NUTRITIONAL HOLDINGS LIMITED ANNUAL INTEGRATED REPORT …

Previously known as “Imuniti Holdings Limited”

NUTRITIONAL HOLDINGS LIMITEDANNUAL INTEGRATED REPORT2012

PAGE B | 2012 ANNUAL INTEGRATED REPORT

CORPORATE PROFILENutritional Holdings is a manufacturer and marketer of pharmaceutical products and complimentary natural medicines as well as high-protein and fortified powdered nutritional food products and supplements. The group’s manufacturing and marketing operations are complemented by its research, design and development capabilities. Nutritional Holding’s ability to deliver an affordable range of nutritionally fortified and natural products aims to address the malnutrition, immune deficiency and water contamination problems in South Africa and beyond.

The Nutritional Holdings Group comprises established, complementary, pharmaceutical and nutritional powdered foodstuffs manufacturing businesses. The group manufactures apart from its vast range of food and complementary medicine under licence, the Imuniti Nutritional Supplement Combo Pack, a basic package containing various natural immune-boosting products and high-protein fortified nutritional supplements as well as water decontamination agents.

VISIONNutritional Holdings’ vision is to develop and provide affordable, sustainable wellness products, services and programmes and to actively promote socio-economic wellbeing for South Africans and throughout sub-Saharan Africa.

MISSION STATEMENTNutritional Holdings’ mission is to be the preferred regional wellness and healthcare product and service supplier to the lower and middle-income segments of the market, and to produce sustainable returns for shareholders.

» NUTRITIONAL HOLDINGS

| 2012 ANNUAL INTEGRATED REPORT

» CONTENTS

BUSINESS OVERVIEW

Corporate profile inside front cover

Vision inside front cover

Mission statement inside front cover

Directorate 2

Group activities 3

Financial highlights 6

Five-year review 7

REPORTS

Chairman’s report 8

Chief Executive Officer’s report 9

Corporate governance 11

Report of the Audit and Risk Management Committee 15

Sustainability report 17

FINANCIAL STATEMENTS

Report of the independent auditors 21

Directors’ responsibilities and approval 22

Declaration by Company Secretary 22

Directors’ report 23

Statement of financial position 26

Statement of comprehensive income 27

Statement of changes in equity 28

Statement of cash flows 29

Notes to the annual financial statements 30

SHAREHOLDER INFORMATION

Shareholder spread 57

Notice of annual general meeting 58

Form of proxy attached

Corporate information inside back cover

As the new Companies Act allows for the distribution of a summarised report to shareholders, this will be our last print run of the complete integrated report. In accordance with the provisions of the new Companies Act, we will make the complete integrated report available on our website (as we do currently viz. www.nholdings.co.za) and printed copies will be available on request. In future, we will send all shareholders printed copies of the notices to the annual general meetings together with a summarised copy of the annual financial statement, unless shareholders elect to review electronic versions. To the extent that our stakeholders support this initiative, it will result both in an improved environmental impact and cost savings.


» DIRECTORATE

Mr Glen Wambach as an independent non-executive director and ChairmanMr Wambach has been involved in the healthcare industry for 25 years and has completed a number of courses during this time. He is currently employed by one of the leading medical scheme administrators in South Africa.

Mr Treve Hendry as an independent non-executive directorMr Hendry has a BCompt (Hons) and is a Chartered Accountant (SA). He is currently the Chief Executive Officer of Argent Industrial Limited, a JSE main board listed company.

Mr Clayton Angus as an independent non-executive directorMr Angus has a BCompt and HDip (Acc) degree and is a Chartered Accountant (SA). He served his articles with KPMG and has a vast experience in business, both in South Africa and London. He is currently the Chief Financial Officer of NOAH.

Mr Henk van der Merwe as Chief Executive Officer Mr van der Merwe has a BCom (Hons) (Acc) (Cum Laude) degree from Pretoria University and is a Chartered Accountant (SA). He worked as a merchant banker (corporate finance field) for 13 years in both South Africa and the United Kingdom, including four years as founder and approved executive at Exchange Sponsors (Pty) Limited. He served four years as Chief Operating Officer and Group Financial Director of Stratcorp Limited, a company listed on the Alternative Exchange of the JSE.

Ms Jenny Etchells as Financial DirectorMs Etchells has a BCompt (Hons) degree and is a Chartered Accountant (SA). In addition, she has a Masters degree in Commerce (Aus), a HDip (Tax), and is a Master Tax Practitioner (SA). She worked in, and managed, various accounting practices, including Deloitte’s, and as a director of BDO Spencer Steward (KZN) Inc. She served two years as Group Financial Director of Argent Industrial Limited, a JSE main board listed company.


» GROUP ACTIVITIES

OPERATIONS

Nutritional FoodsNutritional Foods, which is located in Klerksdorp, has one of the biggest and most efficient factories in South Africa producing high-protein and fortified powdered food and food supplements. It has a large customer base, sales and distribution network.

The company has well-established and recognised brands in the mass catering market of South Africa.

Brands include:

ImpiloLocated in the Durban area, the company has a well-established brand and numerous dossiers with product registrations with the SA Medicines Control Council.

Brands include:

The top sellers are:

Quma Mixture Antacid

Impilo Calamine Lotion

Imbiza Worm Syrup

Kwe Kwe Ointment

Utshile Burn Lotion


» GROUP ACTIVITIES

2003 to 2005Various anecdotal evidence in a number of the South African Development Community (SADC) countries with respect to using the ISCP.

2003Articles by Ms Liz Clarke The product was tested by Ms Liz Clarke, the former chief HIV/AIDS reporter for Independent Newspapers, on an AIDS sufferer called Sylvia in KwaZulu-Natal. The results of the ISCP on a dying HIV/AIDS sufferer after eight weeks were remarkable – the virus, according to the laboratory report, was no longer detectable.

Another article by Ms Clarke, on the life of Godfrey Ngidi that could not walk without assistance – being extremely thin and fading away, being diagnosed with TB and HIV/AIDS – on how the ISCP turned his life to such an extent that he could resume his normal work duties.

Ms Clarke received the USA-South Africa award for the best HIV/AIDS reporter in South Africa and the USA for the year (2002 – 2003).

31 October 2006Clinical trial evaluation criteria were received with respect to the Phase I Clinical Trial concerning the ISCP from the Indigenous Knowledge Systems (IKS) Lead Programme of the South African Medical Research Council (MRC).

27 November to 1 December 2006E2E and Nutritional Holdings were invited by the MRC, to visit the World Health Organisation (WHO) in Brazzaville, Congo at the Regional Expert Committee on Traditional Medicine.

9 May 2007The Ethics Committee granted ethical permission Ref EC07- 003 for the IKS Lead Programme (a division of the MRC) to conduct a Phase I controlled clinical trial in respect of the ISCP. The trial was commissioned by E2E.

17 September 2007The MRC and E2E signed a Memorandum of Agreement with respect to the Phase I Clinical Trial concerning the ISCP.

22 November 2007Signing of the Memorandum of Understanding (MoU) between the Africa Forum and E2E – at Livingstone, Zambia. The roll-out of the ISCP for the African countries as well as the responsibilities of the parties are central to the MoU.

2008Between the Africa Forum and E2E, the Agriculture and Nutrition Project for Future Self-Reliance in Africa (ANSRP) was drafted. The ISCP with respect to cultivation and other agricultural aspects are central to the ANSRP.

9 December 2008 The MRC successfully concluded the Phase I safety and toxicity clinical trails.

22 October 2009The MRC and E2E signed a Research Agreement with respect to the P450 drug metabolising enzymes study concerning the ISCP. This study entailed testing the effect of the ISCP on all major cyto-chrome P450 drug metabolising enzymes in in vitro and in vivo test systems (compatibility of the ISCP with ARV, TB and diabetes medication).

22 October 2009The MRC and E2E signed a Research Agreement to conduct a Nutritional Content Study in respect of the ISCP.

22 October 2009 The MRC and E2E signed a Memorandum of Agreement to conduct a Phase II controlled clinical trial in respect of the ISCP.

The trial aims to prove quality of life parameters and blood results such as CD counts and viral load (in essence proving scientifically what has been seen anecdotally).

In 2006, Nutritional Holdings purchased the rights to manufacture and market the Imuniti Nutritional Supplement Combo Pack (ISCP) in South Africa from Edge to Edge Global Investments Limited (E2E). ISCP is a nutritional pack consisting of eight different natural products. The product has shown to have anti-bacterial and anti-viral properties and provides one person with adequate sustenance and a balanced intake of all required micro and macro-nutrients for a one-month period.

During the 2012 fiscal year, a new exclusive agreement for the first million packs per month was negotiated for an indefinite period.

Due to the trials that have taken place on this product since the rights were purchased, full production has not started but is expected to begin shortly.

The group has focused on this product over the past six years and therefore below is a brief on the activities undertaken by E2E on this product.


The Department of Health (South Africa) has requested the use of the VCT centres (voluntary, counselling and testing centres) for the Imuniti Phase II clinical trial. The trial will be multi-centred and they have also requested an even spread of participants between rural, semi-urban and urban sites.

The Monitoring Board includes top scientists, heads of several Universities’ Bioscience and Pharmacology Departments; Research Directorates and Traditional Medicine Practitioners

December 2009Strategic discussions for further trials with respect to the ISCP with Professor Luc Montagnier (Nobel Laureate 2008) at the United Nations Educational, Scientific and Cultural Organisation (UNESCO) in Paris.

25 January 2010The Ethics Committee granted ethical permission Ref EC09- 005 for the Indigenous Knowledge Systems (IKS) Lead Programme (of the MRC) to conduct a Phase II controlled clinical trial in respect of the ISCP.

28 March 2010MoU signed with Professor Luc Montagnier concerning, amongst others, further trials with respect to the ISCP at the Nanectis Laboratory in Paris, France.

May 2010E2E visited Côte d’Ivoire together with Dr Abie Zogoe (Ambassador of Côte d’Ivoire in SA) on invitation of Dr Aka Aouele (Minister of Health of Côte d’Ivoire).

18 June 2010A Cooperative Research and Development Agreement was signed between Prof Luc Montagnier and E2E.

August 2010Nutritional Content Study: The MRC conducted a study to list all the macro and micronutrients in the product – this study was released during August 2010 by the MRC with the result: on the recommended daily allowance (RDA) scorecard “almost perfect nutrition”.

31 August 2010Prof Luc Montagnier, on behalf of the World Foundation for AIDS Research and Prevention (WFARP), signed a Memorandum of Understanding with the MRC.

October 2010 to March 2011Clinical Trial by Prof Luc Montagnier under the auspices of the WFARP: Testing of the Imuniti product with Prof Luc Montagnier’s BioMarker in collaboration with Dr Henri Chenal at Centre Intégré de Recherches Biocliniques d’Abidjan, Côte d’Ivoire.

The first phase of the trials have been completed during February 2011. The aim is to create a therapeutic treatment programme combining current ARV treatments with a nutritional supplement, the ISCP, in order to give the patient a better quality of life, maintain the patient and potentially eradicate this disease.

The significant results of this trial were shown by two different technologies: Viral DNA sequences in the plasma showed a significant decrease upon a three-month treatment by the ISCP added to ARVs.

• The control arm of ARV alone showed no change in any of the markers requested as per protocol.

• The ARV plus ISCP arm also showed a substantial reduction in the viral DNA in five out of seven patients.

Furthermore, PCR showed that two out of those five patients had viral DNA disappear after three months of ISCP treatment.

April 2011 to dateThe clinical trials Phase II were approved by the Provincial Department of Health to be conducted in KwaZulu-Natal, and MCCs approval was obtained in January 2012. The Phase II trials aim to determine, the safety, tolerability and efficacy of ISCP in HIV-1 infected patients who are naïve to other immune boosters and ARVs.


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» FINANCIAL HIGHLIGHTS

46,5

40,7

49,647,7 48,7

2008 2009 2010 2011 2012

GROSS PROFIT (%)

4 7314 542

(9 001)

(54 533)

2012

(23 511)

2008 2009 2010 2011

ATTRIBUTABLE EARNINGS (R’000)

-1.5

-1.2

-0.9

-0.6

-0.3

0.0

0.3

(0,35)

0,14

(0,99)(1,12)

(1,46)

2008 2009 2010 2011 2012

HEADLINE (LOSS) EARNING PER SHARE (cents)

10

2,72,31,9

2,7

9,2

2008 2009 2010 2011 2012

NET ASSET VALUE PER SHARE (cents)

The group’s attributable earnings increased from R4,542 million to R4,731 million. The headline earnings, however, decreased from a profit of R1,581 million to a loss of R4,578 million. This differential in headline earnings was as a result of the IFRS requirements relating to the recognition of deferred tax assets on estimated tax losses which were recognised for the first time during 2011. This increased headline earnings last year.

Turnover decreased by 12% to R41 million from the previous period as a result of cash flow constraints in the first half of the year and a lack of inventory. The cash inflow from certain of the shareholders in the latter part of the year, together with management’s turnaround programme will assist the company to regain lost market share.

The group’s gross profit percentage, however, increased by 2,2% to 48,7% from 46,5% as a result of managing of issues relating to price and margins.


» FIVE-YEAR REVIEW

Restated Restated2012 2011 2010 2009 2008

Revenue (R’000) 41 067 46 708 53 607 60 500 68 781

Gross profit (%) 48,7 46,5 40,7 49,6 47,7

Attributable earnings for the year (R’000) 4 731 4 542 (9 001) (54 533) (23 511)

Earnings/(loss) per share (cents) 0,20 0,15 (0,95) (6,32) (3,38)

Headline (loss)/earnings per share (cents) (0,35) 0,14 (0,99) (1,12) (1,46)

Net asset value per share (cents) 2,7 2,3 1,9 2,7 9,2

Net asset value per share

(excluding intangibles) (cents) 1,46 1,25 0,8 1,3 1,8

Total assets employed (R’000) 54 834 44 236 38 234 43 836 69 757

Return on shareholders’ equity (%) 11,62 17,44 (43,14) (232,32) (36,01)


» CHAIRMAN’S REPORT

Introduction and overviewThe group’s performance in the past year was disappointing. In March 2011 financial support was negotiated with certain of the shareholders in the form of a subscription for four hundred million shares, however, there was a long delay caused by implementation of the new Companies Act and all the new requirements necessary and the inflow of the funds only materialised in the latter half of the calendar year.

New management was put in place during the year and they were tasked with the implementation of a turnaround programme. These strategies and resultant changes created their own challenges but I am confident that the group is heading on the right path and that the changes will assist the group to grow from strength to strength.

Management has been tasked with turning Nutritional Holdings’ historical business into a profitable situation. There are numerous challenges including the fact that the typical historical contracts have been lost due to the BEE status of the company. This is something that is being addressed and will assist in the future.

The Imuniti Nutritional Supplement Combo Pack was expected to commercialise fully last year, however, this did not happen. Although orders have been received and successfully produced, the customer has been delayed with slow progress being made on the final trials and funding. It appears that there has been progress here with orders increasing currently.

Management has been addressing ways to improve its routes to market, with overhead and production costs under constant review. Strong corporate governance and restoring the corporate image of the group is also high on the agenda.

With the South African governments’ initiatives to promote job creation through manufacturing, Nutritional Holdings intends to play its role which will benefit the shareholders.

The results of the past year should therefore not be repeated in the coming financial year.

SustainabilityWe understand the need to ensure long-term sustainability for the group which will be achieved through a return to profitability.

We have endeavoured to identify the risks associated with this stage of Nutritional Holdings’ business cycle and to ensure that management has mitigated risk as best as practical under the circumstances.

Expansion of our activities will be done cautiously until we have established a platform of sustainable profitability and a strong financial base. Shareholders are cautioned that until we have reached this stage, the group is unlikely to pay dividends.

Corporate governanceThe recommendations and requirements of the King III report on corporate governance and the regulations of the JSE form an integral part of the corporate governance framework within which Nutritional Holdings operates.

AppreciationI would like to thank all our business partners for their support during the year and I remain grateful for the support of the board, shareholders, customers, suppliers, staff and other stakeholders of the Nutritional Holdings Group.

GR WambachChairman

22 May 2012


» CHIEF EXECUTIVE OFFICER’S REPORT

IntroductionAs a result of the delay caused by the new Companies Act requirements, the funding that was negotiated from certain of the shareholders in March 2011 only materialised in the latter half of the calendar year. This resulted in a delay in putting into place the necessary measures to restore the group after the long period of cash constraints.

Nutritional Foods divisionNutritional Foods, once the capital injection in the latter half of the year was received, focused on managing its working capital optimally so as not to lose critical sales but also to be able to expand group market share. Pricing and margin issues were dealt with and the sales forces were brought in-house. The production facilities remain currently underutilised and management is working on ways to address this problem.

Intense management involvement has resulted in far higher levels of coordination and cooperation between the different elements of this business and a far greater strategic focus on the direct needs of the business. The factory has extensive spare capacity and the impact of increased volumes on profitability will be considerable.

Pharmaceutical divisionThe Impilo business (Impilo Marketing and Impilo Drugs) has a contract manufacturing agreement with Pac-Con Pharmaceuticals in terms of which Pac-Con Pharmaceuticals manufactures the Impilo product range. During the year under review the supply problems from Pac-Con were addressed and a reliable supply of product has since been maintained. This has assisted Impilo to recover some of its previously lost revenue, in the second half of the year.

Impilo as part of its risk strategy is negotiating with two other contract manufactures to manufacture products on its behalf in order to ensure the continuous supply of product, which in the past has not always been available and which has damaged our market share. The process is time-consuming due to the numerous statutory requirements, but steady progress is being made.

The upgrade of the manufacturing facility at Isithebe by Pac-Con Pharmaceuticals has had a delayed start. This upgrade will ensure that the factory is fully compliant with all the new Medicines Control Council (MCC) regulations.

CORPORATEExclusive manufacturing agreementIn June 2011 Nutritional Holdings signed an exclusive manufacturing agreement with regard to the Imuniti Nutritional Supplement Combo Pack (ISCP) with Edge to Edge Global Investments Limited (E2E). This agreement gives Nutritional Holdings the exclusive right to supply E2E the first million ISCP Packs per month and thereafter we have the right of first refusal on any further manufacturing of the ISCP Packs. This new agreement supercedes all other previous agreements between E2E and Nutritional Holdings where previously Nutritional Holdings only had the non-exclusive right to manufacture and sell the ISCP Pack in South Africa. The term of the agreement has also been extended to an indefinite period.

Proposed dual listing in AIM market of the London Stock ExchangeNutritional Holdings indicated in June 2011 that it was considering a dual listing on the AIM market of the London Stock Exchange. We did a full investigation into this listing with a visit to the London Stock Exchange and at the moment we feel that due to the ongoing financial instability of the Euro region since the announcement, it is not the right time to do this. We have therefore delayed the process and will relook into it when we feel the time is right.

JSE – Altx 15 IndexNutritional Holdings was made a constituent of the JSE – Altx 15 Index effective 8 July 2011. The Altx 15 is an index that tracks the price performance of the 15 largest companies listed on the Altx.

DTI and IDCThe group together with Edge to Edge Global Investments Limited applied to the Department of Trade and Industry for the ISCP project to be approved for participation in the National Industrial Participation programme. An approval of the concept in principle was received in January 2012. This is now being pursued with the obligors to this programme.

An application was also made together with Edge to Edge Global Investments Limited to the Industrial Development Corporation for the funding of the ISCP project. A phased approach has now been taken for the funding of the project as the manufacturing capacity of the Nutritional Holdings plant is sufficient in the short term and allows supply of the ISCP in the interim. Accordingly, the upgrade of the manufacturing facilities by Nutritional Holdings will be done at a later stage as and when the demand for the ISCP product increases to a level that cannot be facilitated with the current plant available.


» CHIEF EXECUTIVE OFFICER’S REPORT

FINANCIAL RESULTSFinancial performanceSales of R41,607 million were 12% down on the R46,708 million of the previous year. This was mainly due to a decline in sales in the Nutritional Food division. Sales at Nutritional Foods were at the R38 million level for the year. Gross profit declined by R1,7 million to R20,012 million as a result of the decline in sales offset by an increase in the gross margin from 46,5% to 48,7%. The increase in margin was primarily as a result of restructuring the pricing levels at Nutritional Foods. The reduction in gross profit, however, was offset by a reduction in expenses from R26,737 million to R25,603 million (4,2%). The attributable profit increased from a profit of R1,664 million in 2011 to a profit of R2,619 million in 2012.

Financial positionThe attributable profit of the group as well as the proceeds from the increase in the number of shares in issue were the major factors in increasing the net asset value per share from 2,3 cents to 2,7 cents.

ProspectsWith the comprehensive turnaround programme in place the group is on track to improving sales to acceptable levels and reaching acceptable capacity utilisations. As with any business, a limited number of variables have a disproportionate influence on our performance. We are addressing those that are under our control which include local market development and operational and cost performance.

Overall we are focused on implementing strategies to improve business performance in the short, medium and long term, and look forward to performance improvements in 2012.

Our market has been restricted due to our shortfalls in BEE components, something which we are actively addressing.

Positioning for the futureThe Imuniti Nutritional Supplement Combo Pack is still a product which creates opportunities to reposition the company in the near future. The slow progress on this product by the customer is as a result of matters out of their control such as funding of the final trials. These have delayed the commercialisation of the product, however, the first few orders have been received and produced. During the year we renegotiated the manufacturing agreement to an exclusive agreement for the production of the first one million packs per month. The previous agreement was a non-exclusive agreement.

AppreciationI would like to thank Jenny Etchells, our Chief Financial Officer, for her hard work and dedication in the past financial year. She is leaving us as an executive at the end of May 2012 (she stays on as a non-executive director) and we wish her all the best in her new role.

I have been in the role as Chief Executive Officer since March 2011 and would like to thank the board of directors, management and all employees at Nutritional Holdings for their support. Together, I am confident that we will produce the turnaround that we owe to all our stakeholders.

HJ van der MerweChief Executive Officer

22 May 2012


» CORPORATE GOVERNANCE

The Nutritional Holdings Group endorses the Code of Corporate Practices and Conduct as contained in South Africa’s King III Report. The group believes that its governance practices are sound and that they conform to the principles embodied within the King III Report (King III) on Corporate Governance and the Listings Requirements of the JSE Limited (JSE).

Nutritional Holdings and its subsidiaries are intent on implementing the highest standards of corporate governance. The group is committed to good corporate citizenship and organisational integrity in the running of its affairs.

This commitment provides stakeholders with the comfort that the group’s affairs will be managed in an ethical and disciplined manner. Nutritional Holdings’ philosophy is founded on principles of transparency, accountability and responsibility.

JSEThe JSE Listings Requirements require that the group report on the extent of its compliance with King III. The group has committed itself to the adoption of King III and details of the company’s compliance to its recommendations are provided below.

Board of directorsThe board of directors maintains full and effective control over the affairs of the group. In terms of the governance philosophy of the group a clear division of responsibilities at board level ensures a balance of power and authority, such that no one individual has unfettered powers of decision-making.

The non-executive directors are high calibre professionals and are sufficient in number for their independent views to carry significant weight in the board’s deliberations and decisions. They are fully independent of management and are free to make their own decisions and independent judgements. They enjoy no benefits from the group for their services as directors, other than their fees and the potential gains and dividends on their interests in ordinary shares. No share options are granted to non-executive directors.

The group operates in terms of a formally approved board charter which sets out its role and responsibilities, the main elements being:

• Nominations for appointment to the board are formal and transparent and submitted to the full board for consideration;• The Chairman of the board must be an independent, non-executive director;• A formal orientation programme for new directors must be followed;• Specific policies, in line with King III, must exist with regard to conflicts of interest and the maintenance of a register of directors’ interests;• They must conduct an annual self-evaluation;• Directors must have access to staff, records and the advice and services of the Company Secretary;• Succession planning for executive management must be in place and must be updated regularly;• Strategic plans and approvals framework must be in place and must be reviewed regularly;• Policies to ensure the integrity of internal controls and risk management must be in place; and• Social transformation, ethics, safety, health, human capital and environmental management policies and practices must be monitored

and reported on regularly.

Appointments to the board, are formal, transparent and a matter for the board as a whole. Curricula vitae are obtained, and circulated to all board members. Interviews are conducted with the short-listed people. Appointments are then made by a board resolution.

Any appointments to the board are made taking into account the need for ensuring that the board provides a diverse range of skills, knowledge and expertise, the requisite independence, the necessity of achieving a balance between skills and expertise and the professional and industry knowledge necessary to meet the group’s strategic objectives.

The board meets at least quarterly on a formal basis. Additional meetings are arranged where deemed necessary. A detailed breakdown of each director’s attendance at the meetings concerned is indicated below:

Attendance of the current directors at board meetings during the year under review:

5 April 2011 17 May 2011 24 June 2011 17 November 2011 9 March 2012

GR Wambach (chairman) ✔ ✔ ✔ ✔ ✔TR Hendry ✔ ✔CD Angus ✔ ✔HJ van der Merwe ✔ ✔ ✔ ✔ ✔JA Etchells ✔ ✔ ✔ ✔ ✔PHA Fouche ✔ ✔



To enable the board to properly discharge its responsibilities and duties, certain responsibilities of the board have been delegated to board committees. All board committees are chaired by an independent non-executive director. Board committee charters are reviewed on an ongoing basis to ensure that the committees’ duties and responsibilities are aligned with the requirements of corporate governance and keep abreast of developments in this field.

The Audit and Risk Management Committee is now a statutory committee since the new Companies Act and in terms of the recommendations set out in King III, shareholders will now be required to elect the members of this committee at the company’s next annual general meeting.

Audit and Risk Management CommitteeThe Audit and Risk Management Committee consists presently of three members, all of whom are independent non-executive directors, and meet at least twice a year with management and external auditors. Mr TR Hendry was appointed as a member of the committee on 22 June 2011 and Mr CD Angus was appointed as a member of the committee on 23 August 2011. Ms JA Etchells resigned as a member of the committee on 13 June 2011 as she took up the position of Financial Director.

The group believes that the members of the committee are knowledgeable about the affairs of the group and have extensive expertise in finance, accounting and risk management practices.

The Audit and Risk Management Committee fulfils the responsibilities as set out in the Audit and Risk Management Committee Charter, which include:

• Overseeing the internal and external audit function;• Assisting the board in the discharge of its duties relating to the safeguarding of the group’s assets and operation of adequate systems

and internal controls;• The preparation of accurate financial reporting and statements in compliance with all applicable legal requirements, corporate governance

and accounting standards; and• Providing support to the board on the risk profile and risk management of the group.

During the year the committee addressed the following additional responsibilities required by King III and the JSE Listings Requirements;

• Evaluated and confirmed the independence of the external audit function; and • Reviewed the expertise, resources and experience of the Group Financial Director.

Committee members have unlimited access to all information, documents and explanations required to discharge of their duties. This authority has been extended to the external auditors. The board is provided with regular reports on the activities of the committee.

Additional information regarding the committee is contained in the Report of the Audit and Risk Committee on page 15.

