integrated annual report 2016 - psv · pdf file1 scope of report this document contains the...

Integrated Annual Report 2016

Contents1 Scope of report1 Board responsibility statement

2 Operating context

14 Stakeholders

16 Sustainability report

3 Corporate governance

19 Board of directors and committees

20 Corporate governance report

4 Shareholders

27 Analysis of shareholders

30 JSE share information

30 Interaction with shareholders

30 Shareholders’ diary

1 Group overview

3 Value added statement

3 Company structure

4 Group structure and operations

6 Vision, mission and goals

7 Challenges faced by PSV

8 Group directorate

10 Chairman’s report

11 CEO’s report

5 Annual financial report

32 Audit and Risk Committee report

34 Directors’ responsibility statement

34 Certification by Company Secretary

35 Directors’ report

37 Report of independent auditors

38 Consolidated statement of

comprehensive income

39 Consolidated statement of financial position

41 Statement of changes in equity

43 Consolidated statement of cash flows

45 Accounting policies

53 Notes to the annual financial statements

99 Notice of Annual General Meeting

105 Form of proxy

107 Administration

108 Glossary of terms

1

Scope of report

This document contains the annual fi nancial reports of PSV* and its divisions and covers the fi nancial year from 1 March 2015 to 29 February 2016. The previous year’s report was published in August 2015. The directors of PSV present to the shareholders information pertaining to the Company’s operations and financial performance. This is the 11th annual report since listing.

The report contains feedback from the Chairman and Chief Executive Offi cer as well as feedback on corporate governance and the undertakings of the committees in place.

Assurance for the annual fi nancial statements has been provided by our external auditor, Certifi ed Master Auditors Inc, whose unmodifi ed audit opinion is available for inspection at the registered offi ce of PSV. No accounting policies have been changed.

The fi nancial statements were prepared according to International Financial Reporting Standards (“IFRS”), the requirements of the South African Companies Act, regulations of the JSE Limited (“JSE”) and wherever possible recommendations of King III.

PSV is committed to sustainable practices affecting the environment, the economy, our people and the society in which we operate. We are also committed to the production of quality products which meet various accreditation standards. See further details in the Sustainability Report on page 16 of this Integrated Annual Report.

* PSV, the Group, and the Company – should be read as inter-changeable terms.

PSV Holdings Limited (“PSV”) is an industrial engineering

holding company comprising two operating business segments:

Industrial Supplies (including steel, piping, industrial tools

and consumable supplies, and a parts vehicle dealership in

Botswana).

Specialised Services (including comprehensive cryogenic

and gas systems and geosynthetic linings).

A detailed Company structure can be found on page 3 of

this Integrated Annual Report.

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

Ralph Patmore | Chairman

28 July 2016

Additional information requirements:

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

Tony DreisenstockChief Financial Offi cer

Tel: +27 (11) 452 4004 | Fax: +27 (11) 452 4007 | Email: [email protected] Offi ce Park | 8 Greenstone Place | Building C, 2nd Floor | Greenstone Hill

Board responsibility statement

A tough year was endured by the Group which

required the sale and closure of underperforming

businesses and further restructuring

Group overview1

3 Value added statement

3 Company structure

4 Group structure and operations

6 Vision, mission and goals

7 Challenges faced by PSV

8 Group directorate

10 Chairman’s report

11 CEO’s report

Value added statement

This structure graphically represents the trading operations only.

During the year under review, Turbo Agencies Zambia was sold and Turbo DRC was closed.

3

2015

55.6% Employees

26.9% Retained income

13.3% Depreciation and amortisation

12.9% Providers of capital

(8.7)% Government

* Includes deferred tax asset

2016

67.1% Employees

30.0% Retained loss

9.6% Depreciation and amortisation

8.7% Providers of capital

(15.3)% Government

* Includes deferred tax asset

2016 Company structure

100% 100%

100%

PSV Asset Co

100%

PSV Holdings

100%

PSV Treasury

Turbo Agencies Botswana PSV Industrial

Omnirapid 100%

100%African Cryogenics

100%Engineered Linings

Group overview4

PSV Integrated Annual Report 2016

Group structure and operations

Divisional overview Geography Management

Industrial Supplies

Strong agency agreements and suppliers of steel, piping, industrial tools and consumable supplies and automotive capital equipment.

% of contribution to total revenue: Based in Elandsfontein. It services clients throughout Africa as well as local buying offices of African-based companies

MD: Joanne da Silva

2016

53%

2015

64% Turbo Agencies based in Gaborone, Botswana

Area Manager Botswana Operations: Hannes Grobler

Industrial Supplies Specialised Services

Specialised Services

Manufacture, support and supply of comprehensive cryogenic and gas systems and installation of geosynthetic linings.

% of contribution to total revenue: Based in Elandsfontein, Johannesburg

MD: Allan SparrowMD: John Winterton

2016

47%

2015

36% Based in Cape Town. Work is carried out across South Africa as well as in many African countries

General Manager: Herman Pretorius


5

Divisional overview Geography Management Operation Staff Achievements during the year

Industrial Supplies Industrial Supplies

Strong agency agreements and suppliers of steel, piping, industrial tools and consumable supplies and automotive capital equipment.

% of contribution to total revenue: Based in Elandsfontein. It services clients throughout Africa as well as local buying offices of African-based companies

MD: Joanne da Silva

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

Omnirapid is a supplier of, inter alia, steel, piping, industrial tools and consumable supplies.

These products are provided to mining and industrial clients locally in South Africa as well as being exported to various African countries. 7 6

Shows remarkable resilience and the ability to generate sustained levels of profitability and cash flow.2016

53%

2015

64%

turbo agencies (pty) Itd

Manufacturers Representatives and Distributors

Turbo Agencies based in Gaborone, Botswana

Area Manager Botswana Operations: Hannes Grobler

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

The company carries blue chip agencies such as Hilti Construction Equipment, Mining Equipment and Fasteners, Ravaglioli Automotive Equipment, Ridgid Tooling, Kito Lifting, Lincoln Electric Welding amongst others.

15 5Disposing/closing down of the loss making operations being Turbo Zambia and Turbo DRC.


Specialised Services Specialised Services

Manufacture, support and supply of comprehensive cryogenic and gas systems and installation of geosynthetic linings.

% of contribution to total revenue: Based in Elandsfontein, Johannesburg

MD: Allan SparrowMD: John Winterton

African Cryogenics manufactures and supplies gas and cryogenic equipment including road tankers and cryogenic storage vessels.

The division services primarily the gas and chemical industries. It also offers a full repair and complete refurbishment service. The manufacturing facility now has international accreditation in place.

46 11The business is in transformation phase. The business is being restructured and new management will be put in place.

2016

47%

2015

36% Based in Cape Town. Work is carried out across South Africa as well as in many African countries

General Manager: Herman Pretorius Engineered Linings offers an array of geosynthetic and plastic lining solutions.

These lining solutions are designed to assist mining operators for the purpose of seepage containment, corrosion and environmental protection. 26 6

Engineered Linings has been transformed into a vibrant and profitable operation. The company has a healthy order book, excellent prospects and competent management team. Industrial Supplies Specialised Services

A head office structure supports the operating businesses5 6

Vision, mission and goals

To be a recognised provider of industrial

engineering products and services

throughout Africa.

To deliver a high-quality service and products

in each area of the business through the

provision of superior customer service

throughout Africa.

To continue developing as an industrial

engineering group focused on engineered

linings, cryogenics-based products and

industrial solutions.

Group overview6


Vision Mission Goals

7

Challenges faced by PSV

During the year under review, PSV faced economic challenges, often outside of the control of management. The businesses which were affected were either closed down, sold and in those which remained, restructured. Remedial action in the form of reducing operating costs combined with the appointment of new management should ensure stability.

The main infl uencers in the year were the closure of mines, the reduction in mining activity and the lack of capex spend in the gas and chemical industries.

The effects on the PSV businesses can be explained as follows:

Positive effects Negative effects

ManagementExchange rates

(R/US$) RestructuringMining, gas and chemical sectors

SA and international economies

Weak commodity prices

Omnirapid Mining and Industrial Supplies

Turbo Agencies (Botswana) *

African Cryogenics * *

Engineered Linings

PSV Holdings

* Post year-end.

Group overview8


Group directorate

Executive Directors

Anthony (Tony) R Dreisenstock (56) Chief Financial Offi cer

Abilio (Abie) JD da Silva (54)) Chief Executive Offi cer

Independent Non-Executive Directors

Anthony de la Rue (69) Eric Ratshikhopha (65)Ralph Patmore (64)Chairman of the Board

9

Member of the Audit and Risk Committee Member of the Remuneration Committee

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

Ralph Patmore (64)Chairman of the Board

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

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

Anthony de la Rue (69)

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

Eric currently holds a number of directorships on foundations and serves as a trustee on a number of trusts. His background includes vast work experience in the mining sector, having been involved in industrial relations, health and safety, strategic management and corporate social investment.

Eric holds the following qualifi cations: BA (Hons) Sociology, University of the North, Developmental Programme in Labour Relations, University of South Africa Advanced Programme in Labour Relations, University of South Africa Master of Management, University of the Witwatersrand Senior Executive Programme and Harvard School of Business.

Eric Ratshikhopha (65)


Member of the Social and Ethics Committee

Abie is the co-founder of PSV and was appointed as the Chief Executive Offi cer upon listing. He obtained a National Technical Certifi cate 5 from the Johannesburg Technical College and a Business Management Diploma from Damelin College.

Abilio (Abie) JD da Silva (54) Chief Executive Offi cer

Member of the Social and Ethics Committee

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

Anthony (Tony) R Dreisenstock (56)Chief Financial Offi cer

Executive Directors

Group overview10


Chairman’s report

Review of the yearPSV experienced another tough year with continued pressure on commodity prices and low economic growth rates across the countries where the Group operates.

In the year under review, PSV focused on further restructuring in order to ensure the survival of the business. The actions taken are beginning to show positive results, although the Company’s statement of fi nancial position weakened as a result of the losses incurred in the year.

The reduction in mining activities in Africa resulted in the sale of Turbo Zambia and the closure of Turbo DRC. Together with the diffi cult trading

environment, the sale and closure of these businesses contributed to the losses incurred. Both transactions became effective on 1 January 2016. In terms of the sale of Turbo Zambia, PSV’s loan account was repaid and certain stock items were returned to Turbo Botswana.

The only remaining operation outside of our borders is Turbo Botswana which made a small operating profit during the year after further restructuring, which will improve the operating profi tability and cash fl ow in the new year.

With the losses incurred by PSV in the period under review, the Board performed an extensive analysis of the going concern solvency and liquidity of PSV, and has taken cognisance of the defi cit between current liabilities and assets. Based on the approved budgets, the Board is satisfi ed that PSV will remain a viable going concern. Notwithstanding, the Board is mindful of the eroding solvency base and is taking steps to ensure sustained future profi tability. The Company’s major bankers have recently renewed existing overdraft facilities.

The poor operating performance of PSV necessitated the impairment of R16 million of goodwill and specifi c intangibles. This impairment, together with substantial retrenchment costs exceeding R3 million, is refl ected in the excessive increase in costs compared to the previous year.

Operational performanceWe continue to operate two divisions in two primary segments, namely Industrial Supplies and Specialised Services.

The operations of Industrial Supplies were affected by the closure of Turbo DRC and the sale of Turbo Zambia. However, the business continues to show resilience, high cash fl ow generation and profi tability. Omnirapid continues to generate good profi tability and cash fl ow, despite a client in DRC suspending mining operations for 18 months. The outstanding management team at Omnirapid is expected to make up the reduced income from Africa.

The two units in Specialised Services showed mixed results. African Cryogenics suffered as a result of the increase of unprotected imports. Towards the end of the fi nancial year, the weakening currency turned the

tide and stemmed imports. The uptick experienced in interest from the gas companies will only fl ow through in the coming fi nancial year.

Engineered Linings has emerged from a period of restructuring as a vibrant company that has restored customer relations and profi tability. There is a strong order book in place, which stands the company in good stead for the coming year and beyond.

Shareholder changesDuring the fi nancial year, Genesis Capital increased its shareholding in PSV. Details on the shareholders of PSV can be found on page 27 of this annual report.

Dividend policyThe Board reviews the dividend policy annually. No dividends were declared or proposed for the financial year under review as the management is of the view that cash fl ow is required to run the day-to-day operations of the Company.

AppreciationOnce again my fellow Board members, who serve in either a non-executive or executive capacity, demonstrated commitment and support to PSV. Staff continue to be loyal to the business, and we extend our thanks to them for this.

The year will be another challenging one for the Company, given pressure on commodity prices and low economic growth rates. However, the right sizing of the Company, the sale of loss making entities and the introduction of new management at African Cryogenics should ensure sustainability in the new fi nancial year.

Ralph PatmoreChairman

28 July 2016

Ralph Patmore Chairman

Continued restructuring at PSV begins

to show positive results.

11

CEO’s report

IntroductionThis was a challenging year for PSV. Management had to make some diffi cult decisions, which I do feel are in the best interest of PSV going forward. The largest factors influencing the Group in the current fi nancial year included inter alia:

reduced mining activity and in some instances, the closure of mines; slowing economic growth rates in southern Africa; and continual restructuring and further cost reduction programmes.

Having to face and deal with these adversities has not been easy but has ensured a leaner structure with the confi dence to sell or close operations not contributing to the Group. The rightsizing and restructuring should yield positive results.

The 2016 fi nancial resultsThe consolidated statement of comprehensive income has been restated as a result of the discontinued operations. With the prior year restated, revenue is up 6% based on continued operations, with gross profi t percentages improving from 13% in 2015 to 15% in the current year.

Total comprehensive loss for the year settled at R40 million (2015: loss of R27 million). The comprehensive loss comprised of the following elements:

R21 million attributable to discontinued operations; R16 million impairment of goodwill and specifi c intangibles; and The balance of R3 million attributable to trading losses incurred during the year.

The trading businesses which remain (Omnirapid, Turbo Botswana, African Cryogenics and Engineered Linings) in the Group are performing in a satisfactory manner.

Headline loss per share strengthened from a headline loss per share of 9.11 cents per share (“cps”) to a headline loss of 8.20 cps. Despite an overall negative result, the headline loss has improved.

Due to strong working capital management, cash fl ow from operating activities improved from a negative R8 million (2015) to a positive R6 million. Cash fl ow was further enhanced by the proceeds received on the sale of Turbo Zambia. As a result of the losses incurred, the Company’s debt:equity ratio (net of cash) increased from 31% in 2015 to 52% in the current year. Notwithstanding, the absolute amount of interest-bearing debt decreased by 8% to R32 million. PSV ended the year with a net overdraft of R8 million, compared to a net overdraft in 2015 of R11 million.

The Company’s statement of fi nancial position weakened as a result of the losses incurred in the year. The Company’s net tangible asset value per share decreased by 63% from 14 cps in 2015 to 5 cps in 2016.

The path towards improvement can be seen in the cash fl ow generated from continued operations, amounting to R15 million (2015: R11 million negative).

Operational reviewIndustrial SuppliesThis segment contributed 53% (2015: 64%) to the Group’s consolidated reportable segment revenue at an average gross profi t margin of 18% (2015: 18%).

Omnirapid continues to generate good profi tability and cash fl ow. The business continues to show resilience.

Turbo Botswana made a small operating profit for the year. This company has undergone further restructuring and we expect the company’s operating profi tability and cash fl ow generation to improve in the coming year.

Specialised ServicesSpecialised Services contributed 47% (2015: 36%) to the Group’s consolidated reportable segment revenue at an average gross profi t margin of 11% (2015: 5%).

African Cryogenics continues to struggle to compete effectively with international competitors, due to the lack of tariff protection on imports, making the operating environment difficult. Notwithstanding, the weakening of the rand has improved the situation to an extent. New management is in the process of being appointed, with the expertise of former management retained on a consulting basis.

In the current fi nancial year, an international equipment supply contract has been signed which is encouraging for the business having passed stringent quality control parameters. This supply contract will ensure greater visibility of the African Cryogenics name in the market. The current order book for road tankers is strong. However, during quiet periods we are building road tankers for rental or sale.

Engineered Linings has emerged from a period of restructuring as a vibrant company that has restored customer relations and profi tability. The structural changes implemented have resulted in better collections, marketing and job costing. Engineered Linings has a strong order book in place, which stands the company in good stead for the coming year

Abie da Silva CEO

The rightsizing and restructuring should

yield positive results.

Group overview12


CEO’s report (continued)

and beyond. Encouragingly tender sizes have increased and the business is able to honour installation commitments.

Broad-Based Black Economic EmpowermentThe lack of qualifying B-BBEE status required to operate in the South African market is a concern. Management continues to assess options in this regard.

Prospects The past two years of restructuring are beginning to show tangible results. Valuable lessons have been learnt in the past year and these will be taken forward by management.

Despite challenging market conditions, the experience, dedicated and entrepreneurial nature of the Omnirapid management team continues to ensure that volumes and sales targets are met. It is expected that Turbo Botswana will be able to undertake successful market penetration and expansion in the coming year.

Engineered Linings has some excellent prospects and with a stable foundation in place the company can continue to be profi table. The vaporiser contract, and recent orders placed for the manufacture of several multimillion road tankers with African Cryogenics should ensure sustainable levels of profi tability in the coming year.

AppreciationSupport by the PSV Board is invaluable to the executive management, especially in these diffi cult times. I also appreciate the dedication of all our staff, customers, suppliers, shareholders and all other stakeholders in our business.

Abie da SilvaCEO

28 July 2016

The turnaround at Engineered Linings

Engineered Linings was purchased by PSV

nine years ago. Macro-economic conditions

at the time, coupled with a strong mining

sector, ensured success of the business.

PSV management stepped in to restructure,

assist with pricing (quoting) models and

appointed new management. Previous

losses have now turned into positive revenue

and future prospects for Engineered Linings

are encouraging.

PSV acknowledges and recognises the importance of

long-term relationships with all stakeholders in order to

support sustainability. Stakeholder evaluation is undertaken

at Group as well as at divisional level and has evolved over

the past three years. Interaction, feedback, review and

communication with all stakeholders is ongoing and PSV

management is cognisant that the level of interaction

needs to be sustained. Engagement with stakeholders

takes various forms including informal calls, customer

meetings, staff meetings and newsletters to formal

meetings with regulators.

Operatingcontext2

14 Stakeholders

16 Sustainability report

Operating context14


Stakeholders

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

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

Shareholders

Delivering sustainable returns, growth on investment Results presentations and roadshows One-on-one meetings

To ensure strategic growth opportunities, good corporate governance practices and good risk management

Staff

Create and sustain a safe work environment for employees Open communication channels between employees and employers Career development Awareness of rules and regulations within the workplace Regulate discipline in the workplace through progressive disciplinary methods

Weekly “toolbox” discussions Internal communications through management and HR Evaluating employees and identifying training and education opportunities Abridged employee handbook Newsletters/notice boards Induction programme for new employees

Emphasise health and safety awareness and regulatory requirements Promote the relationship and engagement between employee and employer Promote internal training to employees which will allow them opportunities to further develop themselves Ensure circulation of relevant updated legislation Maintain updated Company policies and processes To limit disciplinary processes in the workplace by increasing general communication with employees on the Company’s disciplinary code LabourNet is used to chair disciplinary hearings

Customers GovernmentShareholders Suppliers Financiers/regulatorsStaff

15

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

Customers

To provide the best quality products at the best competitive pricing Regular site visits and customer meetings Promote and market product offerings to customers

Conscious effort to meet expectations where possible Maintain and implement all relevant accreditations Source best competitive pricing

Suppliers

Reliable supply/service delivery and pricing of quality products Transformation of our existing suppliers in alignment with B-BBEE codes

Engage with suppliers to provide valued product/services Communicate our B-BBEE strategy with suppliers and the importance thereof

Research the market to ensure we use reliable suppliers and compare pricing Promote our B-BBEE policy and if necessary source alternative suppliers who meet the requirements

Government

Industry regulatory compliance Transformation and adherence to the revised B-BBEE codes

Meetings with relevant bodies regarding their requirements Ensure we continue to comply with the required legislation in order to secure orders/tenders Business association meetings PSV adheres to the JSE, Companies Act and all other legal requirements To align our B-BBEE strategy and implement a plan for the next five years

Financiers/regulators

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

Operating context16


Sustainability report

IntroductionPSV has set clear, qualitative sustainability goals to match our strategic alignment objectives. Examples include, inter alia, enhancing our system safety, research and running of education programmes for improved employee qualifi cations. Our environmental goals embody a steady decreasing of water and power consumption and the reduction of waste and pollution.

Environmental performancePSV recognises the impact of its business on the surrounding communities and natural environments. This may affect the long-term sustainability of our business, objectives and targets which we foresee considerable potential for savings.

The Company is continuously striving to exceed established environmental targets, implementing environmental management and auditing systems into the ISO 9001:2008 quality management system, that ensure compliance with legislation and regulation and internal policies, procedures and standards.

We will create value through reducing waste and carbon emissions. We will work with suppliers, distributors, retailers, municipalities and consumers to reduce emissions and waste across our value chain, and reuse and recycle waste and packaging.

Health, safety and qualityOccupational safetyPSV Holdings values the health and wellbeing of all its employees. The Group ensures that the necessary resources are available for health and safety training and our divisions seek, as necessary, professional advice regarding the implementation of safety programmes.

