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mazor annual report | 2011 |

Company profile 1Chairman’s and Ceo’s Joint report 2Directorate 6Corporate Information 7Corporate Governance 8annual Financial Statements 13Shareholder analysis 65Shareholders’ Diary 66notice of aGm 67Form of proxy attached

Contents

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on CoVer: WemBleY II

Company Profile

Mazor comprises three divisions:

• Steel which designs, supplies and erects structural steel frames;

• aluminium which designs, manufactures and installs aluminium structures such as doors, windows, shopfronts, façades and balustrades for major blue-chip construction groups and supplies aluminium fenestration systems through HBS; and

• Glass which distributes and manufactures laminated, toughened safety glass and processed glass.

Previously based predominantly in the Western Cape, Mazor has expanded its operations through its glass division and HBS and now has operations throughout South Africa.

Mazor has to date contributed to many of the Western Cape’s most prestigious construction projects including the 2010 Green Point Stadium, the Cape Town International Airport expansion, Convention Towers, the Westin Grand Hotel, the South African Large Telescope (SALT) and major shopping centres.

Mazor’s Vision is simply, to be sure we have reason to be proud.We are proud of our 30-year heritage that has seen the group transition from a family business to a company successfully listed first on AltX in 2007, and in 2008 on the Main Board JSE. We are proud of our client base which is stable, loyal and enduring. We are proud to service our clients because we are confident of the quality of our service and product and we are proud of our reputation that affirms this. We are proud of our team, because their commitment and adherence to the highest standards of quality and strictest standards of ethics mirrors the values that are the bedrock of our culture since inception. We are proud that so many stakeholders choose to continue participating in the group and we are very proud to keep delivering returns.

mazor annual report | 2011 | page 1

aureCon tHe leGaCY

Joint Chairman’s and CEO’s Report

Ronnie Mazor

Monty Kaplan


CrYStal toWerS

With the group’s prior investment in plant, stable capacity, established capability and geographic spread, mazor is well placed to benefit from a recovery in the construction sector.

Company profile

Joint Chairman’s and Ceo’s

report DirectorateCorporate

InformationCorporate

Governance

annual Financial

StatementsShareholder

analysisShareholder’s

Diary

Introduction

The current year was as difficult as anticipated in the previous year’s annual report. Subdued levels of activity plagued the market during the year under review and have continued unrelentingly into the current financial year. a dearth of contracts continues to define the market, continually intensifying competition and depressing margins, particularly in the retail and leisure construction segments which have traditionally been a stronghold for Mazor. The Western Cape, our primary base, saw the contract pool virtually dry up during the year. The market conditions unsurprisingly contributed to a muted performance by the group’s contracting divisions. In addition prevailing trading conditions were not conducive to accessing and penetrating new markets.

given these challenges our Steel and new glass divisions recorded satisfactory performance, with Mazor Steel leveraging in geographical spread and glass capitalising on expansion initiatives and strict cost control to further reduce operational losses and return top line growth.

The group further achieved a number of operational milestones. Through concentrated focus on overheads, as promised, we maintained capacity and at substantially lower costs than in the previous year despite inflationary and other increases in expenses. all prior-year retrenchment costs were absorbed in the first half of the year under review. We also made headway with our diversification strategy, acquiring the business of another glass supplier, glass Unlimited, and finalising the acquisition of a 50% stake in established fenestration systems supplier ,Hulamin Business Systems (‘HBS’) (see ‘acquisitions’ below). as expected the HBS acquisition successfully bolstered the aluminium operations, assisting to off-set the division’s overall poor performance. Looking ahead the acquisitions will expose the group to strong new customer bases in all major cities in the residential, commercial and industrial markets.

another significant achievement during the year was further expansion into africa. New contracts were secured in angola, Namibia and the Seychelles.

Operational reviewMazor Steel returned a profit driven by its wide geographical footprint, a slight upswing in demand and lower operational costs after we rationalised overheads.

Mazor aluminium was the hardest hit by the slow-down in the construction sector. On the upside HBS’s healthy performance went some way to countering this and buoyed revenue. We have successfully turned the business to profit and are seeing the benefits from entry into new markets and cross-selling opportunities. The new products brought on stream by the acquisition are improving volumes and proving profitable.

The new glass operation was the group’s stellar performer, although obviously growth here was off a lower base with the young division comprising formerly underperforming acquisitions bought with the intention of turnaround. We have strengthened growth prospects with substantial capital expenditure on new equipment and technology, as well as expansion into the eastern Cape through a new branch in east London. glass is poisedfor growth as soon as there is an upturn in the economy, backed by its availability of capacity and entrenched bases in high growth regions. The successful diversification into glass continues to offer the group access to new income streams including motor, industrial and furniture to help balance the weak construction market.

Financial overviewRevenue declined 31.7% to R186.8 million from R273.5 million in the previous year, with operating profit down 96.3% to R1.7 million from R46.0 million. This resulted in a 72.4% drop in earnings per share to 8.2 cents per share compared to 29.7 cents for the previous year.

Revenue in Mazor aluminium and Mazor Steel declined 67.7% and 47%, respectively. With margins squeezed, operating profit in these operations were down 73.8% and 82.7%, respectively. The Glass division increased external revenues by 47.4% toR92.9 million and reduced operating losses by 20.6% to R7.6 million.

a more detailed analysis of the annual financial results is set out in the annual financial statements and accompanying notes.



Acquisitions

HBSDuring the year Mazor finalised the acquisition of a 50% interest in HBS for a consideration of R32.6 million. (The acquisition had remained subject to conditions precedent at the previous year-end, which included regulatory approvals. all conditions precedent were successfully fulfilled during the year.) HBS markets and supplies a wide range of fenestration systems into the South african residential, commercial and industrial markets through branches in Johannesburg, Cape Town, Durban and port elizabeth. The systems carry recognised brands including NuKlip, Technal and Hula-Bond, and extend to accessories, technical and design consultation services and relevant software and training. as a result HBS enjoys significant market share in the aluminium industry. Inclusion in the group has already been vindicated, with cross-selling opportunities leveraging HBS’s extended client base opening up continually. accessing these new clients would have been almost impossible to achieve organically, especially given the current state of the construction industry.

In line with our strategy on acquisition, we have employed significant intellectual capital and expertise to support HBS’s management team and successfully bring about the intended turnaround in the business. private equity specialist global Capital, which in the previous year acquired a 10% stake in the group, has supported our efforts in this regard through strategic guidance and input.

Compass Glass Sa – port elizabeth

With our new glass division offering promising prospects notwithstanding the tough environment, the group identified the need to expand our footprint in the glass industry and particularly highlighted the potential for growth in the eastern Cape.

accordingly glass Unlimited in port elizabeth was targeted as a suitable partner for this expansion, and with effect 1 april 2010 the group, through Compass glass Sa, acquired the business as a going concern. The purchase consideration comprised a cash payment of R315 000 in respect of stock and fixed assets and the issue of 100 000 shares in the group.

Dividend

The board declared a final dividend for the year of 2.8 cents per share (2010: 18.1 cents) on 16 May 2011. payment of the dividend totalling R3.4 million will be made on 20 June 2011. Secondary tax on companies amounts to R340 204.

Joint Chairman’s and CEO’s Report continued

QuarrY HIll

Prospects

We expect conditions to remain harsh for the remainder of 2011. There are some positive indications of an improvement in 2012 with a more solid upswing expected in 2013. In addition, the beleaguered Western Cape economy is beginning to show signs of slow recovery, which should increase activity in Mazor’s primary market from 2012 onwards. In this light, and with the group’s prior investment in plant, stable capacity, established capability and geographic spread, Mazor is well placed to benefit from a recovery in the construction sector.

In the interim we will continue to steer our overall product offering from manufacture to materials supply to capture greater margin returns and the major growth opportunities indicated. Further, we will maintain a strict watch on working capital and overheads to ensure a sustainably lean financial framework.

Looking further abroad the contracting operations will continue to venture on to the african continent, albeit extremely cautiously.

Directorate

Sheryl Ozinsky resigned as an independent non-executive director with effect from 9 February 2011. The board thanks her for her valued contribution.

Thanks

We thank our fellow directors, management and staff for the hard work and loyalty over a troubled year, and their ongoing dedication which continues to support our sustainability.

We also thank our advisers and suppliers, as well as our clients and shareholders, for their invaluable support.

monty Kaplan Chairman

ronnie mazor CeO

16 May 2011

With our new Glass division offering promising prospects notwithstanding the tough environment, the group identified the need to expand our footprint in the glass industry and particularly highlighted the potential for growth in the eastern Cape.


Company profile

Joint Chairman’s and Ceo’s

report DirectorateCorporate


Governance

annual Financial



Diary

QuarrY HIll

Frank Boner (65) Ca(Sa)non-executive


Ronnie Mazor (42) BSc econ – uCt Chief executive officer

Liat Mazor (35) BBSc (Finance) – uCt, Ca(Sa), CFa

Group Financial Director

Abu Varachhia (52) BSc Quantity Surveying – uCtnon-executive

Monty Kaplan (82) Ca (Sa) Chairman

Shlomo Mazor (69) executive director

Allan Groll (56) Independent non-executive

Directorate

Frank qualified as a chartered accountant and served as managing partner of an accounting firm, now Horwarth Leveton Boner. He was joint managing director of Reichmans Limited prior to its sale to Investec Bank where Frank subsequently served as manager of Investec’s corporate asset-based finance division. Frank is currently CEO of Global Capital (Pty) Limited, a boutique investment banking and private equity firm, and has been with Global Capital since its inception in 1998.


Ronnie worked in the banking and finance industry as a technical analyst for Bank Leumi in Israel analysing currencies, stocks and bonds. He joined Mazor Steel and Mazor Aluminium in 1995 and has been instrumental in the Mazor Group’s growth.

Liat qualified as a chartered accountant having graduated from the University of Cape Town in 1998. She joined Arthur Andersen in 1999 where she completed her articles. In 2002 she joined Credit Suisse First Boston in London where she was a risk analyst covering emerging markets fixed income derivatives. She joined the Mazor Group in 2004.

Abu qualified as a quantity surveyor at the University of Cape Town. He has been a director of LDM Quantity Surveyors since 1990. LDM has been involved with some of the largest and most prestigious construction contracts in South Africa.He currently also serves as a non-executive director of Ingenuity Property Investments Limited and has held numerous other special appointments throughout his career. These include, amongst others, Vice-president of the South African Council for the Quantity Surveying Profession, Chairman of the Black Technical and Allied Careers Organisation, Chairperson of the Built Environment Advisory Committee for the 2004 Olympic Bid and non-executive director of Spearhead Property Holdings Limited.

Monty is a director of companies with many years’ experience and is currently serving as a non-executive chairman of Trematon Capital Investments Limited. He was previously the CEO of Cape of Good Hope Bank Limited and a director of the SA Post Office Limited.

Shlomo co-founded Mazor Steel and Mazor Aluminium together with his wife Judy. Shlomo brought to the business his technical expertise which were acquired over 23 years working as a boilermaker, welder and rigger in Israel. Shlomo has an in-depth knowledge of the product and continues to ensure that quality is achieved throughout the Mazor Group.

Allan is a Cape Town-based investor with a wide range of local property and business interests. He previously held directorships at other listed companies including Wescape Limited and Furnco Limited. Allan currently serves as an executive director of Trematon Capital Investments Limited.

Corporate Information

registered office8 Monza RoadKillarney Gardens, 7441(PO Box 60635, Table View, 7439)Telephone: +27 21 556 1555registration number: 2007/017221/06Date of incorporation: 26 June 2007

reporting accountants and auditorsMazars Mazars HouseRialto Road, Grand Moorings PrecinctCentury City, 7441(PO Box 2817, Cape Town, 8000)Telephone: +27 21 818 5000

Commercial bankerFirst National Bank Limited(Registration number 1929/001225/06)Corner Cumberland and Industry RoadsPaarden Eiland, 7405(PO Box 14, Paarden Eiland, 7420)Telephone: +27 21 511 7063

Company secretaryLiat Mazor CA(SA)8 Monza RoadKillarney Gardens, 7441(PO Box 60635, Table View, 7439)Telephone: +27 21 556 1555

SponsorBridge Capital Advisors (Pty) Limited2nd Floor, 27 Fricker RoadIllovo BoulevardIllovo, 2196(PO Box 651010, Benmore, 2010Telephone: +27 11 268 6231

attorneysWebber Wentzel Bowens10 Fricker RoadIllovo BoulevardIllovo, 2196(PO Box 61771, Marshalltown, 2107)Telephone: +27 11 530 5000

transfer secretariesComputershare Investor Services (Pty) LimitedGround Floor, 70 Marshall StreetJohannesburg, 2001(PO Box 61051, Marshalltown, 2107)Telephone: +27 11 370 5000


Corporate Governance

tHe leGaCY

The boardThe board comprises seven directors with a majority of non-executive directors (four), two of whom are independent. The board remains chaired by independent non-executive Chairman, Mr M Kaplan.

The responsibilities of the Chairman and CeO are strictly separated, echoed in the separation of duties of the remaining executive directors and non-executive directors, to ensure that no director can exercise unfettered powers of decision-making. The Chairman provides leadership and guidance to the board and encourages proper deliberation on all matters requiring the board’s attention while obtaining input from other directors. The CeO and other executive directors are responsible for devising and overseeing strategy and operational decisions in respect of the day-to-day operations, which are implemented by management. Non-executive directors contribute their independent and objective knowledge and experience to board deliberations. all non-executive directors are sufficiently qualified to contribute significant industry skill and expertise.

Non-executive directors have unfettered access to management at any time. Directors further have access to the external auditors. all directors are entitled, at the group’s expense, to seek independent professional advice on any matters pertaining to the group where they deem this to be necessary.

In accordance with the articles of association one-third of directors retire each year by rotation. Their reappointment will be subject to shareholders’ approval at the annual general Meeting. at the upcoming annual general Meeting Messrs S Mazor and F Boner will retire and being eligible, will stand for re-election. None of the non-executive directors has a service contract with the company. Brief CVs of the directors standing for re-election appear on page 7 of the annual report.

The board is governed by a Board Charter detailing its composition, appointment, responsibilities and processes, as well as the fiduciary duties and role of each director. The Charter tasks the board with:

• setting strategy;

• monitoring succession planning;

• determining investment policy;

• reviewing performance against preapproved budgets;

• developing a corporate code of conduct;

• identifying key risk areas; and

• reviewing processes and procedures to ensure the effectiveness of internal systems of control.

Further duties set out in the Charter include ensuring:

• the application of good corporate governance principles;

• internal control procedures protecting the company’s assets and reputation are in place; and

• adequate technology and systems are applied to run the business effectively.

In terms of the Charter the board is required to regularly assess its own performance and effectiveness and that of the Chairman and individual directors. going forward the board intends conducting an annual self-evaluation exercise as outlined in the Charter.

The board meets at least four times a year and ad-hoc meetings are convened when required.