Human Resources and Remuneration CommitteeThe Human Resources and Remuneration Committee presently consists of three independent non-executive directors. The committee meets at least twice a year and operates according to a board-approved charter.

Members of the committee:GR Wambach Non-executive director – appointed 4 March 2011JA Etchells Non-executive director – appointed 4 March 2011/resigned 13 June 2011TR Hendry Non-executive director – appointed 22 June 2011CD Angus Non-executive director – appointed 23 August 2011

Consideration is given during the meetings to succession planning, training and development, employment equity, broad-based black economic empowerment, human resources policies, wellness programmes and remuneration of management and executive and non-executive directors.

The remuneration policy focuses on market-related payments to management and directors with the objective to retain the services of capable individuals.

Attendance of the current members at Human Resources and Remuneration Committee meetings: Meetings attended

GR Wambach 4/4TR Hendry* 2/4CD Angus* 2/4JA Etchells* 2/4

* Directors were appointed or resigned from the committee during the year and were therefore not eligible to attend all meetings.


Restrictions on share dealingsDirectors and employees are prohibited from dealing in Nutritional Holdings shares during price-sensitive periods. There is a formal clearance procedure in place with respect to directors’ dealings in Nutritional Holdings shares. Closed periods extend from 31 August and 29 February, being the commencement of the interim and year-end reporting dates, respectively, up to the date of announcement of interim and year-end results, and include any other period during which the company is trading under a cautionary announcement.

All directors are required to obtain written permission from the Chairman before dealing in any Nutritional Holdings shares in order to protect them against possible and unintentional contravention of the insider trading laws and stock exchange regulations.

Relationship with the shareholders and stakeholdersManagement maintained communication with shareholders through SENS announcements and regular information on the official Nutritional Holdings website – www.nholdings.co.za.

Company SecretaryMr PHA Fouche resigned as the Company Secretary for the group on 13 June 2011 and Ms JA Etchells was appointed in his place. On 24 August 2011, Ms JA Etchells resigned as Company Secretary to enable her to focus her efforts full time as Financial Director, and Ms GA Verga was appointed in her place. The board is of the opinion that she is suitably qualified and experienced to carry out her duties as stipulated under the Companies Act. The Company Secretary provides guidance to the directors on their duties and ensures awareness of all relevant statutory requirements and legislation. All directors have access to the advice and services of the Company Secretary who at the group’s expense, will arrange independent professional advice for the directors where the directors request it.

The certificate required to be signed in terms of the Companies Act appears on page 22.

Going concernAttention is drawn to the fact that at 29 February 2012, the group had accumulated losses of R88,181 million (2011: R90,800 million).

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

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

Code of ethicsThe group’s ethics policy requires all employees to act with the utmost good faith and integrity and compliance to the applicable legislation. This ensures that Nutritional Holdings remains committed to conducting business in a manner that is above reproach in all reasonable circumstances. In addition, the group strives to provide a work environment that is non-discriminatory with sound safety, health and environmental practices.

Interests of directorsThe Company Secretary keeps a register of directors’ interest in contracts in terms of the Companies Act. The register is available for inspection upon request by those who are entitled to access. The directors have declared their interest in contracts or arrangements entered into by the company or its subsidiaries. Directors are required to inform the board timeously of conflicts of interest they may have in relation to the business and are consequently excluded from voting on such terms.

Integrated sustainability reportingOn page 17 to 20 is the sustainability report, which is a review of the nature and extent of the company’s social transformation, safety, health and environmental management policies and practices.

Risk managementThe group’s main objective is to provide value to shareholders through a long-term sustainable real return on capital as a result of taking business risk within an appropriate risk framework. The board of directors acknowledges its responsibility for establishing, monitoring and communicating appropriate risk and control policies and ensuring sufficient capital is held to support the taking of risk. The board also regards the management of risk as a key business process which ensures that the group is protected against uncertain events which could prevent the group from achieving its objectives.



The group continually updates its vision, strategy, values and business objectives and the requirement for a robust risk management process is critical in ensuring the sustainability of the business model. The directors of the group unanimously support the long-term creation and protection of wealth of its shareholders and fairness to all stakeholders.

The board reviews risk including financial, operational, strategic and environmental risks on an ongoing basis. This review process is carried out to ensure that management continuously identifies potential risk and updates the risk profile of the group. From this profile, the group is able to ensure that the necessary control procedures are implemented to mitigate such risk and, in addition, management is able to respond timeously to any exposure to risk

Strategic and business riskStrategic risk is the risk that the group’s future business plans and strategies may be inadequate to prevent financial loss or protect the group’s competitive position and shareholders’ returns. Negative business risk arises from unexpected losses due to changes in business volumes, margins and costs.

The directors recognise that the business, results of operations and financial condition may be adversely affected in the future due to any of the risks outlined below:

Political, social and economic conditionsThe group is incorporated and operates in South Africa and therefore the country’s political, social and economic conditions are relevant.

South Africa faces many challenges in overcoming substantial inequalities in levels of social and economic development among people. The South African government has taken a number of significant steps towards addressing the political tensions and social and economic problems in South Africa, although certain problems still exist but will reduce with time. While South Africa features a highly developed financial and legal infrastructure at the core of its economy, it presently has high levels of unemployment, poverty and crime. Particular considerations include how the South African government will ultimately address such tensions and problems, to what extent its efforts will be successful, the political, social and economic consequences of such efforts and the effect on South African businesses of the continuing integration of the South African economy with the economies of the rest of the world. The economic direction of South Africa may be influenced by the extent to which the South African government, organised labour and business are able to agree upon common goals and the means of achieving them. While the group believes that the economic sentiment is positive for the future, these political, social and economic problems may have a negative impact on the South African economy. The board of directors will engage with government as required to mitigate the effect of these conditions on the group.

Black economic empowerment (BEE) is an integral part of the South African government’s economic transformation strategy. The group is in the process of implementing BEE initiatives and in obtaining its targets in meeting an acceptable BEE scorecard.

Key personnelThe group’s performance depends to a large extent on the efforts and abilities of its key personnel and employees. The group believes that its success will continue to depend, in part, on its ability to continue to attract, retain and motivate the necessary personnel, including executive officers and certain other key management.

The responsibility of overseeing the day-to-day operation and strategic management of the group depends substantially on senior management and key personnel. The inability to recruit personnel of the correct calibre could have a material adverse effect on the business of the group. The board is engaged at reviewing the group’s remuneration policies to mitigate this risk.

The group’s objectivesThe ability of the board to implement the group’s strategy could be adversely affected by changes in the economy and/or industry in which it operates. Although the group has a clearly defined strategy and the board is optimistic about its prospects, there can be no guarantee that its objectives or any of them will be achieved on a timely basis or at all. The group’s ability to attract new growth opportunities is also dependent on the maintenance of its reputation.

CompetitionThe group competes with numerous other local and international companies and individuals, including larger competitors with access to greater financial, technical and other resources than the group, which may give them a competitive advantage in the market.


» REPORT OF THE AUDIT AND RISK MANAGEMENT COMMITTEE

The Audit and Risk Management Committee is a formally constituted sub-committee of the board of directors and in addition to having specific statutory responsibilities to the shareholders in terms of the South African Companies Act, it assists the board through advising and making submissions on financial reporting, oversight of the risk management process and internal financial controls, external and internal audit functions and statutory and regulatory compliance of the group.

Terms of referenceThe Audit and Risk Committee has adopted formal terms of reference that have been approved by the board and has executed its duties during the past financial year in accordance with these terms of reference. These terms of reference are regularly reviewed and updated where necessary.

CompositionThe committee consists of three independent non-executive directors. During the period under review the committee members continued in office and as at 29 February 2012, as well as after year-end, the Audit Committee comprised:

Name Qualifications Period served

TR Hendry (Chairman) BCompt (Hons), CA (SA) 22 June 2011 to dateCD Angus BCompt, HDip (Acc), CA (SA) 23 August 2011 to dateJA Etchells (Chairman) BCompt (Hons), CA (SA), HDip (Tax), BCom (Aus) 4 March 2011 to 13 June 2011GR Wambach Marketing and Management Diploma, Business Management (MDP),

ILPA Health Benefit Management4 March 2011 to date

The Chief Executive Officer, the Financial Director, representatives from the external auditors and the designated advisor attend the committee meetings by invitation. The external auditors have unrestricted access to the Audit and Risk Management Committee and its Chairman.

MeetingsThe Audit and Risk Management Committee held four meetings during the period. Attendance by the members of the committee at these meetings is shown in the table below:

Director 5 April 2011 17 May 2011 17 November 2011 9 March 2012

JA Etchells (Chairman)* ✔ ✔

TR Hendry (Chairman)* ✔ ✔

GR Wambach ✔ ✔ ✔ ✔

CD Angus* ✔ ✔

* Directors were appointed or resigned during the year and were therefore not eligible to attend all meetings.

Statutory dutiesIn execution of its statutory duties during the past financial year, the Audit and Risk Management Committee:

• Nominated for appointment as external auditors, Grant Thornton and Mr J Barnett as the individual auditor, who in our opinion are independent of the group;

• Determined the fees to be paid to Grant Thornton as disclosed in note 20 to the financial statements and the paragraph on external audit overleaf;

• Determined Grant Thornton’s terms of engagement;

• Believes that the appointment of Grant Thornton complies with the relevant provisions of the Companies Act, the JSE Listings Requirements and King III;

• Pre-approved all non-audit service contracts with Grant Thornton;

• Received no complaints, relating to the accounting practices of the company, the content or auditing of its financial statements, the internal financial controls of the company, and other related matters;

• Reviewed the draft audited financial statements and annual integrated report, the preliminary profit announcement and interim statements;


» REPORT OF THE AUDIT AND RISK MANAGEMENT COMMITTEE

• Met with the external auditors to discuss the annual financial statements prior to their approval by the board;

• Made the submissions to the board on matters concerning the group’s accounting policies, financial control, records and reporting; and

• We concur that the adoption of the going concern premise in the preparation of the financial statements is appropriate.

The objectives of the committee were met during the year under review.

Oversight of risk managementThe committee has satisfied itself that the following areas have been appropriately addressed:

• Financial reporting risks;

• Internal financial controls;

• Fraud risks as they relate to financial reporting;

• IT risks as they relate to financial reporting; and

• Reviewed tax and technology risks, in particular how they are managed.

Internal financial controlsThe committee has:

• Reviewed the effectiveness of the group’s system of internal financial controls including receiving assurance from management;

• Reviewed significant issues raised by the external auditors in their reports; and

• Reviewed policies and procedures for preventing and detecting fraud.

Based on the processes and assurances obtained, we believe that the significant internal financial controls are effective.

Regulatory complianceThe Audit and Risk Management Committee has complied with all applicable legal and regulatory responsibilities.

External auditBased on processes followed and assurances received, nothing has come to our attention with regards to the external auditor’s independence.

Fees for audit services are disclosed in note 20 to the financial statements.

Based on our satisfaction with the results of the activities outlined above, the committee has recommended the re-appointment of Grant Thornton, to the board and shareholders.

Financial function and Financial Director reviewWe have reviewed the expertise, resources and experience of the company’s finance function and are satisfied that these requirements are adequate for the forthcoming year.

The committee reviewed the appropriateness and expertise of the current Financial Director and confirms her suitability in terms of the JSE Listings Requirements.

Annual integrated reportWe have reviewed the integrated report of Nutritional Holdings Limited and the group for the year ended 29 February 2012 and based on the information provided to the committee, consider that the group complies in all material respects with the requirements of the Companies Act and International Financial Reporting Standards, and we recommend the annual integrated report to the board for approval.

The integrated report has been prepared in line with the best practice pursuant to the recommendations of the King III Code. The committee acknowledges that the integrated reporting is in its infancy and that the report will improve over time as practice evolves.

On behalf of the Audit and Risk Management Committee

TR HendryChairman

22 May 2012


» SUSTAINABILITY REPORT

We conduct our business to make a profit and return value to those who have invested in us through the delivery of an affordable range of nutritional fortified food products as well as pharmaceutical, natural and complimentary medicines, with the aim to address the malnutrition and immune deficiency problems in South Africa. We aim to build value for our stakeholders and other stakeholders by addressing our social, environmental and economic impacts.

Responsibility for sustainable developmentThe board accepts overall responsibility for the advancement of sustainable development with the assistance of the board sub-committees. The day-to-day responsibility is delegated to executive management. We understand the responsibility to the people who enable us to conduct business and the country in which we operate. We acknowledge that it is important to manage our economic, social and environmental relationships effectively, which should ensure a better quality of life for all our stakeholders.

Our sustainability agendaOur sustainability agenda comprises the following goals:

• We will strive to be a recognised manufacturer and distributor of superior quality complementary, natural and pharmaceutical medicines as well as high-protein and fortified powdered nutritional food products and supplements to be able to actively promote socio-economic wellbeing for South Africans;

• We will strive to uphold high standards of corporate governance within our marketplace;

• We will actively address the impacts of our business on the natural environment as we use natural resources which are all finite and have to therefore be managed with care; and

• We will strive to ensure we have the right people and culture to meet our goals.

AssuranceWe are committed to ensuring that the non-financial information provided in this annual report is accurate. It is believed that the expectations reflected in this statement are reasonable, but they may be affected by a wide range of variables that could cause actual results to differ materially from those currently anticipated.

We have taken a number of important steps forward in our sustainability endeavours as we progress towards meeting and exceeding the expectations of the stakeholders.



VALUE-ADDED STATEMENTValue-added is the wealth created by the group and its employees by supplying its services and expertise.

This statement shows how the value was shared by those responsible for its achievements.

2012 2011R’000 R’000

Sale of goods and services 41 067 46 708Cost of materials and services 26 187 34 061

Value-added from trading operations 14 880 12 647Non-operating income 272 481

Total value-added 15 152 13 128

Value distributed as followsTo remunerate employees:Salaries, wages, pensions, bonuses and other benefits 9 253 11 956

To reward providers of capital:Interest on loans 577 1 070

To the government:Company tax 59 (5 217)

To replace assets:Depreciation and amortisation 532 777

To expand the group:Retained earnings 4 731 4 542

15 152 13 128

% %

To remunerate employees 61 91

To reward providers of capital 4 8

To the government – (40)

To replace assets 4 6

To expand the group 31 35


Risk management The board is responsible for the total process of risk management for the group and uses the risk assessment monitor as its main source of information to determine the effectiveness of the group’s risk management process. The objective of risk management is to identify, assess, manage and monitor the risks to which the business is exposed. These include credit granting risks, crime, the shift in spending patterns, and foreign currency and interest rate risks. Operational and financial risks are managed through detailed systems of operating and financial controls which are reviewed and monitored regularly.

Losses from defaulting debtors are limited by stringent credit application criteria and clearly defined credit and collection policies. These are reviewed regularly in the light of prevailing economic conditions and bad debt statistics.

With assistance from expert insurance consultants, risks are assessed and insurance cover purchased for all risks above predetermined self-insured limits. Levels of cover are reassessed annually in the light of claims experiences and changes within and outside the group.

Environmental sustainabilityThe group is conscious of the fact that in carrying out its activities there is a potential risk of environmental damage. Our underlying environmental philosophy is the adoption of protective strategies to manage and control the impact of our manufacturing operations upon the environment, at the same time as safeguarding our assets and human resources.

An effort has therefore been made to educate all employees in best practice so as to avoid causing long-term damage to the environment or atmospheric pollution through the inappropriate use of plant and equipment.

The following are amongst efforts made to reduce damage to the environment:

• Time switches added to geysers;• Daylight switches added to lights;• Boiler converted from diesel to paraffin; and• Hot water circulation converted to save energy.

Social responsibilitiesWe acknowledge our social responsibility towards the communities in which we operate and deserving institutions at large. A Social and Ethics Committee has been formed in terms of the new requirements of the Companies Act.

EqualityThe group is an equal opportunity employer and there is no discrimination on the basis of ethnic origin or gender or in any other manner. A number of programmes are in place to ensure that the group’s employee profile will become increasingly representative of the demographics of the regions in which it operates whilst maintaining the group’s high standards.

Employee participation The group will continue to have its operating decisions made at the appropriate levels. Participative management lies at the heart of this strategy, which relies on the building of employee partnerships at every level to foster mutual trust and to encourage people to think at all times about how they can “do things better”. The group strives to liberate the initiative and energies of its people, because it is they who make the difference in the group’s performance.

A share incentive scheme exists to provide employees of the group the opportunity to acquire shares in the capital of the group and to give such employees the incentive to advance the interest of the group for the ultimate benefit of stakeholders.

EmployeesThe number of employees at the end of February 2012 is 49.

Health and safetyWe comply with the Occupational Health and Safety Act and Department of Labour rules and regulations.

Employment equity We comply with the Employment Equity Act, No 55 of 1998, and regular reports are submitted to the Department of Labour. Employment equity committees have been established to set and monitor progress. We believe that no unfair discrimination exists in the workplace.

HIV/AIDSIn 2006 Imuniti purchased the rights to manufacture and market the Imuniti Nutritional Supplement Combo Pack (ISCP) in South Africa from Edge to Edge Global Investments Limited. ISCP is a nutritional pack consisting of eight different natural products. The product has shown to have anti-bacterial and anti-viral properties and provides one person with adequate sustenance and a balanced intake of all required micro and macronutrients for a one-month period.



Ethics and valuesNutritional Holdings share the commitment to:

• Employee development;• Participation and empowerment;• Wealth creation, reward and recognition;• Respect, dignity and equal opportunity;• A safe and healthy work environment;• Community and environmental commitment; • Open communication;• Continuous improvement;• Product quality; and• Customer service.

The group endeavours to act with honesty, responsibility and professional integrity in its dealings with employees, shareholders, customers, suppliers and society at large. Employees are required to maintain the highest ethical standards in ensuring that business practices are conducted in a manner, which in all reasonable circumstances is above reproach. In any instance where ethical standards are called into question, the circumstances are investigated and resolved in an appropriate and fair manner.

Stakeholder engagementAs a listed entity, we comply with legal communication requirements. We believe in regular dialogue with stakeholders and the investor community as a whole. Regular SENS announcements are published to keep the stakeholders informed.

Our website provides up-to-date information to stakeholders.

Communication to stakeholders take place in the following manner:

Stakeholders and other providers of capital • Website • SENS announcements• Trading updates• Bi-annual results announcements• Annual report

Industry• Member of the South African Association of Food Science and Technology (SAAFOST)

Business partners and customers• Face-to-face meetings• Regular discussions

Staff and unions• Management meetings• Union meetings• Employment equity meetings

Suppliers• Regular discussions• Presentations to procurement committees

Product responsibilityThe continuous need for food manufacturers to market products that meet the required food safety standards has resulted in a review of various statute requirements and industry legislation in order to implement better product quality and food safety.

Packaging and ingredient suppliersPackaging and ingredient suppliers have a major impact on the risk management of food quality and safety and are managed accordingly. We drive a policy to exclude dealings with suppliers that pose a threat to our product responsibility. Food Safety Certification is a compulsory requirement for ingredient suppliers and continuous communication and controls have been established to prevent potential risks occurring.

We purchase our pharmaceutical, natural and complimentary medicines that are registered (or in the process of registration) with the SA Medicines Control Council (MCC). These suppliers are subject to the very stringent rules as required by the MCC.


» REPORT OF THE INDEPENDENT AUDITOR

To the shareholders of Nutritional Holdings LimitedWe have audited the group annual financial statements and annual financial statements of Nutritional Holdings Limited, which comprise the consolidated and separate statements of financial position as at 29 February 2012, and the consolidated and separate statements of comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes, and the directors’ report, as set out on pages 23 to 56.

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

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

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

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

OpinionIn our opinion, these financial statements present fairly, in all material respects, the consolidated and separate financial position of Nutritional Holdings Limited as at 29 February 2012, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of South Africa.

Emphasis of matterWithout qualifying our opinion, we draw attention to the report of the directors under the heading “Going concern” on page 23.

Grant ThorntonChartered Accountants (SA)Registered Auditors

James BarnettPartnerChartered Accountant (SA)Registered Auditor

22 May 2012

2nd Floor, 4 Pencarrow CrescentPencarrow ParkLa Lucia Ridge Office EstateLa Lucia4019


» DIRECTORS’ RESPONSIBILITIES AND APPROVAL

» DECLARATION BY COMPANY SECRETARY

The directors are responsible for the preparation and integrity of the annual financial statements of the company and the group, which have been prepared in accordance with International Financial Reporting Standards and applicable legislation, under the supervision of the Financial Director, Ms JA Etchells CA (SA).

In preparing the financial statements, the company and the group have used appropriate accounting policies, supported by reasonable and prudent judgement and estimates, and have complied with all applicable accounting standards. The directors are of the opinion that the financial statements fairly present the financial position of the company and the group at 29 February 2012 and the results of their operations for the year then ended.

The directors have considered the group’s past results, expected future performance and reasonable changes thereto, and access to its funding, material and other resources, and are of the opinion that the company and the group will continue as a going concern.

The directors are responsible for the systems of internal control. These are designed to provide reasonable, but not absolute, assurance as to the reliability of the financial statements, to adequately safeguard, verify and maintain accountability of assets, and to prevent and detect material misstatement and loss. Based on the information and explanations given by management and the comment by the independent auditors on the results of their statutory audit, nothing has come to the attention of the directors which indicates that, in all material aspects, Nutritional Holdings’ system of internal controls and risk management are not effective and that the internal financial controls do not form a sound basis for the preparation of reliable financial statements. The opinions of the directors is supported by the Audit and Risk Management Committee.

The company’s independent external auditors, Grant Thornton, have audited the financial statements and their unqualified report appears on page 21.

The annual financial statements as set out on pages 23 to 56 were approved by the board of directors on 22 May 2012 and are signed on its behalf by:

HJ van der Merwe GR WambachChief Executive Officer Chairman

Durban22 May 2012

The Company Secretary certifies that the company has lodged with the Registrar of Companies all such returns as are required of a public company, in terms of the South African Companies Act, and that all such returns are true, correct, and up to date.

GA VergaCompany Secretary

Durban22 May 2012


» DIRECTORS’ REPORT

The directors have pleasure in submitting their report for the year ended 29 February 2012 on the company and group results for the year under review.

Nature of businessThe group is engaged in the manufacture of high-protein fortified nutritional food products and supplements, as well as pharmaceutical products and complementary natural medicines in South Africa.

Review of activitiesThe net profit of the group for the year was R2,619 million (2011: profit R1,664 million ) after taxation of R0,738 million (2011: R6,239 million).

The operating results and state of affairs of the group are fully set out in the attached financial statements and do not in our opinion require any further comment.

Change of nameThe company changed its name from Imuniti Holdings Limited to Nutritional Holdings Limited effective 11 July 2011.

Going concernWe draw attention to the fact that at 29 February 2012, the company had accumulated losses of R74,793 million (2011: R91,379 million) and that the group had accumulated losses of R88,181 million (2011: R90,8 million).

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

Post year end eventsThe directors are not aware of any material matters or circumstances arising since the end of the financial year that are not disclosed in the integrated report.

Statement of responsibilityThe directors’ statement of responsibility is addressed on page 22 of this annual integrated report.

DividendsIn view of the group’s current financial position, no dividend has been declared for the year.

Authorised and issued share capital There were the following changes in the authorised share capital of the company in the year ended 29 February 2012:

At a general meeting held on 24 June 2011, shareholders approved by special resolutions:

• To convert authorised and issued ordinary shares of the company from ordinary shares of R0,0001 each to ordinary shares of no par value; and

• To increase the authorised share capital of the company from 1 500 000 000 ordinary shares of R0,0001 each to 2 000 000 000 ordinary shares of no par value.

During the current year the following ordinary shares were issued:

• In terms of agreements signed on 2 and 3 March 2011 and amended subsequently, the following shares were issued at a price of 3 cents:

– 10 000 000 ordinary shares to the Kingfisher Discretionary Trust;

– 10 000 000 ordinary shares to the Molefe Family Trust;

– 162 866 666 ordinary shares to the BBE Family Trust; and

– 162 866 666 ordinary shares to the Ellis Family Trust.

Two of the subscribing parties, namely the BBE Family Trust and the Ellis Family Trust, own in excess of 10% of the issued share capital of the company prior to the fresh issue. As a result they are deemed material shareholders and are therefore deemed to be related parties in terms of Section 10 of the JSE Listings Requirements. Shareholders’ approval was obtained at a general meeting held on 24 June 2011. At 29 February 2012, 54 266 668 shares had not been issued in terms of this agreement.

• 90 000 000 ordinary no par value shares were issued to the employee share incentive scheme during the year at a price of 7,49 cents.

During the 2011 year, 51 500 000 ordinary shares were issued at a share premium of R638 156 (net of share issue costs) for working capital purposes.

Level of assuranceThese annual financial statements have been audited in compliance with the applicable requirements of the Companies Act, No 71 of 2008.


» DIRECTORS’ REPORT

PreparerThe annual financial statements were internally compiled by Ms JA Etchells CA (SA).

Interest in subsidiariesPercentage holding Issued Net profit (loss) after tax

2012 2011 share 2012 2011 Nature of businessName of subsidiary Held by % % capital R’000 R’000 subsidiaryPB Tully Family Holdings (Pty) Limited

Nutritional Holdings Limited 100 100 2 (6) – Holding company

Impilo Marketing (Pty) Limited

Nutritional Holdings Limited 100 100 100 34 1 193

Sales and distribution of pharmaceutical and complementary medicines

Nutritional Foods (Pty) Limited

Nutritional Holdings Limited 100 100 1 000 (2 065) (2 798)

Manufacturer and distributor of fortified food

Impilo Drugs (1966) (Pty) Limited

PB Tully Family Holdings (Pty) Limited 100 100 350 100 2 476 3 053

Manufacturer of pharmaceutical, natural and complementary medicines

All the above subsidiaries are incorporated in South Africa.

Details of related party loans are set out in note 34 to the annual financial statements.

Risk management and insuranceRisk is managed in order to protect the assets and earnings of the group against unacceptable financial loss and to safeguard against legal liabilities. Risks are insured at minimum cost with satisfactory cover. Property, plant and equipment are insured at current replacement values.

Major shareholdersThe major shareholders of the company are set out on page 57 of this annual report.

DirectorsThe directors of the company during the year and to the date of this report were as follows:

Name Nationality Changes

GR Wambach* South African (Appointed 4 March 2011)TR Hendry* British (Appointed 22 June 2011)CD Angus* South African (Appointed 23 August 2011)HJ van der Merwe South African (Appointed 4 March 2011)JA Etchells+ South African (Appointed 4 March 2011)PHA Fouche South African (Resigned 31 July 2011)

* Non-executive+ Resigned as executive director subsequent to year end, with effect from 31 May 2012, and will remain as non-executive director of the board.

GR Wambach retires as non-executive director in terms of the company’s articles of association and has offered himself for reappointment.

The attendance at meetings by directors is set out in the Corporate Governance Report on page 11.