Health and Safety CommitteeThe Health and Safety Committee comprises representatives from each division. The committee meets on a regular basis, addressing the requirements of the Occupational Health and Safety Act 85 of 1993.

Work accidents and injuriesWe have made steady progress in managing safety over the past few years and our injury frequency rates.

PSV is pleased to report that there were no fatalities at any of its divisions for the year under review.

Efforts to prevent accidents at work are an essential part of PSV activities and require continuous motivation of employees by health and safety representatives and managers.

Policies and procedures Central to OHSAS requirements, strong policies and procedures are in place to assist in this respect, with the full code of practice.

OHSAS forms part of the acclaimed ISO 9001:2008 system, and being audited as part of the internal audit system.

Quality systemsTUV Rhineland South Africa and the SABS are the accreditation bodies for PSV Holdings and the divisions. Surveillance audits take place annually for all divisions to ensure continued compliance with the ISO 9001:2008 standards followed by recertifi cation every three years.

Human resources managementThe human resources management responsibility is centralised at PSV’s head office, although the responsibility of direct management of employees remains the responsibility. PSV ensures compliance with South African labour legislation and other legislation which includes but is not limited to the Labour Relations Act, Basic Conditions of Employment Act, the Employment Equity Act, the Skills Development Act, the Unemployment Insurance Act, Broad-based Black Economic Empowerment Act and the Occupational Health and Safety Act. No incidents of non-compliance were noted in the period under review.

Our demographic and male to female split is as follows:

African Coloured Indian White

0

10

20

30

40

50

60

3 1

37

60

14

4 0

17

2016 staff demographics (including PSV Africa)

Male Female

African Coloured Indian White

0

50

100

150

200

2 2

52

167

202 2

15

2015 staff demographics (including PSV Africa)

Male Female

17

Fair and sustained employmentPSV treats all staff equitably and responsibly, in compliance with applicable legislation, to ensure that their full potential is realised. The Group is committed to the principles of employment equity as well as achieving a productive and fair working environment that is free of discrimination and offers equal opportunity to all. The Group recognises the importance of employment equity and through recruitment and training continuously strives to improve on previous employment equity standards.

The Group makes every effort to remunerate staff and Directors fairly and equitably. Permanent employees reap the benefit of a cost to company structure, which includes retirement fund contributions, medical aid and other benefi ts. The annual increases for non-union employees are recommended by the Managing Director of each business unit and approved by the Remuneration Committee. Increases for employees that fall within the bargaining unit are negotiated with representative trade unions, except in those instances where there are industry-wide bargaining agreements. The Group will continue to respect these agreements.

External human resource consultants are utilised on an ad hoc basis. Codes and practices, policies and procedures that guide business and employee conduct, non-discrimination, industrial relations, recruitment, employment equity and grievance and dispute settlements are communicated to staff through induction programmes, on notice boards and in their employment contracts. PSV operates in an environment of trust and respect towards all employees. Misconduct or corruption by an employee is treated with appropriate disciplinary action without delay and in most cases the employee is suspended on full pay, pending an investigation. Should an employee be found guilty of misconduct or

corruption, dismissal may follow. In matters of a serious nature, legal action is taken against the employee. Corruption is not tolerated within the Group.

Human rightsPSV is guided by human rights policies detailed in the South African Constitution. South Africa’s endorsement of various International Labour Organisation principles relating to child labour is also binding on the Group. There were no contraventions of these principles for the period under review.

Skills development and retentionAlthough PSV has no formal skills management and training policy, a key initiative of the Group is to nurture and develop its skills base internally to meet the current and future skills requirements. The Group encourages training and skills development as and when required to empower employees with skills to improve efficiency, safety and progress within the Group. Although minimal external training took place in the year under review, internal training did take place.

Corporate social initiativesDuring the year under review, no CSI initiatives were undertaken as cash fl ow within the Group was extremely tight.

Economic performancePSV’s objective is to create a sustainable business and prosperity for its stakeholders. The performance of the Group is discussed in the CEO’s report and is evidenced in the annual financial statements. PSV contributes to overall growth of the country through: investing in skills development and training; creating job opportunities; and supporting local and small business enterprises where possible. PSV does not get fi nancial assistance from the Government.

Corporategovernance3

The Board of Directors (“the Board”) is cognisant

that corporate governance is essential to protect the

interests of all stakeholders and remains committed

to compliance with legal requirements and sound

corporate governance principles.

19 Board of Directors and committees

20 Corporate governance report

Board of Directors and committees

Abie da Silva | CEO

Tony Dreisenstock | CFO

Executive Directors

Ralph Patmore | Chairman

Anthony de la Rue

Eric Ratshikhopha


Board of Directors

Committees

Anthony de la Rue | Chairman

Ralph Patmore

Eric Ratshikhopha

Abie da Silva (by invitation)

Tony Dreisenstock (by invitation)

Audit and Risk Committee

Anthony de la Rue | Chairman

Ralph Patmore

Eric Ratshikhopha

Remuneration Committee

Eric Ratshikhopha | Chairman

Abie da Silva | Executive Director

Tony Dreisenstock | Executive Director

Sagren Sookanathan | Group SHEQ Manager

Social and Ethics Committee

19

Corporate governance20


Corporate governance report

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

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

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

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

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

Board of DirectorsThe leadership of the Group is provided by a unitary effective Board which at year-end comprised two Executive Directors and three

Independent Non-Executive Directors. The Independent Non-Executive Directors are high-merit objective individuals who collectively contribute a wide range of skills and knowledge to the decision-making processes of the Board and also ensure proper deliberation of all matters requiring the Board’s attention. Independence of the Board is monitored annually in terms of the requirements of King III, when formal mandatory declarations of personal interests are made by each Director.

The Board is satisfi ed with its collective members’ levels of knowledge and skill in relation to the business of the Company and the Group. All Directors are required to attend the AltX Directors Induction Programme, hosted by the Institute of Directors Southern Africa (“IoDSA”).

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

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

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

Chief Executive Offi cerThe Chief Executive Officer (“CEO”), Mr Abie da Silva, accepts full responsibility for the sound and effi cient operation of the business as well as the implementation of all strategies and policies adopted by the Board. Managing Directors of the various businesses in the Group assist

him in this task. Board authority conferred on management is delegated through the CEO, in accordance with approved authority levels. Mr da Silva ensures the maintenance of good relations with all the shareholders of the Group.

There is a separation between the responsibilities of the Board and management. Mr da Silva communicates Board directives to executive management ensuring that all strategic objectives of the Company are achieved. For this purpose he meets on a regular basis with his Executive Committee, which consists of strategic head offi ce employees and Managing Directors of the business units in the Group. He ensures that the Group has an effective management team and actively participates in the development of management and succession planning.

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

Biographical details of each Director are set out on pages 8 and 9 of this Integrated Annual Report.

Meeting attendanceThe Board meets at least quarterly, and more frequently if circumstances require. They furthermore confer through round robin deliberations when necessary. Meetings are conducted in accordance with formal agendas and annual work plans, ensuring that all substantive matters are properly addressed. Any Director may request that additional matters be added to the agenda.

Copies of Board packs are circulated to the Directors well in advance of the meetings to ensure proper preparation to enhance constructive and informed deliberations.

21

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

Board processesDirectors’ share dealingsThe Board has an approved trading policy in terms of which dealing in the Group’s shares by Directors and employees is prohibited during closed periods. Directors may not deal in the Company’s shares without fi rst advising and obtaining clearance from the CEO and from the CFO.

The CEO and CFO may not deal in the Company’s shares without fi rst advising and obtaining clearance from the Chairman of the Board. No Director or Executive Committee member may trade in PSV’s shares during closed periods, as defined in terms of the JSE Listings Requirements.

The Board keeps the Company Secretary advised of all their dealings in securities. All dealings are announced on SENS within 24 hours of receiving notice of the dealing from the relevant director.

Interest in contractsDuring the year ended 29 February 2016, none of the Directors had an interest in any contract or arrangement entered into by the Company or its business units, other than as disclosed in Note 24 to the annual fi nancial statements.

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

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

The Board will from time to time assess the skills of the Board to ensure that it consists of the required competency levels in order to be effi cient and in order to provide strategic guidance to the Group.

Should the assessment indicate that there is a lack of competency in a certain area, the Board will consider the appointment of a Director to fulfi l this need.

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

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

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

Changes to the BoardNo resignations or appointments to the Board took place during the fi nancial year.

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

PSV is accountable to its shareholders and stakeholders by setting a charter for the Board, which regulates how business is conducted while adhering to best practice and the highest standard of business conduct. The primary responsibilities of the Board include the regular review of the strategic direction of investment decisions and performance against approved plans, budgets and best practice standards.

The Board retains full and effective control of the Group and decisions on material matters are reserved for the Board.

The objectives of the Board charter are to ensure that all Board members acting on behalf of the Group are aware of their duties and

Attendance by Directors at Board meetings is provided below:

Name of Director6 March

201529 May

201524 July 2015

21 August 2015

30 October 2015

29 February 2016

AJD da Silva (CEO)AR Dreisenstock (CFO)RB Patmore (Chair)A de la RueE Ratshikhopha



Corporate governance report (continued)

responsibilities as Board members and the various legislation and regulations affecting their conduct and to ensure that the principles of good corporate governance are applied in all their dealings in respect, and on behalf of, the Group.

The Board charter is reviewed annually.

Board committeesWhile the Board remains accountable and responsible for the performance and affairs of the Company, Board committees assist the Board in discharging its duties and responsibilities. However, the committees do not in any way mitigate or discharge the Board of its duties and responsibilities.

Board committees observe the same rules of conduct and procedures as the Board unless the Board determines otherwise. Board committees will only speak to and act for the Board when so authorised. The authority conferred on a Board committee will not derogate from the authority delegated to the CEO by the Board. Members of the Board committees will ensure transparency and full disclosure to the Board, except where the Board committees have been mandated otherwise by the Board.

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

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

Audit and Risk CommitteeThe Audit and Risk Committee currently comprises three Independent Non-Executives, Anthony de la Rue (Chairman), Eric Ratshikhopha and Ralph Patmore. The Board is satisfi ed that the three members of the Audit and Risk Committee are highly qualifi ed individuals who on a collective basis have suffi cient qualifi cations and experience to fulfi l its

duties. The members of the committee are also permitted by the Board to consult with specialists when required. The committee meets the requirements of section 94 of the Companies Act and King III in that it comprises three independent Non-Executive Directors. The attendance if committee members for the year ending 29 February 2016 is provided below:

Name of Director6 March

201522 May

201524 July

201530 October

201529 February

2016

RB PatmoreA de la Rue (Chair)E RatshikhophaAJD da Silva (Invitee)AR Dreisenstock (Invitee)

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

These functions are based on the relevant provisions of the Companies Act, 2008 (Act 71 of 2008) (“the Companies Act”), as amended, as well as relevant corporate governance recommendations in terms of King III, and taking account of the relevant provisions of the JSE Listings Requirements.

These include, inter alia, to: review the annual fi nancial statements to ensure that they present a true, balanced and understandable assessment of the financial position and performance of the Company; ensure an effective internal control environment in the Company; nominate the external auditor for appointment as the registered independent auditor after satisfying itself through enquiry that the external audit fi rm and the designated audit partner are independent; determine the fees to be paid to the external auditor as well as its terms of engagement; ensure that the appointment of the external auditor complies with the provisions of the Companies Act and any other legislation relating to the appointment of auditors; evaluate the independence and effectiveness of the external auditors; approve a non-audit service policy which determines the nature and

extent of any non-audit services which the external auditor may provide to the Company; pre-approve any proposed contract with the external auditor for the provision of non-audit services to the Company; and satisfy itself as to the appropriateness of the expertise and experience of the CFO.

The Audit and Risk Committee pays particular attention to the adequacy of internal controls and the integrity of fi nancial reporting. In fulfi lling its function, the committee specifi cally oversees fi nancial reporting risks, internal fi nancial controls, fraud risks and IT risks. The Audit and Risk Committee will also oversee the integrated reporting process of the Group from the ensuing year.

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

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

23

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

PSV is exposed to certain risks, which are infl uenced by its specifi c choices and actions. The Board of PSV along with its Executive Committee and management recognise that risk management is a critical management tool to ensure that the Group achieves its objectives.

The committee’s role has been formulated with the specifi c objective of identifying those risks and implementing policies to combat and mitigate those risks. The committee maintains a Group Risk Register which is reviewed quarterly.

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

The committee oversees the development and annual review of the policies and plans for risk management in order to recommend same to the Board for approval. The Group acknowledges the importance of risk management and corporate governance principles. Risk is an intrinsic part of all activities undertaken by PSV. The committee reviews the effectiveness of the system for monitoring compliance with laws and regulations and the results of management’s investigation and follow-up (including disciplinary action) of any fraudulent acts or non-compliance, obtains regular updates from management and the Group’s legal counsel regarding compliance matters and ensures that all regulatory compliance matters have been considered in the preparation of the fi nancial statements.

Remuneration CommitteeA Remuneration Committee has been established in compliance with the requirements of King III. The Remuneration Committee met three times during the fi nancial year ended 29 February 2016.

The attendance by members at the Remuneration Committee meetings is provided below:

Name of Director29 May

201530 October

201529 February

2016

RB PatmoreA de la Rue (Chair)E RatshikhophaAJD da Silva (Invitee)AR Dreisenstock (Invitee)

The Remuneration Committee comprises the three Independent Non-Executive Directors as members, the Chairman is Anthony de la Rue. The CEO and CFO attend the committee’s meetings by invitation only.

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

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

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

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

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

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

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

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

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

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

9. Advise the Board on the remuneration of Non-Executive Directors;10. Exercise governance over the HR function, inter alia, the setting of

Group performance-based increases and bonuses, job grading, pay scales, and to provide general advice as required to the HR function; and

11. Advise the Board on matters from time to time as requisite.

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

Remuneration of Non-Executive Directors

Type of fee

Approved annualfee for 2016

R

Proposed annualfee for 2017

R

CommitteeChairman 291 300 291 300Member 291 300 291 300



Corporate governance report (continued)

The approved annual fi gure for the 2016 year-end and the proposed annual fi gure for 2017, remains the same as the previous year.

The annual remuneration payable to any Non-Executive Director is R291 300 per annum (2016), notwithstanding the number of committees he/she is a member/Chairman of. The proposed fee for 2017 is R291 300 per annum.

Fees as set out above are subject to shareholder approval at the Annual General Meeting to be held on 30 August 2016.

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

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

2016R

2015 R

Employee 1 2 541 063 1 984 352Employee 2 1 364 676 1 633 824Employee 3 1 267 090 1 269 963

Total 5 172 829 4 888 139

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

Name of Director29 May

201524 July

201529 February

2016

E Ratshikhopha (Chair)AJD da Silva AR Dreisenstock

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

Additional information relating to the points above can be found in the Sustainability Report.

Company Secretary The appointment and removal of the Company Secretary is approved by the Board. The Company Secretary advises the Board on the appropriate procedures for the management of meetings and the implementation of governance procedures, and is further responsible for providing the Board collectively, and each Director individually, with guidance on the discharge of their responsibilities in terms of the legislation and regulatory requirements applicable to South Africa.

The Board is satisfi ed that there is an arm’s length relationship between the Company Secretary and PSV as the Company Secretary is not a Director of the Group and is itself a separate legal entity and at all times maintains open lines of communication with the Board. The Board has unlimited access to the Company Secretary, who advises the Board and its committees on issues including compliance with Group policies and procedures, statutory regulations and relevant governance principles and recommendations. The Company Secretary attends Board and Committee meetings to ensure that comprehensive minutes of meetings are recorded.

Merchantec Capital was appointed in January 2011 as the Company Secretary of PSV. The Board has considered and is satisfi ed that the Company Secretary has the required qualifi cations, skills and knowledge through their many years of experience. The Board is satisfi ed with the

considered advice received from the Company Secretary as well as the level of service provided to PSV. Furthermore, the skills, competence and experience of the Company Secretary are verifi ed through:a. monitoring, guiding and advising the Board on matters relating to

governance, legislative and statutory requirements and their duties and responsibilities as Directors;

b. secretarial and administrative procedures are performed promptly and effi ciently by the Company Secretary; and

c. the Company Secretary ensures that all directors have declared in writing any confl icts of interests at every meeting.

Relations with shareholdersThe Group maintains dialogue with its key fi nancial audiences, especially institutional shareholders and analysts. For further information, refer to page 30 of this Integrated Annual Report.

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

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

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

Code of ConductThe Group is committed to the highest ethical standards of business conduct. The key pillars of the code include adherence to the legal

25

framework and ensuring that the Group is not brought into disrepute, against the overriding background of transparency in all transactions, complying fully with all applicable laws and regulations, ensuring that a relationship of trust and shared values is built up with both employees and external stakeholders. The Directors, employees, employees of outsourced functions, as well as suppliers to PSV, are all expected to comply with these principles and act in terms of the Code of Conduct. The Directors believe that the ethical standards of the Group, as stipulated in the Code of Conduct, are monitored and are being met. Where there is non-compliance with the Code of Conduct, the appropriate discipline is enforced with consistency as the Group responds to offences and prevents recurrences.

The Group adopts a proactive stance in timely

dissemination of appropriate information to stakeholders

and shareholders through SENS as well as print and

electronic news releases and the statutory publication

of the Group’s fi nancial performance.

4 Shareholders

27 Analysis of shareholders

30 JSE share information

30 Interaction with shareholders

30 Shareholders’ diary

27

Analysis of ordinary shareholders as at 29 February 2016

Shareholder spreadNumber

of shareholdings% of total

shareholdingsNumber

of shares% of issued

capital

1 – 1 000 239 37.82% 87 166 0.03%1 001 – 10 000 184 29.11% 857 590 0.32%10 001 – 100 000 150 23.73% 5 401 365 2.03%100 001 – 1 000 000 43 6.80% 15 372 265 5.78%Over 1 000 000 16 2.53% 244 161 456 91.83%

Total 632 100.00% 265 879 842 100.00%

Distribution of shareholdersClose corporations 14 2.22% 646 353 0.24%Control accounts 1 0.16% 950 0.00%Custodians 2 0.32% 4 503 627 1.69%Hedge funds 1 0.16% 3 600 000 1.35%Managed funds 1 0.16% 1 000 0.00%Private companies 14 2.22% 133 468 574 50.20%Public companies 2 0.32% 1 900 0.00%Retail shareholders 560 88.61% 94 554 625 35.56%Share schemes 1 0.16% 7 575 0.00%Stockbrokers and nominees 8 1.27% 11 643 376 4.38%Treasury 1 0.16% 4 520 913 1.70%Trusts 24 3.80% 12 928 777 4.86%Unclaimed scrip 3 0.47% 2 172 0.00%

Total 632 100.00% 265 879 842 100.00%

Shareholders28


Analysis of ordinary shareholders as at 29 February 2016 (continued)

Shareholder typeNumber

of shareholdings% of total

shareholdingsNumber

of shares% of issued

capital

Non-public shareholders 7 1.11% 168 855 754 63.51%

Directors and associates (direct holding) 2 0.32% 58 454 700 21.99%Directors and associates (indirect holding) 2 0.32% 2 000 000 0.75%Holders holding more than 10%Windfall 28 Investments Proprietary Limited 1 0.16% 103 872 566 39.07%Treasury 1 0.16% 4 520 913 1.70%Share schemes 1 0.16% 7 575 –

Public shareholders 625 98.89% 97 024 088 36.49%

Total 632 100.00% 265 879 842 100.00%

Beneficial shareholders with a holding greater than 5% of the issued sharesWindfall 28 Investments Proprietary Limited 103 872 566 39.07%Mr Abilio Jose Duarte da Silva 52 578 600 19.78%Mr Gutta Nassar 13 950 000 5.25%

Total 170 401 166 64.09%

Total number of shareholdings 632

Total number of shares in issue 265 879 842

29

Non-public breakdown 29 February 2016 265 879 842– Directors of the Company or any of its subsidiaries

Beneficial holders > 10% Count Holding %

Windfall 28 Investments Proprietary Limited 1 103 872 566 39.07%

1 103 872 566 39.07%

TreasuryPSV Treasury Proprietary Limited 1 4 520 913 1.70%

1 4 520 913 1.70%

Holding entity name (as per share register) Director Direct holding Indirect holding

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

Director holdings 58 454 700 2 000 000

Note: There have been no changes in directors’ holdings from year-end to date of this integrated annual report.

Shareholders30


JSE share information Interaction with shareholders

Share price performance

Opening price 2 March 2015 12c

Closing price 29 February 2016 45c

Closing high for the period 62c

Closing low for the period 11c

Number of shares in issue 265 879 842

Volume traded during period 70 275 046

Ratio of volume traded to shares in issue (%) 26.43%

Total deals 1 795

Rand value of shares traded R20 423 002

PE ratio (6.75)

Earnings yield (%) (1.482)

The Group maintains a dialogue with key fi nancial audiences, including institutional and private shareholders, analysts, fund and private client managers. The Investor Relations team together with the CEO and CFO manages the dialogue and feedback with and to these respective audiences through face-to-face meetings, presentations and telephonic conversations.