Details of directors’ attendance at board and committee meetings during the year are set out below. The number in parentheses represents the total number of meetings:

Directors Board

Meetings

Audit committee

meetings

Remuneration and nomination

committee meetings

M Kaplan**#~ (Chairman) 4(4) 2(3) 1(1)

R Mazor (CEO) 4(4) 3(3)^ 1(1)^

L Mazor (Financial Director) 4(4) 2(3)^ 1(1)^

A Groll** 4(4) 3(3) 1(1)

S Mazor 4(4)

SM Ozinsky** ◊ 3(3) 2(2) 1(1)

A Varachhia* 3(4)

F Boner* 4(4)

# audit Committee Chairman

*Non-executive

~Remuneration and Nomination Committee Chairman

**Independent non-executive

^ attended by invitation

◊ Resigned from the board on 9 February 2011

Board processes

Company secretaryThe company secretary is responsible for updating the board on legislative and/or regulatory developments on an ongoing basis. all directors have unrestricted access to the advice and services


Company profile

Chairman and Ceo’s

Joint report DirectorateCorporate


Governance

annual Financial



Diary

of the company secretary and to company records, information, documents and property.

regulatory and legislative complianceThe company secretary liaises closely with the group’s sponsor to ensure the group complies with all applicable regulations and legislation.

Conflicts of interest and share dealingsDirectors are required to disclose their shareholdings, additional directorships and any potential conflicts of interest to the Chairman or the company secretary.

Directors are prohibited from dealing in the group’s shares during closed periods which in any year extend from 1 March to the day the annual results are announced and from 1 September to the day the interim results are announced. In addition, all directors cannot trade during any period where they have access to any price-sensitive information. Before dealing in the shares of the group, directors are obliged to inform the Chairman or company secretary who, together with the sponsor, ensures that such dealings are published on SeNS.

new appointmentsThe board, together with the remuneration and nomination committee, is responsible for identifying and nominating new directors. The appointment process is conducted in a formal and transparent manner. In making new appointments, the committee and the board take into account the blend of skills and experience, as well as social and business concerns such as broad-based Bee.

going forward the board will implement a formal process which will include introductions to senior management, site visits, providing copies of the latest interim financial results announcements and annual financial statements and an overview of the company’s accounting systems.

Succession planningMazor continually seeks to identify suitable candidates within the group to train and mentor for succession to senior management and the board.

Board committees

The board has established and mandated a number of committees to perform work on its behalf in various key areas affecting the business of the group. each committee’s role and responsibilities are spelt out in its charter, approved by the board and reviewed to ensure that they remain in line with the group’s changing needs and business climate. The chairmen of the committees or another committee member nominated by them attend the company’s annual general Meeting. as and when required, the board may establish ad-hoc committees to address specific issues. Details of each board committee are provided below.

all committees have satisfied their responsibilities during the year in compliance with their charters.

a review of applicable charters will be conducted to take into account King III and the Companies act 71 of 2008 which has come into effect in 2011.

audit committeeThe audit committee is chaired by Mr M Kaplan and further comprises Mr a groll and Ms SM Ozinsky. Ms SM Ozinsky resigned from the board on 9 February 2011. a replacement is currently being sought. all members of the committee are independent non-executive directors.

The committee met three times during the year. (attendance at meetings is set out on page 9.) Management and the external auditors attend meetings by invitation.

The committee is responsible for reviewing and amending the group’s internal controls, risk management systems and controls, financial reporting, and audit recommendations. Further the committee is tasked with appointing and recommending the external auditor.

a formal audit committee charter is reviewed annually and includes further duties such as:

• evaluating management’s accountability regarding the security of computer systems and contingency plans in the event of a systems breakdown;

• reviewing significant accounting and reporting issues;

• reviewing the external auditor’s performance and audit scope;

• determining the independence of the external auditor;

• developing a formal risk management policy; and

• reviewing systems in place to monitor the group’s regulatory compliance.

a formal procedure governs the process whereby the external auditor is considered for non-audit services. The committee approved the terms of a master service agreement for the external auditor to provide non-audit service, and approved the nature and extent of non-audit services the external auditor may provide in terms of the agreed pre-approval policy.

In compliance with the Listings Requirements, the audit committee confirms that during the financial year ended, the group financial director, Ms L Mazor, adequately performed her duties. The audit committee is satisfied that Ms L Mazor possesses the required expertise and experience to adequately perform her duties

remuneration and nomination committeeThe committee is chaired by independent non-executive Chairman, Mr M Kaplan and comprises further of independent non-executive director Mr a groll. Ms SM Ozinsky also served on the committee


Corporate Governance continued

until her resignation from the board on 9 February 2011. The CeO and financial director attend meetings by invitation and are excluded from deliberations in respect of their own remuneration. (attendance at meetings is set out on page 9.)

The formal remuneration and nomination committee charter sets out the committee’s composition, duties and responsibilities. In terms of the charter the committee is responsible for determining the remuneration packages of executive directors and any criteria necessary to measure their performance, and reviewing annual bonuses, as well as recommending allocations to executive directors and senior employees in terms of the company’s share scheme.

remuneration philosophy Remuneration is benchmarked against industry norms and is performance-related. The employee’s level of experience and qualifications are also taken into consideration when determining remuneration.

Non-executive directors are paid a fee per meeting. These fees remained unchanged from the prior year:

Fees per meeting

R

Director 16 500

Chairperson 22 000

Chairperson – Audit 16 500

Chairperson – RemCo 11 000

Member of audit committee 11 000

Member of RemCo 5 500

Directors’ emoluments are set out in note 24 to the annual financial statements.

Accounting and auditing

external auditThe external auditors are responsible for reporting on whether the annual financial statements are fairly presented in compliance with IFRS. The preparation of the annual financial statements remains the responsibility of the directors.

The audit committee evaluates the independence and effectiveness of the external auditors and considers whether any non-audit services rendered by such auditors substantively impair their independence. If this is found to be the case, appropriate corrective action will be taken in regard to those services.

Internal auditpreviously, due to the size of the group, the board considered a dedicated internal audit function to be impractical. Internal audit responsibilities were managed by the audit committee and executive management. as the group is expanding its operations, the board is currently considering

a formal internal audit function and meetings have been held with suitable independent candidates to fulfil that role. The board anticipates an appointment to be made imminently.

Internal control and risk management

Internal controlThe board is responsible for the group’s systems of internal control and risk management and is assisted in this regard by the audit committee. These systems of internal control are designed to provide reasonable but not absolute assurance as to the integrity and reliability of the annual financial statements, to safeguard and maintain accountability of the group’s assets and to identify and minimise significant fraud, potential liability, loss and material misstatement while complying with applicable statutory laws and regulations.

There are inherent limitations to the effectiveness of any system of internal control, including the possibility of human error and the circumvention or overriding of controls. The system is therefore designed to manage rather than eliminate risk of failure and opportunity risk.

Nothing has come to the attention of the board to indicate that there has been a material breakdown in the internal systems of control during the year.

risk managementThe board, together with the audit committee, is responsible for overseeing risk management activities and ensuring that the requisite risk management culture, policies, practices and systems are implemented and functioning effectively.

Stakeholder communication

The group is committed to timely, consistent and transparent communication with all stakeholders. In doing so Mazor strives to provide a balanced and understandable assessment of the group’s position.

In all manners of communication including financial reporting, formal announcements, media releases, annual meetings, presentation and dialogue with investors and analysts the group seeks to be clear, open, prompt and balanced, communicating in substance rather than form.

Company announcements are published on SeNS and posted on the company’s website. Financial results announcements are also posted to shareholders. Further, the CeO and financial director are available to answer queries from stakeholders, including industry analysts, at all times and wherever possible engage with the financial media to ensure accurate reporting.

Going concern

The annual financial statements contained in this annual report have been prepared on a going concern basis as the directors have every reason to believe that the company and the group have adequate resources to continue in operation for the year ahead.


Company profile




Governance

annual Financial



Diary

Code of Ethics

a formal Code of ethics (‘the Code’) is in place which sets out standards of integrity and ethics in dealings with suppliers, customers, business partners, stakeholders, government and society at large. every employee is required to subscribe to the Code and strict adherence is a condition of employment. Mazor acknowledges that integrity in dealings with all stakeholders is a prerequisite of a sustainable business.

The Code further sets out the group’s commitment to avoiding untruths, concealment or overstatement in all forms of communication including advertising, financial reporting and investor relations. Outside of South africa the Code requires the group and all employees to respect the traditions and cultures of each country in which it operates.

Compliance with the Code is monitored and employees are encouraged to report any suspected contravention of the Code or perceived unethical behaviour. The financial director is tasked with initiating and supervising the investigation into reported breaches of the Code.

Sustainability

The directors acknowledge sustainable transformation as a business imperative and ensure the group adheres to the Department of Trade and Industry’s BBBee Codes of good practice.

BBBee

Direct black shareholding in the group totals 14.7%, held by Cloudberry Investments. The group intends to broaden Bee participation at group level on identification of a viable opportunity in this regard.

preferential procurementIn terms of discretionary spend the group seeks to secure products and services from black-owned and managed enterprises as far as is commercially viable.

employment equity

as set out in the Code, Mazor has a policy of equal opportunity and non-discrimination in employment ensuring no discrimination on the base of race, gender or creed.

Safety, health and environment

The group regards the health and safety of its employees and that of persons affected by its operations to be of vital importance. The group’s primary objective is to achieve and maintain a safe and healthy working environment by ensuring strict compliance with the South african Occupational Health and Safety act, 1993 (‘the act’) and regulations. The commitment to providing a safe and healthy work environment is set out in the Code.

To this end the group ensures that matters affecting health and safety are accorded the highest priority, adequate precautions are taken to prevent injuries, incidents, accidents and ill health, and the provisions of all relevant legislation are fully complied with.

To achieve these goals Mazor provides training to employees in occupational health and safety issues so as to ensure competence in the workplace, be aware of the potential hazards implicit in their work activities and be aware of their scope of authority in terms of occupational health and safety control. Furthermore the group endeavours to manage occupational health and safety to acceptable standards, enforce health and safety measures through discipline in the workplace, and protect the public and people other than company employees from health and safety hazards associated with the group’s activities.

Skills development and training

The Code outline’s the group’s commitment to assisting employees at all levels to develop relevant skills and competencies. Mazor aims to assist employees in achieving their full potential and in doing so endeavours to provide training for all staff.

HIV/aIDS

Mazor is concerned about HIV/aIDS in South africa. The group is currently developing a formal policy in this regard and assessing possible awareness programmes to be implemented in due course.

environment

The group is committed to the preservation and conservation of the environment as set out in the Code. In doing so it seeks to identify means of limiting the use of finite resources and acknowledges its responsibility for land occupied by the group, waste management and usage of energy.

Corporate social investment (CSI)

The Code outlines Mazor’s commitment to CSI. The group aims to contribute to the economic well-being and social development of the communities in which it operates through job creation and donations, and educational and cultural contributions.

Compliance with the Code

The board is committed to compliance with the requirements of King III and is in the process of evaluating the material aspects for implementation, having regard to the group’s size and resources available. In particular, steps are being taken to identify suitable candidates for audit committee chairperson and the appointment of an internal audit function in the light of requirements of King III and the new Companies act.


Corporate Governance continued


Group annual Financial StatementsDirector’s responsibility for the annual Financial Statements 14

Company Secretary’s report 14

Independent auditor’s report 15

Director’s report 16

Group Statement of Financial position 18

Group Statement of Comprehensive Income 19

Group Cash Flow Statement 20

Group Statement of Changes in equity 21

notes to the annual Financial Statements 22

pICK n paY – otterY


Directors’ Responsibility for the Annual Financial StatementsThe directors are responsible for the preparation, integrity and fair presentation of the financial statements of the group and the company. The financial statements, presented on pages 16 to 64, have been prepared in accordance with International Financial Reporting Standards (IFRS) and the Companies act in South africa, and include amounts based on judgements and estimates made by management. The directors have also prepared the other information included in the annual report and are responsible for both its accuracy and its consistency with the financial statements.

The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the group and place considerable importance on maintaining a strong control environment. To enable directors to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost-effective manner. The standards include effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the group and all employees are required to maintain the highest ethical standards in ensuring the group’s business is conducted in a manner that in all reasonable circumstances is above reproach. Whilst operating risk cannot be fully eliminated, the group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The directors are of the opinion that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the financial statements. However, any system of internal control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

Approval of the group and company annual financial statements

The annual financial statements of the group and the company for the year ended 28 February 2011, were approved by the board of directors on 16 May 2011 and signed on its behalf by:

m Kaplan Chairman

r mazor Chief executive Officer

Company Secretary’s ReportI, Liat Mazor, company secretary of Mazor group Limited, certify that, to the best of my knowledge and belief, all returns required of a public company have, in respect of the year ended 28 February 2011, been lodged with the Registrar of Companies and that all such returns are true, correct and up to date.

l mazor

Company SecretaryCape Town

16 May 2011



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Independent Auditor’s ReportTo the members of Mazor Group Limited

We have audited the group annual financial statements and annual financial statements of Mazor group Limited, which comprise the consolidated and separate statements of financial position as at 28 February 2011, and the consolidated and separate statements of comprehensive income, the consolidated and separate statements of changes in equity and consolidated and separate statements of cash flow for the year then ended, and a summary of significant accounting policies and other explanatory notes, and the directors’ report, as set out on pages 16 to 64.

Directors’ responsibility for the financial statements

The company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and in the manner required by the Companies act of South africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

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

an audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement,

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

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

Opinion

In our opinion, these financial statements present fairly, in all material respects, the consolidated and separate financial position of Mazor group Limited as at 28 February 2011, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies act of South africa.

mazars Registered auditor partner: Conrad Burger Registered auditor

Cape Town 16 May 2011

SHoprIte FloW tHrouGH – BraCKenFell oaSIS


Directors’ ReportThe directors have pleasure in submitting their report and the annual financial statements of the company and the group for the year ended 28 February 2011.

Nature of business

The company is listed on the ‘Construction and Materials’ sector of the Main Board of the JSe. The company is the holding company of a number of subsidiary companies principally engaged in construction activities and glass beneficiation in the Republic of South africa.

Group results

gross revenue decreased by R86.7 million to R186.8 million (2010: R273.5 million), generating an operating profit of R1.7 million (2010: R46 million) which represents a decrease of R44.3 million over the previous year. Headline earnings for the year amounted to R9.9 million (2010: R33.8 million), a decrease of R23.9 million. The consolidated statement of comprehensive income is set out on page 19.

Interest in subsidiaries

Details of subsidiary companies are reflected on page 58.

The aggregate net profits for the year of the subsidiaries of the group amounted to R10.6 million. This includes net losses incurred by Compass glass Sa (pty) Limited of R5.6 million for the year. Compass glass (pty) Limited generated profits of R76 243 and Mazor aluminium (pty) Limited and Mazor Steel (pty) Limited generated profits of R9.6 million and R6.6 million respectively. In the prior year, Compass glass (pty) Limited and Compass glass Sa (pty) Limited incurred a loss of R1.4 million and R5.54 million respectively, while Mazor aluminium (pty) Limited and Mazor Steel (pty) Limited generated profits of R31.8 million and R28.1 million respectively.

The losses in Compass glass Sa are predominantly due to:

• a decrease in demand due to economic slow-down; and

• price pressures.

Two new branches of Compass glass Sa were opened during the year in port elizabeth and east London. The performance of Compass glass Sa is expected to improve in the year ahead.

Borrowing powers

The articles of association place no restriction on the directors’ borrowing powers.

Share capital

Full details of the authorised, issued and unissued share capital of the company at 28 February 2011 are set out in note 23 to the financial statements.

