Company”) be and are hereby placed under the control and authority of the Directors of the Company (“Directors”) and that the Directors be and are hereby authorised and empowered to allot and issue all or any of such ordinary shares, or to issue any options in respect of all or any of such ordinary shares, to such person/s on such terms and conditions and at such times as the Directors may from time to time and in their discretion deem fi t, subject to the provisions of Sections 38 and 41 of the Companies Act, 2008 (Act 71 of 2008), as amended, the Memorandum of Incorporation of the Company and the Listings Requirements of JSE Limited, as amended from time to time.”

Ordinary Resolutions to be adopted at this Annual General Meeting require approval from a simple

majority, which is more than 50% of the votes exercised on such Resolutions by shareholders present or

represented by proxy at the meeting.

13. Ordinary Resolution number 3Approval to issue ordinary shares, and to sell treasury shares, for cash“Resolved that the Directors of PSV Holdings Limited (“the Company”) and/or any of its business units

from time to time be and are hereby authorised, by way of a general authority, to:

• allot and issue, or to issue any options in respect of, all or any of the authorised but unissued ordinary

shares in the capital of the Company; and/or

• sell or otherwise dispose of or transfer, or issue any options in respect of, ordinary shares in the capital

of the Company purchased by business units of the Company.

For cash, to such person/s on such terms and conditions and at such times as the Directors may from

time to time in their discretion deem fi t, subject to the Companies Act, 2008 (Act 71 of 2008), as

amended, the Memorandum of Incorporation of the Company and its business units and the Listings

Requirements of JSE Limited (“the JSE Listings Requirements”) from time to time.

The JSE Listings Requirements currently provide, inter alia, that:

• this general authority will be valid until the earlier of the Company’s next Annual General Meeting or the

expiry of a period of 15 (fi fteen) months from the date that this authority is given;

• 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 may only be made to “public shareholders” as defi ned in the JSE Listings Requirements

and not to related parties;

• the securities which are the subject of a general issue for cash may not exceed 50% of the number of

listed securities, excluding treasury shares, as at the date of this notice, being 130 743 102 securities.

Any securities issued under this authorisation will be deducted from the aforementioned 130 743 102

listed securities. In the event of a sub-division or a consolidation the authority will be adjusted to

represent the same allocation ratio;

• in determining the price at which securities may be issued in terms of this authority, the maximum

discount permitted will be 10% (ten percent) of the weighted average traded price of such securities

measured over the 30 (thirty) business days prior to the date that the price of the issue is agreed in

writing between the issuer and the party/ies subscribing for the securities;


• an announcement giving full details, including the number of securities issued, the average discount to

the weighted average traded price of the securities over 30 (thirty) business days prior to the date that

the issue is agreed in writing being the issue and the parties subscribing for the securities and the

impact on net asset value per share, net tangible asset value per share, earnings per share and

headline earnings per share and, if applicable, diluted earnings and headline earnings per share, will

be published when the Company has issued securities representing, on a cumulative basis within the

earlier of the Company’s next Annual General Meeting or the expiry of a period of 15 (fi fteen) months

from the date that this authority is given, 5% (fi ve percent) or more of the number of securities in issue

prior to the issue; and

• whenever the Company wishes to use repurchased shares, held as treasury stock by a business unit

of the Company, such use must comply with the JSE Listings Requirements as if such use was a fresh

issue of ordinary shares.”

Under the JSE Listings Requirements, Ordinary Resolution number 3 must be passed by a 75% (seventy

fi ve percent) majority of the votes cast in favour of the Resolution by all members present or represented

by proxy at the Annual General Meeting.

14. Ordinary Resolution number 4Signature of documents“Resolved that each Director of PSV Holdings Limited (“the Company”) be and is hereby individually

authorised to sign all such documents and do all such things as may be necessary for or incidental to the

implementation of those Resolutions to be proposed at the Annual General Meeting convened to consider

the Resolutions which are passed, in the case of Ordinary Resolutions, or are passed and registered by

the Companies and Intellectual Property Commission, in the case of Special Resolutions.”