The Group adopts a proactive stance in timely dissemination of appropriate information to stakeholders and shareholders through SENS as well as print and electronic news releases and the statutory publication of the Group’s fi nancial performance.

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

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

Shareholders are able to provide feedback to PSV via the website in the “contact us” section, where an email is sent directly to the CEO’s office. An investor relations consultancy has been appointed that further disseminates information to the market and shareholders.

Shareholders’ diary

Financial year-end 29 February 2016Reports and profit announcements:

Final results publication 31 May 2016

Integrated Annual Report publication July/August 2016

Annual General Meeting 30 August 2016

Interim results publication November 2016

The annual fi nancial statements have been audited in

compliance with Section 30 of the Companies Act of 2008.

Tony Dreisenstock CA(SA) was responsible for the

supervision of the preparation of the annual fi nancial

statements. The annual fi nancial statements were

published on 28 July 2016.

5 Annualfi nancial

report

32 Audit and Risk Committee report

34 Director’s responsibility statement

34 Certification by Company Secretary

35 Directors’ report

37 Report of independent auditors

38 Consolidated statement of comprehensive income

39 Consolidated statement of financial position

41 Statement of changes in equity

43 Consolidated statement of cash flows

45 Accounting policies

53 Notes to the annual financial statements

99 Notice of Annual General Meeting

105 Form of proxy

107 Administration

108 Glossary of terms

Annual financial report32


Audit and Risk Committee report for the year ended 29 February 2016

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

Constitution of the committeeThe committee has three Independent Non-Executive Directors as required by the Companies Act and the Board is satisfi ed that the qualifi cations, skill and experience of the committee members meet the requirements of the Act and enable it to fulfi l its mandate. The Chairman of the committee is a chartered accountant.

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

In addition the Act sets out the “duties” of the Audit Committee: to nominate an independent auditor; to determine the fees and terms of engagement of the auditor; to ensure the appointment complies with the Act; to determine the nature and extent of non-audit services that the auditor may or may not provide; to pre-approve any proposed agreement for the auditor to provide non-audit services; to deal with any concerns relating to accounting practices, internal audit, the content or auditing of the Company’s fi nancial statements, internal fi nancial controls, or any related matter; to make submissions to the Board on any matter concerning accounting policies, fi nancial control, records and reporting; and to perform any oversight function required by the Board.

Activities of the Audit Committee during the year: held quarterly meetings of the committee; reviewed management accounts and reports, budgets, budget variations, strategic, fi nancial and operational risks, analysed the balance sheet and income statement, examined working capital management, conducted liquidity and solvency tests, assessed the performance of subsidiaries, examined funding structures and approved fi nancial restructuring of the Group, examined executive and staff remuneration, assessed the state of internal controls and areas of weakness, examined the business model, examined the security and integrity of the IT environment, other related matters; approved the external audit plan and year-end programme for the year ended 29 February 2016; examined the fi nal report of the external auditors, and held year-end meetings with the external auditors in the absence of management, to cover matters in their fi nal report, and held discussions on the year-end audit adjustments; reviewed and approved accounting treatment of signifi cant matters; reviewed and satisfi ed itself as to the independence and competence of the external auditor, having due regard to the scope of additional services provided by them and that such services were properly authorised and have not impaired their independence; assessed and satisfi ed itself as to the competence of the CFO; reviewed and approved shareholder announcements; satisfi ed itself as to the compliance of the fi nal consolidated results for the year ended 29 February 2016 with the Act and International Financial Reporting Standards, reviewed and approved the results and recommended same to the Board for acceptance. The Board has subsequently approved the results for 2016 which will be open for discussion at the forthcoming Annual General Meeting; approved the fees of the external auditor, having given due consideration to additional work performed by the auditors at year-end; and reviewed updated Group business risks.

33

Key matters arising out of the work of the Audit and Risk Committee: Management has instituted better internal controls throughout the Group, and areas of weakness continue to be addressed. Signifi cant staff changes have taken place at all levels in the Group to reduce risk and improve effectiveness of controls and accounting functions. Scrutiny of the performance of subsidiaries is a continuing focus area and measures are taken to improve results of those companies which are not meeting the targets for return on capital and assets. KPIs are used for all subsidiaries, executives and key personnel. The executive meets the management of subsidiaries on a frequent or at least monthly basis to review performance against targets, and to address concerns. Work has been ongoing to reduce head offi ce and divisional costs. The committee continues to review and revise key business risks, and to institute measures to mitigate such risks. Review and approval of the Group budget for 2017.

ConclusionNotwithstanding the ongoing initiatives and matters requiring attention noted above, the committee has satisfi ed itself that the internal control environment, disciplines and procedures are adequate to comply with the Act, and to minimise the fi nancial risks of the Group. The committee is of the opinion that its objectives were met during the year under review.

Anthony de la RueAudit Committee Chairman

28 July 2016



Directors’ responsibility statement Certifi cation by Company Secretary

The Directors are responsible for the preparation and fair presentation of the consolidated and separate annual fi nancial statements of PSV Holdings Limited, comprising the statements of fi nancial position at 29 February 2016, and the statements of comprehensive income, changes in equity and cash fl ows for the year then ended, and the notes to the fi nancial statements which include a summary of signifi cant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa. In addition, the Directors are responsible for preparing the Directors’ report.

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

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

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

Approval of consolidated and separate annual fi nancial statementsThe consolidated and separate annual fi nancial statements of PSV Holdings Limited, as identifi ed in the fi rst paragraph, were approved by the Board of Directors on 31 May 2016 and signed by:

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

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

Merchantec CapitalCompany Secretary

28 July 2016

35

Directors’ report

The Directors submit their report together with the Company and Group annual fi nancial statements for the fi nancial year ended 29 February 2016.

Nature of businessPSV is an industrial engineering holding company comprising two operating business segments: Industrial Supplies (including steel, piping, industrial tools and consumable supplies, and a parts dealership in Botswana); and Specialised Services (including comprehensive cryogenic and gas systems and geosynthetic linings).

Financial statementsThe Company and Group’s results and fi nancial position are contained in the annual fi nancial statements on pages 38 to 98 of the report. The audited annual fi nancial statements have been prepared in accordance with IFRS and their interpretation adopted by the International Accounting Standards Board (“IASB”), the Listings Requirements of the JSE, the Companies Act, 2008 (as amended) and the Companies Regulations, and remain consistent with those applied to the provisional audited results announced on 31 May 2016.

Financial resultsThe consolidated statement of comprehensive income has been restated as a result of the discontinued operations. With the prior year restated, revenue is up 6% based on continued operations, with gross profi t percentages improving from 13% in 2015 to 15% in the current year. The poor operating performance of the Company necessitated the impairment of R16 million of goodwill and specifi c intangibles. This impairment, together with substantial retrenchment costs exceeding R3 million, caused costs to increase compared to the previous year.

Total comprehensive loss for the year settled at R40 million, up from the comprehensive loss of R27 million in 2015. Headline loss per share decreased from a headline loss per share of 9.11 cents per share (“cps”) to a headline loss of 8.20 cps.

Due to tight working capital management, cash fl ow from operating activities improved from negative R8 million (2015) to positive R6 million. Cash fl ow was further enhanced by the proceeds received on the sale of Turbo Zambia. As a result of the losses incurred, the Company’s debt: equity ratio (net of cash) increased from 31% in 2015 to 52% in the current year. Notwithstanding, the absolute amount of interest-bearing debt decreased by 8% to R32 million. PSV ended the year with a net overdraft of R8 million, compared to a net overdraft in 2015 of R11 million.

The Company’s statement of fi nancial position weakened as a result of the losses incurred in the year. The Company’s net tangible asset value per share decreased by 63% from 14 cps in 2015 to 5 cps in 2016.

Sale of Turbo Zambia and closure of Turbo DRCEffective 1 January 2016 Turbo Zambia was sold. In terms of the transaction, the seller repaid PSV’s loan account in the business and certain stock items were returned to Turbo Botswana. Operations in the DRC were also ceased effective 1 January 2016, with the suspension of mining activities by Turbo DRC’s main customer.

DividendsNo dividends were paid nor recommended to shareholders during the fi nancial year ended 29 February 2016.

Property, plant and equipmentDuring the year the Group invested R3,8 million in new property, plant and equipment in order to expand its operations. Details of property, plant and equipment are contained in Note 9 of the annual fi nancial statements.

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

Certifi cation by the Company Secretary Refer to page 34 for the certifi cation by the Company Secretary.

LitigationThe landlord of the premises PSV rented in Elandsfontein declared a dispute on the basis of a supposed breach pertaining to early cancellation. PSV has in turn countered by disputing the deposit warranty called upon by the landlord. The matter was settled post year-end in PSV’s favour.

Independent auditorsIn 2013, the Group appointed Certifi ed Master Auditors Inc. as independent auditors.

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

Directors and secretaryThe names of the Directors in offi ce are set out on page 19. The interests of Directors in the issued share capital of the Company are provided on page 28 of the Integrated Annual Report.

During the year under review, no changes were made to the Board.

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



Directors’ report (continued)

Details of the top earners, other than Directors, are provided on page 24.

Signifi cant shareholdersDetails of signifi cant shareholders are included on page 27 of this Integrated Annual Report.

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

Special resolutions passed at the previous Annual General MeetingAll the resolutions as set out in the notice of Annual General Meeting were passed by the requisite majority of shareholders, at the Annual General Meeting held on 28 August 2015, with the exception of ordinary resolution number 2 “Control of authorised but unissued ordinary shares” and ordinary resolution number 3 “Approval to issue ordinary shares, and to sell treasury shares, for cash”.

Approval of annual fi nancial statementsThe consolidated and separate annual fi nancial statements of PSV Holdings Limited and its business units were approved by the Board of Directors on 31 May 2016 and are signed on its behalf by:

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

37

Report of the independent auditors

To the Shareholders of PSV Holdings Limited

Report on the Financial StatementsWe have audited the consolidated and separate fi nancial statements of PSV Holdings Limited, as set out on pages 38 to 98, which comprise the statement of fi nancial position as at 29 February 2016, and the statement of comprehensive income, statement of changes in equity and statement of cash fl ows for the year then ended, and the notes, comprising a summary of signifi cant accounting policies and other explanatory information.

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

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

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

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

OpinionIn our opinion, the consolidated and separate fi nancial statements present fairly, in all material respects, the fi nancial position of PSV Holdings Limited as at 29 February 2016, and its fi nancial performance and its cash fl ows for the year then ended in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of South Africa.

Other reports required by the Companies ActAs part of our audit of the fi nancial statements for the year ended 29 February 2016, we have read the Directors’ Report, the Audit Committee’s Report and the Company Secretary’s Certifi cate for the purpose of identifying whether there are material inconsistencies between these reports and the audited consolidated and separate fi nancial statements.

These reports are the responsibility of the respective preparers. Based on reading these reports we have not identifi ed material inconsistencies between these reports and the audited consolidated and separate fi nancial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

Report on Other Legal and Regulatory RequirementsIn terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that Certifi ed Master Auditors Inc. has been the auditor of PSV Holdings Limited for four years.

Certifi ed Master Auditors Inc.RS BaardDirectorRegistered Auditors31 May 2016

CMA Offi ce & Conference ParkNo.1 2nd RoadHalfway HouseMidrand1685



Consolidated statement of comprehensive income for the year ended 29 February 2016

GROUP COMPANY

Notes

12 months ended29 February

2016 R

Restated12 months ended

28 February 2015

R


2016 R


2015 R

Revenue 4A 243 428 818 230 289 775 – – Cost of sales (207 285 730) (200 569 779) – –

Gross profit 36 143 088 29 719 996 – – Other income 4 770 603 3 121 820 4 834 697 13 071 137 Other expenses (66 224 423) (55 168 467) (97 387 507) (31 120 311)

Results from operating activities 2 (25 310 732) (22 326 651) (92 552 810) (18 049 174)Finance income 4B 3 253 430 1 338 285 477 118 1 989 182 Finance costs 4B (3 556 267) (5 265 480) (1 300 639) (1 549 408)

Net finance (costs)/income (302 837) (3 927 195) (823 521) 439 774

Loss before income tax (25 613 569) (26 253 846) (93 376 331) (17 609 400)Income tax 5 6 258 939 3 825 693 – –

Loss for the year from continuing operations (19 354 630) (22 428 153) (93 376 331) (17 609 400)Loss from discontinued operations 6 (21 214 169) (4 506 956) – –

Loss for the year attributable to ordinary shareholders (40 568 799) (26 935 109) (93 376 331) (17 609 400)

Other comprehensive income that can be recycled in future periodsThe amount below does not attract any tax and may be subsequently reclassified to profit or loss.Foreign currency translation reserve 7 185 910 (187 402) – –

Total comprehensive loss for the year (40 382 889) (27 122 511) (93 376 331) (17 609 400)

Loss per shareBasic loss per share (cents) 8 (15.37) (10.31)Diluted loss per share (cents) 8 (15.37) (10.25)Basic loss per share (cents) – continuing operations 8 (7.33) (8.58)Diluted loss per share (cents) – continuing operations 8 (7.33) (8.54)Basic loss per share (cents) – discontinued operations 8 (8.04) (1.73)Diluted loss per share (cents) – discontinued operations 8 (8.04) (1.71)

39

GROUP COMPANY

Notes

29 February 2016

R

28 February2015

R

29 February 2016

R

28 February2015

R

ASSETS Non-current assets Property, plant and equipment 9 9 784 915 13 234 506 600 669 1 265 943 Intangible assets 10 415 600 6 370 556 60 400 187 914 Goodwill 11 17 606 734 29 186 265 – – Investment in subsidiaries 12 – – 22 837 623 85 422 147 Deferred taxation assets 18 17 023 454 15 561 721 – –

Total non-current assets 44 830 703 64 353 048 23 498 692 86 876 004

Current assets Inventories and work-in-progress 13 15 729 574 25 812 986 – – Loans to group companies 12 – – 7 983 169 48 925 088 Trade and other receivables 14 38 169 124 51 032 726 907 139 1 924 627 Taxation receivable 55 441 895 640 – – Cash and cash equivalents 15 15 407 994 12 136 880 930 492 729 932

Total current assets 69 362 133 89 878 232 9 820 800 51 579 647

Total assets 114 192 836 154 231 280 33 319 492 138 455 651

EQUITY Share capital 16 273 329 475 273 276 078 273 683 543 273 683 543 Share-based payment reserve 3 – 274 315 – 238 139 Foreign currency translation reserve 7 (76 830) (262 739) – – Retained loss (241 606 579) (201 037 780) (243 303 503) (149 927 173)

Total equity attributable to ordinary shareholders 31 646 066 72 249 874 30 380 040 123 994 509

Consolidated statement of fi nancial position as at 29 February 2016



Consolidated statement of fi nancial position as at 29 February 2016 (continued)

GROUP COMPANY

Notes

29 February 2016

R

28 February2015

R

29 February 2016

R

28 February2015

R

LIABILITIES Non-current liabilities Deferred purchase consideration 17 – 2 000 000 – 2 000 000 Deferred taxation liabilities 18 – 2 663 383 – – Loans and borrowings 19 3 977 566 4 231 930 252 100 255 379

Total non-current liabilities 3 977 566 8 895 313 252 100 2 255 379

Current liabilities Billings in excess of work certified 5 533 500 – – – Provisions 20.2 1 761 701 1 871 820 614 245 542 249 Trade and other payables 20.1 43 193 011 40 028 494 1 944 102 1 755 099 Taxation payable 69 813 2 555 540 – – Current portion of deferred purchase consideration 17 – 2 845 331 – 2 845 331 Bank overdraft 15 23 670 202 23 289 397 – 6 874 867 Current portion of loans and borrowings 19 4 312 963 2 495 511 129 005 188 217

Total current liabilities 78 541 190 73 086 093 2 687 352 12 205 763

Liabilities held-for-saleLiabilities directly associated with non-current assets classified as held-for-sale 6 28 014 – – –

Total liabilities 82 546 770 81 981 406 2 939 452 14 461 142

Total equity and liabilities 114 192 836 154 231 280 33 319 492 138 455 651

41

Share capital

R

Share-based payment reserve

R

Foreign currency translation

(deficit)/reserve R

Accumulated loss

R Total

R

GROUPBalance as at 28 February 2014 Profit/(loss) from trading for the year from operations 273 136 360 41 594 (75 337) (174 102 671) 98 999 946

Continuing operations – – – (22 428 153) (22 428 153)Discontinued operations – – – (4 506 956) (4 506 956)

Other comprehensive income from currency fluctuations

Continuing operations – – 2 042 912 – 2 042 912 Discontinued operations – – (2 230 314) – (2 230 314)

Total comprehensive income for the year – – (187 402) (26 935 109) (27 122 511)

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Shares vested during the year 139 718 (139 718) – – – Share-based payment cost – 372 439 – – 372 439

139 718 232 721 – – 372 439

Balance as at 28 February 2015 273 276 078 274 315 (262 739) (201 037 781) 72 249 873

Total comprehensive income for the year Profit/(loss) from trading for the year from operations – – – (40 568 798) (40 568 798)

Continuing operations – – – (19 354 629) (19 354 629)Discontinued operations – – – (21 214 169) (21 214 169)

Other comprehensive income from currency fluctuations – – 185 909 – 185 909

Continuing operations – – 2 031 909 – 2 031 909 Discontinued operations – – (1 846 000) – (1 846 000)

Total comprehensive income for the year – – 185 909 (40 568 798) (40 382 889)

Consolidated statement of changes in equity as at 29 February 2016



Consolidated statement of changes in equity as at 29 February 2016 (continued)

Share capital

R

Share-based payment reserve

R

Foreign currency translation

(deficit)/reserve R

Accumulated loss

R Total

R

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Shares vested during the year 53 397 (53 397) – – – Share-based payment cost – (220 918) – – (220 918)

53 397 (274 315) – – (220 918)

Balance as at 29 February 2016 273 329 475 – (76 830) (241 606 579) 31 646 066

COMPANY Balance as at 28 February 2014 274 494 010 41 594 – (132 317 773) 142 217 831 Total comprehensive income for the year Loss for the year – – – (17 609 400) (17 609 400)Transactions with owners, recorded directly in equity Contributions by and distributions to owners Cancellation of treasury shares (810 467) – – – (810 467)Share-based payment cost – 196 545 – – 196 545

(810 467) 196 545 – – (613 922)

Balance as at 28 February 2015 273 683 543 238 139 – (149 927 173) 123 994 509

Total comprehensive income for the year Loss for the year – – – (93 376 331) (93 376 331)Contributions by and distributions to owners Share-based payment cost – (238 139) – – (238 139)

– (238 139) – – (238 139)

Balance as at 29 February 2016 273 683 543 – – (243 303 503) 30 380 040

43

Consolidated statement of cash fl ows for the year ended 29 February 2016

GROUP COMPANY

Cash flows from operating activities Notes2016

R2015

R2016

R2015

R

Cash generated from operations 22A 6 283 692 (8 088 623) (15 664 404) (3 587 290)Taxation paid 22B (3 818 382) (1 221 756) – –

Net cash from/(used in) operating activities 2 465 310 (9 310 379) (15 664 404) (3 587 290)

Net cash from/(used in) operating activities – continuing operations 15 581 969 (10 946 666) – –Net cash from/(used in) operating activities – discontinued operations (13 116 659) 1 636 287 – –

Cash flows from investing activitiesAdditions to property, plant and equipment to expand operations (3 812 181) (2 252 165) (401 344) (390 724)Additions to intangibles to expand operations – (219 889) – –Proceeds from disposal of property, plant and equipment 4 739 938 4 801 205 801 463 305 053 Proceeds on sale of subsidiaries 3 082 323 – – – Financial income 3 253 430 1 431 669 477 118 61 356

Net cash (used in)/from investing activities 7 263 510 3 760 820 877 237 (24 315)

Net cash (used in)/from investing activities – continuing operations 3 721 840 4 104 470 – –Net cash (used in)/from investing activities – discontinued operations 3 541 670 (343 650) – –

Cash flows from financing activities Settlement of deferred purchase consideration (4 845 331) (7 232 230) (4 845 331) (7 232 230)External loans (repaid)/granted 1 563 088 (3 075 584) (62 491) (171 245)Loan repaid from group companies – – 28 071 055 3 396 313 Financial expenses (3 556 267) (6 333 021) (1 300 639) (730 282)

Net cash used in financing activities (6 838 510) (16 640 835) 21 862 594 (4 737 444)



Consolidated statement of cash fl ows for the year ended 29 February 2016 (continued)

GROUP COMPANY

Notes2016

R2015

R2016

R2015

R

Net cash used in financing activities – continuing operations (16 389 407) (12 667 176) – –Net cash used in financing activities – discontinued operations 9 550 897 (3 973 659) – –

Net increase/(decrease) in cash and cash equivalents 2 890 310 (22 190 394) 7 075 427 (8 349 049)

Net increase/(decrease) in cash and cash equivalents – continuing operations 2 914 402 (19 509 372) – –Net increase/(decrease) in cash and cash equivalents – discontinued operations (24 092) (2 681 022) – –

Cash and cash equivalents at beginning of year (11 152 517) 11 037 877 (6 144 935) 2 204 114

Cash and cash equivalents at beginning of year – continuing operations (12 187 646) 7 321 726 – –Cash and cash equivalents at beginning of year – discontinued operations 1 035 129 3 716 151 – –

Cash and cash equivalents at end of year 15 (8 262 208) (11 152 517) 930 492 (6 144 935)

Cash and cash equivalents at end of year – continuing operations (9 273 244) (12 187 646) – –Cash and cash equivalents at end of year – discontinued operations 1 011 037 1 035 129 – –

45

Accounting policies for the year ended 29 February 2016

PSV Holdings Limited (“the Company”) is a company domiciled in South Africa. The consolidated fi nancial statements at 29 February 2016 comprise the Company and its subsidiaries (together referred to as “the Group”).