The unissued ordinary shares are under the control of the directors, subject to the regulations of the JSe, until the next annual general Meeting. Shareholders, therefore, will be asked to consider an

ordinary resolution at this annual general Meeting placing under the control of the directors the unissued ordinary shares.

Share incentive schemes

Mazor group Limited has two share incentive schemes, namely the Mazor group Limited Share Incentive Scheme and the Mazor group Limited Bee Share Incentive Scheme. employees are eligible to participate in the schemes only if and to the extent that offers are made to them or options are granted to them.

Share options provide for the vesting of the options over a period of between two to five years. No share options have been issued to date but historical (equity-settled) offers have been accepted for 367 125 shares. These shares can be released from the scheme within one year.

Share incentive schemes are consolidated for the purposes of the group annual financial statements.

Acquisitions

HBSDuring the year Mazor aluminium acquired a 50% interest in Cyndara 193 (pty) Limited t/a HBS (‘HBS’) for a consideration of R32.6 million.

The consideration payable was settled by Mazor through:• The sale by Mazor to HBS of architectural systems and

intellectual property for R20 million; and

• a cash payment to Hulamin extrusions (pty) Limited of R12.6 million.

HBS markets and supplies a wide range of fenestration systems into the South african residential, commercial and industrial markets through branches in Johannesburg, Cape Town, Durban and port elizabeth. The business enjoys a significant market share in the aluminium industry. The transaction will enable Mazor to gain access to an enlarged client base which would have been difficult to obtain organically.

Compass Glass Sa – port elizabethThe group identified the need to expand its national footprint in the glass industry and particularly the potential for growth in the eastern Cape.

glass Unlimited, based in port elizabeth, was targeted as a suitable partner for this expansion, and with effect 1 april 2010 the group, through Compass glass Sa, acquired the business of glass Unlimited as a going concern.

The purchase price payable for the business comprised:• a cash payment of R315 000 in respect of the stock and fixed

assets of the business; and

• the issue of 100 000 shares in the group to Riaan edward Swanepoel, the sole member of glass Unlimited.

Share transactions

On 18 March 2010 the group delisted 100 000 shares previously held as treasury shares.

On 21 april 2010 100 000 new shares were listed on the JSe. These shares were issued to Riaan edward Swanepoel as part of the purchase consideration for the acquisition of the business of glass Unlimited (see ‘acquisitions’ above). These shares are restricted and may not be sold for a period of two years from the date of acquisition. Riaan Swanepoel remains employed by Compass glass Sa as the manager of the port elizabeth branch.

Currently there are 121 501 533 shares in issue.

Directorate and secretary

Details concerning the company’s directors, secretary, business and postal addresses are set out on page 7.

The non-executive directors do not have service agreements.

On 4 June 2010 Liat Mazor resigned as company secretary and adriaan Johannes van Zyl was appointed in her stead.

On 22 February 2011 adriaan Johannes van Zyl resigned as company secretary and Liat Mazor was appointed in his stead.

On 9 February 2010 Sheryl Ozinsky resigned from the board as a non-executive director.

Directors retiring by rotation at the annual general Meeting in accordance with the articles of association of the company are Messrs S Mazor and F Boner. Both are eligible and offer themselves for re-election.

The frequency of board meetings is determined by the board. The Board meets at least on a quarterly basis and also when required to attend to specific business.

Directors’ shareholding

at 28 February 2011, the present directors held a total of 68 148 125 ordinary shares:

Ordinary shares

2011 2010

Direct Indirect Direct Indirect

M Kaplan* 50 218 37 603

A Groll 2 584 440 2 467 670

A Varachhia* 9 430 000 9 430 000

S Ozinsky* 25 000 25 000

S Mazor* 7 469 231 7 469 231

R Mazor* 5 000 000 19 000 000 5 000 000 19 000 000

L Mazor* 5 000 000 19 000 000 5 000 000 19 000 000

F Boner# 614 236 614 236

17 494 231 50 678 894 17 469 231 49 960 273

* Shares are held beneficially# Shares are held non-beneficially

There has been no change in the interests of directors in share capital since the year-end.

Directors’ remuneration

Details of directors’ remuneration are set out in on page 41.

Property, plant and equipment

Full details of the property, plant and equipment are reflected on page 31.

R12.4 million was spent on the acquisition of new plant during the year. This was mainly in respect of expanding and automating the glass division.

Special resolutions

During the year under review the following special resolutions were passed and registered with the registrar:

• authorisation given to directors to approve and implement the acquisition by the company (or by a subsidiary of the company) of shares issued by the company by way of a general authority.

• authorisation given to the company to provide financial assistance to Cloudberry Investments 18 (pty) Limited in terms of section 226 of the Companies act.

Dividends

a final dividend of 18.1 cents per share in respect of the year ended 28 February 2010 was paid on 14 June 2010.

Litigation

We are not aware of any legal or arbitration proceedings, pending or threatened, that may have or have had in the previous 12 months, a material effect on the group’s financial position

Post-balance sheet events

DividendOn 16 May 2011 a dividend of 2.8 cents per share was declared. as a result of the dividend declaration, an STC credit of R340 204 will be consumed.

There are no other matters or circumstances arising since the end of the financial year and the date of this report.


Company profile




Governance

annual Financial



Diary


Group Statement of Financial Position at 28 February 2011

Note(s)2011

R2010

R

ASSETS

Non-current assets

property, plant and equipment 2 60 915 473 54 612 261

goodwill 3 8 396 200 8 141 200

Other financial assets 4 4 142 564 –

equity-accounted investments 5 23 952 750 944

Deferred tax 12 8 344 920 5 216 068

105 751 907 67 970 473

Current assets

Inventories 6 28 218 584 21 946 757

Other financial assets 9 999 10 547

Construction contracts and receivables 7 30 334 581 28 357 180

Current tax receivable 438 770 –

Trade and other receivables 8 24 261 090 21 357 763

Cash and cash equivalents 9 72 297 846 129 541 251

155 560 870 201 213 498

TOTAL ASSETS 261 312 777 269 183 971

EquITy AND LIABILITIES

Equity

Share capital 23 1 211 1 210

Share premium 23 80 278 737 80 023 738

Retained income 142 215 681 154 261 505

222 495 629 234 286 453

Liabilities

Non-current liabilities

Other financial liabilities 10 3 145 262 1 452 081

Deferred tax 12 465 513 1 180 299

3 610 775 2 632 380

Current liabilities

Other financial liabilities 10 2 621 290 2 064 367

Current tax payable 30 611 9 143 440

Trade and other payables 11 28 641 920 21 057 331

Bank overdraft 9 3 912 552 –

35 206 373 32 265 138

Total liabilities 38 817 148 34 897 518

TOTAL EquITy AND LIABILITIES 261 312 777 269 183 971


Group Statement of Comprehensive Incomefor the year ended 28 February 2011

Note(s)2011

R2010

R

Revenue 13 186 769 379 273 514 257

Cost of sales 14 (156 856 198) (196 040 703)

Gross profit 29 913 181 77 473 554

Other income 10 052 165 816 481

Operating expenses (38 278 159) (32 300 113)

Operating profit 15 1 687 187 45 989 922

Share-based payment 31 – (3 378 299)

Profit before investment revenue and finance costs 1 687 187 42 611 623

Investment revenue 17 8 312 772 8 742 701

Income from equity-accounted investments 1 335 810 944

Finance costs 18 (343 753) (464 707)

Profit before taxation 10 992 016 50 890 561

Taxation 19 (1 116 196) (17 122 634)

Total comprehensive income for the period 9 875 820 33 767 927

Number of shares in issue 121 114 053 121 014 053

Weighted average number of shares 121 100 080 113 652 302

Basic and diluted earnings per share (cents) 27 8.2 29.7


Group Cash Flow Statementfor the year ended 28 February 2011

Note(s)2011

R2010

R

Cash flows from operating activities

Cash (utilised for)/generated from operations 20 (5 987 289) 45 170 989

Interest income 5 312 772 8 742 701

Dividend income 3 000 000 –

Finance costs (343 753) (464 707)

Tax paid 21 (14 511 434) (29 148 906)

Dividends paid (21 921 644) (19 033 192)

Net cash flow from operating activities (34 451 348) 5 266 885

Cash flows from investing activities

purchase of property, plant and equipment 22 (12 408 574) (7 204 387)

proceeds on disposal of plant and equipment 211 873 650, 432

acquisition of treasury shares – (3 267 693)

proceeds on disposal of treasury shares – 25 738 764

Investment in joint ventures (12 615 996) (944)

Increase in other financial assets (4 142 016) (10 547)

Net cash flow from investing activities (28 954 713) 15 905 625

Cash flows from financing activities

Increase/(Repayment) of other financial liabilities 2 250 104 (2 338 666)

Net cash flow from financing activities 2 250 104 (2 338 666)

(Decrease)/Increase in cash and cash equivalents for the year (61 155 957) 18 833 844

Cash and cash equivalents at the beginning of the year 129 541 251 110 707 407

Cash and cash equivalents at the end of the year 68 385 294 129 541 251


Group Statement of Changes in Equityfor the year ended 28 February 2011

Sharecapital

R

Sharepremium

R

Retainedincome

R

Totalequity

R

Balance at 1 March 2009 1 108 65 724 599 127 976 641 193 702 348

Changes in equity


Treasury shares acquired (8) (890 203) (890 211)

Treasury shares cancelled (13) (2 377 469) (2 377 482)

Treasury shares sold 123 17 566 811 8 171 830 25 738 764

Dividends paid (19 033 192) (19 033 192)

Share-based payment 3 378 299 3 378 299

Balance at 1 March 2010 1 210 80 023 738 154 261 505 234 286 453

Changes in equity


Treasury shares cancelled –

Shares issued 1 254 999 255 000

Dividends paid (21 921 644)* (21 921 644)

Balance at 28 February 2011 1 211 80 278 737 142 215 681 222 195 629

* a dividend of 18.1 cents per share was paid on 14 June 2010


1 Accounting Policiespresentation of annual Financial StatementsThe consolidated and company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), the interpretations adopted by the International accounting Standards Board (IaSB) and the International Financial Reporting Interpretations Committee (IFRIC), and the Companies act of South africa, 1973.

The financial statements have been prepared on the historical cost basis except for specific financial assets which are stated at fair value. Those categories to which the fair value basis of accounting has been applied are indicated in the individual accounting policy notes below.

The financial statements have been prepared on the going concern basis and these accounting policies set out below have been consistently applied throughout the group to all the periods presented, unless otherwise stated.

Basis for consolidationThe consolidated financial statements incorporate the financial statements of the holding company and its subsidiaries. all financial results are consolidated with similar items on a line-by-line basis.

Inter-group transactions and balances are eliminated on consolidation.

SubsidiariesSubsidiaries are entities in which the group has an interest of more than half of the voting rights or the power to govern the financial and operating policies relevant to the entity. Subsidiaries are consolidated from the acquisition date until the disposal date or any other date where there is a change in shareholding or control such that the entity becomes or ceases to be classified as a subsidiary.

The cost of an acquisition is measured as the fair value of assets transferred, equity instruments issued and liabilities incurred or assumed. The excess of the cost of the acquisition over the fair value of the group’s share of net identifiable assets is recorded as goodwill.

Special purpose entitiesThe group has established special purpose entities (Spes) for the purpose of offering shares and share options to employees of the group. The group does not have direct or indirect ownership of these entities. a Spe is consolidated if, based on an evaluation of substance of

its relationship with the group and the Spe’s risks and rewards, the group concludes that it controls the Spe.

The Spes which are controlled by the group have been established under the terms that impose strict limitations on the decision-making powers of the Spes’ trustees and management and that result in the group receiving the majority of the benefits related to the Spes’ operations and net assets.

Statements and interpretations

Standards, amendments and interpretations effective 1 January 2010 and adopted during the current financial yearDuring the current year, the group adopted the following new and amended standards and interpretations:

IFrS 2 Share-based payments (effective for annual periods beginning on or after 1 July 2009)The amendment clarifies the scope of IFRS 2 by confirming that transactions related to business combinations within the scope of IFRS 3 (2008) Business Combinations are excluded from the scope of IFRS 2. as per IFRS 3, common control transactions and joint ventures for which control is not relevant are no longer explicitly included in the definition of business combinations and therefore IFRS 2 is applicable to transactions relating to business combinations of this type. This amendment did not have an impact on the financial position or performance of the group.

IFrS 3 Business Combinations, IaS 27 Consolidated and Separate Financial Statements and IaS 28 Investments in associates (all revised) (mandatory for business combinations in annual periods beginning on or after 1 July 2009)The more important revisions to the standards include:

• acquisition costs to be expensed.

• Non-controlling interest to either be calculated at fair value or at their proportionate share of the net identifiable assets of the acquiree.

• goodwill is measured at the acquisition date as the difference between the acquisition date fair value of consideration paid, non-controlling interest and fair value of previous shareholding and the fair value of the net identifiable assets of the acquiree.

• goodwill is not subsequently remeasured and no gain or loss is recognised on subsequent changes in ownership interests that do not involve the loss of control. These changes are treated as transactions with owners and recognised directly in equity.

Notes to the Annual Financial Statementsfor the year ended 28 February 2011


• Consideration for an acquisition, including any contingent consideration, is measured at fair value at the acquisition date.

• The non-controlling interest proportionate share of profit or loss is attributed to the NCI even if this results in the non-controlling interest having a deficit balance.

None of the revisions had an impact on the financial position or performance of the group.

IFrS 5 non-current assets Held for Sale and Discontinued operations (effective for annual periods beginning on or after 1 January 2010)The amendment clarifies the disclosures of non-current assets classified as held for sale or discontinued operations. The new wording addresses the uncertainty around the specific disclosures.

IFrS 8 operating Segments (effective for annual periods beginning on or after 1 January 2010)The amendment aims to eliminate the difference with the US standards on the presentation of segment disclosure, by requiring that both assets and liabilities of each segment be presented systematically.

IaS 1 presentation of Financial Statements (effective annual periods beginning on or after 1 January 2010)The amendment aims to provide clarification on the classification of the liability component of convertible assets as current or non-current: this component should not be classified as a current liability simply because it may be settled at any time at the option of the holder.

IaS 7 Statement of Cash Flows (effective for annual periods beginning on or after 1 July 2009)The amendment states that cash flows arising from changes in level of control, where control is not lost, are equity transactions and should therefore be accounted for as cash flows from financing transactions.

IaS 7 Statement of Cash Flows (effective annual periods beginning on or after 1 January 2010)The amendment states that only expenditure that results in the recognition of an asset are eligible for classification as investing activities in the statement of cash flows. This change aims to ensure consistency between the statement of financial position and the statement of cash flows.

IaS 12 Income taxes (effective for annual periods beginning on or after 1 July 2009)The amendment requires that a deferred tax asset should be recognised against goodwill (and profit or loss to the extent that it exceeds goodwill) if the deferred tax asset

existed on acquisition date, but was not recognised by the subsidiary due to whatever reason and the asset became recognisable subsequently. This may only be done if it results from information that existed at acquisition date.

IaS 17 leases (effective for annual periods beginning on or after 1 January 2010)

When the length of a lease, containing a land element, is such that in substance, title passes to the lessee at the end of the lease term, such lease may be classified as a finance lease, as opposed to an operating lease. Retrospective application of this amendment is required on the basis of information available at the date of signature of the lease contract.