Directors’ shareholdingsThe directors of the company had the following direct and indirect interests in the issued share capital of Nutritional Holdings Limited as at 29 February 2012:

2012 2011Direct Indirect Direct Indirect

Executive directorsHJ van der Merwe 10 000 000 JA Etchells 49 793 491 9 743 191PHA Fouche 2 042 777 6 375 000

Non-executive directorsGR Wambach 838 334TR Hendry 1 908 064CD Angus 237 500


Directors’ remunerationThe directors’ remuneration is reflected in note 24 to the annual financial statements.

Special resolutionsAt the annual general meeting held on 24 June 2011, shareholders passed three special resolutions:

Special resolution number 1With effect from 1 March 2011, the executive directors be paid remuneration as determined by their respective contracts of employment, or otherwise as determined by the Remuneration/Nomination Committee from time to time in accordance with the company’s remuneration policy.

Special resolution number 2Approved the remuneration of the non-executive directors for the period to 30 June 2012, being R12 500 per month.

Special resolution number 3Granted the company a general authority for the acquisition by the company of shares issued by the company. This authority is valid until the next annual general meeting provided that it shall not extend beyond fifteen months from the date of passing the resolution.

At a general meeting held on 24 June 2011, shareholders passed three special resolutions:

Special resolution number 1Granted authority for the authorised and issued ordinary shares of the company to be converted from ordinary shares of R0,0001 each to ordinary shares of no par value.

Special resolution number 2Granted authority for the share capital of the company to be increased from 1 500 000 000 ordinary shares of R0,0001 each to 2 000 000 000 ordinary shares of no par value.

Special resolution number 3Granted authority to change the name of the company to Nutritional Holdings Limited with effect from 11 July 2011.

BorrowingsOn behalf of the group, the directors have established credit facilities with various financial institutions for use by the various subsidiary companies. The directors did not exceed any authorised levels of borrowings during the year under review.

Corporate governanceThe directors acknowledge and subscribe to the values of good corporate governance as set out in the King III Report on Corporate Governance for the Republic of South Africa and the board has confirmed that the Nutritional Holdings group has applied all the principles of the King III Report on Governance for South Africa which are in the companies best interest. By supporting this Code of Corporate Practices and Conduct, the directors have recognised the need to conduct the business of the group with integrity and in accordance with generally accepted best corporate governance practices. Refer to the Corporate Governance Report in the annual integrated report for specific disclosure requirements.

SecretaryThe secretary of the company is Ms GA Verga of:

Business address: Postal address:First floor PO Box 50269 Frosterley Park Frosterley ParkLa Lucia Ridge Office Estate La Lucia Ridge Office EstateDurban, 4019 Durban, 4019

AuditorsGrant Thornton continues as auditors of the company and its subsidiaries. At the annual general meeting of 28 June 2012, shareholders will be requested to re-appoint Grant Thornton as auditors of the company for the 2013 financial year and it will be noted that Mr J Barnett will be the individual registered auditor that will undertake the audit.

Litigation As reported in the previous year’s annual report, on 30 October 2009, summons was served on Nutritional Holdings by Andrew Maxwell Tully, Harold Levin, Colin Craig Elsworth and Randal James Brereton, being the trustees of the Tully Family Trust, which trust was the previous owner of the Impilo Group. In terms of the summons, the plaintiffs are claiming that shares issued to them at 60 cents per share, should have been issued at 48 cents per share. The plaintiffs issued a further summons on Nutritional Holdings on 4 December 2009, claiming that the 33 333 333 shares issued to the Tully Family trust were issued in certificated form and thus contrary to the Impilo acquisition agreement in that they were not issued in negotiable form. An appearance to defend both summonses has been filed. There has been no development on this during the current year.

Aside from the information detailed above, Nutritional Holdings and its subsidiaries are not involved in any material legal or arbitration proceedings or legal actions, nor are the directors aware of any proceedings that are pending or threatened, that may have, or have had in the 12-month period preceding the last practicable date, a material effect on the company’s financial position.


» STATEMENT OF FINANCIAL POSITION

GROUP GROUP COMPANY COMPANYFigures in R thousands Notes 2012 2011 2012 2011

ASSETSNon-current assetsProperty, plant and equipment 3 14 251 11 656 43 28Intangible assets 4 18 943 11 694 7 200Investments in subsidiaries 5 51 717 11 974Deferred tax 28 8 757 8 486Finance lease receivables 29 1 147 30 524

41 951 32 983 58 990 12 526

Current assetsInventories 8 4 829 3 999Loans to group companies 6 13 639Loans receivable 7 9 8 9 8Finance lease receivables 29 1 147 751 495 611Trade and other receivables 9 6 268 6 439 866Cash and cash equivalents 10 630 56 60 5

12 883 11 253 1 430 14 263

Total assets 54 834 44 236 60 420 26 789

EQUITY AND LIABILITIESEquityStated capital 11 123 231 113 302 129 972 113 302Reserves 12 5 659 3 547Accumulated loss (88 181) (90 800) (74 793) (91 379)

40 709 26 049 55 179 21 923

LiabilitiesNon-current liabilitiesInstalment sale creditors 13 30 601 30 524Deferred tax 28 3 600 3 270

3 630 3 871 30 524

Current liabilitiesLoans payable 7 1 200 1 200Current tax payable 141Instalment sale creditors 13 587 879 495 611Trade and other payables 14 4 277 9 764 884 2 529Bank overdraft 10 5 631 2 332 3 832 2

10 495 14 316 5 211 4 342

Total liabilities 14 125 18 187 5 241 4 866

Total equity and liabilities 54 834 44 236 60 420 26 789

Net asset value per share (cents) 2,7 2,3


» STATEMENT OF COMPREHENSIVE INCOME


Revenue 15 41 067 46 708 1 770 2 040Cost of sales (21 055) (24 996)

Gross profit 20 012 21 712 1 770 2 040Other income 272 481 11 38Operating expenses excluding impairments (25 071) (25 960) (4 970) (2 321)Depreciation (532) (777) (13) (22)Impairment reversalGroup loans 12 951 (642)Distribution rights 7 200 7 200

Profit (loss) for year 16 1 881 (4 544) 16 949 (907)Investment revenue 17 577 1 039 114 3Finance costs 18 (577) (1 070) (477) (137)

Profit (loss) before taxation for the year 1 881 (4 575) 16 586 (1 041)Taxation 19 738 6 239 –

Profit (loss) for the year 2 619 1 664 16 586 (1 041)Other comprehensive income:Gain on property revaluation 2 909 3 900Taxation related to components of other comprehensive income 19 (797) (1 022)

Other comprehensive income for the year net of taxation 21 2 112 2 878

Total comprehensive income (loss) for the year 4 731 4 542 16 586 (1 041)

Earnings per shareNormal and diluted earnings per share (cents) 35 and 37 0,20 0,15Headline earnings and diluted headline (loss) earnings per share (cents) 36 (0,35) 0,14Comprehensive earnings per share (cents) 38 0,36 0,41


» STATEMENT OF CHANGES IN EQUITY

Figures in R thousands

Share capital/Stated capital

Share premium

Treasury shares

Total share

capitalRevaluation

reserve

Accu-mulated

lossTotal

equity

GROUPBalance at 1 March 2010 109 112 549 112 658 669 (92 464) 20 863Changes in equityTotal comprehensive income for the year 2 878 1 664 4 542Issue of shares 5 639 644 644

Total changes 5 639 644 2 878 1 664 5 186

Balance at 1 March 2011 114 113 188 113 302 3 547 (90 800) 26 049Changes in equityTotal comprehensive income for the year 2 112 2 619 4 731Conversion of shares to no par value 113 188 (113 188) – –Issue of shares 16 670 (6 741) 9 929 9 929

Total changes 129 858 (113 188) (6 741) 9 929 2 112 2 619 14 660

Balance at 29 February 2012 129 972 – (6 741) 123 231 5 659 (88 181) 40 709

Note(s) 11 11 11 12 and 21 21

COMPANYBalance at 1 March 2010 109 112 549 112 658 (90 338) 22 320 Changes in equityTotal comprehensive income for the year (1 041) (1 041) Issue of shares 5 639 644 644

Total changes 5 639 644 (1 041) (397)

Balance at 1 March 2011 114 113 188 113 302 (91 379) 21 923Changes in equityTotal comprehensive income for the year 16 586 16 586 Conversion of shares to no par value 113 188 (113 188) – –Issue of shares 16 670 16 670 16 670

Total changes 129 858 (113 188) 16 670 16 586 33 256

Balance at 29 February 2012 129 972 – 129 972 (74 793) 55 179

Note(s) 11 11 11 12 and 21 21


» STATEMENT OF CASH FLOWS


Cash flows from operating activitiesCash (used in) generated from operations 22 (10 930) (2 042) (5 699) 532Finance income 577 1 039 114 3Finance costs (577) (1 070) (478) (137)Tax (paid) received 23 (141) 547 –

Net cash from operating activities (11 071) (1 526) (6 063) 398

Cash flows from investing activitiesPurchase of property, plant and equipment 3 (221) (12) (28) (1)Sale of property, plant and equipment 2 507Purchase of intangible assets 4 (49)Net movement on loans with group companies – (13 153) (2 565)

Net cash from investing activities (270) 2 495 (13 181) (2 566)

Cash flows from financing activitiesProceeds on share issue 11 9 929 644 16 670 644Net movement in loans (1 201) 1 061 (1 201) 1 061Net movement on instalments sale creditors (863) (1 036) (611) (687)Finance lease movement 751 (1 898) 611 687

Net cash from financing activities 8 616 (1 229) 15 469 1 705

Total cash movement for the year (2 725) (260) (3 775) (463)Cash at the beginning of the year (2 276) (2 016) 3 466

Total cash at end of the year 10 (5 001) (2 276) (3 772) 3


» NOTES TO THE ANNUAL FINANCIAL STATEMENTS

1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS The annual financial statements have been prepared in accordance with International Financial Reporting Standards, the Companies

Act of South Africa, AC 500 statements and the JSE Listings Requirements. The annual financial statements have been prepared on the historical cost basis, except for the measurement of certain financial instruments at fair value, and incorporate the principal accounting policies set out below. They are presented in South African Rands.

These accounting policies are consistent with the previous period and there has been no change in the current year.

1.1 Consolidation Basis of consolidation The consolidated annual financial statements incorporate the annual financial statements of the company and all entities, which

are controlled by the company.

Control exists when the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries are included in the consolidated annual financial statements from the effective date of acquisition to the effective date of disposal.

Adjustments are made when necessary to the annual financial statements of subsidiaries to bring their accounting policies in line with those of the group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

1.2 Significant judgements In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts

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

Loans and receivables The group assesses its loans and receivables for impairment at the end of each reporting period. In determining whether an

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

Allowance for slow moving, damaged and obsolete inventory This is an allowance for inventory to write inventory down to the lower of cost or net realisable value. Management have made

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

Impairment testing The recoverable amounts of individual assets have been determined based on the higher of value-in-use calculations and fair

values less costs to sell. These calculations require the use of estimates and assumptions. These assumptions may change which may then impact our estimations and may then require a material adjustment to the carrying value of intangible and tangible assets.

Property, plant and equipment Management has made certain estimations with regard to the determination of estimated residual values of items of property,

plant and equipment, as discussed further in note 1.3.

Allowance for doubtful debts Past experience indicates a reduced prospect of collecting debtors over the age of three months. Debtors balances older than three

months are regularly assessed by management and provided for at their discretion.

Taxation Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many

transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.


1.2 Significant judgements continued The group recognises the net future benefit related to deferred income tax assets to the extent that it is probable that the

deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.

1.3 Property, plant and equipment The cost of an item of property, plant and equipment is recognised as an asset when:

• It is probable that future economic benefits associated with the item will flow to the company; and

• The cost of the item can be measured reliably.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment.

Property, plant and equipment other than land and buildings is carried at cost less accumulated depreciation and any impairment losses.

Land and buildings are carried at revalued amount, being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Revaluations are made with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period.

Any increase in an asset’s carrying amount, as a result of a revaluation, is recognised to other comprehensive income and accumulated in the revaluation surplus in equity. The increase is recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss.

Any decrease in an asset’s carrying amount, as a result of a revaluation, is recognised in profit or loss in the current period. The decrease is recognised in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognised in other comprehensive income reduces the amount accumulated in the revaluation surplus in equity.

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

Item Average useful life Land indefinite Buildings 30 years Plant and machinery 5 to 15 years Motor vehicles 3 to 10 years

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

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

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



1.4 Intangible assets An intangible asset is recognised when:

• It is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and

• The cost of the asset can be measured reliably.

Intangible assets are initially recognised at cost.

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

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

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

• There is an intention to complete and use or sell it;

• There is an ability to use or sell it;

• It will generate probable future economic benefits;

• There are available technical, financial and other resources to complete the development and to use or sell the asset; and

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

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

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

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

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

Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.

1.5 Investments in subsidiaries Company annual financial statements In the company’s separate annual financial statements, investments in subsidiaries are carried at cost less any accumulated

impairment.

The cost of an investment in a subsidiary is the aggregate of:

• The fair value, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the company; plus

• Any costs directly attributable to the purchase of the subsidiary.

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


1.6 Financial instruments Classification The group classifies financial assets and financial liabilities into the following categories:

• Financial assets at fair value through profit or loss – held for trading;

• Loans and receivables;

• Financial liabilities at fair value through profit or loss – held for trading; and

• Financial liabilities measured at amortised cost.

Classification depends on the purpose for which the financial instruments were obtained/incurred and takes place at initial recognition. For financial instruments which are not at fair value through profit or loss, classification is reassessed on an annual basis.

Initial recognition and measurement Financial instruments are recognised initially when the group becomes a party to the contractual provisions of the instruments.

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

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

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

Transaction costs on financial instruments at fair value through profit or loss are recognised in profit or loss.

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

Subsequent measurement Loans and receivables are subsequently measured at amortised cost, using the effective interest method, less accumulated

impairment losses.

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

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

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

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

Impairment losses are recognised in profit or loss.

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

Where financial assets are impaired through use of an allowance account, the amount of the loss is recognised in profit or loss within operating expenses. When such assets are written off, the write off is made against the relevant allowance account. Subsequent recoveries of amounts previously written off are credited against operating expenses.



1.6 Financial instruments continued Loans to (from) group companies These include loans to and from holding companies, fellow subsidiaries and subsidiaries, and are recognised initially at fair value

plus direct transaction costs.

Loans to group companies are classified as loans and receivables.

Loans from group companies are classified as financial liabilities measured at amortised cost.

Trade and other receivables Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the

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

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

Trade and other receivables are classified as loans and receivables.

Trade and other payables Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest

rate method.

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

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

Bank overdraft and borrowings Bank overdraft and borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using the

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

1.7 Tax Current tax assets and liabilities Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of

current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises

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

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

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


1.7 Tax continued Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised

or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Tax expenses Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the

extent that the tax arises from:

• A transaction or event which is recognised, in the same or a different period, to other comprehensive income;

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

• A business combination.

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

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

1.8 Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is

classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Finance leases – lessor The group recognises finance lease receivables in the statement of financial position.

Finance income is recognised based on a pattern reflecting a constant periodic rate of return on the group’s net investment in the finance lease.

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

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

Any contingent rents are expensed in the period they are incurred.

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

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

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

The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects is assigned using specific identification of the individual costs.

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

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



1.10 Impairment of assets The group assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such

indication exists, the group estimates the recoverable amount of the asset.

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

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

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

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

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

• First, to reduce the carrying amount of any goodwill allocated to the cash-generating unit; and

• Then, to the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit.

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

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

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

1.11 Share capital and equity An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

1.12 Employee benefits Defined contribution plans Payments to defined contribution retirement benefit plans are charged as an expense as they fall due.

1.13 Provisions and contingencies Provisions are recognised when:

• The group has a present obligation as a result of a past event;

• It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

• A reliable estimate can be made of the obligation.

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

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision.

Provisions are not recognised for future operating losses.

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


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

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

• The group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• The amount of revenue can be measured reliably;

• It is probable that the economic benefits associated with the transaction will flow to the group; and

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

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

• The amount of revenue can be measured reliably;

• It is probable that the economic benefits associated with the transaction will flow to the group;

• The stage of completion of the transaction at the end of the reporting period can be measured reliably; and

• The costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

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

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

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

Service fees included in the price of the product are recognised as revenue over the period during which the service is performed.

1.15 Cost of sales When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the

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

1.16 Segment reporting The group has three operating segments: Nutritional Foods, Pharmaceutical and Services. In identifying these operating segments,

management generally follows the group’s service lines representing its main products and services.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive directors that make strategic decisions.

An operating segment is a component of the group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the group’s other components.



2. NEW STANDARDS AND INTERPRETATIONS At the date of approval of these annual financial statements, certain new accounting standards, amendments and interpretations to

existing standards have been published but are not yet effective, and have not been adopted early by the entity.

Management anticipates that all of the pronouncements will be adopted in the entity’s accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the entity’s financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the entity’s financial statements.

2.1 Standards and interpretations not yet effective The group has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory

for the group’s accounting periods beginning on or after 1 March 2012 or later periods:

IFRS 9 Financial Instruments has been issued. This standard represents the first phase of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement, and has mandatory application for accounting periods beginning on or after 1 January 2015. In its current form, it sets out the classification and measurement criteria for financial assets and financial liabilities. It requires all financial assets, including assets currently classified under IAS 39 as available for sale, to be measured at fair value through profit and loss unless the assets can be classified as held at amortised cost. Qualifying equity investments held at fair value may have their fair value changes taken through other comprehensive income by election. Where the fair value option for certain financial liabilities is applied, the portion of fair value changes representing own credit risk would be recognised through other comprehensive income rather than the income statement. The group does not use the fair value option for financial liabilities. The effect of applying the standard in its current form is not considered to have a material impact on the group’s reported profit or equity.

A revised IAS 19 Employee Benefits has been issued and will be mandatory from 1 January 2013. The new standard does not change the values of retirement benefit assets and liabilities on the balance sheet, but does change the amounts recognised in the income statement and in other comprehensive income. The expected return on plan assets and the interest cost on liabilities are replaced by a new component of the income statement charge – interest on the net retirement benefit asset/liability. In addition, prior service costs will no longer be deferred and will be recognised immediately. The revised standard has retrospective application. The effect of applying the standard in its current form does not have an impact on the group.

IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities, have been issued along with revised versions of IAS 27 Separate Financial Statements and IAS 28 Associates; additionally, IAS 31 Joint Ventures has been withdrawn. These standards form a single package of proposals with mandatory application from 1 January 2013. The aim of these standards is to improve the quality of reporting in relation to the consolidation of subsidiaries, special purpose vehicles and accounting for joint arrangements. The requirements of these standards are not expected to materially affect the group.

An amendment to IAS 1 Presentation of Financial Statements has been issued. This amendment changes the disclosure of items presented in other comprehensive income grouping them into items which recycle to profit and loss and items which will not. Apart from the change in disclosure, this amendment will have little impact on the group accounts. Mandatory application is for accounting periods beginning on or after 1 July 2012.

IFRS 13 Fair Value Measurement has been issued. This standard aims to provide a single source of fair value measurement and disclosure requirements for use across IFRS. The implementation of IFRS 13 does not change where fair value is or is not applied under IFRS and will not require a restatement of historical transactions. Mandatory application is from 1 January 2013.


3. PROPERTY, PLANT AND EQUIPMENT2012 2011

Figures in R thousandsCost/

valuation

Accu-mulated

depreciationCarrying

valueCost/

valuation

Accu-mulated


value

GROUPBuildings 10 272 (566) 9 706 7 530 (566) 6 964Land 883 883 639 639Motor vehicles 1 452 (995) 457 1 452 (953) 499Plant and machinery 9 528 (6 323) 3 205 9 387 (5 833) 3 554

Total 22 135 (7 884) 14 251 19 008 (7 352) 11 656

2012 2011

Figures in R thousands Cost

Accu-mulated


value Cost

Accu-mulated


value

COMPANYPlant and machinery 191 (148) 43 159 (131) 28

Reconciliation of property, plant and equipment

Figures in R thousandsOpening balance Additions Disposals Revaluations Depreciation Total

GROUP 2012Buildings 6 964 77 2 665 9 706Land 639 244 883Motor vehicles 499 (42) 457Plant and machinery 3 554 144 (3) (490) 3 205

11 656 221 (3) 2 909 (532) 14 251

GROUP 2011Buildings 3 559 3 405 6 964Land 144 495 639Motor vehicles 652 (36) (117) 499Plant and machinery 6 589 12 (2 387) (660) 3 554

10 944 12 (2 423) 3 900 (777) 11 656

Reconciliation of property, plant and equipment

Figures in R thousandsOpening balance Additions Depreciation Total

COMPANY 2012Plant and machinery 28 28 (13) 43

COMPANY 2011Plant and machinery 49 1 (22) 28



GROUP GROUP COMPANY COMPANYFigures in R thousands 2012 2011 2012 2011

3. PROPERTY, PLANT AND EQUIPMENT continuedPledged as securityCarrying value of assets pledged as security (refer to note 10 and 13):Land and buildings 10 589 7 603Plant and machinery 783 1 373Motor vehicles 200 386

Details of propertyLand and buildings Land and buildings comprise portion 10 of Erf 1911 Extension 1, North West Province, measuring 1,3866 hectares with commercial buildings thereon.Purchase price: 2007 3 339 3 339 Revaluation: 2007 250 250 Revaluation: 2010 680 680 Revaluation: 2011 3 900 3 900 Additions: 2012 77 –Revaluation: 2012 2 909 –Less: accumulated depreciation (566) (566)

10 589 7 603

Revaluations The effective date of the current revaluation was 31 August 2011. The revaluation was performed by the board of directors based on a valuation performed by the group’s bankers.

Land and buildings are re-valued independently every three years.

The valuation was performed using the rental yield approach, and the following assumptions were used:

2012 2011

Yield rate (%) 11 13Office rental per square meter R 35 20Factory rental per square meter R 20 15Garage rental per square meter R 16 12


4. INTANGIBLE ASSETS2012 2011

Figures in R thousands Cost

Accu-mulated

impairmentCarrying

value Cost

Accu-mulated

impairmentCarrying

value

GROUPBrand names 11 694 11 694 11 694 11 694Distribution rights 24 000 (16 800) 7 200 24 000 (24 000)Intellectual property 49 49

Total 35 743 (16 800) 18 943 35 694 (24 000) 11 694

COMPANYDistribution rights 24 000 (16 800) 7 200 24 000 (24 000)

Reconciliation of intangible assets

Figures in R thousandsOpening balance Additions

Reversal of impairment Total

GROUP 2012Brand names 11 694 11 694Distribution rights 7 200 7 200Intellectual property 49 49

Total 11 694 49 7 200 18 943

GROUP 2011Brand names 11 694 11 694

Total 11 694 11 694

COMPANY 2012Distribution rights 7 200 7 200

COMPANY 2011Distribution rights

The useful life of brand names and intellectual property is considered indefinite. Brand names and intellectual property relate to dossiers registered with the Medicines Control Council in Impilo Drugs (1966) (Pty) Limited which do not have a finite life. These dossiers typically remain in demand and have done so in most cases since the inception of the company.

In assessing the carrying values of the brand names, we have assumed that volumes of products will remain at the current levels. The value of the brand names is not identified separately and we have applied our assumptions as one cash-generating unit.

The distribution rights relate to a purchase price of exclusive rights to manufacture the Imuniti Nutritional Supplement Combo Pack (ISCP) from Edge to Edge Global Investments Limited. The agreement has no expiry date and therefore is regarded as indefinite.

The intangible asset relating to the distribution rights of the ISCP was impaired in 2009. A portion of this impairment has been reversed as the company has received orders and produced this product during the period. There is no indication that this order level will not be maintained for at least ten years. The first three distribution outlets owned by the customer of the ISCP have been completed in the Western Cape. These customer distribution outlets are budgeted to monthly require product in excess of the order already placed.



5. INVESTMENTS IN SUBSIDIARIESCOMPANY COMPANY

Name of company Held by

Percentage holding

2012

Percentageholding

2011

2012Carrying amount

R’000

2011Carrying amount

R’000

PB Tully Family Holdings (Pty) Limited Nutritional Holdings Limited 100 100 40 015 40 015Impilo Marketing (Pty) Limited Nutritional Holdings Limited 100 100 500 500Nutritional Foods (Pty) Limited Nutritional Holdings Limited 100 100 1 1

40 516 40 516Impairment of investment in subsidiaries (28 542) (28 542)Perpetual loans to group companies 39 743

51 717 11 974

The carrying amounts of subsidiaries are shown net of impairment losses.

Figures in R thousands

Impairment of investment in subsidiariesOpening balance 28 542 28 542

28 542 28 542

Perpetual loans to group companiesSubsidiariesImpilo Drugs (1966) (Pty) Limited 12 396Nutritional Foods (Pty) Limited 25 787Impilo Marketing (Pty) Limited 7 208PB Tully Family Holdings (Pty) Limited 6Employee Share Incentive Trust Loan 6 741

52 138Impairment of loans to subsidiaries (12 395)

39 743

The above loans are unsecured and repayable at the option of the subsidiary. Interest of R4 205 was charged during the year.

Credit quality of loans to group companiesThe terms of these loans have changed during the year in that the loans are now repayable at the instant of the subsidiary.

The credit quality of loans to group companies that are neither past due nor impaired are assessed individually based on value in use of the company being assessed.

Loans to group companies impairedAs of 29 February 2012, loans to group companies of R12,395 million were impaired.

We have reversed the impairment on the balance of the loans as the value in use exceeds the gross carrying amount.

This has been determined based on generally accepted valuation techniques.

Reconciliation of allowance for impairment of loans to group companiesOpening balance 25 346Reversal of impairment (12 951)

Closing balance 12 395



6. LOANS TO GROUP COMPANIESSubsidiariesImpilo Drugs (1966) (Proprietary) Limited 13 276Nutritional Foods (Proprietary) Limited 21 644Impilo Marketing (Proprietary) Limited 4 065

38 985Impairment of loans to subsidiaries (25 346)

13 639

The above loans are unsecured and repayable on demand. Interest charged during the year: Rnil (2011: Rnil).

Credit quality of loans to group companiesThe credit quality of loans to group companies that are neither past due nor impaired are assessed individually based on the solvency of the company being assessed.

Loans to group companies impairedAs of 29 February 2012, loans to group companies of Rnil (2011: R25,346 million) were impaired and provided for.

Reconciliation of allowance for impairment of loans to group companiesOpening balance 24 705Allowance for impairment 641

Closing balance 25 346

7. LOANS RECEIVABLE (PAYABLE)Sundry loans payable (1 200) (1 200)Sundry loans receivable 9 8 9 8

9 (1 192) 9 (1 192)

Current assets 9 8 9 8Current liabilities (1 200) (1 200)

9 (1 192) 9 (1 192)

The loan of R1,2 million in the prior year was repaid via the issue of 40 million shares at three cents each.

Terms and conditions of loansThe above loans are unsecured, interest-free and repayable by mutual agreement.

Credit quality of loans receivable The credit quality of loans to related parties that are neither past due nor impaired are assessed individually based on historical information.