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

Basis of preparationThe consolidated fi nancial statements (“the fi nancial statements”) for the year ended 29 February 2016 (“the year”) have been prepared in accordance with the framework concepts, the recognition and measurement requirements of International Financial Reporting Standards (“IFRS”), the Listings Requirements of the JSE Limited and the South African Companies Act, 2008 (Act 71 of 2008), as amended. The accounting policies and method of computation applied in preparation of these fi nancial statements are in accordance with IFRS and are consistent with those applied in the annual fi nancial statements for the prior period except for the effect of the adoption of new standards that have become effective during the year. The annual fi nancial statements also acknowledge the fi nancial reporting guides issued by the South African Institute of Chartered Accountants.

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

Basis of consolidationSubsidiariesThe Group fi nancial statements include the fi nancial statements of the Company and its subsidiaries. Where an investment in a subsidiary was acquired during the fi nancial year its results are included from the date control commences.

In assessing when an investor controls an investee, consideration is given to when the entity is exposed, or has rights, to variable returns from its involvement with the investee and whether it has the ability to effect those returns through its power over the investee.

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

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

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

The Company accounts for all investments in subsidiaries at cost, less any impairments, in its separate fi nancial statements.

Foreign currenciesForeign currency transactionsForeign currency transactions are translated at the rates of exchange ruling at the dates of the transactions. Balances on monetary assets and liabilities outstanding on foreign transactions at the end of the fi nancial year are translated to Rand at the rates ruling at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and prepayments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period. Gains or losses on translation are recognised in profi t or loss.

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

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

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

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



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

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

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

Exchange gainsGains on foreign currency transactions are included in fi nance income to the extent they arise on translating foreign currency denominated loans.

Financial expensesFinance expenses comprise interest payable on borrowings and the unwinding of discounts arising on deferred purchase considerations owing to vendors on investments acquired; calculated on the principal outstanding using the effective interest method. Losses on foreign currency transactions are also included in fi nancial expenses.

TaxationIncome tax expense comprises current and deferred tax. Income tax expense is recognised in profi t or loss except to the extent that it relates to a business combination or items recognised directly in equity, in which case it is recognised directly in equity.

Current taxation comprises taxation payable calculated on the basis of the expected taxable income for the year, using the taxation rates enacted or substantively enacted at the reporting date, and any adjustments of taxation payable for previous years. Deferred taxation is recognised in respect of temporary differences. Temporary differences are differences between the carrying amounts of assets and liabilities for fi nancial reporting purposes and their tax base.

Deferred taxation is not recognised for the following temporary differences: the initial recognition of goodwill;

the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profi t; and differences relating to investments in subsidiaries to the extent that the timing of the reversal is controlled by the Company and it is probable that they will not reverse in the foreseeable future.

Deferred taxation is recognised in profi t or loss except to the extent that it relates to a transaction that is recognised in other comprehensive income or directly in equity, which is recognised where the transaction was recorded respectively. The amount of deferred taxation provided is based on the expected manner of the realisation or settlement of the carrying amount of assets and liabilities using taxation rates enacted or substantively enacted at the reporting date, or at a future expected rate should this differ to reporting date. A deferred taxation asset is recognised to the extent that it is probable that future taxable profi ts will be available against which the associated unutilised taxation losses and deductible temporary differences can be utilised. Deferred taxation assets are reduced to the extent that it is no longer probable that the related taxation benefi t will be realised.

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

Property, plant and equipmentProperty, plant and equipment are recorded at cost, less accumulated depreciation and impairment losses.

All assets except for land are depreciated on the straight-line method over their expected useful lives to an estimated residual value. The estimated useful lives are currently: Buildings 50 years Plant and machinery 5 to 10 years Motor vehicles 5 years Furniture and offi ce equipment 5 to 10 years Computer equipment 3 years Patterns and dies 3 to 20 years Leasehold improvements Shorter of useful lives or lease term

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

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

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

Accounting policies for the year ended 29 February 2016 (continued)

47

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

Lease assetsFinance leasesLeases in terms of which the Group assumes substantially all the risks and rewards of ownership are classifi ed as fi nance leases. Property, plant and equipment subject to fi nance lease agreements are capitalised initially at the lesser of their fair value and the present value of the minimum lease payments and the corresponding liability to the lessor is raised. Lease payments are allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability, which is charged against operating profi t, and the capital repayment, which reduces the liability to the lessor. These assets are treated on the same basis as the property, plant and equipment owned by the Group and are subject to impairment testing.

Operating leasesOther leases that do not transfer substantially all the risks and rewards of ownership are treated as operating leases with lease payments charged against profi t or loss. In addition an adjustment to adjust the operating lease payment to a straight-line lease expense over the period of the lease is made. This adjustment is calculated by aggregating the operating lease payments over the life of the lease and dividing it by the period of the lease to give a monthly lease payment which is equal over the period of the lease.

Intangible assetsIntangible assets are stated at cost less accumulated amortisation and impairment losses. The current estimated useful lives are: Market relationships 10 to 20 years Customer relationships 2 to 7 years Technology relationships 10 years

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

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

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

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

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

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

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

Payment in advancePayments in advance are capitalised and are recognised in revenue in the period when the services are rendered.

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

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

InventoriesInventories are stated at the lower of cost or net realisable value. Cost is determined using weighted average cost. These are regularly reviewed and updated to refl ect input cost of raw materials, direct labour, other direct




costs and related normal production overheads. Slow-moving goods and obsolete inventories are written down to their estimated net realisable value.

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

Work-in-progress is valued using the percentage to completion method.

Progress reserve To the extent billings exceed work certifi ed, the excess amount is taken to the balance sheet and refl ected in other payables; To the extent work certifi ed extent current billings, the excess is taken to the balance sheet and refl ected as other receivables; To the extent actual costs to be included on a job are greater than actual costs incurred, the credit is taken to the balance sheet and refl ected in other payables; To the extent actual costs incurred are greater than allowable tab as defi ned, the excess is taken to the balance sheet as work in progress; and To the extent that losses are projected to be made on a contract in progress, those losses are provided for immediately.

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

Repurchase of share capitalWhen share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from equity. Repurchased shares by subsidiaries are classifi ed as treasury shares and are presented as a deduction from total equity. Shares repurchased by PSV Treasury are treated as treasury shares until cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental costs and related income tax effects, is included in equity attributable to the Company’s equity holders.

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

A provision is made for the estimated liability for annual leave and performance bonuses as a result of services rendered by employees up to the date of the statement of fi nancial position.

Financial instrumentsFinancial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Subsequent to initial recognition fi nancial instruments are measured at amortised cost using the effective interest method less any impairment losses.

A fi nancial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash fl ows from the fi nancial assets expire or if the Group transfers the fi nancial asset to another party without retaining control or substantially all risks and rewards of the asset. Financial liabilities are derecognised if the Group’s obligations specifi ed in the contract expire or are discharged or cancelled.

Impairment of fi nancial assetsA fi nancial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A fi nancial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash fl ows of the asset.

Individually signifi cant fi nancial assets are tested for impairment. The remaining fi nancial assets are assessed collectively in groups that share similar credit risk characteristics.

An impairment loss in respect of a fi nancial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash fl ows discounted at the original effective interest rate. For trade receivables, impairments are recognised based on whether the debtors are experiencing fi nancial diffi culty, the probability the debtor will enter bankruptcy or fi nancial reorganisation. Local and foreign trade debtors are considered for impairment when they have exceeded their credit terms.

All impairment losses are recognised in profi t or loss.

OffsetFinancial assets and liabilities are offset and the net amount presented in the statement of fi nancial position when, and only when, the Group has a legal right to offset the amount, and intends either to settle on a net basis or to realise the assets and settle the liability simultaneously.

Earnings per shareThe Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profi t or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profi t or loss attributable to ordinary shareholders and the weighted average number of ordinary shares

49

outstanding for the effects of all dilutive potential ordinary shares, which comprise deferred equity purchase considerations and share awards granted to employees.

Headline earnings per shareHeadline earnings per share is calculated using the weighted average number of ordinary shares in issue during the period and is based on the earnings attributable to ordinary shareholders after excluding those items as required by Circular 2/2015 issued by the South African Institute of Chartered Accountants (“SAICA”).

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

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

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

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

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

services in order to become unconditionally entitled to the equity instruments. The fair value of the instruments granted is determined by using a binomial option-pricing model. In valuing the share options, no account is taken of any performance conditions, other than conditions linked to the price of the shares of the Company.

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

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

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

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

A recharge arrangement exists whereby the subsidiaries are required to fund the difference between the exercise price on the share options and the market price of the share at the time of exercising the option. The recharge arrangement is accounted for separately from the underlying equity-settled share-based payment upon initial recognition, as follows: The subsidiary recognises a recharge liability and a corresponding adjustment against equity for the capital contribution recognised in respect of the share-based payment. The parent recognises a recharge asset and a corresponding adjustment to the carrying amount of the investment in the subsidiary.




Subsequent to initial recognition the recharge arrangement is re-measured at fair value at each subsequent reporting date until settlement date to the extent vested. Where the recharge amount recognised is greater than the initial capital contribution recognised by the subsidiary in respect of the share-based payment, the excess is recognised as a net capital distribution to the parent. The amount of the recharge in excess of the capital contribution recognised as an increase in the investment in subsidiary is deferred and recognised as dividend income by the parent when settled by the subsidiary.

Cash-settled share-based paymentsThe Company and Group have a Share Appreciation Rights Scheme which is treated as a cash-settled share-based payment transaction. If the share-based payment granted has a specifi ed duration of service the expense is recognised in profi t or loss over the duration of the service. Where no service duration is applicable

the expense is recognised immediately in profi t or loss. The liability for the settlement of the share appreciation rights is recorded in the statement of fi nancial position and measured annually with the corresponding amount being recognised in profi t or loss.

Standards and interpretationsDuring the year the Company and Group adopted the new standards and interpretations that become effective. There was no material impact on the fi nancial statements.

The standards and interpretations issued and not yet effective have been considered by the Company and Group and those that are relevant will be adopted in the accounting period in which they become effective and are listed below.

Standard Details of amendment

Annual periods beginning

on or after

IFRS 7 Financial Instruments: Disclosures

Annual Improvements 2012 – 2014 Cycle: 1 January 2016Amendment clarifying the applicability of previous amendments to IFRS 7 issued in December 2011 with regard to offsetting financial assets and financial liabilities in relation to interim financial statements prepared under IAS 34.

IFRS 9 Financial Instruments

A final version of IFRS 9 has been issued which replaces IAS 39 Financial Instruments: Recognition and Measurement. The completed standard comprises guidance on Classification and Measurement, Impairment Hedge Accounting and Derecognition:

1 January 2018* IFRS 9 (2014)

supersedes any previous versions of IFRS 9, but

earlier versions of IFRS 9 remain available for

application if the relevant date of application is before

1 February 2015*

IFRS 9 introduces a new approach to the classification of financial assets, which is driven by the business model in which the asset is held and their cash flow characteristics. A new business model was introduced which does allow certain financial assets to be categorised as “fair value through other comprehensive income” in certain circumstances. The requirements for financial liabilities are mostly carried forward unchanged from IAS 39. However, some changes were made to the fair value option for financial liabilities to address the issue of own credit risk. The new model introduces a single impairment model being applied to all financial instruments, as well as an “expected credit loss” model for the measurement of financial assets. IFRS 9 contains a new model for hedge accounting that aligns the accounting treatment with the risk management activities of an entity, in addition enhanced disclosures will provide better information about risk management and the effect of hedge accounting on the financial statements. IFRS 9 carries forward the derecognition requirements of financial assets and liabilities from IAS 39.

51



on or after

IFRS 15 Revenuefrom Contracts fromCustomers

New standard that requires entities to recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is achieved through a five-step methodology that is required to be applied to all contracts with customers. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements. The new standard supersedes:

(a) IAS 11 Construction Contracts; (b) IAS 18 Revenue; (c) IFRIC 13 Customer Loyalty Programmes; (d) IFRIC 15 Agreements for the Construction of Real Estate; (e) IFRIC 18 Transfers of Assets from Customers; and (f) SIC-31 Revenue – Barter Transactions Involving Advertising Services.

1 January 2018

IFRS 16 Leases New standard that introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. A lessee measures right-of-use assets similarly to other non-financial assets (such as property, plant and equipment) and lease liabilities similarly to other financial liabilities. As a consequence, a lessee recognises depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of the lease liability into a principal portion and an interest portion and presents them in the statement of cash flows applying IAS 7 Statement of Cash Flows.

1 January 2019

IFRS 16 contains expanded disclosure requirements for lessees. Lessees will need to apply judgement in deciding upon the information to disclose to meet the objective of providing a basis for users of financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of the lessee. IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently. IFRS 16 also requires enhanced disclosures to be provided by lessors that will improve information disclosed about a lessor’s risk exposure, particularly to residual value risk. IFRS 16 supersedes the following standards and interpretations:

(a) IAS 17 Leases; (b) IFRIC 4 Determining whether an Arrangement contains a Lease; (c) SIC-15 Operating Leases – Incentives; and (d) SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.






on or after

IAS 1 Presentation ofFinancial Statements

Disclosure Initiative: Amendments designed to encourage entities to apply professional judgement in determining what information to disclose in their financial statements. For example, the amendments make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can inhibit the usefulness of financial disclosures. Furthermore, the amendments clarify that entities should use professional judgement in determining where and in what order information is presented in the financial disclosures.

1 January 2016

IAS 7 Statement of Cash Flows

Disclosure Initiative: Amendments requiring entities to disclose information about changes in their financing liabilities. The additional disclosures will help investors to evaluate changes in liabilities arising from financing activities, including changes from cash flows and non-cash changes (such as foreign exchange gains or losses).

1 January 2017

IAS 12 Income Taxes Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12): Narrow-scope amendment to clarify the requirements on recognition of deferred tax assets for unrealised losses on debt instruments measured at fair value.

1 January 2017

IAS 16 Property, Plant and Equipment

Amendment to both IAS 16 and IAS 38 establishing the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset. Clarifying that revenue is generally presumed to be an inappropriate basis for measuring the consumption of economic benefits in such assets.

1 January 2016

IAS 34 Interim Financial Reporting

Annual Improvements 2012 – 2014 Cycle: Clarification of the meaning of disclosure of information “elsewhere in the interim financial report”. 1 January 2016

IAS 38 Intangible Assets Amendments to IAS 16 and IAS 38 to clarify the basis for the calculation of depreciation and amortisation, as being the expected pattern of consumption of the future economic benefits of an asset.

1 January 2016

Amendment to both IAS 16 and IAS 38 establishing the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset. Clarifying that revenue is generally presumed to be an inappropriate basis for measuring the consumption of economic benefits in such assets.

1 January 2016

53

Notes to the annual fi nancial statements for the year ended 29 February 2016

1. Segmental informationThe Group’s Chief Executive Decision-maker is the Chief Executive Officer (“CEO”). The CEO has determined the operating segments based upon the information reviewed by the him for the purposes of allocating resources and assessing performance. The CEO considers the business from a product and geographical perspective. The CEO assesses the performance of the operating segments based upon profit before tax.

This measurement basis excludes discontinued operations and the effects of non-recurring expenditure from the operating segments such as goodwill impairments where such impairment arises from an isolated, non-recurring event. The measure includes the effects of equity-settled share-based payments and unrealised exchange gains and losses arising from normal trading operations. The CEO reviews internal management reports every month.

The following summary describes the operations in each of the Group’s reportable segments. Industrial Supplies includes the purchasing and distribution of general industrial and automotive supplies (the operations of Turbo Botswana and Omnirapid Mining and Industrial Supplies). Specialised Services includes the manufacture and distribution of cryogenic vessels and heat exchangers, the supply and installation of geosynthetic linings and the provision of specialised cryogenic-based solutions for industrial applications (the operations of Engineered Linings and African Cryogenics). Shared Services and Other includes direct head office costs and operating costs not recovered from the operating segments and discontinued operations. Discontinued operations includes the discontinued businesses of Turbo Agencies (DRC) and Turbo Agencies (Zambia).

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

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

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



Notes to the annual fi nancial statements for the year ended 29 February 2016 (continued)

1. Segmental information (continued)

Segmental report

Industrial Supplies

2016R

Specialised Services

2016R

Shared Services

and Other2016

R

Total2016

R

Total segment revenue 136 393 978 121 022 489 (13 987 649) 243 428 818 Inter-segmental revenue (6 501 221) (7 486 428) 13 987 649 –

Reportable segment revenue 129 892 757 113 536 061 – 243 428 818

Gross profit 23 197 678 12 948 280 (2 870) 36 143 088 Depreciation and amortisation (795 756) – (3 113 368) (3 909 124)Other operating expenses (14 560 798) (13 907 634) (16 191 012) (44 659 444)Impairment of goodwill and intangibles – – (12 885 252) (12 885 252)Profit/(loss) before tax 9 519 376 (3 734 958) (31 397 987) (25 613 569)Profit after tax 10 487 113 (2 745 346) (27 096 397) (19 354 630)Capital expenditure 693 955 2 740 316 377 910 3 812 181 Total assets 67 962 514 38 974 654 7 255 668 114 192 836 Total liabilities (29 393 163) (43 887 371) (9 266 236) (82 546 770)

Continuing operations (29 365 149) (43 887 371) (9 266 236) (82 518 756)Discontinued operations (28 014) – – (28 014)

Revenue per major customer 27 294 341 – – 27 294 341

South AfricaR

BotswanaR

OtherR

TotalR

Segmental information by geographical regionRevenue (external) 225 495 281 17 933 537 – 243 428 818 Non-current assets 20 015 446 24 815 257 – 44 830 703 Revenue per major customer 23 478 518 3 815 823 – 27 294 341

55

Industrial supplies

2015R

Specialised services

2015R

Shared Services

and Other2015

R

Total2015

R

1. Segmental information (continued)Segmental report (continued)Total segment revenue 152 390 536 83 924 972 6 025 733 242 341 241 Inter-segmental revenue (4 058 591) (1 967 142) (6 025 733) (12 051 466)

Reportable segment revenue 148 331 945 81 957 830 – 230 289 775

Gross profit 26 113 239 3 977 241 (370 485) 29 719 996 Depreciation and amortisation (1 004 050) – (3 863 421) (4 867 471) Impairment of goodwill and other intangibles – – (3 959 029) (3 959 029) Other operating expenses (12 827 431) (14 494 885) (15 897 831) (43 220 147) Profit/(loss) before tax from continuing operations 5 381 286 (19 247 330) (12 387 802) (26 253 846)Capital expenditure 1 216 928 41 651 993 586 2 252 165 Total assets 68 990 939 35 023 596 50 216 745 154 231 280

Continuing 45 522 433 35 023 596 50 216 745 130 762 774 Discontinued 23 468 506 – – 23 468 506

Total liabilities (27 931 699) (33 483 599) (20 566 108) (81 981 406)

Continuing (19 463 568) (33 483 599) (20 566 108) (73 513 275)Discontinued (8 468 131) – – (8 468 131)

Revenue per major customer 68 023 534 – – 68 023 534

South AfricaR

BotswanaR

NamibiaR

TotalR

Segmental information by geographical regionRevenue (external) 205 313 781 24 975 994 – 230 289 775 Non-current assets 55 781 930 8 571 118 – 64 353 048 Revenue per major customer 56 381 062 11 642 472 – 68 023 534




GROUP COMPANY

Notes2016

R 2015

R 2016

R 2015

R

2. Results from operating activitiesThe following items have been (charged)/credited in arriving at results from operating activities:Auditors’ remunerationAudit fee – current year (822 309) (867 120) 464 600 (463 000)Foreign exchange gain/(loss) 2 437 287 647 707 (7 289) (409)Impairment of goodwill (8 737 124) – – – Impairment of investment and loans – – (75 455 388) (7 937 106)Total lease charge (4 506 009) (3 319 575) 247 006 823 346

Operating lease charges in respect of buildings (2 772 669) (612 663) (247 006) (823 346)Operating lease straight-lining expenses (1 733 340) (2 706 912) – –

(Impairment)/reversal of trade receivables 14 (907 099) (993 752) – – Impairment of intangibles 10 (4 463 069) (2 459 559) – – Impairment of property, plant and equipment 9b – (1 499 472) – (1 499 472)(Impairment)/reversal on inventories 694 978 (51 798) – – Salaries and wages (27 439 043) (24 472 082) (12 463 337) (8 788 284)Share-based payment expense (220 918) (489 495) (298 577) (196 545)

57

3. Share incentive schemeAt 29 February 2016 the Group has the following share-based payment arrangements:

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

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

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

No shares were granted to employees in the 2015 and 2016 years, as the scheme had been discontinued during the 2013 year.

The scheme will be completed once the last allocations have vested.