IaS 36 Impairment of assets (effective for annual periods beginning on or after 1 January 2010)

The application of IFRS 8 Operating Segments could have an impact on the determination of operating segments. The determination may lead to a revision of the allocation of goodwill to cash-generating units. IFRS 8 allows the aggregation of segments with similar economic characteristics. The amendment to IaS 36 states that the relevant segments for the allocation of goodwill are those existing before the aggregation.

IaS 38 Intangible assets (effective annual periods beginning on or after 1 July 2009)

The amendment states that an identifiable intangible asset acquired in a business combination should be recognised separately from goodwill. The amendment also states that there are no specific measurement techniques required to be used for the measurement of intangible assets when no active market exists.

IaS 39 Financial Instruments: recognition and measurement (effective for annual periods beginning on or after 1 January 2010)

The amendments clarify the scope of exemption for business combination contracts and states that only forward contracts of which finalisation does not depend on the future actions of one or another party are excluded from the scope of IaS 39. The amendment also clarifies that amounts recognised in equity should be reclassified to profit or loss in the same period during which the hedged cash flow affects profit or loss. Finally, the amendment also explains that loan prepayment penalties should be recognised separately from the host contract, unless the option exercise price compensates the lender for the loss of interest income because the loan was repaid early.

Notes to the Annual Financial Statements continuedfor the year ended 28 February 2011

IFrIC 17 Distributions of non-cash assets to owners (effective for annual periods beginning on or after 1 July 2009)The interpretation clarifies that a dividend should only be recognised once it is appropriately authorised; the dividend payable should be measured at the fair value of the net assets to be distributed and the entity should recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss. Further, the interpretation also requires an entity to provide additional disclosure if the net assets held for distribution to the owners meet the definition of a discontinued operation.

aC 503 accounting for Black economic empowerment transactions (effective for annual periods beginning on or after 1 July 2009)The definition of performance conditions has been amended to include a service requirement, in addition to performance targets, with regards to vesting conditions as per IFRS 2 Share-based payments.

Standards, amendments and interpretations not yet effective for the current financial year, but effective for ensuing financial yearsat the date of authorisation of these financial statements, the standards and interpretations listed below were in issue but not yet effective and have not been applied in preparing these consolidated group financial statements:

IFrS 3 Business Combinations (revised) (effective for annual periods beginning on or after 1 July 2010)The amendment clarifies that the initial measurement of non-controlling interest shall be measured at acquisition date fair values, unless otherwise required by IFRS. Only those interests which represent a present ownership interest shall be measured at either fair value or the present ownership’s proportionate share in the recognised amounts of the acquiree’s identifiable assets. This amendment clarifies the definition of a related party. In terms of the definition, the revision clarifies that joint ventures or associates of the same third party are related parties of each other. The adoption of this amendment is not expected to impact the results of the group, neither results in additional disclosure.

IFrS 7 Financial Instruments: Disclosures (effective for annual periods beginning on or after 1 January 2011)The amendment clarifies the requirements for risk disclosures. The adoption of this amendment is not expected to impact the results of the group, but may result in additional disclosure.

IFrS 9 Financial Instruments (effective for annual periods beginning on or after 1 January 2013) This new standard deals with the classification and measurement of financial assets, as follows:

• financial assets will be categorised as those subsequently measured at fair value or at amortised cost (where assets are held to collect contractual cash flows);

• financial assets may only be reclassified if the entity changes its business model for the management of financial assets (prospectively); and

• investments in equity instruments may be measured at fair value through other comprehensive income, but such a decision may not be revoked subsequently. The adoption of this new standard is not expected to impact the results of the group, but will result in additional disclosure.

IaS 1 presentation of Financial Statements (effective for annual periods beginning on or after 1 January 2011) The amendment requires that an entity must present, either in the statement of changes in equity or in the notes, an analysis of other comprehensive income by item. The adoption of this amendment is not expected to impact the results or disclosure of the group.

IaS 24 related party Disclosures (revised) (effective for annual periods beginning on or after 1 January 2011)This amendment clarifies the definition of a related party. In terms of the definition, the revision clarifies that joint ventures or associates of the same third party are related parties of each other. The adoption of this amendment is not expected to impact the results of the group, neither result in additional disclosure.

IaS 32 Financial Instruments: presentation amendment: Classification of rights Issue (effective for annual periods beginning on or after 1 February 2010) The amendment provides that rights, options or warrants to acquire a fixed number of the entity’s own equity instruments for a fixed amount of any currency, are equity instruments if the entity offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. The adoption of this amendment is not expected to impact the results of the group, neither result in additional disclosure.



IFrIC 19 extinguishing Financial liabilities with equity Instruments (effective for annual periods beginning on or after 1 July 2010)The interpretation clarifies the accounting treatment where a debtor and creditor renegotiate the terms of a financial liability and the terms result in the debtor issuing equity instruments to the creditor. This interpretation is not expected to impact the results of the group, neither result in additional disclosure.

Significant judgements and estimates

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgements is inherent in the formation of estimates. actual results in the future could differ from these estimates, which may be material to the annual financial statements.

Significant judgements include:• accounting for construction contracts The group makes estimates and assumptions

concerning the future, particularly as regards the calculation of the profitability of construction contracts. The resulting accounting estimates can, by definition, only approximate the actual results. estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

• Impairment of trade receivables estimates are based on management’s assessment

of the likelihood of collecting receivables outstanding for longer than 120 days.

• property, plant and equipment property, plant and equipment are depreciated on

a straight-line basis over its estimated useful life to residual value. Residual values and useful lives are based on management’s best estimates and actual future outcomes may differ from these estimates.

• loans and receivables The group assesses its loans and receivables

for impairment at each balance sheet date. In determining whether an impairment loss should be recorded in the income statement, the group makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from the financial asset.

• Goodwill The group continually assesses the recoverability of

any goodwill carried on the statement of financial position as part of acquisitions. This requires an estimation of the value in use of the cash-generating unit to which the goodwill is allocated. expected cash flows used to determine the value of goodwill are inherently uncertain and could change over time. They are affected by a number of factors including estimates of costs to produce inventory, future capital expenditure and product markets. The carrying amount of goodwill in the consolidated annual financial statements at 28 February 2011 is R8 396 200 (2010: R8 141 200).

property, plant and equipmentproperty, plant and equipment is initially recognised at cost. The cost of property, plant and equipment includes amounts incurred initially to acquire or construct an item of property, plant and equipment and amounts incurred subsequently to add to or replace part of the asset. Replacement costs include the cost of major inspections. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. Day-to-day servicing costs, such as labour and consumables, are expensed in the income statement.

property, plant and equipment are subsequently measured at cost less accumulated depreciation and any impairment losses.

Depreciation is provided on all property, plant and equipment to write down the cost amount, less residual value, on a straight-line basis over their useful lives as follows:

Item Useful life

Plant and equipment 2 to 20 years

Furniture and fittings 3 to 6 years

Motor vehicles 3 to 8 years

Office and computer equipment 1 to 7 years

Computer software 1 to 5 years

Tools 2 to 4 years

Leasehold improvements 1 to 5 years

Where part of an item of property, plant and equipment is significant in relation to the cost of the item, that part is depreciated separately. The depreciation charge is recognised as an expense in the income statement. The residual values, useful lives and depreciation methods applied to property, plant and equipment are reviewed,



and adjusted if necessary, on an annual basis. These changes are accounted for as a change in estimate.

an item of property, plant and equipment is derecognised upon disposal or when no economic benefit is expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment is included in the income statement and is calculated as the difference between the net proceeds, if any and the carrying amount of the item at the date of derecognition.

Business combinations – goodwillThe company accounts for business combinations using the acquisition method of accounting. The cost of the business combination is measured as the aggregate of the fair values of assets given, liabilities incurred or assumed and equity instruments issued. Costs directly attributable to the business combination are expensed as incurred, except the costs to issue debt which are amortised as part of the effective interest and costs to issue equity which are included in equity.

Contingent consideration is included in the cost of the combination at fair value as at the date of acquisition. Subsequent changes to the assets, liability or equity which arise as a result of the contingent consideration are not affected against goodwill, unless they are valid measurement period adjustments.

The acquiree’s identifiable assets, liabilities and contingent liabilities which meet the recognition conditions of IFRS 3 Business Combinations are recognised at their fair values at acquisition date, except for non-current assets (or disposal company) that are classified as held-for-sale in accordance with IFRS 5 Non-current assets Held-for-sale and Discontinued operations, which are recognised at fair value less costs to sell.

Contingent liabilities are only included in the identifiable assets and liabilities of the acquiree where there is a present obligation at acquisition date.

On acquisition, the company assesses the classification of the acquiree’s assets and liabilities and reclassifies them where the classification is inappropriate for company purposes. This excludes lease agreements and insurance contracts, whose classification remains as per their inception date.

goodwill is determined as the consideration paid, plus the fair value of any shareholding held prior to obtaining control, plus non-controlling interest and less the fair value of the identifiable assets and liabilities of the acquiree.

goodwill is not amortised but is tested on an annual basis for impairment. If goodwill is assessed to be impaired, that impairment is not subsequently reversed.

Jointly controlled entitiesJointly controlled entities are those entities in which the group has joint control. The proportion of assets, liabilities, income and expenses and cash flows attributable to the interests of the group in jointly controlled entities are incorporated in the consolidated financial statements under the appropriate headings. The results of joint ventures are included from the effective dates of acquisition and up to the effective dates of disposal.

Inter-company transactions, balances and unrealised gains on transactions between the group and its joint ventures are eliminated on consolidation. Unrealised losses are eliminated and are also considered an impairment indicator of the asset transferred. accounting policies of joint ventures have been changed where necessary to ensure consistency with policies adopted by the group.

Financial instruments

Initial recognitionThe group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial assets and financial liabilities are recognised on the group’s statement of financial position when the group becomes party to the contractual provisions of the instrument.

trade and other receivablesTrade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

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



Trade and other receivables are classified as loans and receivables.

trade and other payablesTrade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalentsCash and cash equivalents comprise cash at bank and cash on hand and other short-term deposits with an original maturity of three months or less. Cash and cash equivalents are short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially recorded at fair value and subsequently at amortised cost.

For purposes of the cash flow statement, cash and cash equivalents comprise cash and cash equivalents defined above, net of outstanding bank overdrafts.

other financial liabilitiesOther financial liabilities are initially measured at fair value, which is the cash consideration received less transaction costs. Subsequently, borrowings are measured at amortised cost using the effective interest rate method. The amortised cost method results in the accrual of interest in each year by applying the effective interest rate implicit to the outstanding balance on the borrowings. Borrowings are reduced when repayment is made.

other financial assetsThese financial assets are initially at fair value plus direct transaction costs.

at subsequent reporting dates loans and receivables are measured at amortised cost using the effective interest rate method, less any impairment loss recognised to reflect irrecoverable amounts.

Financial instruments at fair value through profit or loss are subsequently measured at fair value, with gains and losses from changes in fair value being included in profit or loss for the period.

Impairment lossesThe company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

In general, an impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in the income statement. any impairment loss of a revalued asset is treated as a revaluation decrease.

The company assesses at each balance sheet date whether there is any indication that an impairment loss recognised in prior periods for assets may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated. The increased carrying amount of an asset attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years.

In general, a reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in the income statement. any reversal of an impairment loss of a revalued asset is treated as a revaluation increase.

leasesLeases of assets where the company assumes substantially all the benefits and risks of ownership are classified as finance leases. Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease liability. This liability is not discounted.

tax

Current tax assets and liabilitiesCurrent tax for current and prior years is, to the extent unpaid, recognised as a tax payable in the statement of financial position. If the amount already paid in respect of current and prior years exceeds the amount due for those years, the excess is recognised as a tax receivable in the balance sheet.




Current tax liabilities and current tax assets are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date.

Deferred tax assets and liabilitiesa deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of goodwill or the initial recognition of an asset or liability in a transaction that at the time of the transaction, affects neither accounting profit (accounting loss) nor taxable profit (tax loss).

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. The measurement of deferred tax assets and liabilities reflect the tax consequences that would follow from the manner in which the group expects to recover or settle the carrying amounts of its assets and liabilities at the balance sheet date.

The carrying amount of deferred tax assets in the balance sheet are reviewed annually and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are off-set for presentation in the balance sheet where the group has a legally enforceable right to do so and the income taxes relate to the same tax authority.

tax expensesCurrent and deferred taxes are recognised as income or an expense and included in the statement of comprehensive income. The current tax payable is based on taxable profit. Taxable profit differs from profit reported in the income statement when there are items of income or expense that are taxable or deductible in other years and it also excludes items that are never taxable or deductible under existing tax legislation.

Secondary taxation on companies (StC)STC is provided in respect of declared dividends, net of dividends received or receivable, and is recognised as a part of the current taxation charge in the statement of comprehensive income in the year the related dividend is declared.

InventoriesInventories are stated at the lower of cost and net realisable value. Cost is determined on a first in, first out basis and comprises all the costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

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

When inventories are sold, the carrying amounts of these inventories are recognised as an expense in the year in which the related revenue is recognised.

Construction contracts and receivablesWhere the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised by reference to the stage of completion at the balance sheet date, as measured by costs incurred at the balance sheet date compared to the estimated total costs of the contract.

Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent that contract costs incurred are recoverable. Contract costs are recognised as an expense in the year in which they are incurred.

When it is probable that the total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately in the statement of comprehensive income.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.

Contract costs comprise the costs that relate directly to the specific contract, costs that are attributable to contract activity in general and can be allocated to the contract and such other costs as are specifically chargeable to the customer under the terms of the contract.




employee benefits

Short-term employee benefits

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as wages, salaries, paid annual leave and sick leave, bonuses, and non-monetary benefits such as medical aid, cars and housing), are recognised in the year in which the service is rendered and are not discounted.

The expected cost of accrued leave is recognised as an expense as the employees render service that increase their entitlement or, in the case of non-accumulating leave, when the absence occurs. accrued leave is measured as the amount that the group expects to pay as a result of unused entitlement that has accumulated to the employee at the balance sheet date.

The expected cost of bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

revenue

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the group and the amount can be measured reliably.

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

Sale of goods

Revenue from the sale of goods is recognised when the group has transferred to the buyer the significant risks and rewards of ownership of the goods, the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the group, and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Contract revenue

Revenue from construction contracts is recognised in accordance with the accounting policy for construction contracts and receivables.

Dividend income

Dividends are recognised, in profit or loss, when the company’s right to receive payment has been established.

other incomeOther income earned by the group which is not included in revenue, is recognised on the following basis:

• Interest income is recognised in the income statement, using the effective interest rate method.

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

The related cost of providing services recognised as revenue in the current period is included in cost of sales.

Contract costs comprise:• costs that relate directly to the specific contract;

• costs that are attributable to contract activity in general and can be allocated to the contract; and

• such other costs as are specifically chargeable to the customer under the terms of the contract.

Borrowing costsBorrowing costs arise on the borrowing of funds and are recognised as an expense in the statement of comprehensive income, in the finance costs line item, in the year in which they are incurred.

translation of foreign currenciesThe functional currency of the group is South african Rands.