8. INVENTORIESRaw materials 1 867 1 872Work in progress 170Finished goods 2 523 2 500Goods in transit 439

4 829 4 542Inventories (write-downs) (543)

4 829 3 999

Reconciliation of allowance for impairment of inventoriesOpening balance (543) (2 580)Amounts written off 543 2 037Closing balance (543)

9. TRADE AND OTHER RECEIVABLESTrade receivables 5 029 6 331Staff loans 21 32Prepayments and other receivables 1 044 22 844Deposits 25 19 6Value added tax 149 35 16

6 268 6 439 866

Trade and other receivables pledged as securityTrade and other receivables were pledged as security for overdraft facilities of R7,4 million (2011: R2,9 million) of the group.

Credit quality of trade and other receivables The credit quality of trade and other receivables that are neither past due nor impaired are assessed by reference to historical information about counterparty default rates.

The assessment performed has resulted in trade and other receivables below being identified as being past due but not impaired. No external credit ratings were obtained for trade and other receivables.

Trade and other receivables past due but not impaired Trade and other receivables which are less than three months past due are not considered to be impaired. At 29 February 2012, R1,497 million (2011: R2,577 million) were past due but not impaired.



9. TRADE AND OTHER RECEIVABLES continuedThe ageing of amounts past due but not impaired is as follows:One month past due 1 277 2 218Two months past due 197 292Three months past due 23 67

1 497 2 577

Trade and other receivables impairedAs of 29 February 2012, trade and other receivables of R0,161 million (2011: R0,262 million) were impaired and provided for.The ageing is as follows:Three to six months 77 2Over six months 84 260

161 262

The creation and release of allowance for impaired receivables have been included in operating expenses in the statement of comprehensive income. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash. The total amount receivable represents the maximum exposure to credit risk for trade receivables and other current assets, before any credit enhancements or collateral that may be held. The group does not hold any current collaterals.

Reconciliation of allowance for impairment of trade and other receivablesOpening balance 262 498Allowance for impairment raised (reversed) 22Unused amounts reversed (123) (236)

161 262

10. CASH AND CASH EQUIVALENTSCash and cash equivalents consist of:Bank balances 517 52 30 4Bank overdraft (5 631) (2 332) (3 832) (2)Cash on hand 1 3 1Short-term deposits 112 1 29 1

(5 001) (2 276) (3 772) 3

Current assets 630 56 60 5Current liabilities (5 631) (2 332) (3 832) (2)

(5 001) (2 276) (3 772) 3

A mortgage bond of R4,6 million is registered over the land and buildings as described in note 3. Land and buildings and trade debtors are pledged as security for overdraft facilities of R7,6 million (2011: R2,9 million) of the group.




11. SHARE CAPITALAuthorised2 000 000 000 ordinary shares of no par value1 500 000 000 ordinary shares of R0,0001 each 150 150100 000 000 redeemable preference shares of R0,0001 each 10 10 10 10

160 160

Reconciliation of number of shares issued:Reported as at 1 March (shares) 1 144 035 1 092 535 1 144 035 1 092 535Issue of shares – ordinary shares (shares) 435 733 51 500 435 733 51 500Treasury shares (shares) (90 000)

1 489 768 1 144 035 1 579 768 1 144 035

Issued1 144 034 847 ordinary shares of R0,0001 each 114 114Share premium 117 833 117 833Share issue costs written off against share premium (4 645) (4 645)Stated share capital – 1 579 768 179 ordinary shares 129 972 129 972Treasury shares – 90 000 000 ordinary shares (6 741)

123 231 113 302 129 972 113 302

During the year, the ordinary shares were converted from par value shares of R0,0001 each to no par value shares.

Treasury shares At 29 February 2012, 90 million ordinary shares were under the control of the directors for the purpose of the existing share incentive scheme.

The unissued shares are under the control of the directors until the next annual general meeting.

12. REVALUATION RESERVEThe revaluation reserve resulted from the revaluation of land and buildings as described in note 3.

Revaluation reserve 5 659 3 547

13. INSTALMENT SALE CREDITORSMinimum lease payments due– Within one year 610 979 512 679– In second to fifth year inclusive 30 619 30 542

640 1 598 542 1 221Less: future finance charges (23) (118) (18) (86)

Present value of minimum lease payments 617 1 480 524 1 135

Non-current liabilities 30 601 30 524Current liabilities 587 879 495 611

617 1 480 524 1 135

The instalment sale creditors are repayable in monthly instalments of R65 515 (2011: R79 967) and bear interest at rates linked to prime. The group’s obligations under instalment sale agreements are secured over assets (refer to note 3).



14. TRADE AND OTHER PAYABLESTrade payables 2 730 4 758 198 398Amounts received in advance 678 42 678VAT 270 788 555Other payables 236 1 293 8 45Accrued expenses 363 2 883 1 531

4 277 9 764 884 2 529

15. REVENUEAdministration and management services 1 770 2 040Rental income 83Sale of goods 41 067 46 625

41 067 46 708 1 770 2 040

16. OPERATING PROFIT (LOSS)Operating profit (loss) for the year is stated after accounting for the following:

Operating lease chargesPremises– Contractual amounts 484 384 321 228Equipment– Contractual amounts 599 616

1 083 1 000 321 228

Profit (loss) on sale of property, plant and equipment (3) 83 –Reversal of impairment on distribution rights (7 200) (7 200)(Reversal) impairment on loans to group companies – (12 951) 642Depreciation on property, plant and equipment 532 777 13 22Employee costs 9 253 11 956 3 284 923

17. INVESTMENT REVENUEInterest revenueBank 2 63 3Finance leases 449 575Trade and other receivables 126 401 114

577 1 039 114 3

18. FINANCE COSTSBank 21 486 2Current borrowings 505 174 399South African Revenue Service 29 223 56 135Trade and other payables 22 187 22

577 1 070 477 137




19. TAXATIONMajor components of the tax incomeDeferredBenefit of unrecognised tax loss/tax credit/temporary difference used to reduce deferred tax expense (184) (2 393)Originating and reversing temporary differences 243 (2 824)

59 (5 217)

Reconciliation of the tax expenseReconciliation between applicable tax rate and average effective tax rate:Applicable tax rate (%) 28,00 28,00 28,00 28,00Non-deductible expenses (%) (42,00) (2,14) (33,92) (26,80)Change in estimate and rates including CGT effect (%) 15,20 747,02 5,92 (1,20)

1,20 772,88 – –

The estimated tax loss available for setoff against future taxable income for the group is R45 968 967 (2011: R41 558 803) and for the company R7 703 918 (2011: R4 196 549).

A deferred tax asset for the company has not been recognised as there is no convincing evidence that the assessed losses will be used.

20. AUDITOR’S REMUNERATIONFees 224 661 127 384

224 661 127 384

21. OTHER COMPREHENSIVE INCOMEGross Tax Net

Components of other comprehensive income R’000 R’000 R’000

GROUP 2012Movements on revaluation Gains on property revaluation 2 909 (797) 2 112

GROUP 2011Movements on revaluationGains on property revaluation 3 900 (1 022) 2 878



22. CASH (USED IN) GENERATED FROM OPERATIONSProfit (loss) before taxation 1 881 (4 575) 16 586 (1 041)Adjustments for:Depreciation and amortisation 532 777 13 22(Profit) loss on sale of assets 3 (84)Interest received (577) (1 039) (114) (3)Finance costs 577 1 070 477 137Impairments (7 200) (20 151) 642Changes in working capital:Inventories (830) 1 440Trade and other receivables 171 948 (867) 5Trade and other payables (5 487) (579) (1 643) 770

(10 930) 2 042 (5 699) 532

23. TAX (PAID) REFUNDEDBalance at beginning of the year 141 406Balance at end of the year – 141

(141) 547

Figures in R thousandsDirectors’

fees Emoluments Allowances Total

24. DIRECTORS’ EMOLUMENTSExecutive 2012HJ van der Merwe 1 560 120 1 680JA Etchells 720 180 900PHA Fouche 286 75 361

– 2 566 375 2 941

Executive 2011PHA Fouche – 370 180 550N Lamble – 132 – 132

– 502 180 682

Non-executive 2012GR Wambach 128 128JA Etchells 15 15TR Hendry 75 75CD Angus 75 75

293 293

Non-executive 2011S Bean 42 42M Gahagan 88 88

130 130



25 FINANCIAL ASSETS BY CATEGORY The carrying amounts of cash and cash equivalents, loans to related parties and trade and other receivables (excluding prepayments) as

disclosed on the statement of financial position are classified as loans and receivables.

26. FINANCIAL LIABILITIES BY CATEGORY The carrying amounts of loans from related parties, instalment sale creditors, trade and other payables, (excluding amounts received

in advance) bank overdraft and provisions as disclosed on the statement of financial position are classified as financial liabilities at amortised cost.

27. RISK MANAGEMENT Capital risk management Management’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide

returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the group consists of debt, which includes the borrowings disclosed in notes 6, 7 and 13, cash and cash equivalents disclosed in note 10, and equity as disclosed in the statement of financial position and notes 11 and 12.

In order to maintain or adjust the capital structure, management may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

There are no externally imposed capital requirements.

There have been no changes to what the entity manages as capital, the strategy for capital maintenance or externally imposed capital requirements from the previous year.


Total borrowingsLoans to (from) related parties (note 7) 1 200 1 200Instalment sale creditors (note 13) 617 1 480 524 1 135

617 2 680 524 2 335Add: cash and cash equivalents (note 10) 5 001 2 276 3 772 (3)

Net debt 5 618 4 956 4 297 2 332Total equity 40 709 26 049 55 179 21 923

Total capital 46 327 31 005 59 475 24 255

Gearing ratio (%) 12 16 7 10

Financial risk management The group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow

interest rate risk and price risk), credit risk and liquidity risk.

Liquidity risk The group’s risk to liquidity is a result of the funds available to cover future commitments. The management manages liquidity risk

through an ongoing review of future commitments and credit facilities.

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

The table overleaf analyses the group’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.


Figures in R thousandsLess than one year

Between one and

two years

Between two and

five yearsOver

five years

27. RISK MANAGEMENT continuedGROUPAt 29 February 2012Instalment sale creditors 587 30Trade and other payables 4 277Bank overdraft 5 631

At 28 February 2011Instalment sale creditors 879 571 30Trade and other payables 9 764Loans 1 200Bank overdraft 2 332

COMPANYAt 29 February 2012Instalment sale creditors 495 30Trade and other payables 884Bank overdraft 3 832

At 28 February 2011Instalment sale creditors 611 524Trade and other payables 2 529Loans 1 200Bank overdraft 2

Interest rate risk As the group has no significant interest-bearing assets, the group’s income and operating cash flows are substantially independent of

changes in market interest rates.

The group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the group to cash flow interest rate risk. Borrowings issued at fixed rates expose the group to fair value interest rate risk. During 2012 and 2011, the group’s borrowings at variable rate were denominated in Rand.

At 29 February 2012, if interest rates on Rand-denominated borrowings had been 1% higher/lower with all other variables held constant, post-tax profit for the year would have been Rnil (2011: R14 800) lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings.

Credit risk Credit risk is managed on a group basis.

Credit risk consists mainly of cash deposits and trade debtors. The company only deposits cash with major banks with high quality credit standing and limits exposure to any one counterparty.

Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, management assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored. Sales to retail customers are settled in cash or using major credit cards. Credit guarantee insurance is purchased when deemed appropriate.




27. RISK MANAGEMENT continuedFinancial assets exposed to credit risk at year-end were as follows:

Financial instrumentFinance lease receivables 1 147 1 898 525 1 135Loans 9 8 9 8Bank 630 56 60 5Trade and other receivables 6 268 6 439 866

28. DEFERRED TAXDeferred taxes arising from temporary differences and unused tax losses are summarised as follows:

Deferred tax assetCurrent liabilities 87Tax losses available for setoff against existing taxable temporary differences 3 514 3 270Tax losses available for setoff against future taxable income 5 156 5 216

8 757 8 486

Deferred tax liabilityProperty, plant and equipment (3 279) (2 548)Long-term financial assets (321) (722)

(3 600) (3 270)

Reconciliation of movement in deferred tax asset (liability)Opening balance 5 216 (260)Increase (decrease) in tax losses available for setoff against existing temporary differences 244 2 399Increase (decrease) in tax losses available for setoff against existing future taxable income (60) 5 216Temporary difference on property, plant and equipment (731) (1 417)Long-term financial assets 401 (722)Current liabilities 87

5 157 5 216

No deferred tax asset has been recognised for tax losses available for setoff against future taxable income where it is not probable that future taxable income will be available. The amount not recognised in deferred tax assets is R4 996 555.

Tax losses available for setoff against future taxable income is only recognised for subsidiaries that generated taxable income in the current and preceding period.



29. FINANCE LEASE RECEIVABLESGross investment in the lease due– Within one year 1 200 1 200 513 679– In second to fifth year inclusive 1 200 30 542

1 200 2 400 543 1 221

Less: unearned finance income (53) (502) (18) (86)

1 147 1 898 525 1 135

Non-current assets 1 147 30 524Current assets 1 147 751 495 611

1 147 1 898 525 1 135

Credit quality of finance lease receivables The credit quality of finance lease receivables that are neither past due nor impaired can be assessed by reference to historical information about counterparty default rates.

30. RETIREMENT BENEFITSDefined contribution plan It is the policy of the group to provide retirement benefits to certain of its employees. A number of defined contribution provident funds, all of which are subject to the Pension Funds Act, exist for this purpose. No retirement benefits are provided to directors.

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

Total group contribution to such schemes 353 545

31. IMPAIRMENT OF ASSETSMaterial impairment losses reversed (recognised)Distribution rights 7 200 7 200Impairment of group loans 12 951 (642)

7 200 20 151 (642)

Distribution rights have not been impaired but reversed. The recoverable amount of distribution rights has been based on its value in use.

Value in useManagement has projected cash flows based on existing levels of orders received.

Key assumptions used by management are based on past experience and include the following:

• Revenue will remain constant;• Growth of 10% on the current year’s gross profit derived from the sales of the product; and• Period use: 10 years

The discount rate applied to the cash flow projections was 10%, being the estimated cost of capital.




32. COMMITMENTSOperating leases – as lessee (expense)Minimum lease payments due– Within one year 86 149– In second to fifth year inclusive 86

86 235

33. CONTINGENCIES Banking facilities for Nutritional Holdings Limited are secured by unlimited letters of surety from Nutritional Foods (Pty) Limited and

Impilo Marketing (Pty) Limited.

Banking facilities for Impilo Marketing (Pty) Limited and Nutritional Foods (Pty) Limited are secured by an unlimited suretyship with loan funds by Nutritional Holdings Limited.

Banking facilities granted to Nutritional Foods (Pty) Limited are secured by a first covering mortgage bond over land and buildings in the amount of R4,6 million.

A guarantee facility of R16 000 (2011: R61 600) has been granted to Impilo Drugs (Pty) Limited and is secured by cash deposit funds.

34. RELATED PARTIES Identity of related parties The group has related party relationships with its subsidiaries (refer to directors’ report) and with directors and executive officers.

Intra-company transactions Amounts due by and to subsidiaries (refer to note 5).

Interest income from subsidiary (refer to note 5).

Administration fee received from subsidiaries (listed below).

Transactions with key management personnel The number of shares held by the directors in the issued share capital of the company at 29 February 2012 were as listed in the directors’

report.

Key management HJ van der Merwe JA Etchells PHA Fouche

Companies controlled by key management during the year Paul Fouche Accounting (Pty) Limited T-Junction 29 (Pty) Limited

Besides the above, certain directors are also directors/officers of other companies which have transactions with the group. The relevant directors do not believe they have the capacity to control or significantly influence the financial or operating policies of those companies. Those companies are therefore not considered to be related parties.


Related party transactionsRent paid to related partiesT-Junction 29 (Pty) Limited 62 177 62 177

Administration fees received from related partiesImpilo Marketing (Pty) Limited 540Impilo Drugs (1966) (Pty) Limited 270 –Nutritional Foods (Pty) Limited 1 500 1 500

Accounting fees paid to related partiesPaul Fouche Accounting (Pty) Limited (450) 309 (388) 236


GROUP GROUPFigures in R thousands 2012 2011

35. EARNINGS PER SHARENumber of ordinary shares in issue net of treasury shares (shares) (‘000) 1 489 768 1 144 035Weighted average shares in issue (shares) (‘000) 1 297 890 1 120 493Profit for the year 2 619 1 664

Earnings per share (cents) 0,20 0,15

36. HEADLINE (LOSS) EARNINGS PER SHAREWeighted average shares in issue (shares) (‘000) 1 297 890 1 120 493Reconciliation of headline earningsProfit for the year 2 619 1 664Adjust for:Loss (profit) from disposal of property, plant and equipment 3 (83)Reversal of impairment of distribution rights (7 200)

Headline (loss) profit (4 578) 1 581

Headline (loss) earnings per share (cents) (0,35) 0,14

37. DILUTED EARNINGS PER SHAREWeighted average shares in issue (shares) (‘000) 1 297 890 1 120 493Diluted weighted average shares in issue (‘000) 1 297 890 1 120 493Profit for the year 2 619 1 664

Diluted earnings per share (cents) 0,20 0,15

38. COMPREHENSIVE EARNINGS PER SHAREWeighted average shares in issue (shares) (‘000) 1 297 890 1 120 493Total comprehensive income for the year 4 731 4 542

Comprehensive earnings per share (cents) 0,36 0,41

2012million

2011million

39. SHARE INCENTIVE SCHEMEA share incentive scheme exists to provide employees of the group the opportunity to acquire shares in the capital of the group and to give such employees the incentive to advance the interest of the group for the ultimate benefit of all stakeholders in the group. The share incentive scheme consists of a share purchase scheme.

The maximum ordinary shares so held may not exceed 171 559 444 of the ordinary share capital of the company.

Total unallocated share incentive scheme shares 90 000 –



40. SEGMENTAL ANALYSIS Operating segments For management purposes the group is organised into three major operating divisions, namely Nutritional Foods, Pharmaceuticals and

Services. These divisions are the basis on which the company reports it primary segment information. The Nutritional Foods division involves the manufacture of high-protein and fortified powdered food and food supplements. The Pharmaceutical division involves the supply of pharmaceutical, complimentary and natural medicines. The Services division involves the providing of administration and management services.

These operating segments are monitored by the group’s chief decision-maker and strategic decisions are made on the basis of adjusted segment operating results.

Nutritional Foods Pharmaceuticals Services ConsolidatedFigures in R thousands 2012 2011 2012 2011 2012 2011 2012 2011

Segment revenueTotal revenue 37 393 43 327 3 674 3 381 1 770 2 040 42 837 48 748 Intersegment revenue – (1 770) (2 040) (1 770) (2 040)

Total external revenue 37 393 43 327 3 674 3 381 – – 41 067 46 708

Segment results(Loss) profit before interest and taxation 1 253 (5 607) 5 284 (1 331) 9 750 (1 381) 16 287 (8 319)Consolidation eliminations 1 500 1 500 (1 186) 1 159 (14 720) 1 118 (14 406) 3 775

Loss before interest and taxation 2 753 (4 107) 4 098 (172) (4 970) (263) 1 881 (4 544)Finance costs (58) (652) (42) (281) (477) (137) (577) (1 070)Finance income 18 461 445 575 114 3 577 1 039 Taxation 321 1 499 417 4 740 738 6 239 Other comprehensive income 2 112 2 878 2 112 2 878

Segment profit (loss) 5 146 79 4 918 4 862 (5 333) (397) 4 731 4 542

Segment assets 25 523 22 414 9 640 8 759 67 161 26 923 102 324 58 096Consolidation eliminations – 670 – 670 Intersegment assets – (150) (233) (47 340) (14 297) (47 490) (14 530)

Total external assets 25 523 22 414 9 490 8 526 20 315 13 296 54 834 44 236

Segment liabilities 7 751 32 690 1 655 23 027 5 240 5 327 14 646 61 044 Consolidation eliminations – (182) – (182)Intersegment liabilities (23 696) (18 979) (521) (521) (42 675)

Total external liabilities 7 751 8 994 1 655 4 048 4 719 5 145 14 125 18 187

Capital and non-cash itemsAdditions to property, plant and equipment 193 28 221 –Disposals of property, plant and equipment (3) 85 2 423 – 2 508 Depreciation 463 682 55 72 14 23 532 777 Impairment losses 3 600 3 600 619 1 118 7 200 1 737

Number of employees at period end 46 51 2 3 1 1 49 55


» SHAREHOLDER SPREAD

Number of shareholders

Percentage of shareholders

Number of shares

Percentage of issued capital

SHARES2012Public 1 017 97,4 1 078 800 833 68,3Non-public 27 2,6 500 967 346 31,7

1 044 100,0 1 579 768 179 100,0

2011Public 844 96,6 488 617 971 42,7Non-public 30 3,4 655 416 876 57,3

874 100,0 1 144 034 847 100,0

MAJOR SHAREHOLDERS HOLDING 5% OR MORE2012Ellis Family Trust 157 419 106 10,0BBE Family Trust 139 350 781 8,8Hans Wessels Trust 139 350 780 8,8SL Sixty Three Company Limited 100 000 000 6,3AR Pinfold 100 000 000 6,3Nutritional Holdings Employee Share Incentive Trust 90 000 000 5,7

2011BBE Family Trust 178 635 298 15,7Ellis Family Trust 174 415 591 15,2Hans Wessels Trust 145 145 833 12,7SL Sixty Three Company Limited 100 000 000 8,7

RANGE OF SHAREHOLDERS20121 – 9 999 116 11,1 488 464 –10 000 – 99 999 376 36,1 13 314 361 0,8100 000 – 999 999 393 37,7 117 067 919 7,41 000 000 shares and over 157 15,1 1 448 897 435 91,7

1 042 100,0 1 579 768 179 100,0

20111 – 9 999 107 12,2 457 172 –10 000 – 99 999 342 39,1 12 520 078 1,1100 000 – 999 999 305 35,0 93 342 185 8,21 000 000 shares and over 120 13,7 1 037 715 412 90,7

874 100,0 1 144 034 847 100,0


» NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the annual general meeting of shareholders of Nutritional Holdings Limited (“Nutritional Holdings” or “the Company”) will be held at the Durban Country Club, 101 Isaiah Ntshangase Road, Durban on Thursday, 28 June 2012 at 10:00 (“the Annual General Meeting” or “the AGM”).

The record date for shareholders to participate and vote at the Annual General Meeting will be Friday,22 June 2012. Accordingly, the last day to trade in order to be eligible to participate and vote at the Annual General Meeting will be Friday, 15 June 2012.

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

AgendaA. Presentation of the audited annual financial statements of the Company as required by article 45 of the Memorandum of Incorporation,

including the reports of the directors and the Audit and Risk Committee for the year ended 29 February 2012 as set out in the Company’s Annual Integrated Report 2012, of which this notice forms part.

B. In terms of articles 68 of the Company’s Memorandum of Incorporation, directors of the Company so elected shall retain office only until the next annual general meeting of the Company at which their appointments shall be confirmed.

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

Ordinary resolution number 1 – Annual financial statements“To consider and endorse the audited financial statements of the Company, including the report of the directors and the external auditors, for the year ended 29 February 2012.”

Percentage of voting rights required to pass this resolution: 50% + 1 vote

Reason for ordinary resolution number 1Article 45 of the Memorandum of Incorporation requires that the annual financial statements of the Company, including the reports of the directors and the Audit and Risk Committee for the year ended 29 February 2012 as set out in the Company’s Annual Integrated Report 2012 of which this notice forms part, be considered by shareholders at the Annual General Meeting.

Ordinary resolution number 2 – Re-appointment of auditors“To re-appoint Grant Thornton as auditors of the Company until the conclusion of the next AGM, with Mr J Barnett being the designated auditor. The Audit and Risk Committee has recommended and the board has endorsed the above re-appointment”.


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

Ordinary resolution number 3 – Confirmation of appointment of a director: TR Hendry“Resolved that Mr TR Hendry’s appointment as a director of the Company with effect from 22 June 2011 is hereby confirmed”.

An abbreviated curriculum vitae in respect of Mr TR Hendry may be viewed on page 2 of the Annual Integrated Report 2012 of which this notice forms part.


Reason for ordinary resolution number 3The reason for ordinary resolution number 3 is that article 68 of the Company’s Memorandum of Incorporation and, to the extent applicable, the Companies Act, requires that the appointment of new directors be confirmed at the next annual general meeting following their appointment.

Ordinary resolution number 4 – Confirmation of appointment of a director: CD Angus“Resolved that Mr CD Angus’s appointment as a director of the Company with effect from 23 August 2011 is hereby confirmed”.


An abbreviated curriculum vitae in respect of Mr CD Angus may be viewed on page 2 of the Annual Integrated Report 2012 of which this notice forms part.


Reason for ordinary resolution number 4The reason for ordinary resolution number 4 is that article 68 of the Company’s Memorandum of Incorporation and, to the extent applicable, the Companies Act, requires that the appointment of new directors be confirmed at the next annual general meeting following their appointment.

Motivation for ordinary resolution numbers 3 and 4In terms article 68 of the Company’s Memorandum of Incorporation, the appointment by the board of directors or any persons as directors of the Company during the year after the last AGM requires confirmation by shareholders at the first AGM of the Company following the appointment of such persons. Messrs Hendry and Angus were appointed as directors of the Company subsequent to the last AGM. The board recommends to shareholders that their appointment be confirmed.

Ordinary resolution number 5 – Auditor’s remuneration“Resolved that the auditor’s remuneration for the year ended 29 February 2012, be confirmed on the recommendation of the Company’s Audit and Risk Committee.”


Reason for ordinary resolution number 5The reason for ordinary resolution number 5 is that section 94(7) of the Companies Act requires that the Company’s Audit and Risk Committee determine the remuneration payable to the auditor. The board recommends that the auditor’s remuneration be considered and approved at the AGM.

Ordinary resolution number 6 – Reappoint GR Wambach as a non-executive director“To reappoint Mr GR Wambach, retiring as a non-executive director of the Company in accordance with the Company’s Memorandum of Incorporation, but being eligible, offers himself for re-election in this capacity.”

An abbreviated curriculum vitae in respect of Mr GR Wambach may be viewed on page 2 of the Annual Integrated Report 2012 of which this notice forms part.


Reason for ordinary resolution number 6The reason for ordinary resolution number 6 is that in terms of the Company’s Memorandum of Incorporation, one-third of the non-executive directors are required to retire at each AGM. These directors may offer themselves for re-election. The board recommends to shareholders the re-election of the director mentioned above who retires by rotation in terms of Article 80 of the Company’s Memorandum of Incorporation and who is eligible for re-election and who has offered himself for re-election.

Ordinary resolution number 7 – Elect GR Wambach as a member of the Audit and Risk Committee“Resolved that, Mr GR Wambach be elected as independent non-executive member of the Audit and Risk Committee, with effect from the conclusion of this AGM in terms of section 94(2) of the Companies Act.”

An abbreviated curriculum vitae in respect of Mr GR Wambach may be viewed on page 2 of the Annual Integrated Report 2012 of which this notice forms part.