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

All options are settled by physical delivery of shares.

GROUP

2016 R

2015 R

The movements in the number of shares allocated to eligible participants are as follows:Balance brought forward 2 251 508 4 501 773 Resignations – (1 378 326)Grants vested during the year (251 508) (871 939)

As at year-end 2 000 000 2 251 508

The outstanding grants will vest on the following dates:By 29 February 2016 – 251 508 After 29 February 2016 2 000 000 2 000 000

2 000 000 2 251 508




3. Share incentive scheme (continued)Vesting periodsEmployees of subsidiaries acquired:

Shares will vest three years from the date of acquisition for employees already in service when the Company was acquired.

2016R

2015R

Reconciliation of reserveOpening balance (274 315) (41 594)Resignations during the year 441 836 117 056 Shares vested during the year 53 397 139 718 Share-based payment expense (220 918) (489 495)

– (274 315)

Share appreciation rights schemeDuring the 2015 period the board of directors approved a share appreciation rights (“SARs”) scheme for directors of the Company. An annual allotment of SARs was made to the Chief Executive Officer and Chief Financial Officer. The CEO was allotted the number of SARs equal to four times his annual salary. The Financial Director’s allotment was calculated at 75% of the CEO’s entitlement. A third of the share appreciation rights vested on 1 September 2015 and an amount of R4 012 391 paid in full on 1 December 2015. The exercise price of the first allotment was calculated at CPI plus a 2% premium above the share price on the last day of February each year. The share appreciation rights are settled by cash payments.

The SARs scheme was cancelled effective 1 March 2016.

1 September2014

1 September2015

1 September2016

Reconciliation of SARs allotted and vesting periodsNumber of share appreciation rights – 4 012 391 –

59

GROUP COMPANY

2016 R

2015 R

2016 R

2015 R

4A. RevenueSale of goods 226 519 440 205 054 909 – – Rendering of services 16 909 378 25 234 866 – –

243 428 818 230 289 775 – –

4B. Finance income and fi nance costsRecognised in profit or lossInterest income on loans and receivables – – – 1 927 826 Interest income on bank deposits 930 720 1 431 669 477 118 61 356 Foreign exchange gains 4 513 197 – – –Transfer to discontinued operations (Note 6) (2 190 487) (93 384) – –

Finance income 3 253 430 1 338 285 477 118 1 989 182

Interest expense on bank overdrafts and loans (4 374 306) (2 074 480) (1 261 668) (672 004)Interest expense on finance leases (81 427) (1 674 478) (38 971) (51 729)Interest paid – South African Revenue Service (18 616) (178 249) – (6 549)Unwinding of interest on deferred purchase considerations – (63 856) – (63 856)Interest paid – other (non-cash items) – (762 936) – (755 270)Foreign exchange losses (579 862) (2 398 148) – – Transfer to discontinued operations (Note 6) 1 497 944 1 886 667 – –

Finance costs (3 556 267) (5 265 480) (1 300 639) (1 549 408)

Net finance costs recognised in profit or loss (302 837) (3 927 195) (823 521) 439 774




GROUP COMPANY

2016 R

2015 R

2016 R

2015 R

5. Income tax expenseSouth African normal taxationCurrent tax expense (2 172 854) (604 935) – –

current year (2 172 854) (268 220) – – prior year underprovision – (336 715) – –

Deferred tax credit/(expense) 6 815 805 4 439 447 – –

current year 6 155 908 4 439 447 – – prior year overprovision 659 897 – – –

Total taxation 4 642 951 3 834 512 – – Transfer to discontinued operations 1 615 988 (8 819) – –

Total taxation charge 6 258 939 3 825 693 – –

% % % %

The effective rate of taxation differs from the standard rate of taxation as follows:Base rate 28.00 28.00 28.00 28.00 Non-deductibles – impairments 7.98 4.47 – – Non-deductibles 0.03 – – – Reduced CGT rate 0.11 0.72 – – Prior year current tax 4.59 (1.09) – – Prior year deferred tax 2.58 – – – Foreign taxes 14.82 0.72 – – Deferred tax current not recognised (33.66) (18.25) (28.00) (28.00)

Effective rate of taxation 24.45 14.57 – –

No deferred tax asset has been raised in relation to the assessed loss in PSV Holdings Limited as the Company is not expected to make any taxable income in the foreseeable future.

61

6. Discontinued operationsDiscontinued operations’ trading results for the yearDiscontinued operations – inclusions in the consolidated statement of comprehensive income

29 February2016

R

28 February2015

R

Revenue 34 091 104 51 637 737 Cost of sales (19 804 738) (40 178 093)

Gross profit 14 286 366 11 459 644 Other income (222 424) 20 195 Depreciation and amortisation (870 217) (1 009 705)Impairment of goodwill (2 842 407) –Impairment of intangibles (314 941) –Impairment of loans and investments related to discontinued operations (4 278 902) –Other expenses (26 048 199) (13 192 626)

Results from operating activities (20 290 724) (2 722 492)

Finance income 2 190 487 93 384 Finance costs (1 497 944) (1 886 667)

Net finance costs 692 543 (1 793 283)

Profit before income tax (19 598 181) (4 515 775)Income tax (1 615 988) 8 819

Normal taxation (3 347 925) 8 819 Deferred taxation 1 731 937 –

(Loss)/profit for the year from discontinued operations (21 214 169) (4 506 956)Other comprehensive loss – fluctuations in foreign currencies (1 846 000) (2 230 314)

Comprehensive loss for the year from discontinued operations (23 060 169) (6 737 270)

The cash flow effects of discontinued operations are disclosed in the cash flow statement.




6. Discontinued operations (continued)Discontinued operations – inclusions in the consolidated statement of financial position

29 February2016

R

28 February2015

R

Non-current assets – 4,309,130 Current assets – 21 204 275 Inventories – 8 209 184 Trade and other receivables – 11 959 962 Cash and cash equivalents – 1 035 129 Total assets – 25 513 405

Equity (28 014) (3 067 854)Non-current liabilities – 15 342 476 Current liabilities 28 014 13 238 783

Trade and other payables 28 014 11 653 794 Reclassified as held-for-sale (28 014) –Taxation payable – 1 506 903 Current portion of loans and borrowings – 78 085 Liabilities directly associated with non-current assets classified as held-for-sale 28 014 –

Total equity and liabilities – 25 513 405

The discontinued operation relates to the sale and disposal of Turbo Agencies Zambia and the cessation of Turbo Agencies Democratic Republic of Congo during the course of 2016. These business were wholly owned subsidiaries of Turbo Botswana.

The discontinued operations were sold/closed down at a loss, and as PSV Holdings Limited has an assessed tax loss which has not been raised, there is no deferred tax effect. The pre and post-tax effects on the gain on disposal of discontinued operations are the same. Refer to Note 18 for deferred tax policy on assessed losses.

63

GROUP

2016 R

2015 R

7. Foreign currency translation reserveBreakdown of FCTR movement Opening balance (262 739) (75 337)Foreign currency translation reserve 185 910 (187 402)

Foreign currency translation closing balance (76 830) (262 739)

8. Earnings per share(Loss) attributable to ordinary shareholders (40 568 799) (26 935 109)(Loss) attributable to ordinary shareholders – continuing operations (19 354 630) (22 428 153)Weighted average number of ordinary shares in issue 263 879 842 261 378 069 Basic (loss) per share (cents) (15.37) (10.31)

Basic (loss) per share (cents) – continuing operations (7.33) (8.58)Basic (loss) per share (cents) – discontinued operations (8.04) (1.73)

Basic (loss) per share is calculated by dividing the net profit/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year.

Reconciliation of weighted average number of sharesShares in issue 265 879 842 265 879 842 Treasury shares not issued to third parties (held by PSV Treasury) (2 000 000) (4 501 773)

Weighted average number of shares 263 879 842 261 378 069

Reconciliation of headline (loss)(Loss) attributable to ordinary shareholders (40 568 799) (26 935 109)(Loss) on disposal of property, plant and equipment (195 963) (564 541)




GROUP

2016 R

2015 R

8. Earnings per share (continued)Discontinued operations – impairment of loans and investments 4 278 902 – Discontinued operations – impairment of intangible assets 314 941 – Discontinued operations – deferred tax on impairment of intangible assets (88 183) – Discontinued operations – impairment of goodwill 2 842 407 – Impairment of tangible assets – 1 499 472 Impairment of non-current assets – – Impairment of goodwill – continuing operations 8 737 124 – Impairment of intangible assets – continuing operations 4 148 128 2 459 557

Tax effect of impairment of intangible assets and loss on disposal of assets (1 106 606) (261 781)Headline loss (21 638 049) (23 802 402)Headline loss – continuing operations (7 771 947) (19 295 446)

Headline loss per share (cents) (8.20) (9.11)

Headline loss per share (cents) – continuing operations (2.95) (7.38)Headline loss per share (cents) – discontinued operations (5.25) (1.73)

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

Dilutive effectThe calculations of diluted profit/(loss) per share and diluted headline profit/(loss) per share are based on:Weighted average number of shares in issue for basic and headline profit/loss per share 263 879 842 261 378 069 Potentially dilutive share grants – 1 357 187

Number of shares for diluted loss per share 263 879 842 262 735 256

65

GROUP

2016 R

2015 R

8. Earnings per share (continued)The dilutive share grants relate to the share incentive scheme referred to in Note 3.

Diluted loss per share (cents) (15.37) (10.25)

Diluted loss per share (cents) – continuing operations (7.33) (8.54)Diluted loss per share (cents) – discontinued operations (8.04) (1.71)

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

Diluted headline loss per share (cents) (8.20) (9.06)

Diluted headline loss per share (cents) – continuing operations (2.95) (7.34)Diluted loss per share (cents) – discontinued operations (5.25) (1.72)

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

No adjustment for the share appreciation scheme was made as the scheme is cash-settled.

Cost R

Accumulated depreciation

R

Carrying amount

R

9A. Property, plant and equipment 2016 Group – owned

Computer equipment 1 143 841 (850 912) 292 929 Furniture and fittings 751 672 (507 327) 244 345 Leasehold improvements 881 275 (523 170) 358 105 Motor vehicles 4 301 342 (2 146 939) 2 154 403 Office equipment 408 337 (272 730) 135 607 Plant and machinery 5 136 061 (3 099 831) 2 036 230

12 622 528 (7 400 909) 5 221 619




Cost R


R

Carrying amount

R

9A. Property, plant and equipment (continued)2016Group – leased

Motor vehicles 6 240 942 (2 300 568) 3 940 374 Plant and machinery 998 668 (375 745) 622 923

7 239 610 (2 676 313) 4 563 297

Total 19 862 138 (10 077 222) 9 784 915

Company – owned

Computer equipment 14 008 (4 459) 9 549 Furniture and fittings 293 283 (258 988) 34 295 Leasehold improvements 624 376 (486 849) 137 527

931 667 (750 296) 181 371

Company – leased

Motor vehicles 571 767 (152 469) 419 298

571 767 (152 469) 419 299

Total 1 503 434 (902 765) 600 669

67

Cost R


R

Carrying amount

R

9A. Property, plant and equipment (continued)2015 Group – owned

Computer equipment 1 371 029 (886 930) 484 099 Furniture and fittings 1 151 166 (669 586) 481 580 Land and buildings 559 972 (2 924) 557 048 Leasehold improvements 1 186 802 (537 129) 649 673 Motor vehicles 6 693 135 (4 308 950) 2 384 185 Office equipment 490 112 (309 389) 180 723 Plant and machinery 5 793 663 (3 255 539) 2 538 124

17 245 879 (9 970 447) 7 275 432

Group – leased

Furniture and fittings 394 415 (283 519) 110 896 Motor vehicles 10 872 480 (5 944 034) 4 928 446 Office equipment 57 070 (54 225) 2 845 Plant and machinery 1 269 140 (352 252) 916 888

12 593 105 (6 634 030) 5 959 075

Total 29 838 984 (16 604 477) 13 234 506

Company – owned

Computer equipment 124 771 (60 097) 64 674 Furniture and fittings 313 611 (226 705) 86 906 Leasehold improvements 805 746 (350 846) 454 900

1 244 128 (637 648) 606 480




Cost R


R

Carrying amount

R

9A. Property, plant and equipment (continued)2015Company – leased

Furniture and fittings 394 415 (283 519) 110 896 Motor vehicles 555 593 (195 995) 359 598 Office equipment 57 070 (54 225) 2 845 Plant and machinery 270 472 (84 347) 186 125

1 277 550 (618 086) 659 464

Total 2 521 678 (1 255 734) 1 265 943

Opening carrying

value Additions Disposals DepreciationFCTR

movement Total

9B. Reconciliation of the carrying amount2016Group – ownedComputer equipment 484 099 130 190 (21 100) (309 286) 9 026 292 929 Furniture and fittings 481 580 54 651 (64 434) (208 979) (18 473) 244 345 Land and buildings 557 048 – (461 476) – (95 572) – Leasehold improvements 649 673 157 986 (111 955) (309 132) (28 467) 358 105 Motor vehicles 2 384 185 1 698 971 (1 654 958) (585 175) 311 380 2 154 403 Office equipment 180 723 7 600 (17 760) (46 755) 11 799 135 607 Plant and equipment 2 538 124 330 622 (192 900) (686 916) 47 300 2 036 230

7 275 432 2 380 020 (2 524 583) (2 146 243) 236 993 5 221 619

69

9B. Reconciliation of the carrying amount (continued)

Opening carrying

value Additions Disposals DepreciationFCTR

movement Total

2016Group – leasedFurniture and fittings 110 896 – (110 896) – – – Motor vehicles 4 928 446 1 432 161 (1 712 027) (1 050 485) 342 279 3 940 374Office equipment 2 845 – (2 845) – – – Plant and machinery 916 888 – (176 204) (117 760) (1) 622 923

5 959 075 1 432 161 (2 001 972) (1 168 245) 342 278 4 563 297

Total 13 234 506 3 812 181 (4 526 555) (3 314 488) 579 271 9 784 915

Company – ownedComputer equipment 64 674 14 008 (44 943) (24 190) – 9 549 Furniture and fittings 86 906 40 259 – (92 870) – 34 295 Leasehold improvements 454 900 157 986 (256 900) (218 458) – 137 528

606 480 212 253 (301 843) (335 518) – 181 372

Company – leasedFurniture and fittings 110 896 – (110 896) – – – Motor vehicles 359 598 189 090 (66 571) (62 820) – 419 297 Office equipment 2 845 – (2 845) – – – Plant and machinery 186 125 – (176 206) (9 919) – –

659 463 189 090 (356 518) (72 739) – 419 297

1 265 943 401 343 (658 361) (408 257) – 600 669





Opening carrying

value Additions

Reclassifi-cation in/(out) Disposals

Transfers in/(out) Impairment Depreciation

FCTR movement Total

2015Group – ownedComputer equipment 854 324 219 502 (181 671) (982) – – (352 117) (54 957) 484 099 Furniture and fittings 685 739 39 840 – (93 761) 69 662 – (176 260) (43 640) 481 580 Land and buildings 3 377 734 – – (2 725 665) – – (12 237) (82 784) 557 048 Leasehold improvements 2 241 834 375 355 – (33 565) (61 781) (1 499 472) (337 578) (35 120) 649 673 Motor vehicles 2 813 588 567 312 – – (228 013) – (287 892) (480 810) 2 384 185 Office equipment 169 848 65 095 – (490) 1 866 – (503 667) 448 071 180 723 Plant and equipment 3 116 651 325 227 – (45 896) 54 828 – (865 210) (47 476) 2 538 124

13 259 718 1 592 331 (181 671) (2 900 359) (163 438) (1 499 472) (2 534 961) (296 716) 7 275 432

Group – leasedComputer equipment – – – – 1 – (1) – – Furniture and fittings 204 037 – – – (14 259) – (78 882) – 110 896 Motor vehicles 6 436 094 659 834 – (1 115 812) 228 013 – (1 110 954) (168 729) 4 928 446 Office equipment – – – – 14 259 – (11 414) – 2 845 Plant and machinery 1 161 266 – – (2) (103 396) – (140 980) – 916 888

7 801 397 659 834 – (1 115 814) 124 618 – (1 342 231) (168 729) 5 959 075

Total 21 061 115 2 252 165 (181 671) (4 016 173) (38 820) (1 499 472) (3 877 192) (465 445) 13 234 506

71


Opening carrying

value Additions Disposals Transfers

in/(out) Impairment Depreciation Total

2015Company – owned Computer equipment 90 458 51 368 (1) – – (77 151) 64 674 Furniture and fittings 242 392 – (92 305) (15 872) – (47 309) 86 906 Land and buildings – – – – – – – Leasehold improvements 1 977 581 339 356 (29 045) (66 301) (1 499 472) (267 219) 454 900 Motor vehicles – – – – – – – Office equipment – – – 1 867 – (1 867) –

2 310 431 390 724 (121 351) (80 306) (1 499 472) (393 546) 606 480

Company – leasedComputer equipment 1 – – – – (1) – Furniture and fittings 204 037 – – (14 259) – (78 882) 110 896 Motor vehicles 410 259 – – – – (50 661) 359 598 Office equipment – – – 14 259 – (11 414) 2 845 Plant and machinery 315 264 – (183 702) 80 306 – (25 743) 186 125

929 561 – (183 702) 80 306 – (166 701) 659 463

3 239 992 390 724 (305 053) – (1 499 472) (560 247) 1 265 943

Leasehold improvements were impaired during 2015 as the Company moved premises and no recovery was made for improvements effected thereto while under lease.

The Company has no contractual commitments to acquire any additional plant and equipment in/after the year-end.




9B. Reconciliation of the carrying amount (continued)SecurityGroup and Company assets leased are subject to finance leases.

GROUP COMPANY

2016 R

2015 R

2016 R

2015 R

The amount outstanding is as follows: 3 318 108 3 960 522 381 105 443 596

Please refer to Note 19 for additional information.

GROUP

Cost2016

R


and impairment 2016

R

Carrying value2016

R

Cost2015

R


and impairment 2015

R

Carrying value2015

R

10. Intangible assetsMarket relationships 4 032 763 (3 677 563) 355 200 4 716 563 (3 446 563) 1 270 000 Customer relationships 4 697 748 (4 697 748) – 7 284 742 (4 218 142) 3 066 600 Technology relationships 4 426 433 (4 426 433) – 5 618 708 (3 864 565) 1 754 143 Software 425 046 (364 646) 60 400 834 588 (554 773) 279 813

13 581 990 (13 166 390) 415 600 18 454 601 (12 084 043) 6 370 556

Opening value R

Amortisation R

ImpairmentR

DisposalsR

FCTRR

Closing valueR

Carrying value reconciliation – 2016Market relationships 1 270 000 (231 000) (683 800) – – 355 200 Customer relationships 3 066 600 (479 606) (2 586 994) – – – Technology relationships 1 754 143 (561 868) (1 192 275) – – – Software 279 813 (192 379) – (17 420) (9 614) 60 400

6 370 556 (1 464 853) (4 463 069) (17 420) (9 614) 415 600

73

Opening value R

AdditionsR

Amortisation R

ImpairmentR

Closing valueR

10. Intangible assets (continued)Carrying value reconciliation – 2015Market relationships 4 385 229 – (655 670) (2 459 559) 1 270 000 Customer relationships 3 577 700 – (511 100) – 3 066 600 Technology relationships 2 316 015 – (561 872) – 1 754 143 Software 331 264 219 889 (271 340) – 279 813

10 610 208 219 889 (1 999 982) (2 459 559) 6 370 556

COMPANY

Cost2016

R


and impairment 2016

R

Carrying value2016

R

Cost2015

R


and impairment 2015

R

Carrying value2015

R

Software 425 046 (364 646) 60 400 425 048 (237 134) 187 914

425 046 (364 646) 60 400 425 048 (237 134) 187 914

Opening value R

Amortisation R

Closing valueR

Carrying value reconciliation – 2016Software 187 914 (127 514) 60 400

187 914 (127 514) 60 400

Carrying value reconciliation – 2015Software 315 430 (127 516) 187 914

315 430 (127 516) 187 914




10. Intangible assets (continued)The terminal growth rates are calculated with reference to each underlying CGU (2015 – 5.5%).

CGU

Terminal rate factor

2016

Omnirapid Mining and Industrial Supplies 4.31African Cryogenics 4.11Turbo Botswana 3.23

The terminal growth rates for the CGUs were based upon current CPIX forecasts. The discount rates used are pre-tax rates that reflect current market assessments of:

(a) the time value of money; and (b) the risks specific to the CGU for which the future cash flow estimates have not been adjusted.

Revenue and operating costs were projected to grow by between 5% to 10% for the years 2017 to 2021. The weighted average cost of capital (“WACC”) is a calculation of the Company’s cost of capital in which each category of capital is proportionately weighted.

The WACCs used in performing the valuations for each CGU are as follows:

29 February 2016

28 February 2015

CGU – WACC (%)Omnirapid Mining and Industrial Supplies 20.17 20.03African Cryogenics 20.67 20.03Turbo Botswana 21.80 21.84

During the year intangible assets attributable to the Turbo Agencie’s business was impaired by R3 161 994, due to losses incurred and the sale of the Zambian and DRC business units. A further R1 301 075 was provided against intangibles attributable to the African Cryogenics business division due to losses incurred, and recoverability not achievable.