Foreign currency transactions are recorded, on initial recognition, in Rands by applying to the foreign currency amount the spot exchange rate between the Rand and the foreign currency at the date of the transaction. at each balance sheet date, foreign currency monetary assets and liabilities are translated using the spot exchange rate at the balance sheet date (closing rate).

Foreign exchange gains and losses arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the year or in previous financial statements are recognised in the income statement in the year in which they arise.

Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency


amount the exchange rate between the Rand and the foreign currency at the date of the cash flow.

Share-based payment transactionsgoods or services received or acquired in a share-based payment transaction where the company settles the consideration for those goods or services by issuing shares or share options are classified as equity-settled share-based payments. These include share-based payment transactions where employees receive remuneration for services rendered to the company in the form of shares or share options.

Shares and share options issued as part of a black economic empowerment transaction are also included in the classification of equity-settled share-based payment transactions.

goods or services received or acquired in a share-based payment transaction are recognised when the goods or as the services are received. a corresponding increase in equity is recognised if the goods or services were received in an equity-settled share-based payment.

When the goods or services received or acquired in a share-based payment transaction do not qualify for recognition as assets, they are recognised as expenses in the statement of comprehensive income. Transactions with employees is recognised as a salary cost in the statement of comprehensive income.

For equity-settled share-based payment transactions, the goods or services received are measured, and the corresponding increase in equity, directly, at the fair value of the goods or services received, unless that fair value cannot be estimated reliably.

If the fair value of the goods or services received cannot be estimated reliably, their value and the corresponding increase in equity, indirectly, are measured by reference to the fair value of the equity instruments granted.

In black economic empowerment transactions, where the fair value of the shares or share options granted exceeds the fair value of the consideration received for those shares or share options, the transaction is measured at the fair value of the shares or share options issued. any difference between this fair value and the fair value of the identifiable goods or services received is recognised directly in the statement of comprehensive income as an expense.

If the share-based payments vest immediately the services received are recognised in full. If the share-based payments granted do not vest until the employee or counterparty completes a specified period of service or

achieves specified performance conditions, the company accounts for those services as they are rendered by the employee or counterparty during the vesting period on a straight-line basis.

Share capitalan equity instrument is any contract that evidences a residual interest in the assets of any entity after deducting all of its liabilities.

as regards treasury shares, the share capital is reduced for the par value of the shares reacquired and the share premium is utilised, so far as is allowed by law, for any additional consideration paid to reacquire the company’s shares. any further consideration paid for the reacquisition of the company’s shares is recognised against the retained earnings in the statement of changes in equity.

Distributions

Distributions declared by the group to holders of the group’s interests are recognised in the statement of changes in equity. Distributions that have not been declared at the balance sheet date are not accounted for in the current year. Such distributions are disclosed where the declaration occurred after the balance sheet date, but before these financial statements are approved for issue.

Segment reporting

a reportable segment is a distinguishable business or geographical component of the group that provides products or services that are different from those of other segments. Segment results, assets and liabilities include items directly attributable to a segment, as well as those that can be allocated on a reasonable basis.

Business segments are defined according to the operational activities undertaken by each segment. geographical segments are defined according to the geographical area in which each segment is located.

Inter-segment transfersSegment revenue, segment expenses and segment results include transfers between business segments and between geographical segments. Such transfer’s are accounted for at arm’s length prices. These transfers are eliminated on consolidation.

Comparative figures

Comparative figures are reclassified or restated where necessary to afford a more meaningful comparison of results as set out in the affected notes to the financial statements.




2 Property, plant and equipment2011 2010

CostR

Accumulated depreciation

R

Carrying value

RCost

R

accumulated depreciation

R

Carrying value

R

plant and equipment 61 744 217 10 513 309 51 230 908 51 666 785 6 905 609 44 761 177

Furniture and fittings 1 009 536 536 455 473 081 885 295 404 532 480 763

Motor vehicles 13 005 068 4 797 946 8 207 122 11 728 093 3 845 018 7 883 075

Office and computer equipment 2 353 549 1 860 712 492 837 2 204 232 1 455 218 749 014

Computer software 681 564 511 566 169 998 537 946 364 110 173 836

Tools 1 102 060 917 225 184 835 1 105 485 692 218 413 267

Leasehold improvements 190 471 33 779 156 692 171 375 20 246 151 129

Total 80 086 465 19 170 992 60 915 473 68 299 211 13 686 951 54 612 261

2011R

2010R

Motor vehicles 4 487 276 5 462 701

plant and equipment 3 204 764 412 645

Opening balance

RAdditions

RDisposals

RDepreciation

RTotal

R

Reconciliation of property, plant and equipment – 2011

plant and equipment 44 761 177 10 229 417 – (3 759 686) 51 230 908

Furniture and fittings 480 763 124 241 – (131 923) 473 081

Motor vehicles 7 883 075 1 735 948 (195 105) (1 216 796) 8 207 122

Office and computer equipment 749 014 156 254 (6 328) (406 103) 492 837

Computer software 173 836 143 618 – (147 456) 169 998

Tools 413 267 – (1 076) (227 356) 184 835

Leasehold improvements 151 129 19 096 – (13 533) 156 692

Total 54 612 261 12 408 574 (202 510) (5 902 853) 60 915 473

reconciliation of property, plant and equipment – 2010

plant and equipment 42 916 860 5 965 968 (612 149) (3 509 502) 44 761 177

Furniture and fittings 539 897 74 657 (4 171) (129 620) 480 763

Motor vehicles 8 974 543 319 788 (52 398) (1 358 858) 7 883 075

Office and computer equipment 679 332 452 042 (7 500) (374 860) 749 014

Computer software 216 742 131 637 – (174 543) 173 836

Tools 507 267 237 386 (65 586) (265 800) 413 267

Leasehold improvements 141 717 22 909 – (13 497) 151 129

Total 53 976 358 7 204 387 (741 804) (5 826 680) 54 612 261

Pledged as security

Carrying value for assets pledged as security for the financial liabilities described in note 10:


3 Goodwill2011

R2010

R

Cost 8 396 200 8 141 200

accumulated impairment – –

Carrying value 8 396 200 8 141 200

The carrying value of goodwill is reconciled as follows:

Carrying value at the beginning of the year 8 141 200 8 141 200

goodwill recognised on acquisitions* 255 000 –

goodwill impaired during the year – –

Carrying value at the end of the year 8 396 200 8 141 200

* goodwill originating from a business acquisition for a purchase price of R570 000 on 1 april 2010.

The directors have considered the impact of IFRS 3: Business Combinations in relation to the purchase-price allocation. The impact of intangible assets included in goodwill was insignificant.

Impairment tests are conducted annually on goodwill based on calculations of the cash-generating unit (CgU) to which the goodwill belongs.

The recoverable amount for the CgU is determined based on value in use calculations and reflects past experience.

Value in use is determined by discounting the future cash flows generated from continuing use of the CgU using a discount rate. The key assumptions for the value in use calculations are as follows:

expected volume growth rate: Cash flows are based on financial forecasts approved by management covering three-year periods and are dependent on expected volume growth rates.

Discount rate: The discount rate is based on the company’s weighted average cost of capital of 14.5%.

4 Other financial assets2011

R2010

R

Listed investments – 1 490 131 shares in Dorbyl Ltd 4 142 564 –

at fair value through profit or loss – designated

The fair value of the financial assets at fair value through profit and loss are measured to fair value using quoted market prices.




5 Equity-accounted investments

Name of company

% holding

2011

% holding

2010

Carrying amount

2011R

Carrying amount

2010R

Cyndara 193 (Pty) Limited t/a HBS 50% – 23 942 514 –

Summary of the company's interests in the joint venture

Current assets 28 131 769 –

Current liabilities – interest-bearing 1 946 458

Current liabilities – non-interest bearing 3 599 667 –

Non-current assets 11 356 869 –

Non-current liabilities – –

Revenue 52 280 145 –

Cost of sales (34 218 682) –

Interest received 64 982 –

expenses (16 474 889) –

Net profit 1 326 518 –

Mazor/Kilpin JV 50% 50% 10 236 944

Summary of the company's interests in the joint venture

Current assets 43 716 364 534

Current liabilities – non-interest bearing (33 489) (175 274)

Non-current assets – –

Non-current liabilities – –

Revenue 2 460 217 19 747 959

Cost of sales (2 449 229) (19 742 130)

Interest received 6 015 11 771

expenses (7 711) (16 656)

Net profit 9 292 944

The carrying amounts of joint ventures are shown net of impairment losses.

6 InventoriesRaw materials 22 894 490 19 989 172

Work in progress 702 606 648 844

Finished goods 3 117 906 1 308 741

goods in transit 1 503 582 –

28 218 584 21 946 757


7 Construction contracts and receivables2011

R2010

RContract debtors 20 624 319 11 626 681Contract retentions 2 560 627 6 036 179Uncompleted contracts: amounts due by customers 7 149 635 10 694 320

30 334 581 28 357 180Uncompleted contractsCosts incurred to date 117 240 546 241 136 884profit recognised to date 22 806 295 110 371 426

140 046 841 351 508 311Work certified to date (130 402 693) (340 813 991)Net amounts due from customers 9 644 148 10 694 320payments received in advance (note 11) (2 494 513) –amounts due from customers 7 149 635 10 694 320

The carrying values of these receivables approximate their fair values due to the short-term nature of the instruments.

The company’s maximum exposure to credit risk through construction contract receivables is R30 334 581 (2010: R28 357 180).


8 Trade and other receivables2011

R2010

RTrade receivables 21 725 690 17 530 609Impairment of trade receivables (3 053 044) (1 663 394)prepayments and deposits 2 042 113 2 283 360Value added taxation 725 024 415 545Staff debtors 1 898 13 599Other receivables 2 819 409 2 778 044

24 261 090 21 357 763

The carrying values of these receivables approximate their fair values due to the short-term nature of the instruments.

Trade and other receivables past due but not impaired

Trade and other receivables which are less than 60 days past due are not considered to be impaired. at 28 February 2011, R11 075 832 (2010: R10 783 001) were past due but not impaired.

The ageing of amounts past due but not impaired is as follows:

60 – 90 days 2 703 518 2 447 943

90 – 120 days 2 105 803 2 885 606

+ 120 days 6 266 511 5 449 452

Trade and other receivables impaired

as of 28 February 2011, trade and other receivables of R3 785 072 (2010: R2 145 907) were impaired and provided for.

The amount of the provision was R3 053 044 as of 28 February 2011 (2010: R1 663 394).

The ageing of these receivables is as follows:+120 days 3 053 044 1 663 394



9 Cash and cash equivalents2011

R2011

RCash and cash equivalents consist of:Cash on hand 6 026 6 026 Bank balances 5 851 749 21 879 270 Short-term deposits 66 440 071 107 655 955

72 297 846 129 541 251

Bank overdraft (3 912 552) – (3 912 552) – 68 385 294 129 541 251

Current assets 72 297 846 129 541 251 Current liabilities (3 912 552) –

68 385 294 129 541 251

The company’s maximum exposure to credit risk through cash and cash equivalents is R72 297 846 (2010: R129 541 251).

10 Other financial liabilities2011

R2011

R

Held at amortised costWesbank 5 766 552 3 516 448 a division of FirstRand Bank LimitedInstalment sale agreements bearing interest at rates of prime minus 1.5% (2010: prime minus 1.5%) per annum and repayable in monthly instalments of R459 034 (2010: R228 869). These liabilities are secured by motor vehicles and plant and equipment as disclosed in note 2.

5 766 552 3 516 448 non-current liabilitiesat amortised cost 3 145 262 1 452 081

Current liabilitiesat amortised cost 2 621 290 2 064 367

5 766 552 3 516 448

The fair value of the instalment sale agreements approximate amortised cost as they bear interest at market-related rates.

8 Trade and other receivables continued2011

R2010

RReconciliation of provision for impairment of trade and other receivablesOpening balance 1 663 394 466 441 Movement in provision for current period 1 389 650 1 196 953

3 053 044 1 663 394

The creation and release of provision for impaired receivables have been included in operating expenses in profit or loss. amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.

The company’s maximum exposure to credit risk through trade receivables is R21 493 953 (2010: R18 658 858).


11 Trade and other payables2011

R2010

R

Trade payables 19 990 426 15 269 759

amounts received in advance (note 7) 2 494 513 –

Value added taxation 1 202 925 1 387 881

Sundry payables 205 549 234 261

accrued leave pay 593 425 428 946

accrued bonus 512 744 307 797

Other accruals 1 635 139 1 280 935

Operating lease payables 2 007 199 2 147 752

28 641 920 21 057 331

12 Deferred taxDeferred taxation assets

asset at the beginning of the year 5 216 068 2 295 585

acquisition of subsidiaries – –

Current year charge to the statement of comprehensive income 3 128 852 2 920 483

asset at the end of the year 8 344 920 5 216 068

arising from the following temporary differences:

Capital allowances (5 006 695) (2 801 613)

provisions and accruals 1 001 344 411 823

Rental accruals 338 937 276 349

Unrealised fair value adjustments 564 760 –

Tax losses 11 146 574 7 329 509

STC credit 300 000 –

8 344 920 5 216 068

Deferred taxation liabilities

Liability at the beginning of the year

Current year charge to the statement of comprehensive income (1 180 299) (945 075)

Liability at the end of the year 714 786 (235 224)

(465 513) (1 180 299)

arising from the following temporary differences:

Capital allowances

provisions and accruals (1 816 556) (1 649 098)

Rental accruals 167 602 143 778

prepayments 223 078 325 021

Income received in advance – –

Tax losses 112 036 –

STC credit 633 344 –

214 983 –

(465 513) (1 180 299)

The directors have assessed that it is appropriate to recognise the deferred tax asset for tax losses as it will be realised through future profits generated by the group.




13 Revenue2011

R2010

R

Contract revenue 92 041 827 205 738 565

Sale of goods 90 512 697 61 687 180

Trading interest income 4 214 855 6 088 512

186 769 379 273 514 257

14 Cost of salesCost of sales 154 778 300 193 290 328

Trading interest paid 2 077 898 2 750 375

156 856 198 196 040 703

15 Operating profitOperating profit is arrived at after taking into account the following:

audit fees 651 647 715 596

(gain)/Loss on disposal of plant and equipment (9 363) 91 372

Foreign exchange loss/(gain) 330 759 (27 338)

Fair value adjustment* (10 000 000) –

Fair value adjustment of financial assets at fair value through profit and loss 2 693 291 –

Depreciation

– plant and equipment 3 987 042 3 775 302

– Motor vehicles 1 216 796 1 358 858

– Office and computer equipment 699 015 692 520

Motor vehicle expenses 5 727 933 4 932 420

Staff costs (note 16) 51 713 771 62 283 765

Operating lease rentals

– property 9 219 041 8 397 579

– equipment 104 146 95 432

* This fair value adjustment arose on the acquisition of 50% of Cyndara 193 (pty) Limited t/a HBS (refer to note 5 for details of the joint venture).

16 Staff costsWages and salaries 46 713 263 57 937 604

Medical aid 424 095 407 039

provident fund – defined contribution fund 1 719 229 766 421

Workmen's compensation 1 074 688 504 753

Skills development 311 480 344 492

Other contributions 1 471 016 2 323 456

51 713 771 62 283 765

The retirement benefit plans are governed by the pension Funds act, 1956 (act No 24 of 1956).

75% of the group’s employees are covered by retirement benefit plans.