Other businessTo transact such other business as may be transacted at the Annual General Meeting of the Company.

Voting and proxiesSpecial Resolutions to be adopted at this Annual General Meeting require approval from 75% (seventy fi ve

percent) of the votes exercised on such Resolutions by shareholders present or represented by proxy at

the meeting. Ordinary Resolutions to be adopted at this Annual General Meeting require approval from a

simple majority, which is more than 50% (fi fty percent) of the votes exercised on such Resolutions by

shareholders present or represented by proxy at the meeting, with the exception of Ordinary Resolution

number 3 which require approval from 75% (seventy fi ve percent) of the votes exercised on such

Resolution by shareholders present or represented by proxy at the meeting.

A shareholder entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy or proxies to attend and act in his/her stead. A proxy need not be a member of the Company. For the convenience of registered members of the Company, a form of proxy is attached hereto.

The attached form of proxy is only to be completed by those ordinary shareholders who:• hold ordinary shares in certifi cated form; or• are recorded on the sub-register in “own name” dematerialised form.

Ordinary shareholders who have dematerialised their ordinary shares through a CSDP or broker without “own name” registration and who wish to attend the Annual General Meeting, must instruct their CSDP or broker to provide them with the relevant Letter of Representation to attend the meeting in person or by proxy and vote. If they do not wish to attend in person or by proxy, 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.

Proxy forms should be forwarded to reach the transfer secretaries, Link Market Services South Africa Proprietary Limited, at least 48 hours, excluding Saturdays, Sundays and public holidays, before the time of the meeting.

Kindly note that meeting participants, which include proxies, are required to provide reasonably satisfactory identifi cation before being entitled to attend or participate in a shareholders’ meeting. Forms of identifi cation include valid identity documents, driver’s licences and passports.

By order of the Board

Merchantec CapitalCompany Secretary

7 July 2014

Johannesburg


Notes


Form of proxy for the year ended 28 February 2014

PSV Holdings Limited

Incorporated in the Republic of South Africa

(Registration number 1998/004365/06)

Share code: PSV

ISIN: ZAE000078705

(“PSV” or “the Company” or “the Group”)

For use only by ordinary shareholders who:

• hold ordinary shares in certifi cated form (“certifi cated ordinary shareholders”); or

• have dematerialised their ordinary shares (“dematerialised ordinary shareholders”) and are registered with “own name” registration, at

this Annual General Meeting of shareholders of the Company to be held at 10:00 on Thursday, 21 August 2014 at the registered offi ce

of PSV, corner Barbara and North Reef Roads, Henville Extension, Elandsfontein, Johannesburg, 1429, and any adjournment thereof.

Dematerialised ordinary shareholders holding ordinary shares other than with “own name” registration who wish to attend the Annual

General Meeting must inform their Central Securities Depository Participant (“CSDP”) or broker of their intention to attend the Annual

General Meeting and request their CSDP or broker to issue them with the relevant Letter of Representation to attend the Annual General

Meeting in person or by proxy and vote. If they do not wish to attend the Annual General Meeting in person or by proxy, they must provide

their CSDP or broker with their voting instructions in terms of the relevant custody agreement entered between them and the CSDP or broker.

These ordinary shareholders must not use this form of proxy.

Name of benefi cial shareholder

Name of registered shareholder

Address

Telephone work ( ) Telephone home ( ) Cell:

being the holder/custodian of ordinary shares in the Company, hereby appoint (see Note):

1. or failing him/her,

2. or failing him/her,

3. the Chairman of the meeting,

as my/our proxy to attend and act for me/us on my/our behalf at the Annual General Meeting of the Company convened for purpose of

considering and, if deemed fi t, passing, with or without modifi cation, the Special and Ordinary Resolutions to be proposed thereat