During the 2015 year the Market Relationship intangible asset recognised on acquisition of the Engineered Linings business was impaired by an amount of R2 459 557 as the division incurred large losses during the year and there is no recoverable amount.

The Company has no contractual commitments to acquire any additional intangible assets after the financial year-end.

There are no intangible assets that require mandatory impairment.

75

GROUP COMPANY

2016

R 2015

R 2016

R 2015

R

11. GoodwillOpening balance 29 186 265 29 186 265 – – Impairment of goodwill (7 187 407) – – – Impairment of goodwill attributable to disposal of Turbo Zambia and Turbo Agencies (4 392 124) – – –

Closing balance 17 606 734 29 186 265 – –

For the purpose of impairment testing, goodwill is allocated to the Group’s individual operating cash-generating units (“CGUs”).

These represent the lowest level within the Group at which goodwill is monitored for internal management purposes.

The aggregate carrying and calculated recoverable amounts of goodwill allocated to each of the units is as follows:

Carryingvalue2016

R

Recoverableamount

2016R

Carryingvalue2015

R

Recoverableamount

2015R

Omnirapid Mining and Industrial Supplies 17 606 734 40 467 723 17 606 734 55 338 507 African Cryogenics – – 4 345 000 11 475 052 Turbo Agencies – – 7 234 531 16 351 513

17 606 734 40 467 723 29 186 265 83 165 072

The recoverable amounts of the CGUs were based on their value in use and were assessed by management.

The value in use for the CGU was determined by discounting the future cash flows from the continuing use of the CGU, and is based on the following key assumptions: Cash flows were based on actual operating results and a five-year forecast business plan. Operating expenses in the historical and forecast periods includes management fees attributable to value-added services. In order to value each CGU on a stand-alone maintainable basis, a fee has been included in operating expenses to compensate for additional costs that would be incurred for services performed on behalf of the

CGUs by head office and to include market-related expenses instead of benefiting from being part of the larger group. Cash flows include maintainable capex but exclude expandable capex items and reflect the ongoing operating cash flows of the CGUs.




11. Goodwill (continued)The terminal growth rates (2015: 5.5%) are calculated with reference to each underlying CGU.

CGU2016

Factor

Omnirapid Mining and Industrial Supplies 4.31African Cryogenics 4.11Turbo Botswana 3.23

The terminal growth rates for the CGUs were based upon current CPIX forecasts. The discount rates used are pre-tax rates that reflect current market assessments of:

(a) the time value of money; and (b) the risks specific to the CGU for which the future cash flow estimates have not been adjusted.

Revenue and operating costs were projected to grow by between 5% to 10% for the years 2017 to 2021. The weighted average cost of capital (“WACC”) is a calculation of the Company’s cost of capital in which each category of capital is proportionately weighted. The forecast cash flows of the PSV Holdings Limited CGUs are discounted using their respective WACCs.

The WACCs used in performing the valuations for each CGU are as follows:

29 February 2016

28 February 2015

CGU – WACC (%)Omnirapid Mining and Industrial Supplies 20.17 20.03African Cryogenics 20.67 20.03Turbo Botswana 21.80 21.84

Based upon our evaluation of the value in use of the abovementioned CGUs, the goodwill was impaired by R11 579 531.

77

Percentage holding Cost of shares Loans to

Issued share capital

2016%

2015%

2016R

2015R

2016R

2015R

12. Investment in subsidiariesHeld by PSV Holdings LimitedOperating companiesPSV Thuthuka Proprietary Limited 200 100 100 200 200 – – Omnirapid Mining & Industrial Supplies Proprietary Limited 100 100 100 100 100 – – PSV Industrial Proprietary Limited 258 100 100 22 832 947 75 922 455 3 601 091 25 998 161 Engineered Linings Proprietary Limited (asset management) 100 100 100 100 100 2 379 139 1 904 422 African Cryogenics Proprietary Limited 3 876 100 100 3 876 3 876 – – Cryoshield Proprietary Limited 100 100 100 100 100 – – Turbo Agencies Proprietary Limited 47 590 100 100 100 9 495 116 – 19 194 010 PSV Treasury Proprietary Limited 100 100 100 100 100 1 640 314 1 640 156 TASA Mining Proprietary Limited 100 100 100 100 100 362 625 188 339

22 837 623 85 422 147 7 983 169 48 925 088

Total owing by subsidiaries 7 983 169 48 925 088 Total owing to subsidiaries – –

7 983 169 48 925 088

Gross loan balance 28 649 777 56 862 194 Impairment of TASA loan – (174 286)Impairment of Turbo Botswana loan (14 037 296) –Impairment of PSVI loan (6 629 312) (7 762 820)

Total loan impairment (20 666 608) (7 937 106)

Net loans after impairment 7 983 169 48 925 088

The loans are unsecured, interest free and have no fixed payment terms.

Due to the short-term nature of the loans to subsidiaries, the directors believe their carrying value approximates their fair value.




GROUP COMPANY

2016

R 2015

R 2016

R 2015

R

13. InventoriesRaw materials and consumables 3 229 707 6 598 179 – – Work in progress – 1 132 784 – – Provision for obsolete stock (2 149 181) (2 844 159) – – Progress revenues and costs accrued in WIP 784 820 – – – Finished goods and merchandise 13 864 228 14 351 081 – – Goods in transit – 6 575 101 – –

15 729 574 25 812 986 – –

The amount of inventory recognised as expense is 207 980 708 200 517 981 – –

Provision for obsolete stockOpening balance 2 844 159 2 792 361 – – Provisions raised during the period – 464 480 – –Provisions utilised during the period (694 978) (412 682) – –

Closing balance 2 149 181 2 844 159 – –

Calculation of inventory recognised as expenseInventory opening balance 25 812 986 29 358 229 – –Purchases 197 202 318 197 024 536 – –Inventory closing balance (15 729 574) (25 812 986) – –

Cost of sales 207 285 730 200 569 779 – –Provision movement 694 978 (51 798) – –

207 980 708 200 517 981 – –

79

GROUP COMPANY

2016 R

2015 R

2016 R

2015 R

14. Trade and other receivablesTrade receivables 33 154 557 41 499 797 227 139 332 168 Prepayments 1 024 305 1 255 667 128 260 191 420 Deposits 1 446 995 1 955 001 55 000 233 712 VAT 1 519 901 5 664 461 154 670 158 908 Customer retentions 315 568 553 471 – – Other 707 798 104 329 342 070 1 008 419

38 169 124 51 032 726 907 139 1 924 627

Trade receivables are non-interest-bearing and are generally on 30-day terms.Provision for doubtful debts Opening balance 1 844 259 3 313 382 Bad debts written off (1 990 043) (2 462 875)Debtors previously provided and now recovered – (34 212)New provisions 907 099 1 027 964

Closing balance 761 315 1 844 259

For terms and conditions relating to related-party receivables, refer to Note 24.

The Group’s exposure to credit and currency risks, and impairment losses related to trade and other receivables is disclosed in Note 21.

Cession of the trade debtors in lieu of banking facilities provided by:Standard Bank 29 991 877 26 141 387 FNB Botswana 1 460 067 3 923 777

31 451 944 30 065 164




GROUP COMPANY

2016

R 2015

R 2016

R 2015

R

15. Cash and cash equivalentsBank and cash balances 15 407 994 12 136 880 930 492 729 932 Bank overdraft (23 670 202) (23 289 397) – (6 874 867)

Cash and cash equivalents in the statement of cash flow (8 262 208) (11 152 517) 930 492 (6 144 935)

The Company’s and Group’s bank overdraft forms part of the cash management activities.

The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities is disclosed in Note 21.3.

The following security has been provided to Standard Bank for the banking facilities granted by them: Cession of trade debtors of PSV Industrial; and Cession of call account of PSV Holdings.

The following security has been provided to FNB Botswana for the banking facilities granted by them to Turbo Agencies Botswana: Cession of trade debtors; Cession of call account; PSV Holdings suretyship of BWP 7 500 000 in favour of the bank; Cession of fire insurance policies; and Deed of hypothecation BWP 7 500 000 over all tangible and intangible assets.

81

GROUP COMPANY

2016

R 2015

R 2016

R 2015

R

16. Share capitalAuthorised1 000 000 000 ordinary shares of no par value

Issued265 879 842 (2015: 265 879 842) ordinary shares of no par value 273 329 475 273 276 078 273 683 543 273 683 543

Number of shares issued to external parties:Total shares in issue 265 879 842 265 879 842 265 879 842 265 879 842 Treasury shares held by PSV Treasury (2 000 000) (4 501 773) (2 000 000) (4 501 773)

Net shares held by external parties 263 879 842 261 378 069 263 879 842 261 378 069

Treasury shares are held in terms of the Group’s share incentive scheme. For details refer to Note 3.

The increase in the value of the ordinary shares issued is as a result of the vesting of shares taken up by employees.

Total sharesTreasury shares by PSV Treasury

Shares held by external parties

Shares in issue at the beginning of the year 265 879 842 2 251 508 263 879 842Treasury shares (2 000 000) (251 508) –Shares in issue at the end of the year 263 879 842 2 000 000 263 879 842




Turbo Agencies Vendor 1 –

Parry R

Turbo Agencies Vendor 2 –

Earthwise R

Total R

17. Deferred purchase considerationBalance owing at 28 February 2014 4 000 000 7 258 435 11 258 435

Long-term portion – 4 659 206 4 659 206 Current portion 4 000 000 2 599 229 6 599 229

Acquisitions during the year – – –

Unwinding of interest 2015 63 856 755 270 819 126 Settlements (1 192 705) – (1 192 705)Cash (2 871 151) (3 168 374) (6 039 525)

Balance owing at 28 February 2015 – 4 845 331 4 845 331

Long-term portion – 2 000 000 2 000 000 Current portion – 2 845 331 2 845 331

Actual repayments – (4 845 331) (4 845 331)

Cash – (4 845 331) (4 845 331)

Balance owing at 29 February 2016 – – –

In respect of the Earthwise vendor, a negotiated early settlement was concluded which resulted in a significant saving to the Company.

83

GROUP COMPANY

2016

R 2015

R 2016

R 2015

R

18. Deferred taxationThe movement on the deferred taxation account is as follows:Balance at beginning of year 12 898 338 8 458 891 – – Profit or loss charge 5 083 868 4 439 447 – –

current year 4 423 971 4 439 447 – – prior year over/(under) provision 659 897 – – –

Statement of financial position debit/(credit) (958 752) – – –

subsidiaries sold during the year (958 752) – – –

Balance at end of year 17 023 454 12 898 338 – –

Balance at end of year is made up of:Deferred taxation assets 17 023 454 15 561 721 – – Deferred taxation liabilities – (2 663 383) – –

17 023 454 12 898 338 – –

Comprising: Capital allowances (715 243) (1 534 452) – – Provisions 6 130 301 1 414 086 – – Intangibles (99 456) (2 417 897) – – Advance receipts 1 021 746 336 848 – – Prepayments (213 791) (153 615) – – Estimated taxation losses 10 899 898 15 253 368 – –

17 023 454 12 898 338 – –

The disposal of subsidiary deferred tax effect is limited to capital allowances.

A deferred tax asset has been raised in PSV Industrial (Pty) Ltd, PSV Asset Co (Pty) Ltd, Engineered Linings (Pty) Ltd and Tasa Mining (Pty) Ltd due to the internal group restructure which will result in economies of scale and removal of duplicated administrative costs.




18. Deferred taxation (continued)On assessing the three-year profitability forecasts of these entities, sufficient taxable income should be generated to fully utilise the deferred tax assets so provided for.

No deferred tax asset has been raised in PSV Holdings Limited as the Company is not expected to make any taxable income in the foreseeable future.

GROUP COMPANY

2016

R 2015

R 2016

R 2015

R

The computed tax losses for which a deferred tax asset has not been raised 38 928 207 54 470 314 54 649 588 36 561 791The computed capital gains tax loss for which a deferred tax asset has not been raised 2 435 336 2 435 336 2 435 336 2 435 336

19. BorrowingsLocalSecuredInstalment sale and finance lease agreements for motor vehicles and equipment 3 318 108 3 960 522 381 105 443 596 Secured by underlying financed assets and payable over periods from two to five years at interest rates linked to Prime Rate.

Rowad International 2 381 902 – – – Not secured. Repayable under agreement yet to be finalised over the balance of 15 months at a 2% interest rate.

FNB bank loan – Turbo Botswana 2 590 519 2 766 919 – – Secured by deed of hypothecation over moveable assets of BWP 7.5 million, cession of fire insurance policy, cession of book debts of Turbo Botswana and a BWP 7.5 million suretyship from PSV Holdings Limited. Repayable over the balance of 60 months at an interest rate of prime plus 1%.

Total borrowings 8 290 529 6 727 441 381 105 443 596 Less: Current portion (4 312 963) (2 495 511) (129 005) (188 217)

3 977 566 4 231 930 252 100 255 379

The carrying value of interest-bearing liabilities approximates their fair value.

The carrying amount of leased assets is reflected in Note 9.

Financial leases are payable as follows:Within 1 year 1 150 374 – 145 909 –2 to 5 years 2 167 534 – 235 196 –

3 318 108 – 381 105 –

85

GROUP COMPANY

2016 R

2015 R

2016 R

2015 R

20. Provisions, trade and other payables20.1 Trade and other payables

Trade payables 29 753 192 19 058 354 179 458 885 473 Accruals 3 569 813 4 537 511 219 067 329 492 Rental straight-line liability 3 376 153 1 642 813 – –VAT payable 135 887 1 299 790 – –Payroll accruals 2 413 105 2 220 221 1 292 071 347 006 Other payables 3 972 875 11 269 805 253 506 193 128 Transferred to liabilities held-for-sale (Note 6) (28 014) – – –

43 193 011 40 028 494 1 944 102 1 755 099

Trade payables are non-interest-bearing and are normally settled on 30-day terms. Accruals are non-interest-bearing and, other than employee benefit accruals, have an average term of 30 days.

For terms and conditions relating to related-party payables, refer to Note 24.

The Group’s exposure to liquidity and currency risk related to trade and other payables is disclosed in Note 21.2 and 21.3.

Other payables in 2015 includes R9.3 million deposits received from customers for work to be completed. In 2016 there is an accrual for retrenchment packages in African Cryogenics of R3 million.

20.2 ProvisionsLeave pay provision 1 290 331 1 661 522 508 980 418 867 Provision for bonuses 471 370 210 298 105 265 109 322

1 761 701 1 871 820 614 245 528 189

Provision for leave pay and bonusOpening balance 1 871 820 3 313 382 528 189 506 511Provision utilised (1 435 410) (2 462 875) (291 050) (279 442)Provisions raised during the year 1 325 291 1 021 313 377 106 301 120

Closing balance 1 761 701 1 871 820 614 245 528 189




21. Financial risk management overviewThe Group has exposure to the following risks from its use of financial instruments:

credit risk; liquidity risk; and market risk.

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout these financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.

The Board of Directors is also responsible for analysing the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.

21.1 Credit riskCredit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The demographics of the Group’s customer base, including the default risk of the industry and country in which customers operate, has less of an influence on credit risk.

The Group has established a credit process under which each new customer is evaluated individually for creditworthiness before the Group’s standard payment terms and conditions are offered.

The Group’s review includes external ratings, where available, and in some cases bank references.

Exposure limits are established for each customer, in accordance with the approval framework. All new clients are required to complete a credit application.

More than 50% of the Group’s customers have been transacting with the Group for over five years, and losses have occurred infrequently.

In monitoring customer credit risk, customers are grouped according to their credit characteristics, including geographic location, industry, ageing profile, maturity and existence of previous financial difficulties.

The Group’s major customer adhered to extended credit terms of between 30 and 90 days.

The dependence on the major customer related to a significant project undertaken that has now come to an end.

The Group does not require collateral in respect of trade and other receivables, as it mainly renders services to major companies in the industries in which they operate and the exposure to credit risk is monitored on an ongoing basis.

The Group has transacted with a credit guarantee insurance provider to insure the debtors.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The key components of this allowance is a specific loss component that relates to individually significant exposures in respect of losses that have been incurred but not yet identified. At statement of financial position date there was an allowance for impairment based on the above process.

The Company only deposits cash with major banks of high quality credit standing to manage its credit risk relating to cash and cash equivalents. Refer to Note 15 for the bank and cash balances which represent the maximum exposure of cash and cash equivalents to credit risk.

87

21. Financial risk management overview (continued)

21.1 Credit risk (continued)Exposure to credit riskThe carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

2016R

2015R

Trade and other receivables – excludes prepayments and VAT 35 624 918 44 112 599

The maximum exposure to credit risk by significant customer at year-end was:CUSTOMER A 2 568 831 – CUSTOMER B 1 245 127 – CUSTOMER C 1 313 797 – CUSTOMER D – 7 384 800 CUSTOMER E 2 516 149 1 817 000 CUSTOMER F 1 129 954 2 413 000 CUSTOMER G 1 194 713 484 000 CUSTOMER H – 1 241 790 CUSTOMER I – 7 749 672 CUSTOMER J 2 034 683 1 891 000 CUSTOMER K 2 267 356 1 008 000

Impairment lossesThe ageing of trade receivables as at reporting date was:Not past due 28 030 985 35 496 328 90 days past due 1 960 892 1 455 963 120 days past due 3 162 680 4 547 506

Trade receivables (Note 14) 33 154 557 41 499 797

The movement in the allowance for impairment of trade receivables during the year was as follows:Balance at beginning of year 1 844 259 3 313 382 Impairment loss processed through profit or loss (1 082 944) (1 469 123)

Balance at end of year 761 315 1 844 259

Trade receivables provided are all in 120+ days.




21. Financial risk management overview (continued)21.2 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due under normal conditions.

The Group manages its working capital requirements stringently and ensures that it has sufficient cash on demand to meet expected operational expenses for the short term, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted such as natural disasters.

In addition, the Group maintains the following lines of credit:

2016R

2015R

Standard Bank Limited overdraft facility of R21 million overdraft facility utilised 18 316 483 18 678 341

First National Bank Limited overdraft facility of BWP 4.5 million overdraft facility utilised 5 353 719 4 611 056

23 670 202 23 289 397

Interest on the above is variable with the prime overdraft rate.

Where acquisitions are made, transactions are structured in such a way so as to settle the purchase price over a fixed period.

The following are the contractual maturities of financial liabilities:

Non-derivative financial liabilities

Carrying amount

R

Contractual cash flows

R

12 months or less

R

More than 12 months

R

2016Billings in excess of work certified 5 533 500 5 533 500 5 533 500 –Trade and other payables (excluding VAT and straight-line leasing) 39 680 972 39 680 972 39 680 972 –Loans and borrowings 8 290 529 9 176 233 4 449 757 4 726 477Bank overdraft 23 670 202 23 670 202 23 670 202 –

Total 77 175 203 78 060 907 73 334 431 4 726 477

89

Carrying amount

R

Contractual cash flows

R

12 months or less

R

More than 12 months

R

21. Financial risk management overview (continued)21.2 Liquidity risk (continued)

2015Deferred purchase consideration 4 845 331 4 845 331 2 845 331 2 000 000 Trade and other payables (excluding VAT and straight-line leasing) 37 085 891 37 085 891 37 085 891 –Loans and borrowings 6 727 441 7 445 932 2 762 032 4 683 900Bank overdraft 23 289 397 23 289 397 23 289 397 –

Total 71 948 060 72 666 551 65 982 651 6 683 900

21.3 Market riskMarket risk is the risk that changes in market prices, such as foreign currency exchange rates, may cause a decrease in fair values of future cash flows of financial instruments and consequently result in a financial loss for the Group.21.3.1 Currency risk

The Group is exposed to currency risk on certain debtors or creditors that are denominated in a currency other than the functional currency of the Group, the South African Rand.

The Group is also exposed to currency risk on certain long-term inter-company loans which are denominated in a currency other than the functional currency of the Group.

The currencies in which these transactions primarily are denominated are Euros, US Dollars, Botswana Pulas and Zambian Kwachas.

The Group policy is not to actively manage foreign exchange risk by means of FECs, or other hedging instruments.

The table below presents the Rand equivalent of the foreign currency exposure:

USD2016

GBP2016

Euro2016

ZMK2016

BWP2016

USD2015

GBP2015

Euro2015

ZMK2015

BWP2015

Trade receivables 141 877 – – – 1 489 113 10 998 009 – – 2 982 291 2 219 999 Cash and cash equivalents 1 611 – – – – 2 181 860 – – – (4 346 306)Trade payables (169 077) (19 934) (372 394) – (1 387 492) (11 507 197) (40 777) (1 040 608) (1 753 702) (139 593)

Gross exposure (25 589) (19 934) (372 394) – 101 621 1 672 672 (40 777) (1 040 608) 1 228 589 (2 265 900)




Reporting date spot rate Average rate

2016 2015 2016 2015


21.3 Market risk (continued)21.3.1 Currency risk (continued)

The following significant exchange rates applied at year-end.USD 16.14 11.58 13.47 10.95 GBP 22.38 17.86 20.36 17.74 Euro 17.59 12.98 14.85 13.99 BWP 1.39 1.18 1.27 1.19 ZMW – 1.66 – 1.76

Sensitivity analysis Due to the volatility of the Rand to other currencies to which the Group is exposed, a 20% (2015: 20%) strengthening in the Rand against the following currencies would have increased/(decreased) profit or loss by the amounts shown below:

201620%

201520%

USD (82 601) 334 534 GBP (89 225) (8 155)Euro (1 310 082) (208 122)BWP 28 251 (453 180)ZMK – 245 718

A 20% weakening in the rand against the above currencies at 29 February 2016 would have an equal and opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

Losses and profits on loans to and from foreign subsidiaries are detailed in Note 24.