Ordinary resolution number 8 – Elect TR Hendry as a member of the Audit and Risk Committee“Resolved that, Mr TR Hendry be elected as independent non-executive member of the Audit and Risk Committee, with effect from the conclusion of this AGM in terms of section 94(2) of the Companies Act.”

An abbreviated curriculum vitae in respect of Mr TR Hendry may be viewed on page 2 of the Annual Integrated Report 2012 of which this notice forms part.

Reason for ordinary resolution numbers 7 to 8The reason for ordinary resolution numbers 7 to 8 is that the Company, being a public listed Company, must appoint an Audit and Risk Committee as prescribed by sections 66(2) and 94(2) of the Companies Act, which also requires that the members of such Audit and Risk Committee be appointed, or re-appointed, as the case maybe, at each annual general meeting of a company.



Ordinary resolution number 9 – Placing unissued ordinary shares for purpose of share option scheme under the control of the directors“To continue to place the unissued ordinary shares in the capital of the Company reserved for the purpose of the Company’s share option scheme, comprising 171 559 444 ordinary shares in total, under the control of the directors, who shall be authorised to issue these shares at such times and on such terms as they may determine.”


Reason for ordinary resolution number 9 The reason for ordinary resolution numbers 9 is that the Company, being a public listed Company, needs to incentivise its executives and senior staff.

Ordinary resolution number 10 – Placing of the authorised but unissued ordinary share capital under the control of the directors“Resolved that, the entire authorised but unissued ordinary share capital of no par value of the Company be and is hereby placed under the control of the directors of the Company, which directors are, subject to the Listings Requirements of the JSE Limited (“JSE”) and the provisions off the Companies Act, 2008, authorised to allot and issue any such shares at such time or times, to any such person or persons, Company or companies and upon such terms and conditions as they may determine, such authority to remain in force until the next Annual General Meeting of the Company. “


Reason for ordinary resolution number 10In terms of the Company’s Memorandum of Incorporation, the members of the Company have to approve the placement of the unissued ordinary shares under the control of the directors. Unless renewed, the existing authority granted by the members at the previous AGM on 24 June 2011 expires at the forthcoming AGM. The authority will be subject to the Companies Act and the JSE Listings Requirements. The aggregated number of ordinary shares able to be allotted and issued in terms of this resolution shall be limited to 20% (twenty per cent) of the number of ordinary shares in issue at 29 February 2012.

The directors have decided to seek annual renewal of this authority, in accordance with best practice. The directors have no current plans to make use of this authority, but are seeking its renewal to ensure that the Company has maximum flexibility in managing the group’s capital resources.

Ordinary resolution number 11 – Issue of shares for cash placed under the control of the directors“Resolved that in terms of the Listings Requirements of the JSE, the mandate given to the directors of the Company in terms of a general authority to issue shares for cash, as and when suitable opportunities arise be renewed subject to the following conditions:

• This general authority is valid until the Company’s next Annual General Meeting provided that it shall not extend beyond fifteen months from the date of the passing of this ordinary resolution;

• The securities issued for cash must be of a class already in issue, or where this is not the case, must be limited to such shares or rights that are convertible into a class already in issue;

• After the Company has issued shares for cash which represent, on a cumulative basis within a financial year 5% or more of the number of shares of that class in issue prior to the issue, the Company shall publish an announcement containing full details of the issue, (including the number of shares issued, the average discount to the weighted average traded price of the shares over 30 business days prior to the date that the issue is agreed in writing between the issuer and the party subscribing for the share, and the effect of the issue on net asset value, net tangible asset value, earnings and headline earnings per share), or any other announcement that may be required in such regard in terms of the Listings Requirements of the JSE which may be applicable from time to time;

• The number of shares issued for cash in aggregate in any one financial year shall not exceed 50% of the Company’s issued share capital of ordinary shares. The number of ordinary shares which may be issued shall be based on the number of ordinary shares in issue at the date of such application less any ordinary shares in issue during the current financial year, provided that any ordinary shares to be issued pursuant to a rights issue (announced, irrevocable and fully underwritten) or acquisition (concluded up to the date of application including announcement of the final terms) may be included as though they were shares in issue at the date of application;

• The maximum discount at which ordinary shares may be issued is 10% of the weighted average traded price of those shares over the 30 business days prior to the date that the price of the issue is agreed between the Company and the party subscribing for the shares or any other price agreed by the JSE;

• The allotment and issue of shares must be made to public shareholders as defined in the Listings Requirements of the JSE, and not to related parties.”



Reason for ordinary resolution number 11For listed entities wishing to issue shares, it is necessary for the board not only to obtain the prior authority of the shareholders as may be required in terms of their Memorandum of Incorporation contemplated in ordinary resolution number 10 above, but it is also necessary to obtain the prior authority of shareholders in accordance with the Listings Requirements of the JSE. The reason for this resolution is accordingly to obtain a general authority from shareholders to issue shares in compliance with the Listings Requirements of the JSE. The authority granted in terms of this ordinary resolution number 11 must accordingly be read together with authority granted in terms of ordinary resolution number 10 above and any exercise thereof will be subject to the conditions contained in ordinary resolution number 11.

Ordinary resolution number 12 – Authorisation to sign any documents“Resolved that any director of the Company be and hereby is authorised to sign any documents and to take any steps as may be necessary or expedient to give effect to ordinary resolution numbers 1, 2, 3, 4, 5, 6, 7, 8 , 9, 10 and 11, and special resolution numbers 1 to 6”.


Special resolution number 1 – Remuneration of non-executive directors“Resolved in terms of section 66(9) of the Companies Act, that the Company be and is hereby authorised to remunerate its directors for their services as directors on the basis set out below and on any other basis as may be recommended by the remuneration committee and approved by the board of directors, provided that this authority will be valid until the next Annual General Meeting:

Independent non-executivesBoard members: R150 000 per annum

Proposed annual remunerationBoard members: R150 000 per annum

Remuneration will be paid monthly.

Remuneration is based on four board meetings, four Audit and Risk Meetings and two Remuneration Committee Meetings per year.”

Percentage of voting rights required to pass this resolution: 75%

Reason for special resolution number 1The reason for special resolution number 1 is for the Company to obtain the approval of shareholders by special resolution for the payment of remuneration to its non-executive directors in accordance with the requirements of the Companies Act.

The effect of special resolution number 1 is that the Company will be able to pay its non-executive directors for the services they render to the Company as directors without requiring further shareholder approval until the next AGM.

Special resolution number 2 – Acquisition of Company’s own shares“Resolved in terms of section 46 and 48 of the Companies Act and the Memorandum of Incorporation of the Company (or one of its wholly-owned subsidiaries) that the directors of the Company be authorised, by way of a general approval, until this authority lapses at the next Annual General Meeting of the Company provided that it shall not extend beyond fifteen months from the date of passing of this special resolution (whichever period is the shorter), to acquire the Company’s own shares, upon such terms and conditions and in such amounts as the directors may from time to time decide, but subject to the Listings Requirements of the JSE subject to the following terms and conditions:

• any repurchase of shares must be affected 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;

• after the Company has acquired shares which constitute, on a cumulative basis, 3% (three percent) of the initial number of shares in issue (at the time that authority from shareholders for the repurchase is granted) of the relevant class of securities and for each 3% in aggregate of the initial number of that class acquired thereafter the Company shall publish an announcement containing full details of such repurchase;



• at any one point in time the Company may only appoint one agent to effect any repurchase on the Company’s behalf;

• the repurchase of shares may not be undertaken by the Company or any of its wholly owned subsidiaries during a prohibited period as defined by the JSE Listings Requirements, unless a repurchase programme is in place where the dates and quantities of shares to be traded during the relevant period are fixed and full details of the programme have been disclosed in an announcement on SENS prior to the commencement of the prohibited period;

• the number of shares which may be repurchased pursuant to this authority in any one financial year may not in aggregate, exceed 20% of the Company’s issued share capital as at the date of passing of this special resolution or 10% of the Company’s issued share capital in the case of an acquisition of shares in the Company by a subsidiary of the Company;

• the repurchase of shares may not be made at a price greater than 10% above the weighted average of the market value of the shares for the five business days immediately preceding the date on which the transaction is effected; and

• the Company’s designated advisor shall confirm the adequacy of the Company’s working capital for purposes of undertaking the repurchase of shares in writing to the JSE prior to entering the market to proceed with the repurchase.”


Reason for special resolution number 2The reason for this special resolution is to extend the general authority given to the directors of the Company or any subsidiary of the Company in terms of the Companies Act and the Listings Requirements of the JSE for the acquisition by the Company or its subsidiaries of the Company’s shares which authority shall be used at the directors’ discretion during the course of the period authorised.

The directors, after considering the effect of the maximum repurchase permitted, are of the opinion that for a period of twelve months after the date of the notice of this Annual General Meeting:

• the Company and the Group will be able to pay their debts in the ordinary course of business;

• the consolidated assets of the Company and the Group, fairly valued in accordance with International Financial Reporting Standards (IFRS) will be in excess of the liabilities of the Company and the Group. For this purpose the assets and liabilities should be recognised and measured in accordance with the accounting policies used in the latest audited group annual financial statements;

• the share capital and reserves of the Company and the Group will be adequate for the ordinary business purposes; and

• the working capital of the Company and the Group will be adequate for ordinary business purposes.

In accordance with the Listings Requirements of the JSE Limited, the directors record that:

Although there is no immediate intention to effect a repurchase of securities of the Company, the directors would utilise the general authority to repurchase securities as and when suitable opportunities present themselves, which opportunities may require expeditious and immediate action.

Special resolution number 3 – Financial assistance to a related or inter-related Company/corporation“Resolved that:

1. the Company be and is hereby authorised, in terms of a general authority contemplated in section 45(3)(a)(ii) of the Companies Act for a period of two years from the date of this resolution, to provide direct or indirect financial assistance (as defined in section 45(1) of the Companies Act) (”financial assistance”) to the following categories of persons (“categories of persons”):

(a) related or inter-related Company or corporation: and/or

(b) member of a related or inter-related corporation.

2. subject to, in relation to each grant of financial assistance to the categories of persons of such financial assistance, the board of directors of the Company being satisfied that:

(i) pursuant to section 45(3)(b)(i) of the Companies Act, immediately after providing the Financial Assistance, the Company would satisfy the solvency and liquidity test (as defined in section 4(1) of the Companies Act);


(ii) pursuant to section 45(3)(b)(ii) of the Companies Act, the terms under which the financial assistance is proposed to be given are fair and reasonable to the Company; and

(iii) any conditions or restrictions respecting the granting of the financial assistance set out in the Company’s Memorandum of Incorporation have been complied with.”

Percentage of voting rights required to pass this resolution: 75%Reason for special resolution number 3

Section 45 of the Companies Act regulates the provision of financial assistance by the Company to certain categories of persons. The term financial assistance has been defined in the Act in wide terms and includes lending money, guaranteeing a loan or obligation, and securing any debt or obligation but excludes lending money in the ordinary course of business by a Company whose primary business is the lending of money. The Companies Act stipulates that the board of directors of the Company may provide financial assistance as contemplated in section 45 of the Act to the categories of persons, provided that the shareholders of the Company passed a special resolution within the previous two years which approves such financial assistance generally for such categories of persons. This will allow the board of the Company, always subject to applicable law in particular the solvency and liquidity requirements as set out in the Act, to provide financial assistance to the said categories of persons.

Special resolution number 4 – Financial assistance to any person as envisaged in section 44 of the Companies Act“Resolved that:

• the Company be and is hereby authorised, in terms of a general authority contemplated in section 44(3)(a)(ii) of the Companies Act for a period of two years from the date of this resolution, to provide direct or indirect financial assistance by way of a loan, guarantee, the provision of security or otherwise as defined in section 44 of the Companies Act (“financial assistance”) to any person for the purposes or in connection with:

– the subscription of any option or any securities issued or to be issued by the Company or a related or inter-related Company; or

– the purchase of any securities of the Company or a related or inter-related Company;

• subject to the board of directors of the Company being satisfied that:

– pursuant to section 44(3)(b)(i) of the Companies Act, immediately after providing the financial assistance, the Company would satisfy the solvency and liquidity test (as defined in section 4(1) of the Companies Act);

– pursuant to section 44(3)(b)(ii) of the Companies Act, the terms under which the financial assistance is proposed to be given are fair and reasonable to the Company; and

– any conditions or restrictions respecting the granting of the financial assistance set out in the Company’s Memorandum of Incorporation have been complied with.”


Reason for special resolution number 4Section 44 of the Companies Act regulates the provision of financial assistance by the Company to any person by way of a loan, guarantee, the provision of security or otherwise for the purpose of or in connection with, (i) the subscription of any option, or any securities, issued or to be issued by the Company or related or inter-related Company, or (ii) for the purchase of any securities of the Company, or a related or inter-related Company.

This will allow the board of the Company, always subject to applicable law, in particular the solvency and liquidity requirements as set out in the Companies Act, to provide financial assistance to any person for the purposes envisaged in section 44(2) of the Companies Act.

Special resolution number 5 – Adoption of new Memorandum of Incorporation“Resolved, that, the existing Memorandum and Articles of Association of the Company be and are hereby amended and substituted in its entirety by the new Memorandum of Incorporation, a copy of which has been made available for inspection by Shareholders, with effect from the date of filing of the required notice of amendment with the Companies and Intellectual Property Commission.”


Reason for special resolution number 5The reason for special resolution 5 is to bring the Company’s constitutional documents in harmony with the provisions of the Companies Act. The effect of special resolution 5 is that the Company will have adopted the new Memorandum of Incorporation, which is in harmony with the provisions of the Companies Act.



Copies of the proposed new Memorandum of Incorporation will be available for inspection by any person who has a beneficial interest in any securities of the Company at the registered office of the Company – First floor 9 Frosterley Park, La Lucia Ridge Office Estate, Durban, 4019 and at PSG Capital, First Floor, Building 8, Inanda Greens Business Park, 54 Wierda Road West, Wierda Valley, Sandton, 2196, during normal office hours from the date of issue of this notice of annual general meeting up to and including the date of the annual general meeting or any adjourned meeting. In addition, shareholders can refer to Annexure 2 attached to and forming part of this notice of Annual General Meeting which sets out a copy of the proposed new Memorandum of Incorporation and this may also be downloaded from the Company’s website address at www.nholdings.co.za.

Special resolution number 6 – Conversion of the preference share capital“Resolved, that in accordance with the provisions of Regulation 31 of the Companies Act, the authorised share capital of the Company be and is hereby reorganised as follows:

• by the conversion of each of the existing authorised and par value preference shares of R0,0001 each into authorised preference shares of no par value, on the basis that each no par value preference share shall have the same value, rights and privileges which are the same as or equivalent to the rights and privileges which attached to such shares immediately prior to 11 May 2011, being the first date on which the Companies Act came into operation.”

Reason for special resolution number 6The reason is to convert the authorised preference share capital from par value preference shares into preference shares of no par value as required by the Companies Act.

The effect of special resolution 6 is that the authorised preference share capital of the Company shall be converted to preference shares of no par value.

Disclosure requirements in terms of the Listings RequirementsThe following additional information, some of which may appear elsewhere in the annual integrated report is provided in terms of the Listings Requirements for purposes of ordinary resolution number 11 and special resolution number 2:

Directors and management page 2Major shareholders page 57Directors interest in shares page 24Share capital of the Company page 46

Directors’ responsibility statementThe directors, whose names are given on page 2 of this Annual Integrated Report 2012, collectively and individually accept full responsibility for the accuracy of the information pertaining to the resolutions and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading and that all reasonable enquiries to ascertain such facts have been made and that the aforementioned resolutions contain all the information required by the JSE.

Material changeOther than the facts and developments reported on in this Annual Integrated Report 2012, there have been no material changes in the affairs, financial or trading position of the Company or its subsidiaries since the Company’s financial year-and the signature of this report.

Litigation statementThe directors are not aware of any legal or arbitration proceedings, including any proceedings that are pending or threatened of which the Company is aware which may have or have had in the recent past, being at least the previous twelve months from date of this Annual Integrated Report 2012, a material effect on the financial position of the Company and its subsidiaries.


THE SHARE CAPITAL CONVERSION• In terms of section 35 of the Companies Act, a company’s share capital shall not be allowed to have a nominal or par value, provided that

in terms of Item 6(2) of Schedule 5 to the Companies Act, any shares of a pre-existing company that have been issued with a nominal or par value, and are held by a shareholder before 11 May 2011, shall continue to exist as such subject to further regulations that may be issued.

• Accordingly, in order to bring Nutritional Holding’s share capital structure into harmony with the provisions of the Companies Act, the Company is required to convert the Company’s current authorised preference par value shares to preference shares of no par value for the sake of consistency.

• The value, rights and privileges attaching to the no par value preference shares in the Company will be the same as the value, rights and privileges which attached to the current par value preference shares, immediately prior to their conversion into par value preference shares.

• The board has prepared a report on the share capital conversion, as set out in Annexure 1, (below) which report will be submitted to the Companies and Intellectual Properties Commission and South African Revenue Service prior to the Annual General Meeting in accordance with regulation 31(7) of the Companies Regulations.

• Shareholders are referred to the table below illustrating the share capital of the Company subsequent to the conversion of the preference shares

• The share capital conversion requires shareholder approval by way of a special resolution in terms of section 36(2)(a)and section 16(1)(c) of the Act.

• Special resolution 6 in the notice of Annual General Meeting has been included for purposes of approval of the share capital conversion.

ANNEXURE 1“REPORT IN TERMS OF REGULATION 31(7) OF THE COMPANIES REGULATIONSIn accordance with Regulation 31(7), it is the opinion of the board of directors of Nutritional Holdings Limited (“Nutritional Holdings ” or “the Company”) that:

• The value of the shares in Nutritional Holdings held by preference shareholders, will be unaffected by the conversion of its preference par value share capital to preference shares of no par value (“the conversion”);

• The Company has no issued preference share capital;

• There will be no material effect on the rights of preference shareholders as a result of the conversion; and

• There will be no material adverse effects as a result of the conversion and no person will receive any compensation as a result of the conversion.”



ANNEXURE 2PROPOSED NEW MEMORANDUM OF INCORPORATIONRepublic of South Africa The Companies Act, No. 71 of 2008 (as amended)

MEMORANDUM OF INCORPORATION OF NUTRITIONAL HOLDINGS LIMITED A PUBLIC COMPANY Registration number: 2004/002282/06

TABLE OF CONTENTS1 INTERPRETATION

2 JURISTIC PERSONALITY

3 LIMITATION OF LIABILITY

4 POWERS OF THE COMPANY

5 RESTRICTIVE CONDITIONS

6 ISSUE OF SHARES AND VARIATION OF RIGHTS

7 CERTIFICATED AND UNCERTIFICATED SECURITIES

8 SECURITIES REGISTER

9 TRANSFER OF SECURITIES

10 NO LIEN

11 TRANSMISSION OF SECURITIES

12 SHARE WARRANTS

13 DEBT INSTRUMENTS

14 CAPITALISATION SHARES

15 BENEFICIAL INTERESTS IN SECURITIES

16 FINANCIAL ASSISTANCE

17 ACQUISITION BY THE COMPANY OF ITS OWN SHARES

18 ODD-LOT OFFERS

19 RECORD DATE FOR EXERCISE OF SHAREHOLDER RIGHTS

20 SHAREHOLDERS’ MEETINGS

21 SHAREHOLDERS’ MEETINGS BY ELECTRONIC COMMUNICATION

22 VOTES OF SHAREHOLDERS

23 PROXIES AND REPRESENTATIVES

24 SHAREHOLDERS’ RESOLUTIONS

25 SHAREHOLDERS ACTING OTHER THAN AT A MEETING

26 COMPOSITION AND POWERS OF THE BOARD OF DIRECTORS

27 DIRECTORS’ MEETINGS

28 DIRECTORS’ COMPENSATION AND FINANCIAL ASSISTANCE

29 EXECUTIVE DIRECTORS

30 INDEMNIFICATION OF DIRECTORS

31 BORROWING POWERS

32 COMMITTEES OF THE BOARD

33 ANNUAL FINANCIAL STATEMENTS

34 COMPANY SECRETARY

35 AUTHENTICATION OF DOCUMENTS

36 DISTRIBUTIONS

37 RESERVES

38 ACCESS TO COMPANY RECORDS

39 PAYMENT OF COMMISSION

40 NOTICES

41 WINDING-UP

42 PRE-ACQUISITION PROFITS

43 AMENDMENT OF MEMORANDUM OF INCORPORATION

44 COMPANY RULES


SCHEDULES

1 CLASSES OF SHARES INTERPRETATION

1.1 In this Memorandum of Incorporation, unless the context clearly indicates a contrary intention, the following words and expressions bear the meanings assigned to them and cognate expressions bear corresponding meanings –

1.1.1 “Act” means the Companies Act, No. 71 of 2008, as amended, consolidated or re-enacted from time to time, and includes all schedules to such Act;

1.1.2 “Board” or “Directors” means the board of Directors from time to time of the Company;

1.1.3 “Certificated Securities” means Securities issued by the Company that are not Uncertificated Securities;

1.1.4 “Central Securities Depositary” has the meaning set out in section 1 of the Securities Services Act;

1.1.5 “Commission” means the Companies and Intellectual Property Commission established by section 185;

1.1.6 “Companies Tribunal” means the Companies Tribunal established by section 193;

1.1.7 “Company” means the company named on the first page of this document, duly incorporated under the registration number endorsed thereon;

1.1.8 “Director” means a member of the Board as contemplated in section 66, or an alternate director, and includes any person occupying the position of a director or alternate director, by whatever name designated;

1.1.9 “Electronic Communication” has the meaning set out in section 1 of the Electronic Communications and Transactions Act, No 25 of 2002;

1.1.10 “IFRS” means the International Financial Reporting Standards, as adopted from time to time by the Board of the International Accounting Standards Committee, or its successor body, and approved for use in South Africa from time to time by the Financial Reporting Standards Council established in terms of section 203;

1.1.11 “JSE” means the exchange, licensed under the Security Services Act, operated by JSE Limited (Registration number 2005/022939/06), a public company duly incorporated in South Africa;

1.1.12 “JSE Listings Requirements” means the Listings Requirements of the JSE applicable from time to time;

1.1.13 “Participant” has the meaning set out in section 1 of the Securities Services Act;

1.1.14 “Prescribed Officer” has the meaning attributable thereto in section 1;

1.1.15 “Regulations” means the regulations published in terms of the Act from time to time;

1.1.16 “Securities” means -

1.1.16.1 any shares, notes, bonds, debentures or other instruments, irrespective of their form or title, issued, or authorised to be issued, by the Company; or

1.1.16.2 anything falling within the meaning of “securities” as set out in section 1 of the Securities Services Act;

1.1.17 “Securities Register” means the register of issued Securities of the Company required to be established in terms of sections 50(1) and referred to in clause 8 hereof;

1.1.18 “Securities Services Act” means the Securities Services Act, No 36 of 2004, including any amendment, consolidation or re-enactment thereof;

1.1.19 “SENS” means the Securities Exchange News Service established and operated by the Listings Division of the JSE;

1.1.20 “Share” means one of the units into which the proprietary interest in the Company is divided;

1.1.21 “Shareholder” means the holder of a Share who is entered as such in the Securities Register, subject to the provisions of section 57;

1.1.22 “Solvency and Liquidity Test” has the meaning attributed thereto in section 4;

1.1.23 “South Africa” means the Republic of South Africa;

1.1.24 “Sub-register” means the record of Uncertificated Securities administered and maintained by a Participant, which forms part of the Securities Register in terms of the Act;

1.1.25 “Uncertificated Securities” means any “securities” defined as such in section 29 of the Securities Services Act; and

1.1.26 “Uncertificated Securities Register” means the record of uncertificated securities administered and maintained by a Participant or Central Securities Depositary, as determined in accordance with the rules of the Central Securities Depositary, and which forms part of the Securities Register.

1.2 In this Memorandum of Incorporation, unless the context clearly indicates otherwise:

1.2.1 words and expressions defined in the Act and which are not defined herein shall have the meanings given to them in the Act;

1.2.2 a reference to the Act shall include reference to the Regulations;

1.2.3 a reference to a section by number refers to the corresponding section of the Act;

1.2.4 a reference to a clause by number refers to a corresponding provision of this Memorandum of Incorporation;

1.2.5 in any instance where there is a conflict between a provision (be it expressed, implied or tacit) of this Memorandum of Incorporation and

1.2.5.1 a provision of any agreement entered into between Shareholders as contemplated in section 15(7), the provision of this Memorandum of Incorporation shall prevail to the extent of the conflict;

1.2.5.2 an alterable provision of the Act, the provision of this Memorandum of Incorporation shall prevail to the extent of the conflict; and



1.2.5.3 an unalterable provision of the Act, subject to the provisions of clause 1.2.5.4, the unalterable provision of the Act shall prevail to the extent of the conflict unless the Memorandum of Incorporation imposes on the Company a higher standard, greater restriction, longer period of time or similarly more onerous requirement, in which event the relevant provision of this Memorandum of Incorporation shall prevail to the extent of the conflict;

1.2.5.4 an unalterable provision of the Act amended after the date of adoption of this Memorandum of Incorporation or any amendment of the relevant provision of this Memorandum of Incorporation, the amended unalterable provision of the Act shall prevail to the extent of the conflict;

1.2.5.5 an exemption granted by the Companies Tribunal to the Company in terms of section 6(2) from any prohibition or requirement established by or in terms of an unalterable provision of the Act, the exemption shall prevail to the extent of the conflict;

1.2.6 clause headings are for convenience only and are not to be used in its interpretation;

1.2.7 an expression which denotes:

1.2.7.1 any gender includes the other genders;

1.2.7.2 a natural person includes a juristic person and vice versa; and

1.2.7.3 the singular includes the plural and vice versa;

1.2.8 if the due date for performance of any obligation in terms of this Memorandum of Incorporation is a day which is not a business day then (unless otherwise stipulated), the due date for performance of the relevant obligation shall be the immediately succeeding business day;

1.2.9 any words or expressions defined in any clause shall, unless the application of any such word or expression is specifically limited to that clause, bear the meaning assigned to such word or expression throughout the whole of this Memorandum of Incorporation;

1.2.10 any reference to a notice shall be construed as a reference to a written notice, and shall include a notice which is transmitted electronically in a manner and form permitted in terms of the Act and/or the Regulations.

1.3 Any reference in this Memorandum of Incorporation to:

1.3.1 “days” shall be construed as calendar days unless qualified by the word “business”, in which instance a “business day” will be any day other than a Saturday, Sunday or public holiday as gazetted by the government of South Africa from time to time;

1.3.2 “law” means any law of general application, as amended and re-enacted from time to time, and includes the common law and any statute, constitution, decree, treaty, regulation, directive, ordinance, by-law, order or any other enactment of legislative measure of government (including local and provincial government) statutory or regulatory body which has the force of law; and

1.3.3 “writing” means legible writing and includes printing, typewriting, lithography or any other mechanical process, as well as any electronic communication in a manner and a form permitted in terms of the Act and/or the Regulations.