17 Investment revenue2011

R2010

R

Interest revenue

Bank 5 286 845 8 692 086

Loans 1 113 2 523

Other 24 814 48 092

5 312 772 8 742 701

Dividend revenue

Listed investments 3 000 000 –

8 312 772 8 742 701

18 Finance costs Bank 235 266 456 814

Other 108 487 7 893

343 753 464 707

19 Taxationmajor components of the tax expenseCurrent

Local income tax – current year 2 562 871 17 681 616

Local income tax – prior year – –

Secondary tax on companies 2 199 178 2 126 277

4 762 049 19 807 893

Deferred

Originating and reversing temporary differences 1 319 539 1 758 030

Tax losses (4 450 409) (4 443 289)

STC credit (514 983) –

(3 645 853) (2 685 259)

1 116 196 17 122 634

reconciliation of the tax expense

Reconciliation between applicable tax rate and average effective tax rate:

applicable tax rate 28.00% 28.00%

Disallowable charges 3.24% 0.00%

Non-taxable income (36.41%) (0.39%)

Share-based payment 0.00% 1.86%

Secondary tax on companies 20.01% 4.18%

Unutilised STC credits (4.69%)

effective tax rate 10.15% 33.65%

estimated tax losses available for set-off against future taxable income 39 809 193 26 176 818

potential tax relief at current taxation rates 11 146 574 7 329 509

Relief depends on sufficient taxable income being earned in future by subsidiaries concerned.

The estimated tax losses have been accounted for in both years presented.




20 Cash generated from operations2011

R2010

R

profit before taxation 10 992 016 50 890 561

Adjustments for:

Depreciation 5 902 853 5 826 680

(gain)/Loss on sale of assets (9 363) 91 372

Fair value adjustment on acquisition of joint venture (10 000 000)

Income from equity-accounted investments (1 335 810)

Interest received (5 312 772) (8 742 701)

Dividends received (3 000 000) –

Finance costs 343 753 464 707

Share-based payment – 3 378 299

Changes in working capital:

Increase in inventories (6 271 827) (3 308 000)

Increase in trade and other receivables (2 903 327) (3 653 762)

(Increase)/Decrease in construction contracts and receivables (1 977 401) 11 326 935

Increase/(Decrease) in trade and other payables 7 584 589 (11 103 102)

(5 987 289) 45 170 989

21 Tax paidBalance at the beginning of the year (9 143 440) (18 484 453)

Current tax for the year recognised in the income statement (4 959 835) (19 807 893)

Balance at the end of the year (408 159) 9 143 440

(14 511 434) (29 148 906)

22 Investment in plant and equipment – To maintain operations 111 633 530 522

– To expand operations 12 296 941 6 673 865

12 408 574 7 204 387



23 Share capital2011

R2010

R

authorised

500 000 000 ordinary shares of 0.001 cents each 5 000 5 000

Issued 1 211 1 210

121 501 553 (2010: 121 501 553) fully paid up ordinary shares of 0.001 cent each 1 215 1 215

Treasury shares (4) (5)

Share premium 80 278 737 80 023 738

80 279 948 80 024 948

The directors are authorised, until the forthcoming annual general meeting, to issue the unissued shares for any purpose and upon such terms and conditions as they see fit.

Less than 1% of the issued share capital of the group has been issued to employees in terms of the share incentive schemes.

367 125 ordinary shares may be taken up by the employees in the next year at R4.00 a share in terms of the Mazor group Limited Share Incentive Scheme and the Mazor group Limited Bee Share Incentive Scheme.

The share premium is stated after eliminating the treasury shares. This had the effect of reducing share premium by R1 549 996 (2010: R1 797 301).


24 Directors’ emoluments2011

R2010

Rnon-executive directorspaid by the holding company – Directors’ fees 407 000 420 500

executive directorspaid by subsidiaries – Salaries 3 629 964 3 495 617 – Bonus 257 497 257 497 – Medical 104 326 95 242 – Other benefits 482 732 470 038

4 881 519 4 738 894

SalariesR

BonusR

MedicalR

Other fees/benefits

R

Total emoluments

R2011DirectorexecutiveR Mazor 1 930 764 160 897 74 370 196 889 2 362 920 L Mazor 1 159 200 96 600 29 956 115 203 1 400 959 S Mazor 540 000 – – 170 640 710 640

3 629 964 257 497 104 326 482 732 4 474 519 non-executiveM Kaplan 121 000 121 000 a groll 99 000 99 000 a Varachhia 49 500 49 500 S Ozinsky# 71 500 71 500 F Boner 66 000 66 000

Total 3 629 964 257 497 104 326 889 732 4 881 519 # Resigned on 9 February 2011

2010DirectorexecutiveR Mazor 1 846 817 160 897 67 884 192 343 2 267 941 L Mazor 1 108 800 96 600 27 358 112 551 1 345 309 S Mazor 540 000 – – 165 144 705 144

3 495 617 257 497 95 242 470 038 4 318 394 non-executiveM Kaplan 145 000 145 000 a groll 102 000 102 000 a Varachhia 49 500 49 500 S Ozinsky 91 000 91 000 F Boner* 33 000 33 000 Total 3 495 617 257 497 95 242 890 538 4 738 894

* appointed on 27 October 2009

executive directors do not receive directors’ fees.

Non-executive directors do not have service contracts with group companies.




25 Capital commitments

2011R

2010R

Capital commitments include expenditure relating to plant and equipment for which board approval has been obtained.

authorised and contracted for – 3 093 063

authorised but not yet contracted for – –

26 Commitments under operating leasesCommitments

The minimum lease rentals to be paid under non-cancellable leases at 28 February 2011 are:

Buildings:

– payable within one year 9 838 071 8 325 398

– payable in two to five years 8 560 766 13 604 495

– payable thereafter – –

Lease terms are between three to five years with three to five-year renewal options and escalation rates of 9% – 10% per annum.

No contingent rent is payable.


27 Earnings per share2011

R2010

R

earnings per share is calculated by dividing earnings by the weighted average number of shares in issue.

appropriate adjustments are made in calculating headline earnings per share.

Shares in issue 121 501 553 121 501 553

Shares in issue (after treasury shares) 121 114 053 121 014 053


Weighted average number of shares

Shares in issue at the beginning of the period 121 501 553 122 847 222

Shares issued to Re Swanepoel 86 027 –

Shares cancelled (100 000) (1 147 413)

121 487 580 121 699 809

Less: Treasury shares under the control of the directors (387 500) (8 047 507)


Reconciliation between earnings and headline earnings:

earnings attributable to ordinary shareholders 9 875 820 33 767 927

adjusted for:

(gain)/Loss on disposal of property, plant and equipment (9 363) 91 372

Tax effect thereof 2 622 (25 584)

Headline earnings 9 869 079 33 833 715

earnings per share (cents) 8.2 29.7

Diluted earnings per share (cents) 8.2 29.7

Headline earnings per share (cents) 8.2 29.8

Diluted headline earnings per share (cents) 8.2 29.8



29 Financial risk managementThe group has exposure to the following risks from its use of financial instruments:

– liquidity risk;

– credit risk;

– market risk; and

– capital risk.

The group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the company’s financial performance. 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 consolidated financial statements.

The board of directors has overall responsibility for the establishment and oversight of the group’s risk management framework. The board has established the audit and risk committee, which is responsible for developing and monitoring the group’s risk management policies. The committee reports regularly to the board of directors on its activities.


nature of relationshipnature of transaction

entities with common directors/shareholders/beneficiaries

The Li-Ron Trust Rent paid 3 673 583 3 370 260

Ron-li (pty) Ltd Rent paid 1 133 358 1 039 778

Details of directors’ remuneration are disclosed under note 24.

28 Related parties2011

R2010

R

The group is controlled by Mazor group Limited, the ultimate holding company. The group has the following interests in subsidiaries and joint ventures:

– Mazor Steel (pty) Ltd (100%)

– Mazor aluminium (pty) Ltd (100%)

– Compass glass (pty) Ltd (100%)

– Compass glass Sa (pty) Ltd (100%) (previously early glass (pty) Ltd)

– Cyndara 193 (pty) Ltd t/a Hulamin Building Systems (50%)

During the year, group companies, in the ordinary course of business, entered into various inter-group purchase and sale transactions.

These transactions are no less favourable than those arranged with third parties.

Transactions and balances between the group companies have been eliminated on consolidation and are not disclosed.

Details of transactions and balances with other related parties are as set out below:


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.

potential credit risk comprises construction contracts, trade and other receivables and cash deposits.

Contract and trade receivables comprise a spread customer base. Management evaluates credit risk relating to customers on an ongoing basis.

When undertaking a new contract, the group evaluates both the contractor and the ultimate client. Most of the group’s customer base consists of contractors with whom the group has been transacting for over five years. The group only transacts with contractors who are well established in the market-place and with ultimate clients who the group has confirmed through comprehensive credit checks have the financial means to meet their financial obligations.

all trade debtors are subjected to stringent credit and background checks before opening an account in order to determine the potential customer’s credit quality and credit limits. Insurance cover is obtained for all new accounts opened above a predetermined limit set by management.


29 Financial risk management continued

liquidity riskprudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions.

The group’s risk to liquidity is a result of the funds available to cover future commitments. The group manages liquidity risk through an ongoing review of future commitments and credit facilities. The group has maintained a cash positive position for many years.

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

The maturity profile of the recognised financial instruments represent the undiscounted cash flows that are expected to occur in the future.

> 1 yearR

2 – 5 yearsR

> 5 years R

TotalR

at 28 February 2011

Trade and other payables 22 937 283 – – 22 937283

Interest-bearing loans 2 968 513 3 410 636 6 379 149

Bank overdraft 3 912 552 – – 3 912 552

guarantees 9 103 429 – – 9 103 429

38 921 776 3 410 636 – 42 332 413

at 28 February 2010

Trade and other payables 17 521 698 – – 17 521 698

Interest-bearing loans 2 265 683 1 521 339 3 787 022

Bank overdraft – – – –

guarantees 13 812 852 – – 13 812 852

33 600 233 1 521 339 – 35 121 572


29 Financial risk management continuedCredit quality of contract and trade receivables:

2011 2010

Carrying value

R

Impairment provision

R

Carrying value

R

Impairment provision

R

Not past due 0 – 30 days 33 009 399 9 620 276

Not past due 31 – 60 days 2 471 803 9 170 850

past due 61 – 120 days 2 073 446 3 353 966

past due > 120 days 4 795 361 (3 053 044) 7 012 198 (1 663 394)

42 350 009 (3 053 044) 29 157 290 (1 663 394)

Contract and trade receivables as a percentage of revenue (%) 21.04 10.05


market riskMarket risk is the risk that changes in market prices, such as interest rates and supply ability and prices will affect the group’s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

The group is exposed to market risk through its purchasing of goods in order to complete contracts in line with specifications. The group’s risk comprises price fluctuations and supply shortages. The group manages this risk by maintaining good relationship with its suppliers and constantly monitoring the changing environment and adjusting procurement levels accordingly.

The group is exposed to interest rate risk through its commitment to instalment sale agreements, other financial liabilities, cash and cash equivalents and financial assets carried at fair value through profit and loss. The group manages its exposure through keeping favourable bank and short-term deposit balances which serve to hedge against future exposure.



Interest rate risk

Profit/(Loss) should the interest rate change by 1.5%

Amount exposed to risk

R

Rate increase

R

Rate decrease

R

2011

Financial assets

Cash and Cash equivalents 68 385 294 1 025 779 (1 025 779)

Impact of financial assets on:

– profit before taxation 1 025 779 (1 025 779)

– profit after taxation 738 561 (738 561)

Financial liabilities

Instalment sale agreements 5 766 552 (86 498) 86 498

Impact of financial liabilities on:

– profit before taxation (86 498) 86 498

– profit after taxation (62 279) 62 279

Overall impact on profit after tax 718 538 (718 538)

2010

Financial assets

Cash and Cash equivalents 129 541 251 1 943 119 (1 943 119)

Impact of financial assets on:

– profit before taxation 1 943 119 (1 943 119)

– profit after taxation 1 399 046 (1 399 046)

Financial liabilities

Instalment sale agreements 3 516 448 (52 747) 52 747

Impact of financial liabilities on:

– profit before taxation (52 747) 52 747

– profit after taxation (37 978) 37 978

Overall impact on profit after tax 1 361 068 (1 361 068)

29 Financial risk management continuedSensitivity analysispotential interest rate risk is presented by way of sensitivity analysis demonstrating the effects of movements in market interest rates. a movement of 150 basis points in the prime lending rate at 28 February 2011 would have had the following effects on profitability for the year:


29 Financial risk management continued Capital risk managementThe group manages its capital to ensure that the group will be able to continue as a going concern, while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The group considers its capital to consist of share capital of R80 279 948 (2010: R80 024 948) and retained income of R142 215 681 (2010: R154 261 505).

The board monitors the capital structure of the group by considering the cost of capital and the risks associated with each class of capital. The board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.

The level of dividends paid by the group is determined with reference to the liquidity and solvency of the group, as well as consideration of budgets and forecasts.

The group’s overall strategy remains unchanged from the previous year. The group is not subject to any externally imposed capital requirements.

Fair valuesThe fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as reflected in the notes to the annual financial statements.

The accounting policies summarise the significant methods and assumptions used in estimating the fair values of financial instruments.

30 Categories of financial instrumentsThe following accounting policies for financial instruments have been applied to the line items below:

In addition, the financial instruments carried at fair value are disclosed in accordance to a fair value hierarchy.

The hierarchy has three levels that reflect the significance of the inputs used in measuring fair value. These are as follows:

Level 1: Quoted prices unadjusted in active markets for identical assets and liabilities

Level 2: Inputs other than quoted prices included with level 1 that are observable for the asset or liability either directly or indirectly derived from prices

Level 3: Inputs for the assets or liabilities that are not based on observable market data

Loans and

receivablesR

Financial assets at fair

value through profit and loss

designatedas such

RTotal

R LevelAssets as per the statement of financial position2011Other financial assets 9 999 – 9 999 n/aListed investments – 4 142 564 4 142 564 1Construction contract receivables 30 334 581 – 30 334 581 n/aTrade and other receivables 21 493 953 – 21 493 953 n/aCash and cash equivalents 72 297 846 – 72 297 846 n/a

124 136 379 4 142 564 128 278 943

2010

Other financial assets 10 547 – 10 547 n/a

Construction contract receivables 28 357 180 – 28 357 180 n/a



Trade and other receivables 18 658 858 – 18 658 858 n/a

Cash and cash equivalents 129 541 251 – 129 541 251 n/a

176 567 836 – 176 567 836 n/a

Carrying value

R

Financial liabilities at

amortised cost

R Level

liabilities as per the statement of financial position

2011

Other financial liabilities 5 766 552 5 766 552 n/a

Trade and other payables 22 937 283 22 937 283 n/a

Bank overdraft 3 912 552 3 912 552 n/a

32 616 387 32 616 387

2010

Other financial liabilities 3 516 448 3 516 448 n/a

Trade and other payables 17 521 698 17 521 698 n/a

21 038 146 21 038 146

31 Share-based payments

2011R

2010R

Sale of shares to global Capital (pty) Ltd – 3 378 299

During the prior year, Mazor aluminium (pty) Ltd sold 12 284 722 shares to global Capital (pty) Ltd for 222.5 cents per share.

global Capital was identified as a strategic equity partner for the group.