(“Resolutions”) and at each postponement or adjournment thereof and to vote for and/or against such Resolutions, and/or abstain from

voting, in respect of the ordinary shares in the issued share capital of the Company registered in my/our name/s in accordance with the

following instructions:

Number of ordinary shares

For Against Abstain

1. To receive, consider and adopt the annual fi nancial statements of the Company and Group for the fi nancial year ended 28 February 2014

2. To approve the re-election as Director of Anthony de la Rue who retires by rotation

3. To approve the appointment of Anthony de la Rue as member and Chairman of the Independent Audit and Risk Committee

4. To approve the appointment of Eric Ratshikhopha as a member of the Independent Audit and Risk Committee

5. To approve the appointment of Ralph Patmore as a member of the Independent Audit and Risk Committee

6. To confi rm the appointment of Certifi ed Masters Auditors Inc as auditors of the Company together with Raymond Baard being the individual registered auditor for the ensuing fi nancial year.

7. Special Resolution number 1Approval of the Non-Executive Directors’ remuneration

8. Special Resolution number 2General approval to acquire shares

9. Special Resolution number 3Financial assistance for the subscription of securities

10. Special Resolution number 4Loans or other fi nancial assistance to inter-related companies

11. Ordinary Resolution number 1Approval of the remuneration policy

12. Ordinary Resolution number 2Control of authorised but unissued ordinary shares

13. Ordinary Resolution number 3Approval to issue ordinary shares, and to sell treasury shares, for cash

14. Ordinary Resolution number 4Signature of documents

Please indicate instructions to proxy in the space provided above by the insertion therein of the relevant number of votes exercisable.

A member entitled to attend and vote at the Annual General Meeting may appoint one or more proxies to attend and act in his stead. A proxy

so appointed need not be a member of the Company.

Signed at on 2014

Signature

Assisted by (if applicable)



Notes to the form of proxy

1. The form of proxy must only be completed by shareholders who hold shares in certifi cated form or who are recorded on the sub-register

in electronic form in “own name”.

2. All other benefi cial owners who have dematerialised their shares through a CSDP or broker and wish to attend the Annual General

Meeting 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.

3. A shareholder entitled to attend and vote at the Annual General Meeting may insert the name of a proxy or the names of two alternate

proxies (none of whom need be a shareholder of the Company) of the shareholder’s choice in the space provided, with or without deleting

“the Chairman of the meeting”. The person whose name stands fi rst on this form of proxy and who is present at the Annual General

Meeting will be entitled to act as proxy to the exclusion of those proxy(ies) whose names follow. Should this space be left blank, the proxy

will be exercised by the Chairman of the meeting.

4. A shareholder is entitled to one vote on a show of hands and, on a poll, one vote in respect of each ordinary share held. A shareholder’s

instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that shareholder in the

appropriate space provided. If an “X” has been inserted in one of the blocks to a particular Resolution, it will indicate the voting of all the

shares held by the shareholder concerned. Failure to comply with this will be deemed to authorise the proxy to vote or to abstain from

voting at the Annual General Meeting as he/she deems fi t in respect of all the shareholders’ votes exercisable thereat. A shareholder or

the proxy is not obliged to use all the votes exercisable by the shareholder or by the proxy, but the total of the votes cast and in respect

of which abstention is recorded may not exceed the total of the votes exercisable by the shareholder or the proxy.

5. A vote given in terms of an instrument of proxy shall be valid in relation to the Annual General Meeting notwithstanding the death, insanity

or other legal disability of the person granting it, or the revocation of the proxy, or the transfer of the ordinary shares in respect of which

the proxy is given, unless notice as to any of the aforementioned matters shall or have been received by the transfer secretaries not less

than 48 (forty eight) hours before the commencement of the Annual General Meeting.

6. If a shareholder does not indicate on this form that his/her proxy is to vote in favour of or against any Resolution or to abstain from voting,

or gives contradictory instructions, or should any further Resolution(s) or any amendment(s) which may properly be put before the Annual

General Meeting be proposed, such proxy shall be entitled to vote as he/she thinks fi t.