21.3.2 Cash fl ow interest rate riskBorrowings are generally at a rate linked to the prime bank overdraft rate.

The Group had interest-bearing borrowings at year-end as well as finance leases.

91


21.3 Market risk (continued)21.3.2 Cash fl ow Interest rate risk (continued)

At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was as follows:

2016 2015

Variable rate instrumentsFinancial liabilitiesBank overdraft 23 670 202 23 289 397 Finance lease liabilities, leases and bonds 8 290 529 6 727 441

31 960 731 30 016 838

A change of 1% has been used due to the relative stability of the prime lending rate in South Africa and the effect would have increased/(reduced) profits by the amounts shown below based on year-end balances.

1% decrease2016

R

1% increase2016

R

1% decrease2015

R

1% increase2015

R

Variable rate instruments 319 607 (319 607) 300 168 (300 168)

A change of 1% in the interest rates will not have an effect on the fair values of fixed rate financial instruments as all interest-free financial instruments are short-term in nature.

21.4 Capital managementCapital is defi ned as total equity as refl ected on the statement of fi nancial position.

The Board’s policy is to maintain a strong capital base to sustain future development of the business and maintain creditor and market confi dence.

There were no changes in the Company’s approach to capital management during the year.

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure to reduce the cost of capital.

Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including “current and non-current borrowings” as shown in the consolidated statement of fi nancial position) less cash and cash equivalents. Total capital is calculated as “equity” as shown in the consolidated statement of fi nancial position plus net debt.




2016 2015

21. Financial risk management overview (continued)21.4 Capital management (continued)

Reconciliation of capitalOpening balance 72 249 874 98 999 946 Loss for the year (40 568 798) (26 935 109)Foreign currency translation reserve 185 908 (187 403)Share-based payment reserve (220 918) 372 439

Total equity attributable to ordinary shareholders 31 646 066 72 249 874

21.5 Fair values of fi nancial instrumentsThe fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:

GROUP COMPANY

Loans and receivable/ liabilities at

amortised cost 2016

R

Fair value 2016

R


amortised cost 2015

R

Fair value 2015

R


amortised cost 2016

R

Fair value 2016

R


amortised cost 2015

R

Fair value 2015

R

Financial assets Trade and other receivables 38 169 124 38 169 124 51 032 726 51 032 726 907 139 907 139 1 924 627 1 924 627 Cash and bank balances 15 407 994 15 407 994 12 136 880 12 136 880 930 492 930 492 729 932 729 932 Loans receivable – – – – 7 983 169 7 983 169 48 925 088 48 925 088

53 577 118 53 577 118 63 169 606 63 169 606 9 820 800 9 820 800 51 579 647 51 579 647

93

GROUP COMPANY


amortised cost 2016

R

Fair value 2016

R


amortised cost 2015

R

Fair value 2015

R


amortised cost 2016

R

Fair value 2016

R


amortised cost 2015

R

Fair value 2015

R


21.5 Fair values of fi nancial instruments (continued)Financial liabilities Loans and borrowings 8 290 529 8 290 529 6 727 441 6 727 441 381 105 381 105 443 596 443 596 Trade and other payables (excluding VAT) 43 057 125 43 057 125 38 728 704 38 728 704 1 944 102 1 944 102 1 755 099 1 755 099 Transferred to assets held-for-sale (Note 6) (28 014) (28 014) – – – – – – Bank overdraft 23 670 202 23 670 202 23 289 397 23 289 397 – – 6 874 867 6 874 867 Deferred purchase consideration – – 4 845 331 4 845 331 – – 4 845 331 4 845 331 Billings in excess of work certified 5 533 500 5 533 500 – – – – – –Liabilities directly associated with non-current assets classified as held-for-sale 28 014 28 014 – – – – – –

80 551 356 80 551 356 73 590 873 73 590 873 2 325 207 2 325 207 13 918 893 13 918 893

The fair values of the long-term financial instruments approximate their carrying values due to the variable interest rate terms of the financial instrument.

The Directors consider the carrying value of the current financial instruments to approximate their fair value due to their short-term nature.




GROUP COMPANY DISCONTINUED OPERATIONS

2016 R

2015 R

2016 R

2015 R

2016 R

2015 R

22. Cash fl ow informationA. Cash generated by/(utilised in) operations

Loss before taxation including discontinued operations (45 211 750) (30 769 621) (93 376 331) (17 609 400) (19 598 181) (4 515 775)Adjustments for:Finance income (3 253 430) (1 431 669) (477 118) (1 989 182) (2 190 487) – Finance expenses 3 556 267 6 333 021 806 646 730 282 1 497 944 1 112 025 Interest on deferred purchase consideration – 819 126 493 993 819 126 – –Share-based payment expense (220 918) 372 439 (238 139) 196 545 – –Depreciation 3 314 488 3 877 192 408 257 560 247 870 217 532 282 Amortisation of intangibles 1 464 853 1 999 984 127 514 127 516 – 90 187 Impairment of intangibles 4 463 069 2 459 557 – – 314 941 –Impairment of goodwill 11 579 531 – – – 2 842 407 –Movement in provisions (110 119) (196 610) 71 996 54 389 (426 499) –IFRS lease straight-lining 1 733 340 (2 706 912) – (4 335 665) – –Impairment of property, plant and equipment – 1 499 472 – 1 499 472 – –(Profit)/loss on disposal of property, plant and equipment (195 963) (564 541) (143 102) – 646 273 (1 884)Movement in foreign currency translation reserve (383 748) 278 049 – – (2 554 934) (121 186)Impairment of investments – – 75 455 388 7 937 106 6 305 615 –

(23 264 380) (18 030 513) (16 870 896) (12 009 564) (12 292 704) (2 904 351)

95

GROUP COMPANY DISCONTINUED OPERATIONS

2016 R

2015 R

2016 R

2015 R

2016 R

2015 R

22. Cash fl ow information (continued)A. Cash generated by/(utilised in) operations (continued)

Changes in working capital(Increase)/decrease in inventories 5 950 728 3 545 243 – 2 869 932 8 209 184 8 593 218 (Increase)/decrease in trade and other receivables 7 998 037 6 999 551 1 017 489 6 828 280 11 959 962 3 891 199 Increase/(decrease) in trade and other payables 15 599 307 (602 904) 189 003 (1 275 938) (6 456 644) 781 149

6 283 692 (8 088 623) (15 664 404) (3 587 290) 1 419 798 10 361 215

B. Taxation paidBalance payable at beginning of year 1 659 900 2 276 721 – – 754 392 1 115 469 Charge to profit or loss 2 172 854 604 935 – – 3 347 925 (153 545)Transfer to discontinued operations – – – – 752 511 –Non-cash adjustment in DRC and TAZ – – – – 2 850 228 –Balance (payable) at end of year (14 372) (1 659 900) – – – (754 392)

3 818 382 1 221 756 – – 7 705 056 207 532

23. Defi ned contribution benefi t informationEmployees of the Group contribute to the Sanlam Umbrella Provident Fund.

Those employed before 1 September 2010 may elect to contribute 10%, 12% or 19% of their pensionable salary to the fund.

Those employed after 1 September 2010 contribute 10% of their pensionable salary to the fund. All permanent salaried staff are required to join the fund.

At year-end the total number of employees in the Company belonging to the fund was 61 (2015: 60).




24. Related-party transactionsThe Company has no holding company. All related-party transactions, except for related-party loans which are interest free, are concluded under terms that are no less favourable than those arranged with third parties. Outstanding trading balances at year-end are unsecured, interest free and settlement is in cash. Outstanding loan balances at year-end are unsecured, interest free and are repayable on demand, except for Turbo Botswana, which bears interest at prime plus 1.25%.

Management feesAll management fees are intra-group and have been eliminated on consolidation.

Directors’ remuneration and share optionsDetailed disclosure of directors’ remuneration is made in Note 25.

Group companiesDetails of subsidiary companies are given in Note 12.

Transactions with related partiesDetails of revenue from subsidiaries are:

Category of transactionRecipient

company/divisionPaying

company/divisionSOCI

disclosure line

Income/(expense)2016

R

Income/(expense)2015

R

Sales and cost of salesRevenue PSV Industrial PSV Industrial Revenue 13 987 648 7 137 804 Cost of sales PSV Industrial PSV Industrial Cost of sales (13 987 648) (7 137 804)

Management fees PSV Holdings Ltd PSV Industrial 1 296 125 7 952 857 Property rental PSV Industrial PSV Industrial 424 320 –Asset rental PSV Industrial PSV Industrial 2 921 729 5 129 813 Recovery costs received – –

PSV Holdings Ltd PSV Industrial Other income 2 305 835 3 890 521 PSV Holdings Ltd PSV Industrial Other expenses (2 305 835) (3 890 521)

Finance costs and finance income Turbo Botswana Turbo DRC Finance income 642 982 1 927 826 Turbo Botswana Turbo DRC Finance costs (642 982) (1 927 826)

97

25. Directors’ remunerationDirectors’ remuneration in respect of the financial year ended 29 February 2016 was as follows:

Basic remuneration

R

Other benefits

R

Retirement and medical

R

Incentives and bonuses

R

Directors’ fees

RTotal

R

2016Executive AJD da Silva 2 193 280 – 388 222 2 292 795 – 4 874 297 AR Dreisenstock 2 015 303 – 331 137 1 719 596 – 4 066 036

Non-executiveE Ratshikhopha – – – – 290 154 290 154 A de la Rue – – – – 291 300 291 300 R Patmore – – – – 291 305 291 305

4 208 583 – 719 359 4 012 391 872 759 9 813 092

2015Executive AJD da Silva 2 041 861 – 358 647 – – 2 400 508 AR Dreisenstock 1 894 331 – 308 235 – – 2 202 566

Non-executiveE Ratshikhopha – – – – 260 050 260 050 A de la Rue – – – – 264 400 264 400 R Patmore – – – – 264 552 264 552

3 936 192 – 666 882 – 789 002 5 392 076

PSV Holdings Limited executive and non-executive remuneration is approved annually by the Remuneration Committee.




26. Contingent liabilitiesThere are no contingent liabilities at year-end.

27. CommitmentsThe Group has entered into operating leases for premises which is expected to result in the following outflows:

GROUP COMPANY

2016

R2015

R2016

R2015

R

Within 1 year 6 535 130 5 692 703 538 396 496 218 2 to 5 years 24 941 058 23 784 470 378 710 917 106 More than 5 years 21 953 803 29 721 928 – –

53 429 991 59 199 101 917 106 1 413 324

28. Going concernThe annual financial statements have been prepared on the going concern basis. Despite the losses incurred by PSV in the current year and based on the extensive going concern and liquidity review and based on the approved budget for 2017, the directors have every reason to believe that the Group has adequate resources to continue in operation for the foreseeable future.

29. Subsequent eventsThe directors are not aware of any material subsequent events between year-end and reporting date.

99

Notice of Annual General Meeting

PSV Holdings LimitedIncorporated in the Republic of South Africa(Registration number: 1998/004365/06)Share code: PSVISIN: ZAE000078705(“PSV” or “the Company” or “the Group”)

If you are in any doubt as to what action you should take in respect of the following resolutions, please consult your Central Securities Depository Participant (“CSDP”), broker, banker, attorney, accountant or other professional adviser immediately.

Notice is hereby given of the Annual General Meeting (“Annual General Meeting”) of shareholders of PSV which will be held at 10:00 on Tuesday, 30 August 2016, at Stoneridge Offi ce Park, 8 Greenstone Place, Building C, 2nd Floor, Greenstone Hill, for the purpose of considering and, if deemed fi t, passing, with or without modifi cation, the resolutions set out hereafter.

The Board of Directors of the Company (“the Board”) has determined that, in terms of section 62(3)(a), as read with section 59 of the Companies Act, 2008 (Act 71 of 2008), as amended, the record date for the purposes of determining which shareholders of the Company are entitled to participate in and vote at the Annual General Meeting is Friday, 26 August 2016. Accordingly, the last day to trade PSV’s shares in order to be recorded in the register to be entitled to vote will be Tuesday, 23 August 2016.

1. To receive, consider and adopt the annual fi nancial statements of the Company and the Group for the fi nancial year ended 29 February 2016, including the reports of the auditors, Directors and the Audit and Risk Committee.

2. To re-elect Ralph Patmore who, in terms of Article 24 of the Company’s Memorandum of Incorporation, retires by rotation at this Annual General Meeting but, being eligible to do so, offers himself for re-election.

An abbreviated curriculum vitae of Ralph Patmore appears on page 9 of the Integrated Annual Report of which this notice forms part. 3. To appoint Anthony de la Rue as a member and Chairman of the PSV Holdings Limited Independent Audit

and Risk Committee.4. To appoint Eric Ratshikhopha as a member of the PSV Holdings Limited Independent Audit and Risk

Committee.5. To appoint Ralph Patmore as a member of the PSV Holdings Limited Independent Audit and Risk

Committee.

An abbreviated curriculum vitae in respect of each member of the Independent Audit Committee appears on page 9 of the Integrated Annual Report of which this notice forms part.

6. To confi rm the appointment of Certifi ed Master Auditors Inc as independent auditors of the Company with Raymond Baard, being the individual registered auditor who has undertaken the audit of the Company for the ensuing fi nancial year and to authorise the Directors to determine the auditors’ remuneration.

The minimum percentage of voting rights required for each of the resolutions set out in item numbers 1 to 6 above to be adopted is more than 50% (fi fty percent) of the voting rights exercised on each of the resolutions by shareholders present or represented by proxy at the Annual General Meeting.

As special business, to consider and, if deemed fi t, to pass, with or without modifi cation, the following resolutions:

7. Special Resolution number 1 Non-Executive Directors’ remuneration “Resolved that, in terms of the provisions of section 66(9) of the Companies Act, 2008 (Act 71 of 2008),

as amended, the annual remuneration payable to the Non-Executive Directors of PSV Holdings Limited (“the Company”), as amended, for their services as Directors of the Company for the fi nancial year ending 28 February 2017, be and is hereby approved as follows:

Type of fee

Approved annual fee for

2016

Proposed annual fee for 2017

CommitteeChairman R291 300 R291 300Member R291 300 R291 300

Explanatory note In terms of section 66(9) of the Companies Act, a company is required to pre-approve the payment of

remuneration to Non-Executive Directors for their services as Directors for the ensuing fi nancial year by means of a special resolution passed by shareholders of the Company within the previous two years. The annual remuneration payable to any Non-Executive Director is R291 300 per annum (2016), notwithstanding the number of committees he/she is a member/Chairman of. The proposed fee for 2017 is R291 300 per annum.

Special resolutions to be adopted at this Annual General Meeting require approval from at least 75% (seventy-fi ve percent) of the votes exercised on such resolutions by shareholders present or represented by proxy at the meeting.



Notice of Annual General Meeting (continued)

8. Special Resolution number 2 General approval to acquire shares “Resolved, by way of a general approval that PSV Holdings Limited (“the Company”) and/or any of its

business units from time to time be and are hereby authorised to acquire ordinary shares in the Company in terms of sections 46 and 48 of the Companies Act, 2008 (Act 71 of 2008), as amended, the Memorandum of Incorporation of the Company and its business units and the Listings Requirements of JSE Limited (“the JSE”), as amended from time to time.

The JSE Listings Requirements currently provide, inter alia, that: the acquisition of the ordinary shares must be effected through the order book operated by the JSE

trading system and done without any prior understanding or arrangement between the Company and the counterparty;

this general authority shall only be valid until the earlier of the Company’s next Annual General Meeting or the expiry of a period of 15 (fi fteen) months from the date of passing of this special resolution;

in determining the price at which the Company’s ordinary shares are acquired in terms of this general authority, the maximum premium at which such ordinary shares may be acquired will be 10% (ten percent) of the weighted average of the market value at which such ordinary shares are traded on the JSE, as determined over the 5 (fi ve) business days immediately preceding the date on which the transaction is effected;

at any point in time, the Company may only appoint one agent to effect any acquisition/s on its behalf; the acquisitions of ordinary shares in the aggregate in any one fi nancial year may not exceed 20%

(twenty percent) of the Company’s issued ordinary share capital; the Company may only effect the repurchase once a resolution has been passed by the Board of

Directors of the Company (“the Board”) confi rming that the Board has authorised the repurchase, that the Company has passed the solvency and liquidity test (“test”) and that since the test was done there have been no material changes to the fi nancial position of the Group;

the Company or its business units may not acquire ordinary shares during a prohibited period as defi ned in paragraph 3.67 of the JSE Listings Requirements; and

an announcement will be published once the Company has cumulatively repurchased 3% (three percent) of the number of the ordinary shares in issue at the time this general authority is granted (“initial number”), and for each 3% (three percent) in aggregate of the initial number acquired thereafter.”

Explanatory note The purpose of this Special Resolution number 2 is to obtain an authority for, and to authorise, the

Company and the Company’s business units, by way of a general authority, to acquire the Company’s issued ordinary shares.

It is the intention of the Directors of the Company to use such authority should prevailing circumstances (including tax dispensations and market conditions) in their opinion warrant it.


Other disclosures in terms of section 11.26 of the JSE Listings Requirements The JSE Listings Requirements require the following disclosure which are contained in the Integrated

Annual Report of which this notice forms part: Major shareholders of the Company – pages 27 and 28 Share capital of the Company – page 81

Material changes There have been no material changes in the affairs or fi nancial position of the Company and its business

units since the Company’s fi nancial year-end and the date of this notice.

Directors’ responsibility statement The Directors, whose names are given on pages 8 and 9 of the Integrated Annual Report of which this

notice forms part, collectively and individually accept full responsibility for the accuracy of the information pertaining to Special Resolution number 2 and certify that to the best of their knowledge and belief there are no facts in relation to Special Resolution number 2 that have been omitted which would make any statement in relation to Special Resolution number 2 false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that Special Resolution number 2 together with this notice contains all information required by law and the JSE Listings Requirements in relation to Special Resolution number 2.

Adequacy of working capital At the time that the contemplated repurchase is to take place, the Directors of the Company will ensure

that, after considering the effect of the maximum repurchase and for a period of 12 months thereafter: the Company and its business units will be able to pay their debts as they become due in the ordinary

course of business; the consolidated assets of the Company and its business units, fairly valued in accordance with

International Financial Reporting Standards, will be in excess of the consolidated liabilities of the Company and its business units;

the issued share capital and reserves of the Company and its business units will be adequate for the purpose of the ordinary business of the Company and its business units; and the working capital available to the Company and its business units will be suffi cient for the Group’s requirements.

101

9. Special Resolution number 3 Financial assistance for subscription of securities “Resolved that, as a special resolution, in terms of section 44 of the Companies Act, 2008 (Act 71 of

2008), as amended (“Companies Act”), the shareholders of PSV Holdings Limited (“the Company”) hereby approve of the Company providing, at any time and from time to time during the period of two years commencing on the date of this Special Resolution number 3, fi nancial assistance by way of a loan, guarantee, the provision of security or otherwise, as contemplated in section 44 of the Companies Act, to any person for the purpose of, or in connection with, the subscription for any option, or any securities, issued or to be issued by the Company or a related or inter-related company, or for the purchase of any securities of the Company or a related or inter-related company, provided that:

(a) the Board of Directors of the Company (“the Board”), from time to time, determines: (i) the specifi c recipient, or general category of potential recipients of such fi nancial assistance; (ii) the form, nature and extent of such fi nancial assistance; and (iii) the terms and conditions under which such fi nancial assistance is provided; and (b) the Board may not authorise the Company to provide any fi nancial assistance pursuant to this Special

Resolution number 3 unless the Board meets all those requirements of section 44 of the Companies Act which it is required to meet in order to authorise the Company to provide such financial assistance.”

Explanatory note Reason for and effect of Special Resolution number 3 The purpose for and effect of this Special Resolution number 3 is to grant the Board the authority to

authorise the Company to provide fi nancial assistance to any person for the purpose of, or in connection with, the subscription for any option or securities issued or to be issued by the Company or a related or inter-related company.


10. Special Resolution number 4 Loans or other fi nancial assistance to inter-related companies “Resolved that, as a special resolution, in terms of section 45 of the Companies Act, 2008 (Act 71 of

2008), as amended (“Companies Act”), the shareholders of PSV Holdings Limited (“the Company”) hereby approve of the Company providing, at any time and from time to time during the period of two years commencing on the date of this Special Resolution number 4, any direct or indirect fi nancial assistance (which includes lending money, guaranteeing a loan or other obligation, and securing any debt

or obligation) as contemplated in section 45 of the Companies Act to a Director or prescribed offi cer of the Company, or to a related or inter-related company or corporation or to a member of any such related or inter-related corporation or to a person related to any such company, corporation, Director, prescribed offi cer or member provided that:

(a) the Board of Directors of the Company (“the Board”), from time to time, determines: (i) the specifi c recipient or general category of potential recipients of such fi nancial assistance; (ii) the form, nature and extent of such fi nancial assistance; and (iii) the terms and conditions under which such fi nancial assistance is provided; and (b) the Board may not authorise the Company to provide any fi nancial assistance pursuant to this Special

Resolution number 4 unless the Board meets all those requirements of section 45 of the Companies Act which it is required to meet in order to authorise the Company to provide such financial assistance.”