The closing price on 18 September 2009 of 250 cents per share was used to value these shares and consequently R3 378 299 was recognised as a share-based payment in 2010.

The sale to global Capital resulted in a net after-tax profit of R8 171 837 which is included in equity.

The above transaction had no impact on the cash flows or the net asset value of the group.

32 Guaranteesguarantees issued by subsidiaries for the due fulfilment of construction contracts 9 103 429 13 812 852

It is the opinion of the directors that the possibility of any loss is improbable and it is not anticipated that any material liabilities will arise.



33 Segmental analysisprimary reporting format

Operating segments

Aluminium Steel GlassCorporate and

investments Consolidated

At 28 February 2011

Segment revenue – external 27 602 161 66 254 218 92 913 000 – 186 769 379

Segment revenue – internal 19 573 – 29 442 603 2 065 000 31 527 176

Segment result (operating profit) 5 908 044 5 897 406 (7 560 737) (2 557 526) 1 687 187

Segment result – joint venture (equity-accounted investment) 1 326 518 9 292 – – 1 335 810

Motor vehicle expenses 917 808 971 533 3 838 592 – 5 727 933

Staff costs 13 686 743 15 867 492 22 159 536 – 51 713 771

Operating lease 2 290 850 2 184 300 4 848 037 – 9 323 187

Non-cash income and expenses

– Depreciation (784 685) (556 870) (4 557 065) (4 233) (5 902 853)

– Unreaslised fair value adjustment – – – (2 017 000) (2 017 000)

– Fair value adjustment on acquisition of joint venture 10 000 000 – – – 10 000 000

equity-accounted investment – joint venture 23 942 514 10 236 23 952 750

Segment assets 68 182 827 73 074 046 106 198 306 13 857 598 261 312 777

Segment liabilities 4 704 337 9 899 535 23 972 310 240 966 38 817 148

Capital expenditure 23 239 12 483 12 372 852 – 12 408 574

at 28 February 2010

Segment revenue – external 85 579 605 124 910 599 63 024 053 – 273 514 257

Segment revenue – internal 9 388 536 – 31 204 073 780 000 41 372 609

Segment result (operating profit) 22 524 721 34 096 112 (9 523 199) (1 107 712) 45 989 922

Segment result – joint venture (equity-accounted investment) – 944 – – 944

Motor vehicle expenses 1 533 690 742 775 2 655 955 – 4 932 420

Staff costs 23 367 979 19 506 232 19 409 554 – 62 283 765

Operating lease 2 291 661 2 184 300 4 017 050 – 8 493 011

Non-cash income and expenses

– Depreciation (1 012 729) (662 122) (4 147 596) (4 233) (5 826 680)

equity-accounted investment – joint venture – 944 – – 944

Segment assets 76 478 070 96 256 619 87 886 977 8 562 305 269 183 971

Segment liabilities 9 920 081 12 966 838 11 790 228 220 371 34 897 518

Capital expenditure 436 395 114 770 6 653 222 – 7 204 387


33 Segmental analysis continuedSecondary reporting format

geographical segments

Western Cape Eastern Cape Gauteng Consolidated

At 28 February 2011

Segment revenue – external 147 634 939 9 635 397 29 499 043 186 769 379

Segment result (operating profit) 7 629 320 (563 028) (5 379 105) 1 687 187

Segment assets 222 763 700 6 739 739 31 809 338 261 312 777

Segment liabilities 30 875 292 2 669 684 5 272 172 38 817 148

Capital expenditure 10 599 163 1 410 140 399 271 12 408 574

at 28 February 2010

Segment revenue – external 251 947 571 – 21 566 686 273 514 257

Segment result (operating profit) 51 560 129 – (5 570 207) 45 989 922

Segment assets 243 319 597 – 25 864 374 269 183 971

Segment liabilities 31 527 599 – 3 369 919 34 897 518

Capital expenditure 1 618 664 – 5 585 723 7 204 387

The Western Cape segment includes operations in george.




Company Annual Financial StatementsCompany Statement of Financial Position 54

Company Statement of Comprehensive Income 55

Company Cash Flow Statement 56

Company Statement of Changes in Equity 57

Notes to the Annual Financial Statements 58



Note(s)2011

R2010

R

ASSETS

Non-current assets 1 8 992 13 226

property, plant and equipment 2 44 182 021 44 182 021

Investments in subsidiaries 3 99 224 970 86 682 609

Long-term receivables 4 4 142 564

Other financial assets 13 1 206 705 220 198

Deferred tax 148 765 252 131 098 054

Current assets

Short-term receivables 5 693 251 706 649

Cash and cash equivalents 6 81 720 4 806

774 971 711 455

TOTAL ASSETS 149 540 223 131 809 509

EquITy AND LIABILITIES

Equity

Share capital 14 1 215 1 215

Share premium 120 384 368 120 129 369

Retained income 894 722 1 639 602

121 280 305 121 770 186

Liabilities

non-current liabilities

Deferred tax 13 – –

– –

Current liabilities

Loans from subsidiaries 7 28 018 952 9 11 952

Trade and other payables 8 240 966 227 371

28 259 918 10 039 323

Total liabilities 28 259 918 10 039 323

TOTAL EquITy AND LIABILITIES 149 540 223 131 809 509

Company Statement of Financial Positionat 28 February 2011


Note(s)2011

R2010

R

Revenue 9 2 065 000 780 000

Other income – 276 378

Operating expenses (4 622 523) (2 152 149)

Operating loss 10 (2 557 523) (1 095 771)

Investment revenue 11 25 017 131 21 540 937

Finance costs (36) (2 001)

Profit before taxation 22 459 572 20 443 165

Taxation 12 (1 212 671) (1 894 003)


Company Statement of Comprehensive Incomefor the year ended 28 February 2011


Note(s)2011

R2010

R

Cash flows from operating activities

Cash generated from operations 15 19 465 484 19 820 350

Interest income 25 350 278 165

Dividend income 3 000 000

Finance costs (36) (2 001)

Tax paid 16 (2 199 178) (3 191 272)

Dividends paid (21 991 781) (21 262 772)

Net cash flow from operating activities (1 700 161) (4 357 530)

Cash flows from investing activities

Increase in loans to subsidiaries (12 612 499) (14 362 001)

Decrease in long-term receivables 70 138 67 812

Increase in other financial assets (4 142 564) –

purchase of treasury shares – (2 624 789)

Net cash flow from investing activities (16 684 925) (16 918 978)

Cash flows from financing activities

proceeds on share issue 255 000 –

Increase in loans from subsidiaries 18 207 000 9 240 500

Net cash flow from financing activities 18 462 000 9 240 500

Increase/(Decrease) in cash and cash equivalents for the year 76 914 (12 036 008)

Cash and cash equivalents at the beginning of the year 4 806 12 040 814

Cash and cash equivalents at the end of the year 81 720 4 806

Company Cash Flow Statementfor the year ended 28 February 2011


Share capital

R

Share premium

R

Retained income

R

Total equity

R

Balance at 1 March 2009 1 229 122 754 144 4 353 212 127 108 585

Total comprehensive income for the period – – 18 549 162 18 549 162

Treasury shares acquired (1) (247 306) – (247 307)

Treasury shares cancelled (13) (2 377 469) – (2 377 482)

Dividends paid – – (21 262 772) (21 262 772)

Balance at 1 March 2010 1 215 120 129 369 1 639 602 121 770 186

Total comprehensive income for the period – – 21 246 901 21 246 901

Treasury shares cancelled (1) – – (1)

Shares issued 1 254 999 – 255 000

Dividends paid – – (21 991 781)* (21 991 781)

Balance at 28 February 2011 1 215 120 384 368 894 722 121 280 305

* a dividend of 18.1 cents per share was paid on 14 June 2010

Company Statement of Changes in Equityfor the year ended 28 February 2011


Company Notes to the Annual Financial Statementsfor the year ended 28 February 2011

1 Property, plant and equipment2011

R2010

R

Furniture and fittings:

Opening balance 13 226 17 457

additions – –

Depreciation (4 234) (4 231)

Carrying value 8 992 13 226

2 Investments in subsidiaries

Shares at cost:Issued share

capital

Mazor aluminium (pty) Ltd 200 21 012 660 21 012 660

Mazor Steel (pty) Ltd 200 17 542 376 17 542 376

early glass (pty) Ltd 1 000 69 549 69 549

Compass glass (pty) Ltd 100 5 557 436 5 557 436

44 182 021 44 182 021

all the subsidiaries are incorporated in South africa and are 100% held by Mazor group Limited.

3 Long-term receivablesShare trusts

Mazor group Limited Share Incentive Trust 956 550 1 004 063

Mazor group Limited Bee Share Incentive Trust 455 500 478 125

1 412 050 1 482 188

The loans are unsecured, bear no interest and will not be repaid within the next 12 months.

Subsidiaries

Compass glass (pty) Ltd 61 873 657 55 573 657

early glass (pty) Ltd 35 939 263 29 626 764

97 812 920 85 200 421

The loans are unsecured, bear no interest and will not be repaid within the next 12 months.

The fair values of the loans to subsidiaries cannot be relaibly determined as there is uncertainty as to the timing of the future cash flows.

99 224 970 86 682 609

4 Other financial assets1 490 131 shares held in Dorbyl Ltd 4 142 564 –

4 142 564 –

at fair value through profit or loss – designatedThe fair value of the financial assets at fair value through profit and loss are measured to fair value using quoted market prices.


Company Notes to the Annual Financial Statements continuedfor the year ended 28 February 2011

5 Short-term receivables2011

R2010

R

prepayments 245 300 183 873 Value added taxation – – SaRS tax due 702 7 000 Other receivables 447 249 515 776

693 251 706 649

6 Cash and cash equivalentsBank balances 81 720 4 806 Short-term deposits – –

81 720 4 806

7 Loans from subsidiariesMazor aluminium (pty) Ltd 13 946 452 5 646 452

Mazor Steel (pty) Ltd 14 072 500 4 165 500 28 018 952 9 811 952

The loans are unsecured and interest free. There are no fixed terms of repayment. The loans are recorded at cost as there is uncertainty as to the timing of future cash flows.

8 Trade and other payablesaccounts payable 182 982 151 036 accruals 29 333 33 483 Value added taxation 28 651 42 852

240 966 227 371

9 Revenueadministration and management fee 2 065 000 780 000

2 065 000 780 000

10 Operating lossOperating loss is arrived at after taking into account the following:audit fees 99 680 176 159 Depreciation– Furniture and fittings 4 234 4 231 Non-executive directors’ fees 407 000 420 500 Fair value adjustment of financial assets at fair value through profit and loss 2 693 291 –

11 Investment revenueInterest revenueBank 25 350 278 165 DividendsDividends received from subsidiaries 21 991 781 21 262 772 Other dividends received 3 000 000 –

25 017 131 21 540 937


12 Taxation2011

R2010

R

Major components of the tax expense

Current

Local income tax – current year – –

Secondary tax on companies 2 199 178 2 126 277

2 199 178 2 126 277

Deferred

Originating and reversing temporary differences (986 507) (232 274)

(986 507) (232 274)

1 212 671 1 894 003

No provision has been made for income tax in the current year as the company incurred an assessed loss of R1 219 563 (2010: R785 280).

Reconciliation of the tax expense

Reconciliation between applicable tax rate and average effective tax rate:

applicable tax rate 28.00% 28.00%

Disallowable charges 0.10% 0.00%

Non-taxable income (31.15%) (29.14%)

Secondary tax on companies 9.79% 10.40%

Unutilised STC credits (1.34%) –

effective tax rate 5.40% 9.26%



13 Deferred taxation2011

R2010

RDeferred taxation assetsasset at the beginning of the year 220 198 – Current year charge to the statement of comprehensive income 986 507 220 198 asset at the end of the year 1 206 705 220 198

arising from the following temporary differences:Capital allowances 470 319 Unrealised fair value adjustments 564 760 Tax losses 341 475 219 878 STC credits 300 000 –

1 206 705 220 198

Deferred taxation liabilitiesLiability at the beginning of the year – (12 076)Current year charge to the statement of comprehensive income – 12 076 Liability at the end of the year – –

arising from the following temporary differences:Capital allowances – – prepayments – –

– –

14 Share capitalAuthorised500 000 000 ordinary shares of 0.001 cent each 5 000 5 000

Issued1 215 1 215

121 501 553 (2010: 121 501 553) fully paid up ordinary shares of 0.001 cent each 1 215 1 216Treasury shares – (1)

15 Cash generated from operationsprofit before taxation 22 459 572 20 443 165 adjustments for:Depreciation 4 234 4 231 Interest received (25 350) (278 165)Dividends received (3 000 000) –Finance costs 36 2 001 Changes in working capital:Decrease/(Increase) in short-term receivables 13 397 (398 309)Increase in trade and other payables 13 595 47 427

19 465 484 19 820 350

16 Tax paidBalance at the beginning of the year – (1 064 995)Current tax for the year recognised in the statement of comprehensive income (2 199 178) (2 126 277)Balance at the end of the year – –

(2 199 178) (3 191 272)




17 Related parties2011

R2010

R

The company has the following interests in subsidiaries and joint ventures:

– Mazor Steel (pty) Ltd (100%)

– Mazor aluminium (pty) Ltd (100%)

– Compass glass (pty) Ltd (100%)

– Compass glass Sa (pty) Ltd (100%) (previously early glass (pty) Ltd)

– Cyndara 193 (pty) Ltd t/a Hulamin Building Systems (50%)

Related party balances

Loan accounts – owing (to)/by related parties

– Mazor Steel (pty) Ltd (14 072 500) (4 165 500)

– Mazor aluminium (pty) Ltd (13 946 452) (5 646 452)

– Compass glass (pty) Ltd 61 873 657 55 573 657

– Compass glass Sa (pty) Ltd 35 939 263 29 626 764

amounts included in short-term receivables

– Mazor Steel (pty) Ltd – –

– Mazor aluminium (pty) Ltd – 301 458

– Compass glass (pty) Ltd 242 250 28 500

– Compass glass Sa (pty) Ltd 173 850 185 820

Related party transactions

administration fees received from related parties

– Mazor Steel (pty) Ltd 365 000 195 000

– Mazor aluminium (pty) Ltd 300 000 195 000

– Compass glass (pty) Ltd 577 500 195 000

– Compass glass Sa (pty) Ltd 822 500 195 000

Dividends received from related parties

– Mazor Steel (pty) Ltd 11 550 000 13 067 772

– Mazor aluminium (pty) Ltd 10 441 781 8 195 000



18 Financial risk managementThe company has exposure to the following risks from its use of financial instruments:

– liquidity risk; and– credit risk.

The company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the company’s financial performance. This note presents information about the company’s exposure to each of the above risks, the company’s objectives, policies and processes for measuring and managing risk, and the company’s management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

The board of directors has overall responsibility for the establishment and oversight of the company’s risk management framework. The board has established the audit and risk committee, which is responsible for developing and monitoring the company’s risk management policies. The committee reports regularly to the board of directors on its activities.

Liquidity risk

prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions.

The company’s risk to liquidity is a result of the funds available to cover future commitments. The company manages liquidity risk through an ongoing review of future commitments and credit facilities. The company has maintained a cash positive position for many years.