7. The Chairman of the Annual General Meeting may reject or accept any form of proxy which is completed and/or received other than in

compliance with these notes.

8. A shareholder’s authorisation to the proxy including the Chairman of the Annual General Meeting, to vote on such shareholder’s behalf,

shall be deemed to include the authority to vote on procedural matters at the Annual General Meeting.

9. 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.

10. Documentary evidence establishing the authority of a person signing the form of proxy in a representative capacity must be attached

to this form of proxy, unless previously recorded by the Company’s transfer secretaries or waived by the Chairman of the Annual General

Meeting.

11. A minor or any other person under legal incapacity must be assisted by his/her parent or guardian, as applicable, unless the relevant

documents establishing his/her capacity are produced or have been registered by the transfer secretaries of the Company.

12. Where there are joint holders of ordinary shares:

• any one holder may sign the form of proxy; and

• the vote(s) of the senior ordinary shareholders (for that purpose seniority will be determined by the order in which the names of

ordinary shareholders appear in the Company’s register of ordinary shareholders) who tender a vote (whether in person or by proxy)

will be accepted to the exclusion of the vote(s) of the other joint shareholder(s).

13. Forms of proxy should be lodged with or mailed to Link Market Services South Africa Proprietary Limited:

Hand deliveries to: Postal deliveries to:

Link Market Services South Africa Proprietary Limited Link Market Services South Africa Proprietary Limited

13th Floor, Rennie House PO Box 4844

19 Ameshoff Street, Braamfontein Johannesburg

2001 2000

to be received by no later than Tuesday, 19 August 2014 (or 48 hours before any adjournment of the Annual General Meeting which

date, if necessary, will be notifi ed on SENS).

14. A deletion of any printed matter and the completion of any blank space need not be signed or initialled. Any alteration or correction must

be signed and not merely initialled.

Summary of the rights of a shareholder to be represented by proxy, as set out in Section 58 of the Companies Act:

• A proxy appointment must be in writing, dated and signed by the shareholder appointing a proxy, and, subject to the rights of a

shareholder to revoke such appointment (as set out below), remains valid only until the end of the relevant shareholders’ meeting.

• A proxy may delegate the proxy’s authority to act on behalf of a shareholder to another person, subject to any restrictions set out in the

instrument appointing the proxy.

• The appointment of a proxy is suspended at any time and to the extent that the shareholder who appointed such proxy chooses to act

directly and in person in the exercise of any rights as a shareholder.

• The appointment of a proxy is revocable by the shareholder in question cancelling it in writing, or making a later inconsistent appointment

of a proxy, and delivering a copy of the revocation instrument to the proxy and to the Company. The revocation of a proxy appointment

constitutes a complete and fi nal cancellation of the proxy’s authority to act on behalf of the shareholder as of the later of:

(a) the date stated in the revocation instrument, if any; and

(b) the date on which the revocation instrument is delivered to the Company as required in the fi rst sentence of this paragraph.

• If the instrument appointing the proxy or proxies has been delivered to the Company, as long as that appointment remains in effect, any

notice that is required by the Companies Act or the Company’s Memorandum of Incorporation to be delivered by the Company to the

shareholder, must be delivered by the Company to:

(a) the shareholder; or

(b) the proxy or proxies, if the shareholder has (i) directed the Company to do so in writing; and (ii) paid any reasonable fee charged by

the Company for doing so.

• Attention is also drawn to the “Notes to proxy”.

• The completion of a form of proxy does not preclude any shareholder from attending the Annual General Meeting.