Explanatory note Reason for and effect of Special Resolution number 4 The reason for and purpose of this Special Resolution number 4 is to grant the Board the authority to

authorise the Company to provide fi nancial assistance as contemplated in section 45 of the Companies Act to a Director or prescribed offi cer of the Company, or to a related or inter-related company or corporation, or to a member of a related or inter-related corporation, or to a person related to any such company, corporation, Director, prescribed offi cer or member.

Notice given to shareholders of the Company in terms of section 45(5) of the Companies Act of a resolution adopted by the Board authorising the Company to provide such direct or indirect fi nancial assistance in respect of Special Resolution number 4:

(a) by the time that this notice of Annual General Meeting is delivered to shareholders of the Company, the Board will have adopted a resolution (“Section 45 Board Resolution”) authorising the Company to provide, at any time and from time to time during the period of two years commencing on the date on which Special Resolution number 4 is adopted, any direct or indirect fi nancial assistance as contemplated in section 45 of the Companies Act (which includes lending money, guaranteeing a loan or other obligation, and securing any debt or obligation) to a Director or prescribed offi cer of the Company or of a related or inter-related company, or to a related or inter-related company or corporation, or to a member of any such related or inter-related corporation, or to a person related to any such company, corporation, Director, prescribed offi cer or a member;



Notice of Annual General Meeting (continued)

(b) the section 45 Board Resolution will be effective only if and to the extent that Special Resolution number 4 is adopted by the shareholders of the Company, and the provision of any such direct or indirect fi nancial assistance by the Company, pursuant to such resolution, will always be subject to the Board being satisfi ed that:

(i) immediately after providing such fi nancial assistance, the Company will satisfy the solvency and liquidity test as referred to in section 45(3)(b)(i) of the Companies Act; and

(ii) the terms under which such fi nancial assistance is to be given are fair and reasonable to the Company as referred to in section 45(3)(b)(ii) of the Companies Act; and

(c) in as much as the section 45 Board Resolution contemplates that such fi nancial assistance will in the aggregate exceed one-tenth of one percent of the Company’s net worth at the date of adoption of such resolution, the Company hereby provides notice of the Section 45 Board Resolution to shareholders of the Company. Such notice will also be provided to any trade union representing any employees of the Company.

11. Ordinary Resolution number 1 Approval of remuneration policy “Resolved that the remuneration policy of the Directors of PSV Holdings Limited (“the Company”), as set

out on page 23 of the Integrated Annual Report, be and is hereby approved as a non-binding advisory vote of shareholders of the Company in terms of the King III Report on Corporate Governance.”

12. Ordinary Resolution number 2 Control of authorised but unissued ordinary shares “Resolved that the authorised but unissued ordinary shares in the capital of PSV Holdings Limited (“the

Company”) be and are hereby placed under the control and authority of the Directors of the Company (“Directors”) and that the Directors be and are hereby authorised and empowered to allot and issue all or any of such ordinary shares, or to issue any options in respect of all or any of such ordinary shares, to such person/s on such terms and conditions and at such times as the Directors may from time to time and in their discretion deem fi t, subject to the provisions of sections 38 and 41 of the Companies Act, 2008 (Act 71 of 2008), as amended, the Memorandum of Incorporation of the Company and the Listings Requirements of JSE Limited, as amended from time to time.”

Ordinary resolutions to be adopted at this Annual General Meeting require approval from a simple majority, which is more than 50% of the votes exercised on such resolutions by shareholders present or represented by proxy at the meeting.

13. Ordinary Resolution number 3 Approval to issue ordinary shares, and to sell treasury shares, for cash “Resolved that the Directors of PSV Holdings Limited (“the Company”) and/or any of its business units

from time to time be and are hereby authorised, by way of a general authority, to: allot and issue, or to issue any options in respect of, all or any of the authorised but unissued ordinary

shares in the capital of the Company; and/or sell or otherwise dispose of or transfer, or issue any options in respect of, ordinary shares in the capital

of the Company purchased by business units of the Company for cash, to such person/s on such terms and conditions and at such times as the Directors may from time to time in their discretion deem fi t, subject to the Companies Act, 2008 (Act 71 of 2008), as amended, the Memorandum of Incorporation of the Company and its business units and the Listings Requirements of JSE Limited (“the JSE Listings Requirements”) from time to time.

The JSE Listings Requirements currently provide, inter alia, that: this general authority will be valid until the earlier of the Company’s next Annual General Meeting or

the expiry of a period of 15 (fi fteen) months from the date that this authority is given; the securities which are the subject of the issue for cash must be of a class already in issue, or where

this is not the case, must be limited to such securities or rights that are convertible into a class already in issue;

any such issue may only be made to “public shareholders” as defi ned in the JSE Listings Requirements and not to related parties;

the securities which are the subject of a general issue for cash may not exceed 50% (fi fty percent) of the number of listed securities, excluding treasury shares, as at the date of this notice, being 131 939 921 securities. Any securities issued under this authorisation will be deducted from the aforementioned 131 939 921 listed securities. In the event of a sub-division or a consolidation the authority will be adjusted to represent the same allocation ratio;

in determining the price at which securities may be issued in terms of this authority, the maximum discount permitted will be 10% (ten percent) of the weighted average traded price of such securities measured over the 30 (thirty) business days prior to the date that the price of the issue is agreed in writing between the issuer and the party/ies subscribing for the securities;

an announcement giving full details, including the number of securities issued, the average discount to the weighted average traded price of the securities over 30 (thirty) business days prior to the date that the issue is agreed in writing being the issuer and the parties subscribing for the securities and in respect of the issue of options and convertible securities, the effects of the issue on the statement of fi nancial position, net asset value per share, net tangible asset value per share, the statement of comprehensive income and, if applicable, diluted earnings and headline earnings per share, or in respect of an issue of shares, an

103

explanation including supporting information (if any) of the intended use of the funds will be published when the Company has issued securities representing, on a cumulative basis within the earlier of the Company’s next Annual General Meeting or the expiry of a period of 15 (fi fteen) months from the date that this authority is given, 5% (fi ve percent) or more of the number of securities in issue prior to the issue; and

whenever the Company wishes to use repurchased shares, held as treasury stock by a business unit of the Company, such use must comply with the JSE Listings Requirements as if such use was a fresh issue of ordinary shares.”

Under the JSE Listings Requirements, Ordinary Resolution number 3 must be passed by a 75% (seventy-fi ve percent) majority of the votes cast in favour of the resolution by all members present or represented by proxy at the Annual General Meeting.

14. Ordinary Resolution number 4 Signature of documents “Resolved that each Director of PSV Holdings Limited (“the Company”) be and is hereby individually

authorised to sign all such documents and do all such things as may be necessary for or incidental to the implementation of those resolutions to be proposed at the Annual General Meeting convened to consider the resolutions which are passed, in the case of ordinary resolutions, or are passed and registered by the Companies and Intellectual Property Commission, in the case of special resolutions.”

Other businessTo transact such other business as may be transacted at the Annual General Meeting of the Company.

Voting and proxiesSpecial resolutions to be adopted at this Annual General Meeting require approval from 75% (seventy-fi ve percent) of the votes exercised on such resolutions by shareholders present or represented by proxy at the meeting. Ordinary resolutions to be adopted at this Annual General Meeting require approval from a simple majority, which is more than 50% (fi fty percent) of the votes exercised on such resolutions by shareholders present or represented by proxy at the meeting, with the exception of Ordinary Resolution number 3 which requires approval from 75% (seventy-fi ve percent) of the votes exercised on such resolution by shareholders present or represented by proxy at the meeting.

A shareholder entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy or proxies to attend and act in his/her stead. A proxy need not be a member of the Company. For the convenience of registered members of the Company, a form of proxy is attached hereto.

The attached form of proxy is only to be completed by those ordinary shareholders who: hold ordinary shares in certifi cated form; or are recorded on the sub-register in “own name” dematerialised form.

Ordinary shareholders who have dematerialised their ordinary shares through a CSDP or broker without “own name” registration and who wish to attend the Annual General Meeting, must instruct their CSDP or broker to provide them with the relevant letter of representation to attend the meeting in person or by proxy and vote. If they do not wish to attend in person or by proxy, they must provide the CSDP or broker with their voting instructions in terms of the relevant custody agreement entered into between them and the CSDP or broker.

Proxy forms should be forwarded to reach the transfer secretaries, Link Market Services South Africa Proprietary Limited, at least 48 hours, excluding Saturdays, Sundays and public holidays, before the time of the meeting.

Kindly note that meeting participants, which include proxies, are required to provide reasonably satisfactory identifi cation before being entitled to attend or participate in a shareholders’ meeting. Forms of identifi cation include valid identity documents, driver’s licences and passports.

By order of the Board

Merchantec CapitalCompany Secretary

28 July 2016Johannesburg



Notes

105

Form of proxy

PSV Holdings LimitedIncorporated in the Republic of South Africa(Registration number 1998/004365/06)Share code: PSV ISIN: ZAE000078705(“PSV” or “the Company” or “the Group”)

For use only by ordinary shareholders who: hold ordinary shares in certifi cated form (“certifi cated ordinary shareholders”); or have dematerialised their ordinary shares (“dematerialised ordinary shareholders”) and are registered with “own name” registration, at this Annual General Meeting of shareholders of the Company to be held at 10:00 on Tuesday, 30 August 2016, at the registered offi ce of PSV, Stoneridge Offi ce Park, 8 Greenstone Place, Building C, 2nd Floor, Greenstone Hill, and any adjournment thereof.

Dematerialised ordinary shareholders holding ordinary shares other than with “own name” registration who wish to attend the Annual General Meeting must inform their Central Securities Depository Participant (“CSDP”) or broker of their intention to attend the Annual General Meeting and request their CSDP or broker to issue them with the relevant letter of representation to attend the Annual General Meeting in person or by proxy and vote. If they do not wish to attend the Annual General Meeting in person or by proxy, they must provide their CSDP or broker with their voting instructions in terms of the relevant custody agreement entered between them and the CSDP or broker.

These ordinary shareholders must not use this form of proxy.

Name of benefi cial shareholder

Name of registered shareholder

Address

Telephone work Telephone home Cell

being the holder/custodian of ordinary shares in the Company, hereby appoint (see Note):

1. or failing him/her,

2. or failing him/her,

3. the Chairman of the meeting, as my/our proxy to attend and act for me/us on my/our behalf at the Annual General Meeting of the Company convened for purpose of considering and, if deemed fi t, passing, with or without modifi cation, the special and ordinary resolutions to be proposed thereat (“resolutions”) and at each postponement or adjournment thereof and to vote for and/or against such resolutions, and/or abstain from voting, in respect of the ordinary shares in the issued share capital of the Company registered in my/our name/s in accordance with the following instructions:

Number of ordinary shares

For Against Abstain

1. To receive, consider and adopt the annual financial statements of the Company and Group for the financial year ended 29 February 2016

2. To approve the re-election as Director of Ralph Patmore who retires by rotation

3. To approve the appointment of Anthony de la Rue as a member and Chairman of the Independent Audit and Risk Committee

4. To approve the appointment of Eric Ratshikhopha as a member of the Independent Audit and Risk Committee

5. To approve the appointment of Ralph Patmore as a member of the Independent Audit and Risk Committee

6. To confirm the appointment of Certified Masters Auditors Inc as auditors of the Company together with Raymond Baard being the individual registered auditor for the ensuing financial year.

7. Special Resolution number 1 – Approval of the Non-Executive Directors’ remuneration

8. Special Resolution number 2 – General approval to acquire shares

9. Special Resolution number 3 – Financial assistance for the subscription of securities

10. Special Resolution number 4 – Loans or other financial assistance to inter-related companies

11. Ordinary Resolution number 1 – Approval of the remuneration policy

12. Ordinary Resolution number 2 – Control of authorised but unissued ordinary shares

13. Ordinary Resolution number 3 – Approval to issue ordinary shares, and to sell treasury shares, for cash

14. Ordinary Resolution number 4 – Signature of documents

Please indicate instructions to proxy in the space provided above by the insertion therein of the relevant number of votes exercisable.

A member entitled to attend and vote at the Annual General Meeting may appoint one or more proxies to attend and act in his stead. A proxy so appointed need not be a member of the Company.

Signed at on 2016

Signature

Assisted by (if applicable)



Notes to the form of proxy

1. The form of proxy must only be completed by shareholders who hold shares in certifi cated form or who are recorded on the sub-register in electronic form in “own name”.

2. All other benefi cial owners who have dematerialised their shares through a CSDP or broker and wish to attend the Annual General Meeting must provide the CSDP or broker with their voting instructions in terms of the relevant custody agreement entered into between them and the CSDP or broker.

3. A shareholder entitled to attend and vote at the Annual General Meeting may insert the name of a proxy or the names of two alternate proxies (none of whom need be a shareholder of the Company) of the shareholder’s choice in the space provided, with or without deleting “the Chairman of the meeting”. The person whose name stands fi rst on this form of proxy and who is present at the Annual General Meeting will be entitled to act as proxy to the exclusion of those proxy(ies) whose names follow. Should this space be left blank, the proxy will be exercised by the Chairman of the meeting.

4. A shareholder is entitled to one vote on a show of hands and, on a poll, one vote in respect of each ordinary share held. A shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that shareholder in the appropriate space provided. If an “X” has been inserted in one of the blocks to a particular resolution, it will indicate the voting of all the shares held by the shareholder concerned. Failure to comply with this will be deemed to authorise the proxy to vote or to abstain from voting at the Annual General Meeting as he/she deems fi t in respect of all the shareholders’ votes exercisable thereat. A shareholder or the proxy is not obliged to use all the votes exercisable by the shareholder or by the proxy, but the total of the votes cast and in respect of which abstention is recorded may not exceed the total of the votes exercisable by the shareholder or the proxy.

5. A vote given in terms of an instrument of proxy shall be valid in relation to the Annual General Meeting notwithstanding the death, insanity or other legal disability of the person granting it, or the revocation of the proxy, or the transfer of the ordinary shares in respect of which the proxy is given, unless notice as to any of the aforementioned matters shall or have been received by the transfer secretaries not less than 48 (forty-eight) hours before the commencement of the Annual General Meeting.

6. If a shareholder does not indicate on this form that his/her proxy is to vote in favour of or against any resolution or to abstain from voting, or gives contradictory instructions, or should any further resolution(s) or any amendment(s) which may properly be put before the Annual General Meeting be proposed, such proxy shall be entitled to vote as he/she thinks fi t.

7. The Chairman of the Annual General Meeting may reject or accept any form of proxy which is completed and/or received other than in compliance with these notes.

8. A shareholder’s authorisation to the proxy including the Chairman of the Annual General Meeting, to vote on such shareholder’s behalf, shall be deemed to include the authority to vote on procedural matters at the Annual General Meeting.

9. The completion and lodging of this form of proxy will not preclude the relevant shareholder from attending the Annual General Meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof.

10. Documentary evidence establishing the authority of a person signing the form of proxy in a representative capacity must be attached to this form of proxy, unless previously recorded by the Company’s transfer secretaries or waived by the Chairman of the Annual General Meeting.

11. A minor or any other person under legal incapacity must be assisted by his/her parent or guardian, as applicable, unless the relevant documents establishing his/her capacity are produced or have been registered by the transfer secretaries of the Company.

12. Where there are joint holders of ordinary shares: any one holder may sign the form of proxy; and the vote(s) of the senior ordinary shareholders (for that purpose seniority will be determined by the order in which

the names of ordinary shareholders appear in the Company’s register of ordinary shareholders) who tender a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint shareholder(s).

13. Forms of proxy should be lodged with or mailed to Link Market Services South Africa Proprietary Limited: Hand deliveries to: Postal deliveries to: Link Market Services South Africa Proprietary Limited Link Market Services South Africa Proprietary Limited 13th Floor, Rennie House PO Box 4844 19 Ameshoff Street, Braamfontein Johannesburg 2001 2000

to be received by no later than 10:00 on Friday, 26 August 2016 (or 48 hours before any adjournment of the Annual General Meeting which date, if necessary, will be notifi ed on SENS).

14. A deletion of any printed matter and the completion of any blank space need not be signed or initialled. Any alteration or correction must be signed and not merely initialled.

Summary of the rights of a shareholder to be represented by proxy, as set out in section 58 of the Companies Act: A proxy appointment must be in writing, dated and signed by the shareholder appointing a proxy, and, subject to

the rights of a shareholder to revoke such appointment (as set out below), remains valid only until the end of the relevant shareholders’ meeting.

A proxy may delegate the proxy’s authority to act on behalf of a shareholder to another person, subject to any restrictions set out in the instrument appointing the proxy.

The appointment of a proxy is suspended at any time and to the extent that the shareholder who appointed such proxy chooses to act directly and in person in the exercise of any rights as a shareholder.

The appointment of a proxy is revocable by the shareholder in question cancelling it in writing, or making a later inconsistent appointment of a proxy, and delivering a copy of the revocation instrument to the proxy and to the Company. The revocation of a proxy appointment constitutes a complete and fi nal cancellation of the proxy’s authority to act on behalf of the shareholder as of the later of:

(a) the date stated in the revocation instrument, if any; and (b) the date on which the revocation instrument is delivered to the Company as required in the fi rst sentence of

this paragraph. If the instrument appointing the proxy or proxies has been delivered to the Company, as long as that appointment

remains in effect, any notice that is required by the Companies Act or the Company’s Memorandum of Incorporation to be delivered by the Company to the shareholder, must be delivered by the Company to:

(a) the shareholder; or (b) the proxy or proxies, if the shareholder has (i) directed the Company to do so in writing; and (ii) paid any

reasonable fee charged by the Company for doing so. Attention is also drawn to the “Notes to proxy”. The completion of a form of proxy does not preclude any shareholder from attending the Annual General Meeting.

107

Administration

AttorneysPagel Schulenburg AttorneysCoachman’s Crossing Offi ce ParkBlock BCorner Brian Street and Peter PlaceBryanston

Tel: +27 (0) 11 463 1214Fax: +27 (0) 11 706 1049

Designated adviserMerchantec Capital2nd Floor, North WingHyde Park Corner Offi ce SuitesCorner 6th Road and Jan Smuts AvenueHyde Park

PO Box 41480Craighall2024

Telephone: +27 (0) 11 325 6363Facsimile: +27 (0) 11 325 6362

Business address and registered offi ceStoneridge Offi ce Park8 Greenstone PlaceBuilding C2nd FloorGreenstone Hill


Postnet Suite 229Private Bag X19Gardenview2047

Company SecretaryMerchantec Capital2nd Floor, North WingHyde Park Corner Offi ce SuitesCorner 6th Road and Jan Smuts AvenueHyde Park


Transfer secretariesLink Market Services South Africa Proprietary Limited13th FloorRennie House19 Ameshoff StreetBraamfontein

PO Box 4844Johannesburg2000


AuditorsCertifi ed Master Auditors IncNo 12nd RoadMidrand

Private Bag X168Halfway House1685


Investor relationsKeyter Rech Investor SolutionsVanessa RechFountain Grove Offi ce ParkCorner William Nicol and 2nd RoadHyde Park

PO Box 653078Benmore2010

Telephone: +27 (0) 87 351 3814Email: [email protected]



Glossary of terms

African Cryogenics African Cryogenics a division of PSV Industrial Proprietary Limited

AltX Alternative Exchange of the JSE Securities Exchange

B-BBEE Broad-Based Black Economic Empowerment

BWP Botswana Pula

CEO Chief Executive Officer

CFO Chief Financial Officer

CGU Cash Generating Unit

CPIX Consumer Price Index

CPS Cents per share

CSDP Central Securities Depository Participant

CSI Corporate Social Investment

DRC Democratic Republic of the Congo

Engineered Linings Engineered Linings a division of PSV Industrial (Pty) Ltd

Euro European Monetary Unit

GBP Great British Pound

Group PSV Holding Limited and its business units

HEPS Headline Earnings per Share

HR Human Resources

IT Information Technology

JSE JSE Limited

KPI Key Performance Indicator

LabourNet A strategic HR business partner which specialises in ensuring fair labour procedures and practices are implemented in all aspects of the PSV business

Omnirapid Omnirapid Mining and Industrial Supplies a division of PSV Industrial (Pty) Ltd

PSV PSV Holdings Limited

SARS South African Revenue Services

SENS Securities Exchange News Service

Turbo Agencies Incorporating Turbo Agencies Proprietary Limited: (Botswana), Turbo Agencies (Pvt) Limited: (Zambia), Turbo Agencies (DRC): SPRL (DRC)

USD United States Dollar

VAT Value Added Tax

ZMW Zambia Kwacha

Physical address Stoneridge Offi ce Park, 8 Greenstone Place, Building C, 2nd Floor, Greenstone Hill

Postal address Postnet Suite 229, Private Bag X19, Gardenview, 2047

Tel +27 11 452 4004 Fax +27 11 452 4007 www.psvholdings.com

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