1.4 The words “include” and “including” mean “include without limitation” and “including without limitation”. The use of the words “include” and “including” followed by a specific example or examples shall not be construed as limiting the meaning of the general wording preceding it.

1.5 Unless otherwise provided, defined terms appearing in this Memorandum of Incorporation in title case shall be given their meaning as defined, while the same terms appearing in lower case shall be interpreted in accordance with their plain English meaning.

1.6 Unless specifically otherwise provided, any number of days prescribed shall be determined by excluding the first and including the last day or, where the last day falls on a day that is not a business day, the next succeeding business day.

1.7 Where figures are referred to in numerals and in words, and there is any conflict between the two, the words shall prevail, unless the context indicates a contrary intention.

1.8 Any reference herein to “this Memorandum of Incorporation” shall be construed as a reference to this Memorandum of Incorporation as amended from time to time.

2 JURISTIC PERSONALITY

2.1 The Company is a pre-existing company as defined in the Act and, as such, continues to exist as a public company as if it had been incorporated and registered in terms of the Act, as contemplated in item 2 of the Fifth Schedule to the Act, and this Memorandum of Incorporation replaces and supersedes the Memorandum and Articles of Association of the Company applicable immediately prior to the filing hereof.

2.2 The Company is incorporated in accordance with and governed by –

2.2.1 the unalterable provisions of the Act, save to the extent that this Memorandum of Incorporation does not impose on the Company a higher standard, greater restriction, longer period of time or similarly more onerous requirement;

2.2.2 the alterable provisions of the Act, subject to the limitations, extensions, variations or substitutions set out in this Memorandum of Incorporation; and

2.2.3 the other provisions of this Memorandum of Incorporation.

3 LIMITATION OF LIABILITY

No person shall, solely by reason of being an incorporator, Shareholder or Director of the Company, be liable for any liabilities or obligations of the Company.

4 POWERS OF THE COMPANY

4.1 The Company has all of the legal powers and capacity contemplated in the Act, and no provision contained in this Memorandum of Incorporation should be interpreted or construed as negating, limiting, or restricting those powers in any way whatsoever.

4.2 The legal powers and capacity of the Company are not subject to any restrictions, limitations or qualifications, as contemplated in section 19(1)(b)(ii).


5 RESTRICTIVE CONDITIONS This Memorandum of Incorporation does not contain any restrictive conditions applicable to the Company as contemplated in section 15(2)(b) or (c).

6 ISSUE OF SHARES AND VARIATION OF RIGHTS 6.1 The Company is authorised to issue:

6.1.1 such number of ordinary Shares, of the same class, as set out in Schedule 1 hereto, each of which ranks pari passu in respect of all rights and entitles the holder to

6.1.1.1 vote at any annual general meeting or general meeting, or as contemplated in clause 25, in person or by proxy, on any matter to be decided by the Shareholders of the Company and to 1 (one) vote in respect of each ordinary Share in the case of a vote by means of a poll;

6.1.1.2 participate proportionally in any distribution made by the Company; and

6.1.1.3 share proportionally in the Company’s residual value on its dissolution;

6.1.2 such number of each of such further classes of Shares, if any, as are set out in Schedule 1 hereto subject to the preferences, rights, limitations and other terms associated with each such class set out therein.

6.2 The Company may from time to time by special resolution as contemplated in clause 6.3 below:

6.2.1 increase or decrease the number of authorised Shares of any class of the Company’s Shares;

6.2.2 consolidate and reduce the number of the Company’s issued and authorised Shares of any class;

6.2.3 subdivide its Shares of any class by increasing the number of its issued and authorised Shares of that class without an increase of its capital;

6.2.4 cancel Shares not taken up by anyone or undertaken to be taken up;

6.2.5 reclassify any classified Shares that have been authorised but not issued;

6.2.6 classify any unclassified Shares that have been authorised but not issued; or

6.2.7 determine the preferences, rights, limitations or other terms of any Shares, and such powers shall only be capable of being exercised by the Shareholders by way of a special resolution of the Shareholders

6.3 The creation, authorisation and classification of Shares, the subdivision or consolidation of Shares, amendments to the numbers of authorised Shares of each class, the conversion of one class of Shares into one or more other classes of Shares, the conversion of Shares from par value to no par value and variations to the preferences, rights, limitations and other terms associated with any class of Shares as set out in this Memorandum of Incorporation may be changed only by an amendment of this Memorandum of Incorporation by special resolution and in accordance with the JSE Listings Requirements.

6.4 All allocation of Shares will be rounded up or down based on standard rounding convention resulting in allocations of whole securities and no fractional entitlements.

6.5 Each Share issued by the Company has associated with it an irrevocable right of the Shareholder to vote on any proposal to amend the preferences, rights, limitations and other terms associated with that Share as contemplated in clause 22.2. If any amendment to this Memorandum of Incorporation relates to the variation of any preferences, rights, limitation and other terms associated with any class of Shares already in issue, such amendments shall not be implemented without a special resolution adopted by the holders of Shares of that class at a separate meeting. The holders of Shares of that class will, subject to the further provisions of clause 22.2, also be entitled to vote at the meeting of ordinary Shareholders where the amendment is tabled for approval.

6.6 No further securities ranking in priority to, or pari passu with, existing preference shares, of any class, shall be created without a special resolution passed at a separate general meeting of such preference shareholders.

6.7 No Shares may be authorised in respect of which the preferences, rights, limitations or any other terms of any class of Shares may be varied in response to any objectively ascertainable external fact or facts as provided for in sections 37(6) and 37(7).

6.8 The Board may, subject to clause 6.12 and the further provisions of this clause 6.8, resolve to issue Shares of the Company at any time, but only – 6.8.1 within the classes and to the extent that those Shares have been authorised by or in terms of this Memorandum of Incorporation; and 6.8.2 only to the extent that such issue has been approved by the Shareholders in general meeting, either by way of a general authority (which

may be either conditional or unconditional) to issue Shares in its discretion or a specific authority in respect of any particular issue of Shares, provided that, if such approval is in the form of a general authority to the Directors, it shall be valid only until the next annual general meeting of the Company and it may be varied or revoked by any general meeting of the Shareholders prior to such annual general meeting.

6.9 All issues of Shares for cash and all issues of options and convertible securities granted or issued for cash must, in addition, be in accordance with the JSE Listings Requirements.

6.10 All Securities of the Company for which a listing is sought on the JSE and all Securities of the same class as Securities of the Company which are listed on the JSE must, notwithstanding the provisions of section 40(5) but unless otherwise required by the Act, only be issued after the Company has received the consideration approved by the Board for the issuance of such Securities.

6.11 Subject to what may be authorised by the Act, the JSE Listings Requirements and at meetings of Shareholders in accordance with clause 6.13, and subject to clause 6.12, the Board may only issue unissued Shares if such Shares have first been offered to existing ordinary Shareholders in proportion to their shareholding on such terms and in accordance with such procedures as the Board may determine, unless such Shares are issued for the acquisition of assets by the Company.

6.12 Notwithstanding the provisions of clause 6.11, the Shareholders may at a general meeting authorise the Directors to issue Shares of the Company at any time and/or grant options to subscribe for Shares as the Directors in their discretion think fit, provided that such transaction(s) has/have been approved by the JSE and comply with the JSE Listings Requirements.



6.13 Notwithstanding the provisions of clauses 6.2, 6.11 and 6.12, any issue of Shares, Securities convertible into Shares, or rights exercisable for Shares in a transaction, or a series of integrated transactions shall, in accordance with the provisions of section 41(3), require the approval of the Shareholders by special resolution if the voting power of the class of Shares that are issued or are issuable as a result of the transaction or series of integrated transactions will be equal to or exceed 30% (thirty percent) of the voting power of all the Shares of that class held by Shareholders immediately before that transaction or series of integrated transactions.

6.14 Except to the extent that any such right is specifically included as one of the rights, preferences or other terms upon which any class of Shares is issued or as may otherwise be provided in this Memorandum of Incorporation, no Shareholder shall have any pre-emptive or other similar preferential right to be offered or to subscribe for any additional Shares issued by the Company.

7 CERTIFICATED AND UNCERTIFICATED SECURITIES 7.1 Securities of the Company are to be issued in certificated or uncertificated form, as shall be determined by the Board from time to time. Except to the

extent otherwise provided in the Act, the rights and obligations of Security holders shall not be different solely on the basis of their Securities being Certificated Securities or Uncertificated Securities and each provision of this Memorandum of Incorporation applies with respect to any Uncertificated Securities in the same manner as it applies to Certificated Securities, unless otherwise stated or indicated by the context.

7.2 Any Certificated Securities may cease to be evidenced by certificates and thereafter become Uncertificated Securities. 7.3 Any Uncertificated Securities may be withdrawn from the Uncertificated Securities Register, and certificates issued evidencing those Securities at the

election of the holder of those Uncertificated Securities. A holder of Uncertificated Securities who elects to withdraw all or part of the Uncertificated Securities held by it in an Uncertificated Securities Register, and obtain a certificate in respect of those withdrawn Securities, may so notify the relevant Participant or Central Securities Depository as required by the rules of the Central Securities Depository.

7.4 After receiving notice from a Participant or Central Securities Depository, as the case may be, that the holder of Uncertificated Securities wishes to withdraw all or part of the Uncertificated Securities held by it in an Uncertificated Securities Register, and obtain a certificate in respect thereof, the Company shall, in accordance with the provisions of the Act –

7.4.1 enter the relevant Security holder’s name and details of its holding of Securities in the Securities Register and indicate on the Securities Register that the securities so withdrawn are no longer held in uncertificated form; and

7.4.2 within the time periods specified in the Act, prepare and deliver to the relevant person a certificate in respect of the Securities and notify the Central Securities Depository that the Securities are no longer held in uncertificated form.

7.5 The Company may charge a holder of its Securities a reasonable fee to cover the actual cost of issuing any certificate as contemplated in this clause.8 SECURITIES REGISTER 8.1 The Company must establish or cause to be established a Securities Register in the form prescribed by the Act and the Regulations and maintain the

Securities Register in accordance with the prescribed standards. 8.2 As soon as practicable after issuing any Securities the Company must enter or cause to be entered in the Securities Register, in respect of every class of

Securities it has issued: 8.2.1 the total number of Uncertificated Securities; 8.2.2 with respect to Certificated Securities – 8.2.2.1 the names and addresses of the persons to whom the Certificated Securities were issued; 8.2.2.2 the number of Certificated Securities issued to each of them; 8.2.2.3 in the case of Securities other than Shares as contemplated in section 43, the number of those Securities issued and outstanding

and the names and addresses of the registered holders of the Securities and any holders of beneficial interests therein; and 8.2.2.4 any other prescribed information. 8.3 If the Company has issued Uncertificated Securities, or has issued Securities that have ceased to be Certificated Securities as contemplated in clause 7.2,

a record must be administered and maintained by a Participant or Central Securities Depository, in the prescribed form, as the Uncertificated Securities Register, which:

8.3.1 forms part of the Securities Register; and 8.3.2 must contain, with respect to all Uncertificated Securities contemplated in this clause 8, any details referred to in clause 8.2.2, read with the

changes required by the context or as determined by the rules of the Central Securities Depository. 8.4 The Securities Register or Uncertificated Securities Register maintained in accordance with the Act shall be sufficient proof of the facts recorded in it, in

the absence of evidence to the contrary. 8.5 Unless all the Shares rank equally for all purposes, the Shares, or each class of Shares, and any other Securities, must be distinguished by an appropriate

numbering system. 8.6 A certificate evidencing any Certificated Securities of the Company – 8.6.1 must state on its face: 8.6.1.1 the name of the Company; 8.6.1.2 the name of the person to whom the Securities were issued; and 8.6.1.3 the number and class of Shares and designation of the series, if any, evidenced by that certificate; 8.6.2 must be signed by 2 (two) persons authorised by the Board, which signatures may be affixed or placed on the certificate by autographic,

mechanical or electronic means; and

8.6.3 is proof that the named Security holder owns the Securities, in the absence of evidence to the contrary.

8.7 A certificate remains valid despite the subsequent departure from office of any person who signed it.


8.8 If, as contemplated in clause 8.5, all of the Shares rank equally for all purposes, and are therefore not distinguished by a numbering system:

8.8.1.1 each certificate issued in respect of those Shares must be distinguished by a numbering system; and

8.8.1.2 if the Share has been transferred, the certificate must be endorsed with a reference number or similar device that will enable each preceding holder of the Share in succession to be identified, provided that in terms of Schedule 5 of the Act, if the Company is a pre-existing company (as defined in the Act), the failure of any Share certificate to satisfy the provisions of clauses 8.6 to 8.8 is not a contravention of the Act and does not invalidate that certificate.

8.9 If a Share certificate is defaced, lost or destroyed, it may be replaced -

8.9.1 free of charge by the Company; and

8.9.2 in case of defacement, on delivery of the old certificate to the Company.

8.10 The Directors may, as they deem fit, determine such terms (if any) as to evidence and indemnity and payment of the out of pocket expenses of the Company of investigating such evidence and, in the case of loss or destruction, of advertising the same.

9 TRANSFER OF SECURITIES

9.1 The instrument of transfer of any Certificated Securities which are not listed on the JSE shall be signed by both the transferor and the transferee and the transferor shall be deemed to remain the holder of such Certificated Securities until the name of the transferee is entered in the Securities Register. The Directors may, however, in their discretion in such cases as they deem fit, dispense with requiring the signature of the transferee on the instrument of transfer.

9.2 Subject to such restrictions as may be applicable, (whether by virtue of the preferences, rights, limitations or other terms associated with the Securities in question), any Shareholder or holder of other Securities may transfer all or any of its Certificated Securities by instrument in writing in any usual or common form or any other form which the Directors may approve.

9.3 Every instrument of transfer shall be delivered to the principal place of business of the Company, accompanied by –

9.3.1 the certificate issued in respect of the Certificated Securities to be transferred; and/or

9.3.2 such other evidence as the Company may require to prove the title of the transferor, or his or her right to transfer the Certificated Securities.

9.4 All authorities to sign transfer deeds or other instruments of transfer granted by holders of Securities for the purpose of transferring Certificated Securities which may be lodged, produced or exhibited with or to the Company at its registered office or at its transfer office shall, as between the Company and the grantor of such authorities, be taken and deemed to continue and remain in full force and effect, and the Company may allow the same to be acted upon until such time as express notice in writing of the revocation of the same shall have been given and lodged at the Company’s registered office or transfer office at which the authority was first lodged, produced or exhibited. Even after the giving and lodging of such notice, the Company shall be entitled to give effect to any instruments signed under the authority to sign and certified by any officer of the Company as being in order before the giving and lodging of such notice. [LR10.2(b)]

9.5 All instruments of transfer, when registered, shall either be retained by the Company or disposed of in such manner as the Directors shall from time to time decide.

9.6 The transfer of Uncertificated Securities may be effected only –

9.6.1 by a Participant or Central Securities Depository;

9.6.2 on receipt of an instruction to transfer sent and properly authenticated in terms of the rules of a Central Securities Depository or an order of a Court; and

9.6.3 in accordance with section 53 and the rules of the Central Securities Depository.

9.7 Transfer of ownership in any Uncertificated Securities must be effected by debiting the account in the Uncertificated Securities Register from which the transfer is effected and crediting the account in the Uncertificated Securities Register to which the transfer is effected, in accordance with the rules of the Central Securities Depository.

9.8 Securities transfer tax and other legal costs payable in respect of any transfer of Securities pursuant to this Memorandum of Incorporation will be paid by the Company to the extent that the Company is liable therefor in law, but shall, to that extent, be recoverable from the person acquiring such Securities.

9.9 The Securities Register (or any part thereof relating to holders of any class of Shares) may, in the discretion of the Directors upon notice being given by advertisement in the Government Gazette of South Africa and a newspaper circulating in the district in which the registered office of the Company is situated be closed during such time as the Directors may think fit, not exceeding in the aggregate 60 (sixty) days in any year.

10 NO LIEN

It is recorded for the avoidance of doubt that fully paid Securities shall not be subject to any lien in favour of the Company and shall be freely transferable.

11 TRANSMISSION OF SECURITIES

11.1 The executor of the estate of a deceased sole holder of a Security shall be the only person recognised by the Company as having any title to such Security. In the case of a Security registered in the names of 2 (two) or more holders, the survivor or survivors, or the executor of the estate of any deceased Shareholder, as determined by the Board, shall be the only person recognised by the Company as having any title to the Security. Any person who submits proof of his appointment as the executor, administrator, trustee, curator, or guardian in respect of the estate of a deceased Shareholder or holder of other Securities (“Security Holder”) of the Company, or of a Security Holder whose estate has been sequestrated or of a Security Holder who is otherwise under a disability or as the liquidator of any body corporate which is a Security Holder of the Company, shall be entered in the Securities Register nomine officii, and shall thereafter, for all purposes, be deemed to be a Securities Holder.



11.2 Subject to the provisions of clause 11.1, any person becoming entitled to any Security by virtue of the death of a Security Holder shall, upon producing such evidence that he has such title or rights as the Directors think sufficient, have the right either to have such Security transferred to himself or to make such other transfer of the Security as such Security Holder could have made, provided that in respect of a transfer other than to himself –

11.2.1 the Directors shall have the same right to refuse or suspend registration as they would have had in the case of a proposed transfer of such Security by such Security Holder before his death; and

11.2.2 a person becoming entitled to any Security shall not, unless and until he is himself registered as a Security Holder in respect of such Security, be entitled to exercise any voting or other right attaching to such Security or any other right relating to meetings of the Company.

12 SHARE WARRANTS 12.1 Subject to the provisions of the Act and any other provisions of this Memorandum of Incorporation, the Company may issue Share warrants.

12.2 For the purpose referred to in clause 12.1, the Directors may

12.2.1 issue warrants in respect of fully paid up Shares, stating that the bearer is entitled to the Shares therein specified;

12.2.2 provide for the payment, by coupons or otherwise, of future dividends on the Shares included in such warrants.

12.3 The Directors may determine and from time to time vary

12.3.1 the form, language and conditions upon which the warrants shall be issued;

12.3.2 the conditions upon which

12.3.2.1 the bearer of a warrant shall be entitled to attend and vote at general meetings;

12.3.2.2 a warrant may be surrendered;

12.3.2.3 the name of the holder may be entered in the Securities Register in respect of the Shares specified therein.

12.4 Subject to the provisions of the Memorandum of Incorporation, the bearer of a warrant shall be a full Shareholder of the Company.

12.5 The holder of a warrant shall be subject to the provisions from time to time in force relating thereto, whether made before or after the issue of such warrant.

12.6 The Directors may, on such terms and conditions as they think fit, authorise the issue of a new warrant or coupon in substitution for one proved to their satisfaction to have been destroyed, but not otherwise.

13 DEBT INSTRUMENTS The Board may authorise the Company to issue secured or unsecured debt instruments as set out in section 43(2), but no special privileges associated with

any such debt instruments as contemplated in section 43(3) may be granted, and the authority of the Board in such regard is limited by this Memorandum of Incorporation.

14 CAPITALISATION SHARES 14.1 Subject to the provisions of clauses 6.11 and 6.12 and compliance with the section 47 of the Act and the JSE Listings Requirements, to the extent

applicable, the Board shall have the power and authority to –

14.1.1 approve the issuing of any authorised Shares as capitalisation Shares;

14.1.2 to issue Shares of one class as capitalisation Shares in respect of Shares of another class; and/or

14.1.3 subject to the provisions of clause 14.2, to resolve to permit Shareholders to elect to receive a cash payment in lieu of a capitalisation Share.

14.2 The Board may not resolve to offer a cash payment in lieu of awarding a capitalisation share, as contemplated in clause 14.1.3, unless the Board –

14.2.1 has considered the Solvency and Liquidity Test as required by section 46, on the assumption that every such Shareholder would elect to receive cash; and

14.2.2 is satisfied that the Company would satisfy the Solvency and Liquidity Test immediately upon the completion of the distribution.

15 BENEFICIAL INTERESTS IN SECURITIES The authority of the Company’s board of directors to allow the Company’s issued securities to be held by and registered in the name of one person for the

beneficial interest of another person, as set out in section 56(1) is not limited or restricted by this Memorandum of Incorporation..

16 FINANCIAL ASSISTANCE Subject to compliance with the further requirements of the Act, the Board may authorise the Company to provide financial assistance by way of loan, guarantee,

the provision of security or otherwise to any person for the purpose of, or in connection with, the subscription of any option, or any Securities, issued or to be issued by the Company or a related or inter-related company, or for the purchase of any such Securities, as set out in section 44, and the authority of the Board in this regard is not limited or restricted by this Memorandum of Incorporation.

17 ACQUISITION BY THE COMPANY OF ITS OWN SHARES 17.1 Subject to the JSE Listings Requirements, the provisions of the Act and the further provisions of this clause 17 –

17.1.1 the Board may determine that the Company acquire a number of its own Shares; and

17.1.2 the board of any subsidiary of the Company may determine that such subsidiary acquire Shares of the Company, but –

17.1.2.1 not more than 10% (ten percent), in aggregate, of the number of issued Shares of any class may be held by, or for the benefit of, all of the subsidiaries of the Company, taken together; and

17.1.2.2 no voting rights attached to those Shares may be exercised while the Shares are held by that subsidiary and it remains a subsidiary of the Company.


17.2 Any decision by the Company to acquire its own Shares must satisfy the JSE Listings Requirements and the requirements of the Act and, accordingly, for as long as it is required in terms of the JSE Listings Requirements, the acquisition shall be approved by a special resolution of the Shareholders, whether in respect of a particular repurchase or generally approved by Shareholders and such acquisition shall otherwise comply with sections 5.67 to 5.69 of the JSE Listings Requirements (or such other sections as may be applicable from time to time), provided that no such approval of Shareholders shall be required in respect of a pro rata acquisition by the Company from all its Shareholders;

18 ODD-LOT OFFERS 18.1 If, upon implementation of any odd-lot offer made by the Company in accordance with the restrictions and procedures imposed by the JSE Listings

Requirements, subject to the majority shareholders approving same at a general meeting and the approval thereof by the JSE, there are holders of Shares holding in aggregate less than 100 (one hundred) Shares, or such other number of shares as determined by the JSE as amounting to an odd-lot (“odd-lots”) in the Company (“odd-lot holders”), then the Company shall, save in respect of odd-lot holders who have elected to retain their odd-lots or to increase their odd-lots to holdings of 100 (one hundred) Shares or such other number of Shares as determined by the JSE as amounting to an odd-lot, in the Company -

18.1.1 cause the odd-lots to be sold in such manner as the Directors may direct; and

18.1.2 procure that the proceeds of such sales are paid to such odd-lot holders.

18.2 All unclaimed proceeds (of such sales) will be held in the Company’s trust account for a period of 3 (three) years from the date on which the Directors caused the odd-lots to be sold until claimed, whereafter any such unclaimed proceeds held in trust after the expiry of the 3 (three) year period be declared forfeited by the Directors for the benefit of the Company and may be invested or applied otherwise as deemed fit by the Directors..

19 RECORD DATE FOR EXERCISE OF SHAREHOLDER RIGHTS The record date for the purpose of determining which Shareholders are entitled to:

19.1 receive notice of a Shareholders’ meeting;

19.2 participate in and vote at a Shareholders’ meeting;

19.3 decide any matter by written consent or by Electronic Communication;

19.4 receive a distribution;

19.5 be allotted or exercise other rights; or

19.6 participate in any other transaction, shall be determined by the Board, provided that, for as long as the JSE Listings Requirements apply to the Company and prescribe a record date, such record date shall be the record date so prescribed by the JSE Listings Requirements.

20 SHAREHOLDERS’ MEETINGS 20.1 Calling of Shareholders’ meetings

20.1.1 The Board, or any Prescribed Officer of the Company authorised by the Board, is entitled to call a Shareholders’ meeting at any time.

20.1.2 Subject to the provisions of section 60 dealing with the passing of resolutions of Shareholders otherwise than at a meeting of Shareholders, the Company shall hold a Shareholders’ meeting –

20.1.2.1 at any time that the Board is required by the Act, the JSE Listings Requirements or this Memorandum of Incorporation to refer a matter to Shareholders for decision; or

20.1.2.2 whenever required in terms of the Act to fill a vacancy on the Board; or

20.1.2.3 when required in terms of clause 20.1.3 or by any other provision of this Memorandum of Incorporation.

20.1.3 The Board shall call a meeting of Shareholders if 1 (one) or more written and signed demands by Shareholders calling for such a meeting are delivered to the Company and –

20.1.3.1 each such demand describes the specific purpose for which the meeting is proposed; and

20.1.3.2 in aggregate, demands for substantially the same purpose are made and signed by the holders, as of the earliest time specified in any of those demands, of at least 10% (ten percent) of the voting rights entitled to be exercised in relation to the matter proposed to be considered at the meeting.

20.2 Annual general meetings

20.2.1 In addition to other meetings of the Company that may be convened from time to time, the Company shall convene an annual general meeting of its Shareholders once in each calendar year, but no more than 15 (fifteen) months after the date of the previous annual general meeting.

20.2.2 The Company shall deliver notices of meetings to each Shareholder entitled to vote at such meeting who has elected to receive such documents.

20.2.3 Subject to the provisions of the JSE Listings Requirements, and for as long as required in terms of the provisions of the Act, any such annual general meeting:

20.2.3.1 shall be capable of being held by Electronic Communication in accordance with the further provisions of this Memorandum of Incorporation; and

20.2.3.2 shall not be capable of being held in accordance with the provisions of clause 25.

20.2.4 Each annual general meeting of the Company contemplated in clause 20.1.3.2 shall provide for at least the following business to be transacted:

20.2.4.1 the presentation of the directors’ report, audited financial statements for the immediately preceding financial year of the Company and an audit committee report;



20.2.4.2 the election of Directors, to the extent required by the Act and by clause 26.3.2 of this Memorandum of Incorporation;

20.2.4.3 the appointment of an auditor and an audit committee for the following financial year;

20.2.4.4 the sanctioning or declaration of dividends; and

20.2.4.5 any matters raised by the Shareholders, with or without advance notice to the Company.

20.2.5 Save as otherwise provided herein, the Company is not required to hold any other Shareholders’ meetings other than those specifically required by the Act and the JSE Listings Requirements.

20.3 Location of and notices of meetings

20.3.1 The Board may determine the location of any Shareholders’ meeting, and the Company may hold any such meeting in South Africa or in any foreign country, and the authority of the Board and the Company in this regard is not limited or restricted by this Memorandum of Incorporation.

20.3.2 Every Shareholder’s meeting shall be reasonably accessible within South Africa for electronic participation by Shareholders, irrespective of whether the meeting is held in South Africa or elsewhere.

20.3.3 All meetings (whether called for the passing of special or ordinary resolutions) shall be called on not less than 15 (fifteen) business days’ notice.