Administration

Business address and registered offi cePSV Holdings Offi ce Park, Corner Barbara and North Reef Roads, ElandsfonteinTelephone: +27 (0) 11 657 6000 Facsimile: +27 (0) 11 822 8470(Postnet Suite 229, Private Bag X19, Gardenview, 2047)

Company SecretaryMerchantec Capital2nd Floor, North Wing, Hyde Park Corner Offi ce Suites, Corner 6th Road and Jan Smuts Avenue, Hyde ParkTelephone: +27 (0) 11 325 6363Facsimile: +27 (0) 11 325 6362

Transfer secretariesLink Market Services South Africa Proprietary Limited13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein (PO Box 4844, Johannesburg, 2000)Telephone: +27 (0) 11 713 0899Facsimile: +27 (0) 86 674 4381

AttorneysEversheds AttorneysBuilding 1, 19 Impala Road, Chislehurston, Johannesburg, 2196(PO Box 782244, Sandton City, 2146)Telephone: +27 (0) 10 500 1175Facsimile: +27 (0) 73 577 1607

Designated adviserMerchantec Capital2nd Floor, North Wing, Hyde Park Corner Offi ce Suites, Corner 6th Road and Jan Smuts Avenue, Hyde Park(PO Box 41480, Craighall, 2024)Telephone: +27 (0) 11 325 6363Facsimile: +27 (0) 11 325 6362

AuditorsCertifi ed Master Auditors IncNo 1, 2nd Road, Midrand(Private Bag X168, Halfway House, 1685)Telephone: +27 (0) 11 315 0215Facsimile: +27 (0) 11 315 0639

Investor relationsKeyter Rech Investor SolutionsVanessa RechFountain Grove Office Park, Corner William Nicol and 2nd Road, Hyde Park(PO Box 653078, Benmore, 2010)Telephone: +27 (0) 87 351 3814 Email: [email protected]

African Cryogenics A division of PSV Industries Proprietary

Limited

AltX Alternative Exchange of the Johannesburg

Stock Exchange

B-BBEE Broad-Based Black Economic

Empowerment

BWP Botswana Pulas

CEO Chief Executive Offi cer

CFO Chief Financial Offi cer

CGU Cash Generating Unit

CIPC Companies and Intellectual Property

Commission

COMPASS Community Provision and Social Services

CPIX Consumer Price Index

CPS Cents per share

Cryoshield Cryoshield Proprietary Limited

CSDP Central Securities Depository Participant

CSI Corporate Social Investment

DRC Democratic Republic of the Congo

Engineered Linings Engineered Linings Proprietary Limited

Euro European Monetary Unit

FOMDP Friends of Martin De Porres

GBP Great British Pound

Group PSV Holding Limited and its business units

HEPS Headline Earnings per Share

HR Human Resources

IT Information Technology

JSE JSE Limited

KPA Key Performance Area

KPI Key Performance Indicator

LabourNet A strategic HR business partner which

specialises in ensuring fair labour

procedures and practices are implemented

in all aspects of the PSV business

Mitech PSV Mitech Control Valves Proprietary

Limited

OHSAS Occupational Health and Safety

Assessment Series

Glossary of terms

Omnirapid Omnirapid Mining and Industrial Supplies

Proprietary Limited

PBT Profi t Before Tax

Petrologic Petrologic Proprietary Limited

PSV PSV Holdings Limited

RAGI Rand Air and Gas Installations Proprietary

Limited

SARS South African Revenue Services

SENS Stock Exchange News Service

Turbo Agencies Incorporating Turbo Agencies Proprietary

Limited: (Botswana), Turbo Agencies (Pvt)

Limited: (Zambia), Turbo Agencies (DRC):

SPRL (DRC)

USD United States Dollar

VAT Value Added Tax

ZMK Zambia Kwacha

Physical addressPSV Holdings Offi ce ParkCorner Barbara and North Reef RoadsElandsfontein

Postal addressPostnet Suite 229 Private Bag X19 Gardenview, 2047

Tel +27 11 657 6000Fax +27 11 822 8470

www.psvholdings.com

Integrated Annual Report 2014 - PSV Holdings · 2014. 9. 12. · PSV Integrated Annual Report 2014...

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Transcript of Integrated Annual Report 2014 - PSV Holdings · 2014. 9. 12. · PSV Integrated Annual Report 2014...