20.4 Quorum and adjournment of meetings

20.4.1 The quorum for a Shareholders’ meeting to begin or for a matter to be considered, shall be at least 3 (three) Shareholders entitled to attend and vote and present at the meeting. In addition:

20.4.1.1 a Shareholders’ meeting may not begin until sufficient persons are present at the meeting to exercise, in aggregate, at least 25% (twenty five percent) of the voting rights that are entitled to be exercised in respect of at least one matter to be decided at the meeting; and

20.4.1.2 a matter to be decided at a Shareholders’ meeting may not begin to be considered unless sufficient persons are present at the meeting to exercise, in aggregate, at least 25% (twenty five percent) of all of the voting rights that are entitled to be exercised in respect of that matter at the time the matter is called on the agenda.

20.4.2 The time periods specified in sections 64(4) and (5) apply to the Company without variation and, accordingly, if within 1 (one) hour after the appointed time for a meeting to begin, the requirements of clause 20.4:

20.4.2.1 for that meeting to begin have not been satisfied, the meeting shall be postponed, without any motion, vote or further notice, for 1 (one) week;

20.4.2.2 for consideration of a particular matter to begin have not been satisfied:

20.4.2.2.1 if there is other business on the agenda of the meeting, consideration of that matter may be postponed to a later time in the meeting without any motion or vote; or

20.4.2.2.2 if there is no other business on the agenda of the meeting, the meeting shall be adjourned, without any motion or vote, for 1 (one) week, provided that the person intended to chair a meeting that cannot begin due to the operation of clause 20.4 may extend the 1 (one) hour limit allowed in clause 20.4.2 for a reasonable period on the grounds that:

20.4.2.3 exceptional circumstances affecting weather, transportation or Electronic Communication have generally impeded or are generally impeding the ability of Shareholders to be present at the meeting; or

20.4.2.4 one or more particular Shareholders, having been delayed, have communicated an intention to attend the meeting, and those Shareholders, together with others in attendance, would satisfy the requirements of clause 20.4.

20.4.3 The accidental omission to give notice of any meeting to any particular Shareholder or Shareholders shall not invalidate any resolution passed at any such meeting.

20.4.4 The Company shall not be required to give further notice of a meeting that has been postponed or adjourned in terms of clause 20.4.2 unless the location for the meeting is different from:

20.4.4.1 the location of the postponed or adjourned meeting; or

20.4.4.2 the location announced at the time of adjournment, in the case of an adjourned meeting.

20.4.5 Notwithstanding the provisions of clause 20.4.4, for so long as the Company’s Securities are listed on the JSE, the Company shall release notice on SENS of any postponed or adjourned meeting (whether postponed or adjourned in terms of clause 20.4.2 or otherwise).

20.4.6 If at the time appointed in terms of clause 20.4.2 for a postponed meeting to begin, or for an adjourned meeting to resume, the requirements of clause 20.4 have not been satisfied, the Shareholders present in person or by proxy will be deemed to constitute a quorum.

20.4.7 After a quorum has been established for a meeting, or for a matter to be considered at a meeting, all the Shareholders forming part of the quorum must be present at the meeting for the matter to be considered at the meeting.

20.4.8 The chairperson of a meeting may with the consent of a meeting at which a quorum is present (and must if the meeting resolves thus) adjourn the meeting from time to time and from place to place, but an adjourned meeting may only deal with matters which could legally be dealt with at the meeting on which the adjournment took place.

20.4.9 The maximum period allowable for an adjournment of a Shareholders’ meeting is as set out in section 64(12), without variation.


20.5 Conduct of meetings

20.5.1 The chairperson, or in his or her absence, the deputy chairperson, if any, of the Board shall preside as chairperson at every Shareholder’s meeting.

20.5.2 If there is no such chairperson or deputy chairperson, or if at any meeting he or she is not present within 15 (fifteen) minutes after the time appointed for holding the meeting or is unwilling to act as chairperson, the Directors present shall choose 1 (one) of their number to be chairperson. If no Director is willing to act as chairperson or if no Director is present within 15 (fifteen) minutes after the time appointed for commencement of the meeting, the Shareholders present shall choose one of their number to be chairperson of the meeting.

20.5.3 The chairperson of a Shareholders’ meeting may –

20.5.3.1 appoint any firm or persons to act as scrutineers for the purpose of checking any powers of attorney received and for counting the votes at the meeting;

20.5.3.2 act on a certificate given by any such scrutineers without requiring production at the meeting of the forms of proxy or himself counting the votes.

20.5.4 If any votes were counted which ought not to have been counted or if any votes were not counted which ought to have been counted, the error shall not vitiate the resolution, unless:

20.5.4.1 it is brought to the attention of the chairperson at the meeting; and

20.5.4.2 in the opinion of the chairperson of the meeting, it is of sufficient magnitude to vitiate the resolution.

20.5.5 Any objection to the admissibility of any vote (whether on a show of hands or on a poll) shall be raised -

20.5.5.1 at the meeting or adjourned meeting at which the vote objected to was recorded; or

20.5.5.2 at the meeting or adjourned meeting at which the result of the poll was announced, and every vote not then disallowed shall be valid for all purposes. Any objection made timeously shall be referred to the chairperson of the meeting, whose decision shall be final and conclusive.

20.5.6 Even if he is not a Shareholder:

20.5.6.1 any Director; or

20.5.6.2 the company’s attorney (or where the company’s attorneys are a firm, any partner or director thereof), may attend and speak at any Shareholders’ meeting, but may not vote, unless he is a Shareholder or the proxy or representative of a Shareholder.

21 SHAREHOLDERS’ MEETINGS BY ELECTRONIC COMMUNICATION

21.1 Subject to the provisions of the JSE Listings Requirements, the Company may conduct a Shareholders’ meeting entirely by Electronic Communication or provide for participation in a meeting by Electronic Communication, as set out in section 63, and the power of the Company to do so is not limited or restricted by this Memorandum of Incorporation. Accordingly –

21.1.1 any Shareholders’ meeting may be conducted entirely by Electronic Communication; or

21.1.2 one or more Shareholders, or proxies for Shareholders, may participate by Electronic Communication in all or part of any Shareholders’ meeting that is being held in person, so long as the Electronic Communication employed ordinarily enables all persons participating in that meeting to communicate concurrently with each other and without an intermediary, and to participate reasonably effectively in the meeting.

21.2 Any notice of any meeting of Shareholders at which it will be possible for Shareholders to participate by way of Electronic Communication shall inform Shareholders of the ability to so participate and shall provide any necessary information to enable Shareholders or their proxies to access the available medium or means of Electronic Communication, provided that such access shall be at the expense of the Shareholder or proxy concerned.

22 VOTES OF SHAREHOLDERS

22.1 Subject to any special rights or restrictions as to voting attached to any Shares by or in accordance with this Memorandum of Incorporation, at a meeting of the Company:

22.1.1 every person present and entitled to exercise voting rights shall be entitled to 1 (one) vote on a show of hands, irrespective of the number of voting rights that person would otherwise be entitled to exercise;

22.1.2 on a poll any person who is present at the meeting, whether as a Shareholder or as proxy for a Shareholder, has the number of votes determined in accordance with the voting rights associated with the Securities held by that Shareholder; and

22.1.3 the holders of Securities other than ordinary Shares shall not be entitled to vote on any resolution at a meeting of Shareholders, except as provided in clause 22.2.

22.2 If any resolution is proposed as contemplated in clause 6.4, the holders of such Shares (“Affected Shareholders”) shall be entitled to vote at the meeting of ordinary Shareholders as contemplated in clause 22.1, provided that –

22.2.1 the votes of the Shares of that class held by the Affected Shareholders (“Affected Shares”) shall not carry any special rights or privileges and each Affected Shareholder shall be entitled to 1 (one) vote for every Affected Share held; and

22.2.2 the total voting rights of the Affected Shareholders in respect of the Affected Shares shall not be more than 24.99% (twenty four comma ninety nine percent) of the total votes (including the votes of the ordinary Shareholders) exercisable at that meeting (with any cumulative fraction of a vote in respect of any Affected Shares held by an Affected Shareholder rounded down to the nearest whole number).

22.3 Voting shall be conducted by means of a polled vote in respect of any matter to be voted on at a meeting of Shareholders if a demand is made for such a vote by:



22.3.1 at least 5 (five) persons having the right to vote on that matter, either as Shareholders or as proxies representing Shareholders; or

22.3.2 a Shareholder who is, or Shareholders who together are, entitled, as Shareholders or proxies representing Shareholders, to exercise at least 10% (ten percent) of the voting rights entitled to be voted on that matter; or

22.3.3 the chairperson of the meeting.

22.4 At any meeting of the Company a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded in accordance with the provisions of clause 22.3, and unless a poll is so demanded, a declaration by the chairperson that a resolution has, on a show of hands, been carried or carried unanimously or by a particular majority or defeated, and an entry to that effect in the book containing the minutes of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against such resolution. The demand for a poll may be withdrawn.

22.5 If a poll is duly demanded, it shall be taken in such manner as the chairperson directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. In computing the majority on the poll, regard shall be had to the number of votes to which each Shareholder is entitled.

22.6 In the case of an equality of votes, whether on a show of hands or on a poll, the chairperson of the meeting at which the show of hands takes place, or at which the poll is demanded, shall not be entitled to a second or casting vote.

22.7 A poll demanded on the election of a chairperson (as contemplated in clause 20.5.2) or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairperson of the meeting directs. The demand for a poll shall not prevent the continuation of a meeting for the transaction of any business other than the question upon which the poll has been demanded.

22.8 A person who is entitled to more than 1 (one) vote, does not have to exercise all his or her votes and does not have to exercise all his or her votes in the same manner.

22.9 Where there are joint registered holders of any Share, any 1 (one) of such persons may exercise all of the voting rights attached to that Share at any meeting, either personally or by proxy, as if he or she were solely entitled thereto. If more than 1 (one) of such joint holders is present at any meeting, personally or by proxy, the person so present whose name stands first in the Securities Register in respect of such Share shall alone be entitled to vote in respect thereof.

22.10 The board of any company or the controlling body of any other entity or person that holds any Securities of the Company may authorise any person to act as its representative at any meeting of Shareholders of the Company, in which event the following provisions will apply:

22.10.1 the person so authorised may exercise the same powers of the authorising company, entity or person as it could have exercised if it were an individual holder of Shares; and

22.10.2 the authorising company, entity or person shall lodge a resolution of the directors of such company or controlling body of such other entity or person confirming the granting of such authority, and certified under the hand of the chairperson or secretary thereof, with the Company before the commencement of any Shareholders’ meeting at which such person intends to exercise any rights of such Shareholder, unless excused from doing so by the chairperson of such meeting.

23 PROXIES AND REPRESENTATIVES

23.1 Any Shareholder may at any time appoint any natural person (or two or more natural persons concurrently), including a natural person who is not a Shareholder, as a proxy to:

23.1.1 participate in, and speak and vote at, a Shareholders’ meeting on behalf of that Shareholder; or

23.1.2 give or withhold written consent on behalf of that Shareholder to a decision contemplated in section 60, provided that a Shareholder may appoint more than 1 (one) proxy to exercise voting rights attached to different Securities held by the Shareholder.

23.2 A proxy appointment:

23.2.1 must be in writing, dated and signed by the Shareholder; and

23.2.2 remains valid for:

23.2.2.1 1 (one) year after the date on which it was signed; or

23.2.2.2 any longer or shorter period expressly set out in the appointment, unless it is revoked in a manner contemplated in the Act or expires earlier as contemplated in the Act.

23.3 The holder of a power of attorney or other written authority from a Shareholder may, if so authorised thereby, represent such Shareholder at any meeting of the Company and such holder shall deliver the power of attorney or other written authority (if any), or a copy thereof, to the Company before such holder exercises any rights of the Shareholder at a Shareholders’ meeting. A Shareholder so represented at a meeting of the Company shall be deemed for purposes of this Memorandum of Incorporation to be a Shareholder who is present at the meeting.

23.4 All of the remaining provisions of the Act relating to the appointment and revocation of proxies and the rights of proxies generally shall apply and, in particular:

23.4.1 a Shareholder has the right to appoint 2 (two) or more persons concurrently as proxies as set out in section 58(3)(a);

23.4.2 a Shareholder’s proxy may delegate the proxy’s powers to another person as set out in section 58(3)(b);

23.4.3 a Shareholder or his proxy must deliver to the Company a copy of the instrument appointing a proxy not later than 48 (forty eight) hours before the commencement of the meeting at which the proxy intends to exercise that Shareholder’s rights, provided that the chairperson of the meeting may, in his discretion, accept proxies that have been delivered after the expiry of the aforementioned period up until the time of commencement of the meeting; and


23.4.4 unless the instrument appointing a proxy provides otherwise, a Shareholder’s proxy may decide, without direction from the Shareholder, whether to exercise or abstain from exercising any voting right of the Shareholder, as set out in section 58(7), and none of such rights or powers are limited, restricted or varied by this Memorandum of Incorporation.

23.5 Every instrument of proxy shall, as far as circumstances permit, be substantially in the following form, or in such other form as the Directors may approve from time to time:

“I/We

being a shareholder of Nutritional Holdings Limited do hereby appoint

or failing him/her or failing him/her, the chairperson of the meeting a

s my/our proxy to vote or abstain from voting on my/our behalf at the meeting of the Company to be held at on and at any adjournment thereof as follows:

In favour of Against Abstain

Special resolution number 1

Ordinary resolution number 1

(Indicate instruction to proxy by way of a cross in space provided above). Except as instructed above or if no instructions are inserted above, my/our proxy may vote as he/she thinks fit.

Signed this day of in the year of 2012.

Shareholder’s signature

(Note: A shareholder entitled to attend, speak and vote is entitled to appoint a proxy to attend, speak and vote in his/her stead, and such proxy need not be a shareholder of the Company).”

24 SHAREHOLDERS’ RESOLUTIONS

24.1 For an ordinary resolution to be approved it must be supported by more than 50% (fifty percent) of the voting rights of Shareholders exercised on the resolution, as provided in section 65(7).

24.2 For a special resolution to be approved it must be supported by the holders of at least 75% (seventy five percent) of the voting rights exercised on the resolution, as provided in section 65(9).

24.3 No matters require a special resolution adopted at a Shareholders’ meeting of the Company, other than:

24.3.1 those matters set out in section 65(11); or

24.3.2 any other matter required by the Act to be resolved by means of a special resolution; or

24.3.3 for so long as the Company’s Securities are listed on the JSE, any other matter required by the JSE Listings Requirements to be resolved by means of a special resolution.

24.4 In the event that any Shareholder abstains from voting in respect of any resolution, such Shareholder will, for the purposes of determining the number of votes exercised in respect of that resolution, be deemed not to have exercised a vote in respect thereof.

25 SHAREHOLDERS ACTING OTHER THAN AT A MEETING

25.1 In accordance with the provisions of section 60, but subject to clause 25.4, a resolution that could be voted on at a Shareholders’ meeting (other than in respect of the election of Directors) may instead be

25.1.1 submitted by the Board for consideration to the Shareholders entitled to exercise the voting rights in relation to the resolution; and

25.1.2 voted on in writing by such Shareholders within a period of 20 (twenty) business days after the resolution was submitted to them.

25.2 A resolution contemplated in clause 25.1:

25.2.1 will have been adopted if it is supported by persons entitled to exercise sufficient voting rights for it to have been adopted as an ordinary or special resolution, as the case may be, at a properly constituted Shareholders’ meeting; and

25.2.2 if adopted, will have the same effect as if it had been approved by voting at a meeting.

25.3 Within the period prescribed by the Act after adopting a resolution in accordance with the procedures provided in this clause 25, the Company shall deliver a statement describing the results of the vote, consent process, or election to every Shareholder who was entitled to vote on or consent to the resolution.

25.4 The provisions of this clause 25 shall not apply to any Shareholder meetings that are called for in terms of the Listings Requirements or the passing of any resolution in terms of clause 26.1.2 or to any annual general meeting of the Company.

26 COMPOSITION AND POWERS OF THE BOARD OF DIRECTORS

26.1 Number of Directors

26.1.1 In addition to the minimum number of Directors, if any, that the Company must have to satisfy any requirement in terms of the Act to appoint an audit committee and a social and ethics committee, the Board must comprise at least 4 (four) Directors and the Shareholders shall be entitled, by ordinary resolution, to determine such maximum number of Directors as they from time to time shall consider appropriate.



26.1.2 All Directors shall be elected by an ordinary resolution of the Shareholders at a general or annual general meeting of the Company and no appointment of a Director in accordance with a resolution passed in terms of section 60 shall be competent.

26.1.3 Every person holding office as a Director, Prescribed Officer, company secretary or auditor of the Company immediately before the effective date of the Act will, as contemplated in item 7(1) of Schedule 5 to the Act, continue to hold that office.

26.2 Appointment and nomination of Directors

26.2.1 In any election of Directors:

26.2.1.1 the election is to be conducted as a series of votes, each of which is on the candidacy of a single individual to fill a single vacancy, with the series of votes continuing until all vacancies on the Board have been filled; and

26.2.1.2 in each vote to fill a vacancy:

26.2.1.2.1 each vote entitled to be exercised may be exercised once; and

26.2.1.2.2 the vacancy is filled only if a majority of the votes exercised support the candidate.

26.2.2 Subject to the provisions of clauses 26.4.1.1 and 29, the Company shall only have elected Directors and there shall be no appointed or ex offıcio Directors as contemplated in section 66(4).

26.3 Eligibility, resignation and retirement of Directors

26.3.1 Apart from satisfying the qualification and eligibility requirements set out in section 69, a person need not satisfy any eligibility requirements or qualifications to become or remain a Director or a Prescribed Officer of the Company.

26.3.2 No Director shall be appointed for life or for an indefinite period and the Directors shall rotate in accordance with the following provisions of this clause 26.3.2:

26.3.2.1 at each annual general meeting referred to in clause 20.2.1, 1/3 (one third) of the Directors for the time being, or if their number is not 3 (three) or a multiple of 3 (three), the number nearest to 1/3 (one third), but not less than 1/3 (one third), shall retire from office, provided that if a Director is appointed as an executive Director or as an employee of the Company in any other capacity, he or she shall not, while he or she continues to hold that position or office, be subject to retirement by rotation and he or she shall not, in such case, be taken into account in determining the rotation or retirement of Directors;

26.3.2.2 the Directors to retire in every year shall be those who have been longest in office since their last election, but as between persons who were elected as Directors on the same day, those to retire shall, unless they otherwise agree among themselves, be determined by lot;

26.3.2.3 a retiring Director shall be eligible for re-election;

26.3.2.4 the Company, at the general meeting at which a Director retires in the above manner, or at any other general meeting, may fill the vacancy by electing a person thereto, provided that the Company shall not be entitled to fill the vacancy by means of a resolution passed in accordance with clause 25;

26.3.2.5 if at any meeting at which an election of Directors ought to take place the offices of the retiring Directors are not filled, unless it is expressly resolved not to fill such vacancies, the meeting shall stand adjourned and the further provisions of this Memorandum of Incorporation, including clauses 20.4.2 to 20.4.6 (inclusive) will apply mutatis mutandis to such adjournment, and if at such adjourned meeting the vacancies are not filled, the retiring Directors, or such of them as have not had their offices filled, shall be deemed to have been re-elected at such adjourned meeting.

26.3.3 The Board shall, through its nomination committee (if such nomination committee has been constituted in terms of clause 32), provide the Shareholders with a recommendation in the notice of the meeting at which the re-election of a retiring Director is proposed, as to which retiring Directors are eligible for re-election, taking into account that Director’s past performance and contribution. Sufficient time shall be allowed between the date of such notice and the date of the general meeting or annual general meeting at which the re-election of the Director is to be proposed to allow nominations to reach the Company’s office from any part in South Africa.

26.4 Powers of the Directors

26.4.1 The Board has the power to:

26.4.1.1 appoint or co-opt any person as Director, whether to fill any vacancy on the Board on a temporary basis, as set out in section 68(3), or as an additional Director provided that such appointment must be confirmed by the Shareholders, in accordance with clause 26.1.2, at the next annual general meeting of the Company, as required in terms of section 70(3)(b)(i); and

26.4.1.2 exercise all of the powers and perform any of the functions of the Company, as set out in section 66(1), and the powers of the Board in this regard are only limited and restricted as contemplated in this clause 26.

26.4.2 The Directors may at any time and from time to time by power of attorney appoint any person or persons to be the attorney or attorneys and agent(s) of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors in terms of this Memorandum of Incorporation) and for such period and subject to such conditions as the Directors may from time to time think fit. Any such appointment may, if the Directors think fit, be made in favour of any company, the shareholders, directors, nominees or managers of any company or firm, or otherwise in favour of any fluctuating body of persons, whether nominated directly or indirectly by the Directors. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorneys and agents as the Directors think fit. Any such attorneys or agents as aforesaid may be authorised by the Directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in them.

26.4.3 Save as otherwise expressly provided herein, all cheques, promissory notes, bills of exchange and other negotiable or transferable instruments, and all documents to be executed by the Company, shall be signed, drawn, accepted, endorsed or executed, as the case may be, in such manner as the Directors shall from time to time determine.


26.4.4 All acts performed by the Directors or by a committee of Directors or by any person acting as a Director or a member of a committee shall, notwithstanding that it shall afterwards be discovered that there was some defect in the appointment of the Directors or persons acting as aforesaid, or that any of them were disqualified from or had vacated office, be as valid as if every such person had been duly appointed and was qualified and had continued to be a Director or member of such committee.

26.4.5 If the number of Directors falls below the minimum number fixed in accordance with this Memorandum of Incorporation, the remaining Directors must as soon as possible and in any event not later than 3 (three) months from the date that the number falls below such minimum, fill the vacancy/ies in accordance with clause 26.4.1.1 or convene a general meeting for the purpose of filling the vacancies, and the failure by the Company to have the minimum number of Directors during the said 3 (three) month period does not limit or negate the authority of the Board or invalidate anything done by the Board while their number is below the minimum number fixed in accordance with this Memorandum of Incorporation.

26.4.6 The Directors in office may act notwithstanding any vacancy in their body, but if after the expiry of the 3 (three) month period contemplated in clause 26.4.5, their number remains below the minimum number fixed in accordance with this Memorandum of Incorporation, they may, for as long as their number is reduced below such minimum, act only for the purpose of filling vacancies in their body in terms of section 68(3) or of summoning general meetings of the Company, but not for any other purpose.

26.5 Directors’ interests

26.5.1 A Director may hold any other office or place of profit under the Company (except that of auditor) or any subsidiary of the Company in conjunction with the office of Director, for such period and on such terms as to remuneration (in addition to the remuneration to which he may be entitled as a Director) and otherwise as a disinterested quorum of the Directors may determine.

26.5.2 A Director of the Company may be or become a director or other officer of, or otherwise interested in, any company promoted by the Company or in which the Company may be interested as shareholder or otherwise, provided that the appointment and remuneration in respect of such other office must be determined by a disinterested quorum of Directors.

26.5.3 Each Director and each alternate Director, Prescribed Officer and member of any committee of the Board (whether or not such latter persons are also members of the Board) shall, subject to the exemptions contained in section 75(2) and the qualifications contained in section 75(3), comply with all of the provisions of section 75 in the event that they (or any person who is a related person to them) has a personal financial interest in any matter to be considered by the Board.

26.5.4 The Directors shall not, for as long as the Securities of the Company is listed on the JSE, have the power to propose any resolution in terms of sections 20(2) and 20(6) to Shareholders to ratify an act of the Directors that is inconsistent with any limit imposed by this Memorandum of Incorporation on the authority of the Directors to perform such an act on behalf of the Company in the event that such a resolution would lead to ratification of an act that is contrary to the JSE Listings Requirements, unless the Directors have obtained the prior approval of the JSE to propose such a resolution to Shareholders.

27 DIRECTORS’ MEETINGS

27.1 Save as may be provided otherwise herein, the Directors may meet together for the despatch of business, adjourn and otherwise regulate their meetings as they think fit.

27.2 The Directors may elect a chairperson and a deputy chairperson and determine the period for which each is to hold office. The chairperson, or in his absence the deputy chairperson, shall be entitled to preside over all meetings of Directors. If no chairperson or deputy chairperson is elected, or if at any meeting neither is present or willing to act as chairperson thereof within 10 (ten) minutes of the time appointed for holding the meeting, the Directors present shall choose 1 (one) of their number to be chairperson of such meeting.

27.3 In addition to the provisions of section 73(1), any Director shall at any time be entitled to call a meeting of the Directors.

27.4 The Board has the power:

27.4.1 as contemplated in section 74, to consider any matter and/or adopt any resolution other than at a meeting and, accordingly, any decision that could be voted on at a meeting of the Board may instead be adopted by the written consent of a majority of the Directors, given in person or by Electronic Communication, provided that each Director has received notice of the matter to be decided;

27.4.2 to conduct a meeting entirely by Electronic Communication, or to provide for participation in a meeting by Electronic Communication, as set out in section 73(3), provided that, as required by such section, the Electronic Communication facility employed ordinarily enables all persons participating in the meeting to communicate concurrently with each other without an intermediary and to participate reasonably effectively in the meeting;

27.4.3 to determine the manner and form of providing notice of its meetings contemplated in section 73(4), provided that:

27.4.3.1 the notice period for the convening of any meeting of the Board will be at least 7 (seven) days unless the decision of the Directors is required within a shorter period of notice, in which event the meeting may be called on shorter notice. The decision of the chairperson of the Board, or failing the chairperson for any reason, the decision of the majority of the Directors as to whether a shorter period of notice may be given, shall be final and binding on the directors. To the extent that a Director votes or indicates that he will abstain from voting on any matter in respect of which such shorter notice period has been given, such Director will be regarded, at the same time, as having approved the shorter notice period unless such Director expressly states that he is voting against the shorter notice period;

27.4.3.2 an agenda of the matters to be discussed at the meeting shall be given to each Director, together with the notice referred to in clause 27.4.3.1; and



27.4.4 to proceed with a meeting despite a failure or defect in giving notice of the meeting, as provided in section 73(5), and the powers of the Board in respect of the above matters are not limited or restricted by this Memorandum of Incorporation.

27.5 The quorum requirement for a Directors’ meeting (including an adjourned meeting) to begin, the voting rights at such a meeting, and the requirements for approval of a resolution at such a meeting are as set out in section 73(5), subject only to clause 27.5.5, and accordingly:

27.5.1 if all of the Directors of the Company:

27.5.1.1 acknowledge actual receipt of the notice convening a meeting; or

27.5.1.2 are present at a meeting; or

27.5.1.3 waive notice of a meeting, the meeting may proceed even if the Company failed to give the required notice of that meeting or there was a defect in the giving of the notice;

27.5.2 a majority of the Directors must be present at a meeting before a vote may be called at any meeting of the Directors;

27.5.3 each Director has 1 (one) vote on a matter before the Board;

27.5.4 a majority of the votes cast in favour of a resolution is sufficient to approve that resolution;

27.5.5 in the case of a tied vote:

27.5.5.1 the chairperson may not cast a deciding vote in addition to any deliberative vote; and

27.5.5.2 the matter being voted on fails.

27.6 Resolutions adopted by the Board:

27.6.1 must be dated, sequentially numbered and inserted in the Company’s minute book; and

27.6.2 are effective as of the date of the resolution, unless any resolution states otherwise.

27.7 Any minutes of a meeting, or a resolution, signed by the chairperson of the meeting, or by the chairperson of the next meeting of the Board or by the Company secretary, are evidence of the proceedings of that meeting, or the adoption of that resolution, as the case may be.

28 DIRECTORS’ COMPENSATION AND FINANCIAL ASSISTANCE 28.1 The Company may pay remuneration to the Directors for their services as Directors in accordance with a special resolution approved by the Shareholders

within the previous 2 (two) years, as set out in section 66(8) and (9), and the power of the Company in this regard is not limited or restricted by this Memorandum of Incorporation.

28.2 Any Director who:

28.2.1 serves on any executive or other committee; or

28.2.2 devotes special attention to the business of the Company; or

28.2.3 goes or resides outside South Africa for the purpose of the Company; or

28.2.4 otherwise performs or binds himself to perform services which, in the opinion of the Directors, are outside the scope of the ordinary duties of a Director, may be paid such extra remuneration or allowances in addition to or in substitution of the remuneration to which he may be entitled as a Director, as a disinterested quorum of the Directors may from time to time determine.

28.3 The Directors may also be paid all their travelling and other expenses necessarily incurred by them in connection with:

28.3.1 the business of the Company; and

28.3.2 attending meetings of the Directors or of committees of the Directors of the Company.

28.4 The Board may, as contemplated in and subject to the requirements of section 45, authorise the Company to provide financial assistance to a Director, Prescribed Officer or other person referred to in section 45(2), and the power of the Board in this regard is not limited or restricted by this Memorandum of Incorporation.

29 EXECUTIVE DIRECTORS 29.1 The Directors may from time to time appoint 1 (one) or more executive Directors for such term and at such remuneration as they may think fit, and may

revoke such appointment subject to the terms of any agreement entered into in any particular case. A Director so appointed shall not be subject to retirement in the same manner as the other Directors, but his or her appointment shall terminate if he or she ceases for any reason to be a Director.

29.2 Subject to the provisions of any contract between himself or herself and the Company, an executive Director shall be subject to the same provisions as to disqualification and removal as the other Directors of the Company.

29.3 The Directors may from time to time entrust to and confer upon an executive Director for the time being such of the powers exercisable in terms of this Memorandum of Incorporation by the Directors as they may think fit, and may confer such powers for such time and to be exercised for such objects and purposes, and upon such terms and conditions, and with such restrictions, as they think expedient; and they may confer such powers either collaterally with or to the exclusion of and in substitution for all or any of the powers of the Directors in that behalf, and may from time to time revoke, withdraw, alter or vary all or any of such powers.

30 INDEMNIFICATION OF DIRECTORS 30.1 The Company may:

30.1.1 advance expenses to a Director or directly or indirectly indemnify a Director in respect of the defence of legal proceedings, as set out in section 78(4);

30.1.2 indemnify a Director in respect of liability as set out in section 78(5); and/or


30.1.3 purchase insurance to protect the Company or a Director as set out in section 78(7), and the power of the Company in this regard is not limited, restricted or extended by this Memorandum of Incorporation.

30.2 The provisions of clause 30.1 shall apply mutatis mutandis in respect of any Prescribed Officer or member of any committee of the Board, including the audit committee, or any former Director, former Prescribed Officer or former member of any committee of the Board.

31 BORROWING POWERS 31.1 Subject to the provisions of clause 31.2 and the other provisions of this Memorandum of Incorporation, the Directors may from time to time 31.1.1 borrow for the purposes of the Company such sums as they think fit; and 31.1.2 secure the payment or repayment of any such sums, or any other sum, as they think fit, whether by the creation and issue of Securities,

mortgage or charge upon all or any of the property or assets of the Company. 31.2 The Directors shall procure (but as regards subsidiaries of the Company only insofar as by the exercise of voting and other rights or powers of control

exercisable by the Company they can so procure) that the aggregate principal amount at any one time outstanding in respect of moneys so borrowed or raised by:

31.2.1 the Company; and 31.2.2 all the subsidiaries for the time being of the Company (excluding moneys borrowed or raised by any of such companies from any other of

such companies but including the principal amount secured by any outstanding guarantees or suretyships given by the Company or any of its subsidiaries for the time being for the indebtedness of any other company or companies whatsoever and not already included in the aggregate amount of the moneys so borrowed or raised), shall not exceed, to the extent applicable, the aggregate amount at that time authorised to be borrowed or secured by the Company or the subsidiaries for the time being of the Company (as the case may be).

32 COMMITTEES OF THE BOARD 32.1 The Board may: 32.1.1 appoint committees of Directors and delegate to any such committee any of the authority of the Board as contemplated in section 72(1); and/

or 32.1.2 include in any such committee persons who are not Directors, as contemplated in section 72(2)(a), and the power of the Board in this regard

is not limited or restricted by this Memorandum of Incorporation. 32.2 The authority of a committee appointed by the Board as contemplated in section 72(2)(b) and (c) is not limited or restricted by this Memorandum of

Incorporation. 32.3 The Board shall further appoint such committees as it is obliged to do in terms of the Act and, for as long as the Company’s Securities are listed on the

JSE, such committees as are required by the JSE Listings Requirements, having such functions and powers as are prescribed by the Act and/or the JSE Listings Requirements, as the case may be.

33 ANNUAL FINANCIAL STATEMENTS 33.1 The Company shall keep all such accurate and complete accounting records as are necessary to enable the Company to satisfy its obligations in terms of: 33.1.1 the Act; 33.1.2 any other law with respect to the preparation of financial statements to which the Company may be subject; and 33.1.3 this Memorandum of Incorporation. 33.2 The Company shall each year, after the end of its financial year, prepare annual financial statements within the period prescribed by the Act, or such

shorter period as may be appropriate to provide the required notice of an annual general meeting in terms of section 61(7). 33.3 The Company shall appoint an auditor each year at its annual general meeting. If the Company appoints a firm as its auditor, any change in the

composition of the members of that firm shall not by itself create a vacancy in the office of auditor. 33.4 The annual financial statements of the Company must be prepared and audited in accordance with the provisions of section 30 of the Act. 33.5 A copy of the annual financial statements must be delivered to Shareholders at least 15 (fifteen) business days before the date of the annual general

meeting of the Company at which such annual financial statements will be considered. 33.6 The annual financial statements shall be prepared on a basis that is not inconsistent with any unalterable provision of the Act and shall – 33.6.1 satisfy, as to form and content, the financial reporting standards of IFRS; and 33.6.2 subject to and in accordance with IFR: 33.6.2.1 present fairly the state of affairs and business of the Company and explain the transactions and financial position of the business

of the Company; 33.6.2.2 show the Company’s assets, liabilities and equity, as well as its income and expenses; 33.6.2.3 set out the date on which the statements were produced and the accounting period to which they apply; and 33.6.2.4 bear on the first page thereof a prominent notice indicating that the annual financial statements have been audited and the name

and professional designation of the person who prepared them. 34 COMPANY SECRETARY 34.1 The Company must appoint a company secretary.

34.2 The company secretary must have the requisite knowledge of, or experience with, relevant laws and be a permanent resident of South Africa.

34.3 The Board must fill any vacancy in the office of company secretary within the period prescribed by the Act after such vacancy arises by a person whom the Directors consider to have the requisite knowledge and experience.



35 AUTHENTICATION OF DOCUMENTS

Any Director or the company secretary or any person appointed by the Board for that purpose shall have the power to authenticate:

35.1 this Memorandum of Incorporation;

35.2 any resolution taken by the Company in general meeting or the Board; and

35.3 any book, charter, certificate, document or account with regard to the matters of the Company, and to certify copies thereof as true copies and excerpts.

36 DISTRIBUTIONS

36.1 Subject to the provisions of the Act, and particularly section 46 and this Memorandum of Incorporation, the Company may make any proposed distribution, as defined and contemplated in the Act, if such distribution:

36.1.1 is pursuant to an existing legal obligation of the Company, or a court order; or

36.1.2 is authorised by resolution of the Board, in compliance with the JSE Listings Requirements.

36.2 No distribution shall bear interest against the Company, except as otherwise provided under the conditions of issue of the Shares in respect of which such distribution is payable.

36.3 Distributions may be declared either free of or subject to the deduction of income tax and any other tax or duty in respect of which the Company may be chargeable.

36.4 The Directors may from time to time declare and pay to the Shareholders such interim distributions as the Directors consider to be appropriate.

36.5 No larger distribution shall be declared by the Company in general meeting than is recommended by the Directors, but the Company in general meeting may declare a smaller distribution.

36.6 All unclaimed dividends may be invested by the Company in trust for the benefit of the Company until claimed, and dividends that remain unclaimed for a period of 3 (three) years from the date on which they were declared may be declared by the Directors to be forfeited for the benefit of the Company. The Directors may at any time annul such forfeiture upon such conditions (if any) as they think fit. Subject to the provisions of clause 18.2, all unclaimed monies, other than dividends, that are due to Shareholder/s shall be held by the Company in trust for an indefinite period until lawfully claimed by such Shareholder/s.

36.7 Any distribution, interest or other sum payable in cash to the holder of a Share may be paid by cheque or warrant sent by post and addressed to:

36.7.1 the holder at his registered address; or

36.7.2 in the case of joint holders, the holder whose name appears first in the Securities Register in respect of the share, at his registered address; or

36.7.3 such person and at such address as the holder or joint holders may in writing direct.

36.8 Every such cheque or warrant shall:

36.8.1 be made payable to the order of the person to whom it is addressed; and

36.8.2 be sent at the risk of the holder or joint holders.

36.9 The Company shall not be responsible for the loss in transmission of any cheque or warrant or of any document (whether similar to a cheque or warrant or not) sent by post as aforesaid.

36.10 A holder or any one of two or more joint holders, or his or their agent duly appointed in writing, may give valid receipts for any distributions or other moneys paid in respect of a Share held by such holder or joint holders.

36.11 When such cheque or warrant is paid, it shall discharge the Company of any further liability in respect of the amount concerned.

36.12 A distribution may also be paid in any other way determined by the Directors, and if the directives of the Directors in that regard are complied with, the Company shall not be liable for any loss or damage which a Shareholder may suffer as a result thereof.

36.13 Without detracting from the ability of the Company to issue capitalisation Shares, any distribution may be paid wholly or in part:

36.13.1 by the distribution of specific assets; or

36.13.2 by the issue of Shares, debentures or securities of the Company or of any other company; or

36.13.3 in cash; or

36.13.4 in any other way which the Directors or the Company in general meeting may at the time of declaring the distribution determine.

36.14 Where any difficulty arises in regard to such distribution, the Directors may settle that difficulty as they think expedient, and in particular may fix the value which shall be placed on such specific assets on distribution.

36.15 The Directors may:

36.15.1 determine that cash payments shall be made to any Shareholder on the basis of the value so fixed in order to secure equality of distribution; and

36.15.2 vest any such assets in trustees upon such trusts for the benefit of the persons entitled to the distribution as the Directors deem expedient.

36.16 Any distribution must be made payable to Shareholders registered as at a date subsequent to the date of declaration thereof or the date of confirmation thereof, whichever is the later date.

36.17 Without limiting the provisions of clause 36.1.2 above, all payments made to holders of Securities listed on the JSE (“Listed Securities”) must be in accordance with the JSE Listings Requirements and capital payments to holders of Listed Securities may not be made on the basis that it can be called up again.


37 RESERVES

37.1 The Board may, before recommending any preference or other dividend or other distribution, set aside such amounts from the profits of the Company as reserves as it deems fit.

37.2 Such reserves may in the discretion of the Board be used for any admissible purpose and pending such use, the Board may in its discretion:

37.2.1 use them for the business of the Company without them being separated from the other assets of the Company; or

37.2.2 invest it.

37.3 The Board may in its discretion transfer any profits which should not be distributed in its opinion, without putting them to reserve.

37.4 The Board may:

37.4.1 distribute any such reserve funds as it deems fit;

37.4.2 consolidate such funds or any part thereof in one fund.

38 ACCESS TO COMPANY RECORDS

38.1 Each person who holds or has a beneficial interest in any Securities issued by the Company is entitled to inspect and copy, without any charge for any such inspection or upon payment of no more than the prescribed maximum charge for any such copy, the information contained in the records of the Company referred to in section 26(1), being:

38.1.1 this Memorandum of Incorporation, and any amendments or alterations thereof;

38.1.2 a record of the Directors, including the details of any person who has served as a Director, for the period as prescribed by the Act after that person has ceased to serve as a Director, and any information relating to such persons referred to in section 24(5);

38.1.3 all:

38.1.3.1 reports presented at an annual general meeting of the Company for the period as prescribed by the Act after the date of any such meeting; and

38.1.3.2 annual financial statements required by the Act for the period as prescribed by the Act after the date on which each such particular statements were issued;

38.1.4 notice and minutes of all Shareholders’ meetings, including:

38.1.4.1 all resolutions adopted by them, for the period as prescribed by the Act after the date each such resolution was adopted; and

38.1.4.2 any document that was made available by the Company to the holders of Securities in relation to each such resolution;

38.1.5 any written communications sent generally by the Company to all holders of any class of the Company’s Securities, for the period as prescribed by the Act after the date on which each of such communications was issued; and

38.1.6 the Securities Register.

38.2 A person not contemplated in clause 38.1 has a right to inspect the Securities Register and the register of Directors of the Company upon payment of an amount not exceeding the prescribed maximum fee for any such inspection.

38.3 A person who wishes to inspect the Uncertificated Securities Register may do so only through the Company in terms of section 26, and in accordance with the rules of the Central Securities Depository. Within the period as prescribed by the Act after the date of a request for inspection, the Company must produce a record of the Uncertificated Securities Register, which record must reflect at least the details referred to in section 50(3)(b) at the close of business on the day on which the request for inspection was made.

39 PAYMENT OF COMMISSION

39.1 The Company may pay a commission to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any Securities of the Company or for procuring or agreeing to procure, whether absolutely or conditionally, subscriptions for any Securities of the Company, provided that for as long as the Securities of the Company is listed on the JSE, such commission may not exceed a rate of 10% (ten percent) of the issue price of the relevant Security.

39.2 Commission may be paid out of capital or profits, whether current or accumulated, or partly out of the one and partly out of the other.

39.3 Such commission may be paid in cash or, if authorised by the Shareholders by ordinary resolution, by the allotment of fully or partly paid-up Securities, or partly in one way and partly in the other.

39.4 The Company may, on any issue of Securities, pay such brokerage as may be lawful.

40 NOTICES

40.1 All notices shall be given by the Company to each Shareholder of the Company who has elected to receive such notices and simultaneously to the Issuer Regulation Division of the JSE, and shall be given in writing in any manner authorised by the JSE Listings Requirements and/or the Act, as may be applicable. All notices shall, in addition to the above, be released through SENS provided that, in the event that the Shares or other Securities of the Company are not listed on the JSE, all the provisions of this Memorandum of Incorporation relating to the publication of notices via SENS shall no longer apply and such notices shall thereafter only be delivered in accordance with the provisions of the Act.

40.2 Each Shareholder of the Company:

40.2.1 shall notify in writing to the Company an address, which address shall be his registered address for the purposes of receiving written notices from the Company by post and if he has not named such an address he shall be deemed to have waived his right to be so served with notices; and



40.2.2 may notify in writing to the Company an email address and/or facsimile number, which address shall be his address for the purposes of receiving notices by way of Electronic Communication, provided that a Shareholder who fails to notify the Company of an address as set out in this clause 40.2 above, will be deemed to have elected not to receive notices and documents, from the Company.

40.3 Any Shareholder whose address in the Securities Register is an address not within South Africa, shall be entitled to have notices served upon him at such address.

40.4 In the case of joint holders of a Share, all notices shall, unless such holders otherwise in writing request and the Directors agree, be given to that Shareholder whose name appears first in the Securities Register and a notice so given shall be deemed sufficient notice to all the joint holders.

40.5 Every person who by operation of law, transfer or other means whatsoever becomes entitled to any Share, shall be bound by every notice in respect of that Share which, previously to his name and address being entered in the Securities Register, was given to the person from whom he derives his title to such Share.

40.6 Any notice or document delivered or sent by post to or left at the registered address of any Shareholder in pursuance of this Memorandum of Incorporation shall, notwithstanding that such Shareholder was then deceased, and whether or not the Company has notice of his death, be deemed to have been duly served in respect of any Shares, whether held solely or jointly with other persons by such Shareholder, until some other person be registered in his stead as the sole or joint holder thereof, and such service shall for all purposes of this Memorandum of Incorporation be deemed a sufficient service of such notice or document on his heirs, executors or administrators, and all persons (if any) jointly interested with him in any such Shares.

41 WINDING-UP 41.1 If the Company is wound-up the liquidator may, with the sanction of a special resolution of the Shareholders, divide among the Shareholders in specie or

kind the whole or any part of the assets of the Company and may for such purpose

41.1.1 set a value which he deems fair upon any asset; and

41.1.2 determine how the division shall be carried out as between the Shareholders or holders of different classes of Shares.

41.2 The liquidator may, with the sanction of a special resolution of the Shareholders, vest the whole or any part of the assets in trustees upon trusts for the benefit of the Shareholders or any of them.

41.3 Any such resolution may provide for and sanction a distribution of specific assets amongst the holders of different classes of Shares contrary to their existing rights, but each Shareholder shall in that event have a right of dissent and other ancillary rights in the same manner as if such resolution were a special resolution passed pursuant to the provisions of the Act.

42 PRE-ACQUISITION PROFITS 42.1 Where any asset, business or property is purchased by the Company with effect from an expired date on condition that the Company shall be entitled to

the profits as from that date and shall be liable for the losses thereof, such profits or losses (according to the case) shall:

42.1.1 in the discretion of the Board; and

42.1.2 within the limits of the law, be credited or debited entirely or partially against the income account.

42.2 The amount so credited or debited shall, for the purposes of ascertaining the amount available for dividends, be treated as a profit or loss arising from the business of the Company and the amount available for dividends shall be adjusted accordingly.

43 AMENDMENT OF MEMORANDUM OF INCORPORATION 43.1 This Memorandum of Incorporation may only be altered or amended by way of a special resolution of the ordinary Shareholders in accordance with

section 16(1)(c), except if such amendment is in compliance with a Court order as contemplated in section 16(1)(a) and section 16(4).

43.2 An amendment of this Memorandum of Incorporation will take effect from the later of:

43.2.1 the date on, and time at, which the Commission accepts the filing of the notice of amendment contemplated in section 16(7); and

43.2.2 the date, if any, set out in the said notice of amendment, save in the case of an amendment that changes the name of the Company, which will take effect from the date set out in the amended registration certificate issued by the Commission.

44 COMPANY RULES The Board is prohibited from making, amending or appealing any Rules as contemplated in section 15(3) and the Board’s capacity to make such Rules is hereby

excluded.

ADOPTION This Memorandum of Incorporation was adopted by special resolution of the Shareholders on 28 June 2012.

CLASSES OF SHARES 1 The Company is authorised to issue 2 000 000 000 ordinary Shares of no par value as contemplated in clause 6.1.1 of the Memorandum of Incorporation

to which this schedule is Schedule 1.

2 In addition to the Shares contemplated in paragraph 1 above, the Company is authorised to issue no more than the following further Shares: 100 000 000 redeemable convertible preference shares of no par value.


ProxiesA shareholder of the Company entitled to attend, speak, and vote at the annual general meeting is entitled to appoint a proxy or proxies to attend, speak and on a poll vote in his stead. The proxy need not be a shareholder of the Company. A form of proxy is attached for the convenience of any certificated shareholder and own name registered dematerialised shareholder who cannot attend the Annual General Meeting, but who wishes to be represented.

Additional forms of proxy may also be obtained on request from the Company’s registered office. The completed forms of proxy must be deposited at, posted or faxed to the registered office of the Company or the transfer secretaries at the address set out on the inside of the back cover, to be received by no later than 10:00 on Tuesday, 26 June 2012. Any member who completes and lodges a form of proxy will nevertheless be entitled to attend and vote in person at the Annual General Meeting should the member subsequently decide to do so.

Shareholders who have dematerialised their ordinary shares through a CSDP or broker, other than own name registered dematerialised shareholders, and who wish to attend the Annual General Meeting must request their CSDP or broker to issue them with a letter of representation. Alternatively, dematerialised shareholders other than own name registered dematerialised shareholders, who wish to be represented, must provide their CSDP or broker with their voting instructions in terms of the custody agreement between them and their CSDP or broker in the manner and by the time-frame stipulated.

VotingOn a show of hands, every shareholder of the Company present in person or by proxy shall have 1 (one) vote only, irrespective of the number of shares he holds or represents, provided that a proxy shall, irrespective of the number of members he represents have only 1 (one) vote. On a poll, every shareholder of the Company who is present in person or represented by proxy, shall have one vote for every share held in the company by such shareholder.

By order of the board

GA VergaCompany Secretary

Durban 22 May 2012

Registered office addressFirst Floor, 9 Frosterley ParkLa Lucia Ridge Office EstateDurban 4019

Transfer secretariesLink Market Services (Pty) Limited13th Floor Rennie House19 Ameshoff StreetBraamfonteinJohannesburg 2001

PO Box 4844Johannesburg2000

» FORM OF PROXY

NUTRITIONAL HOLDINGS LIMITED(Incorporated in the Republic of South Africa)(Registration number 2004/002286/06)ISIN: ZAE 000156485 Share code: NUT(“Nutritional Holdings” or “the Company”)

For use by certificated and own name registered shareholders of the Company (“members”) at the Annual General Meeting of Nutritional Holdings to be held at 10:00 on Thursday, 28 June 2012 (“the Annual General Meeting”) at the Durban Country Club, 101 Isaiah Ntshangase Road, Durban.

I/We: (please print names in full)

of (address)

being the holder/s of ordinary shares of no par value in Nutritional Holdings, appoint (see note 1):

1. or failing him/her,

2. or failing him/her,

3. the Chairperson of the Annual General Meeting,

as my/our proxy to act for me/us and on my/our behalf at the Annual General Meeting which will be held for the purpose of considering, and if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at any adjournment thereof and to vote for and/or against the resolutions and/or abstain from voting in respect of the ordinary shares registered in my/our name/s, in accordance with the following instructions (see note 3):

Number of votes (one vote per share)For Against Abstain

Ordinary resolution number 1– Annual financial statementsOrdinary resolution number 2 – Re-appointment of auditorsOrdinary resolution number 3 – Confirmation of appointment fo a director: TR HendryOrdinary resolution number 4 – Confirmation of appointment fo a director: CD AngusOrdinary resolution number 5 – Auditors remunerationOrdinary resolution number 6 – Re-appoint GR Wambach as a non-executive directorOrdinary resolution number 7 – Elect GR Wambach as a member of the Audit and Risk CommitteeOrdinary resolution number 8 – Elect TR Hendry as a member of the Audit and Risk CommitteeOrdinary resolution number 9 – Placing unissued ordinary shares for purpose of share option

scheme under the control of the directorsOrdinary resolution number 10 – Placing of the authorised but unissued ordinary share capital

under the control of the directorsOrdinary resolution number 11 – I ssue of shares for cash placed under the control of the directorsOrdinary resolution number 12 – Authorisation to sign any documentsSpecial resolution number 1 – Remuneration of non-executive directorsSpecial resolution number 2 – Acquisition of Company’s own sharesSpecial resolution number 3– Financial Assistance to a related of inter-related company/

corporationSpecial resolution number 4 – Financial assistance to any person as envisaged in section 44 of

the Companies ActSpecial resolution number 5 – Adoption of new Memorandum of IncorporationSpecial resolution number 6 – Conversion of the preference share capital

Signed at: on 2012

Signature:

Assisted by me where applicable:

Name: Capacity: Signature:

Please read the notes on the reverse hereof

» NOTES TO THE FORM OF PROXY

Certificated shareholdersIf you are a certificated shareholder or have dematerialised your shares with own name registration and you are unable to attend the Annual General Meeting of Nutritional Holdings shareholders to be held at 10:00 on Thursday, 28 June 2012 and wish to be represented thereat, you must complete and return this form of proxy in accordance with the instructions contained herein and lodge it with, or post it to, the transfer secretaries, namely Link Market Services.

Dematerialised shareholders other than those with own name registrationIf you hold dematerialised shares in Nutritional Holdings through a CSDP or broker other than with an own name registration, you must timeously advise your CSDP or broker of your intention to attend and vote at the general meeting or be represented by proxy thereat in order for your CSDP or broker to provide you with the necessary letter of representation to do so, or should you not wish to attend the general meeting in person, you must timeously provide your CSDP or broker with your voting instruction in order for the CSDP or broker to vote in accordance with your instruction at the Annual General Meeting.

NOTES1. Each member is entitled to appoint one or more proxies (who need not be members of the Company) to attend, speak and, on a poll, vote

in place of that member at the Annual General Meeting.

2. A member may insert the name of a proxy or the names of two alternative proxies of the member’s choice in the space provided, with or without deleting “the Chairperson of the Annual General Meeting”. The person whose name stands first on the form of proxy and who is present at the Annual General Meeting will be entitled to act as proxy to the exclusion of those whose names follow.

3. A member’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that member in the appropriate box/es provided. Failure to comply with the above will be deemed to authorise the Chairperson of the Annual General Meeting, if he is the authorised proxy, to vote in favour of the resolutions at the Annual General Meeting, or any other proxy to vote or to abstain from voting at the Annual General Meeting as he deems fit, in respect of all the member’s votes exercisable thereat.

4. A member or his proxy is not obliged to vote in respect of all the ordinary shares held or represented by him but the total number of votes for or against the resolutions and in respect of which any abstention is recorded may not exceed the total number of votes to which the member or his proxy is entitled.

5. Forms of proxy must be lodged with, or posted to the transfer secretaries to be received no later than 2 hours before the Annual General Meeting.

6. The completion and lodging of this form of proxy will not preclude the relevant member from attending the Annual General Meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such member wish to do so.

7. Any alterations or corrections to this form of proxy must be initialled by the signatory/ies.

8. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy unless previously recorded by the Company’s transfer office or waived by the Chairperson of the Annual General Meeting.

9. The Chairperson of the Annual General Meeting may reject or accept any proxy form which is completed and/or received other than in accordance with these instructions, provided that he is satisfied as to the manner in which a member wishes to vote.

» CORPORATE INFORMATION

Country of incorporation and domicile South Africa

Holding company registration number 2004/002282/06

Directors CD Angus JA Etchells TR Hendry HJ van der Merwe GR Wambach

Registered office First Floor 9 Frosterley Park La Lucia Ridge Office Estate 4019

Postal address PO Box 5044 Frosterley Park La Lucia Ridge Office Estate 4019

Auditors Grant Thornton (Durban) Practice number: 905690 2nd Floor Pencarrow Park 4 Pencarrow Crescent La Lucia Ridge Office Estate La Lucia 4019

Telephone 031 584 7100 Facsimile 031 584 7101

Previously known as “Imuniti Holdings Limited”

NUTRITIONAL HOLDINGS LIMITED ANNUAL INTEGRATED REPORT …

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