The following table analyses the company’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

The maturity profile of the recognised financial instruments represent the undiscounted cash flows that are expected to occur in the future.

> 1 year 2 – 5 years > 5 years Total

At 28 February 2011

Loans from subsidiaries 28 018 952 – – 28 018 952

Short-term financial liabilities 212 315 – – 212 315

28 231 267 – – 28 231 267

at 28 February 2010

Loans from subsidiaries 9 811 952 – – 9 811 952

Short-term financial liabilities 184 519 – – 184 519

9 996 471 – – 9 996 471

Credit risk

Credit risk is the risk of financial loss to the company if a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the company’s loans to subsidiaries.

Based on the subsidiaries’ performance and expected future performance, management believes that the loans are fully recoverable.

The performance of subsidiaries is monitored by management on a regular basis.



19 Categories of financial instrumentsThe following accounting policies for financial instruments have been applied to the line items below:

In addition the financial instruments carried at fair value are disclosed in accordance to a fair value hierarchy.

The hierarchy has three levels that reflect the significance of the inputs used in measuring fair value. These are as follows:

Level 1: Quoted prices unadjusted in active markets for identical assets and liabilities

Level 2: Inputs other than quoted prices included with level 1 that are observable for the asset or liability either directly or indirectly derived from prices

Level 3: Inputs for the assets or liability that are not based on observable market data

Loans and

receivablesR

Financial assets

at fair value through

profit and loss

designated as such

RTotal

R Level

Assets as per the statement of financial position

2011

Long-term receivables 99 224 970 99 224 970 n/a

Listed investments 4 142 564 4 142 564 1

Short-term receivables 447 250 – 447 250 n/a

Cash and cash equivalents 81 720 – 81 720 n/a

99 753 940 4 142 564 103 896 504

2010

Long-term receivables 86 682 609 – 86 682 609 n/a

Listed investments – – – n/a

Short-term receivables 515 776 – 515 776 n/a

Cash and cash equivalents 4 806 – 4 806 n/a

87 203 191 – 87 203 191 n/a

Carrying value

R

Financial liabilities at

amortised cost

R Level

Liabilities as per the statement of financial position

2011

Loans from subsidiaries 28 018 952 28 018 952 n/a

Short-term financial liabilities 212 315 212 315 n/a

28 231 267 28 231 267

2010

Loans from subsidiaries 9 811 952 9 811 952 n/a

Short-term financial liabilities 184 519 184 519 n/a

9 996 471 9 996 471


Company profile




Governance

annual Financial



Diary

Shareholder spreadNumber of

shareholders %Number of

shares %1 – 1 000 shares 127 19.54 70 177 0.061 001 – 10 000 shares 291 44.77 1 371 262 1.1310 001 – 100 000 shares 179 27.54 6 632 149 5.46100 001 – 1 000 000 shares 42 6.46 14 515 804 11.951 000 001 shares and over 11 1.69 98 912 161 81.41Total 650 100 121 501 553 100Distribution of shareholdersBanks 1 0.15 240 000 0.20Bee employee Share Trusts 1 0.15 125 000 0.10Brokers 2 0.31 700 001 0.58Close corporations 18 2.77 363 336 0.30employee share trusts 1 0.15 262 500 0.22endowment funds 4 0.62 95 025 0.08Individuals 503 77.38 30 390 230 25.01Insurance companies 4 0.62 787 503 0.65Investment companies 1 0.15 1 500 000 1.23Medical aid schemes 1 0.15 400 0.00Mutual funds 9 1.38 9 539 816 7.85Nominees and trusts 60 9.23 54 357 118 44.74Other corporations 11 1.69 862 045 0.71pension funds 10 1.54 1 720 419 1.42private companies 23 3.54 20 528 160 16.90public companies 1 0.15 30 000 0.02

total 650 100 121 501 553 100

Public/Non-public shareholdersNumber of

shareholdings %Number of

shares %non-public shareholders 13 2.00 87 093 863 71.68 Directors’ holdings 10 1.54 77 886 363 64.10associate holdings 1 0.15 8 820 000 7.26Share trust 1 0.15 262 500 0.22Bee employee Share Trust 1 0.15 125 000 0.10

public shareholders 637 98.00 34 407 690 28.32 Total 650 100 121 501 553 100

Note: associate holdings comprise the remaining shareholding of Cloudberry Investments 18 (pty) Ltd which is not included in directors’ holdings.

Beneficial shareholders holding 5% or moreNumber of

shares %The ati Trust 19 000 000 15.64 The elma Trust 19 000 000 15.64 Cloudberry Investments 18 (pty) Ltd 18 000 000 14.81 Yonbor Nominees (pty) Ltd 12 512 132 10.30 S Mazor 7 469 231 6.15 DJ Mazor 6 530 769 5.38

Shareholder Analysisregister date: 25 February 2011Issued share capital: 121 501 553


Dividend dates:Last day to trade cum distribution Thursday, 9 June 2011

Shares trade ex distribution Friday, 10 June 2011

Record date Friday, 17 June 2011

payment date Monday, 20 June 2011

annual general meeting 30 June 2011

Interim reporting period 31 august 2011

Interim report November 2011

Financial year-end 28 February 2012

annual report May 2012

Shareholders’ Diary

oaSIS


Notice of Annual General Meeting

Notice is hereby given to all shareholders of Mazor as at the record date set out below that the agM of shareholders will be held at 12:00 on Thursday, 30 June 2011 at the offices of Mazars at Mazars House, Rialto Road, grand Moorings precinct, Century City, 7441 to transact the following business:

To consider and, if thought fit, pass with or without modification, the following special and ordinary resolutions, as well as any matters raised by shareholders in this agM. any matter raised by a shareholder, with or without advance notice is to be transacted at an agM as required by the Companies act, 71 of 2008, as amended (the ‘Companies act’), as read with the Listings Requirements of the JSe Limited (‘Listings Requirements’). The agM is to be participated in and voted at by shareholders reflected in the share register as at the record date of Friday, 24 June 2011.

If you are in any doubt about what action you should take, consult your broker, Central Securities Depository participant (‘CSDp’), legal adviser, banker, financial adviser, accountant or other professional adviser immediately.

If you have disposed of all your shares in Mazor, please forward this document, together with the enclosed form of proxy, to the purchaser of such shares or the broker, banker or other agent through whom you disposed of such shares.

Included in this document are:

• The notice of meeting, setting out the resolutions to be proposed thereat, together with explanatory notes.

• a proxy form for use by shareholders holding ordinary shares in the Company in certificated form or recorded in sub-registered electronic form in ‘own name’ (which form must be lodged with the company’s transfer secretary, being Computershare Investor Services (pty) Limited, 17 Marshall Street, Johannesburg 2001 (pO Box 61051, Marshalltown, 2107)) to be received by no later than 10:00 on Tuesday, 28 June 2011.

• Shareholders who have dematerialised their shares and are not registered as ‘own name’ dematerialised shareholders who wish to attend the annual general meeting (‘agM’), must instruct their Central Securities Depository participant (‘CSDp’) or broker to provide them with the relevant letter of representation to enable them to attend such meeting or, alternatively, should they wish to vote but not to attend the agM, they must provide their CSDp or broker with their voting instructions in terms of the relevant custody agreement entered into between them and the CSDp or broker. Such shareholders must not complete this form of proxy.

a shareholder (including certificated shareholders and dematerialised shareholders who hold their shares with “own name” registration) entitled to attend and vote at the meeting may appoint one or more proxies to attend, participate and vote

in his/her/its stead. a proxy does not have to be a shareholder of the company. The appointment of a proxy will not preclude the shareholder who appointed that proxy from attending the agM and participating and voting in person thereat to the exclusion of any such proxy. a form of proxy for use at the meeting is attached.

Identification of meeting participants: Kindly note that meeting participants (including proxies) are required to provide reasonably satisfactory identification before being entitled to attend or participate in a shareholders’ meeting. Forms of identification include valid identity documents, driver’s licences and passports.

ORDINARy RESOLuTIONSWhen reading the resolutions below, please refer to the explanatory notes for agM resolutions on page 70.

each of the below ordinary resolutions requires the support of a simple majority (that is, 50% + 1) of the votes exercised in respect of each resolution in order to be adopted.

1. Ordinary Resolution Number One To receive and adopt the annual financial statements for the

year ended 28 February 2011 including the Directors’ Report and the report of the auditors thereon.

The complete financial statements are set out on pages 16 to 64 of the integrated annual report.

2. Ordinary Resolution Number Two To resolve that the appointment of Mr a Darko as a non-

executive director be authorised and confirmed.

Mr a Darko (58 years) is a seasoned business executive with over 30 years of international management experience. He is a fellow of the association of Chartered Certified accountants (FCCa) and has a Masters degree in Management Information Systems from the Sheffield Hallam University in the UK.

He was previously the group CIO of anglogold ashanti and currently serves as a non-executive director of the Consolidated Infrastructure group (formerly known as Buildworks) where he chairs the transformation and sustainability committee of the board and also serves on the audit committee.

3. Ordinary Resolution Number Three To resolve that the reappointment of Mr S Mazor as an

executive director, who retires by rotation, but being eligible, offers himself for re-election in accordance with the company’s articles of association for a further term of office be authorised and confirmed.

(Mr S Mazor was first appointed to the board in October 2007. a brief CV appears on page 7 of the annual report.)

4. Ordinary Resolution Number Four To resolve that the reappointment of Mr F Boner as a

non-executive director, who retires by rotation, but being

(Incorporated in the Republic of South africa)registration number: 2007/017221/06

Share code: MZR ISIn: Zae000109823


Notice of Annual General Meeting continued

eligible, offers himself for re-election in accordance with the company’s articles of association for a further term of office be authorised and confirmed.

(Mr F Boner was first appointed to the board in October 2009. a brief CV appears on page 7 of the annual report.)

5. Ordinary Resolution Number Five To resolve that the appointment of Mr a Darko as an audit

committee member, be authorised and confirmed. a brief CV of Mr a Darko is set out in ordinary resolution number two.

6. Ordinary Resolution Number Six To resolve that the reappointment of Mr M Kaplan as an audit

committee member, be authorised and confirmed. a brief CV of Mr M Kaplan appears on page 7 of the annual report.

7. Ordinary Resolution Number Seven To resolve that the appointment of Mr F Boner as an audit

committee member, be authorised and confirmed, subject to his re-election as a director pursuant to ordinary resolution number four. a brief CV of Mr F Boner appears on page 7 of the annual report.

8. Ordinary Resolution Number Eight To resolve that the reappointment of Mazars as auditors (for

the financial year ending February 2012), until the conclusion of the next agM, be authorised and confirmed.

9. Ordinary Resolution Number Nine To resolve that the fees paid to the directors of the company in

respect of the year ended 28 February 2011, as set out in the annual report on page 41, be approved.

10. Ordinary Resolution Number Ten

General Payments To resolve that, in terms of the company’s articles of association

and subject to the provisions of the Companies act and the Listings Requirements, the directors of the company shall be entitled, from time to time, to pay by way of a reduction of share premium, capital distributions to shareholders of the company in lieu of a dividend. Such distributions shall be made pro rata to all shareholders. This authority shall not extend beyond the date of the annual general meeting following the date of the annual general meeting at which this resolution is being proposed or 15 months from the date of the resolution, whichever is shorter.

It is the intention of the company and/or any of its subsidiaries to utilise the general authority to make a general payment to shareholders, if at some future date the cash resources of the company are in excess of its requirements. In this regard the directors will take account of, inter alia, appropriate capitalisation structures for the company, the long-term cash

needs of the company, and will ensure that any such payments are in the interests of shareholders.

That the method by which the company intends to make general payments to shareholders in terms of a general authority and the date on which such payments will take place has not yet been determined.

11. Ordinary Resolution Number Eleven Control of authorised but unissued shares

To resolve that all the unissued shares in the authorised share capital of the company be and are hereby placed under the control of the directors of the company, who are authorised to allot and issue the same to such persons and on such terms and conditions as they may determine in their sole and absolute discretion, subject to the provisions of the Companies act and the Listings Requirements.

12. Ordinary Resolution Number Twelve The adoption of this ordinary resolution is subject to achieving

a 75% majority of the votes cast in favour by shareholders present or represented by proxy at this meeting.

General authority to issue shares for cash To resolve that the directors be given the general authority

to issue unissued shares of a class already in issue, for cash, when the directors consider it appropriate in the circumstances, subject to the provisions of the company’s articles of association, the Companies act and the Listings Requirements.

SPECIAL RESOLuTIONS each of the below special resolutions requires the support

of at least 75% of the votes exercised in respect of each resolution in order to be adopted.

13. Special Resolution Number One

Repurchase of shares To resolve that the company is authorised to repurchase or

purchase, as the case may be, shares issued by the company, upon such terms and conditions and in such number as the directors of the company may from time to time determine, including that such securities be purchased or repurchased from share premium, but subject to the applicable requirements of the company’s articles of association, the Companies act and the Listings Requirements, each as presently constituted and as amended from time to time; and subject further to the restriction that the repurchase or purchase, as the case may be, by the company, of shares in the company of any class under this authority shall not, in aggregate in any one financial year exceed 20% of the shares in issue in such class as at the commencement of such financial year.



The board of directors of the company has considered the impact of a repurchase of up to 20% of the company’s shares, which falls within the amount permissible under a general authority in terms of the Listings Requirements, the company’s articles of association and in compliance with the Companies act.

Should the opportunity arise and should the directors deem it to be advantageous to the company to repurchase such shares, it is considered appropriate that the directors (and relevant subsidiaries) be authorised to repurchase the company’s shares.

For the purpose of considering the special resolution and in compliance with paragraph 11.26 of the Listings Requirements, the information listed below has been included in the annual report, in which this notice of agM is included, at the places indicated:

• directors and management – refer to pages 6 and 7 of this report;

• major shareholders – refer to page 65 of this report;

• directors’ interests in securities – refer to page 17 of this report;

• share capital of the company – refer to page 40 of this report;

• the directors, whose names are set out on pages 6 and 7 of this report, collectively and individually accept full responsibility for the accuracy of the information contained in this special resolution and certify that to the best of their knowledge and belief, there are no other facts, the omission of which, would make any statement false or misleading and that they have made all reasonable enquiries in this regard.

There are no legal arbitration proceedings (including any such proceedings that are pending or threatened of which the company is aware), which may have or have had a material effect on the company’s financial position over the last 12 months.

at the date of completing this notice, there have been no material changes in the financial or trading position of the company and its subsidiaries that have occurred since 28 February 2011.

at the present time, the directors have no specific intention with regard to the utilisation of this authority which will be used only if the circumstances are appropriate.

a general repurchase of the company’s shares shall only take place after the JSe has received written confirmation from the company’s sponsor in respect of the directors’ working capital statement.

To the extent any repurchase is effected in terms of this authorisation, the company will only do so if:

• the company and the group will be able in the ordinary course of business to pay its debts for a period of 12 months after the date of the notice of the annual general/general meeting;

• the assets of the company and the group will be in excess of the liabilities of the company and the group for a period of 12 months after the date of the notice of the annual general/general meeting. For this purpose, the assets and liabilities should be recognised and measured in accordance with the accounting policies used in the latest audited annual group financial statements;

• share capital and reserves of the company and the group will be adequate for ordinary business purposes for a period of 12 months after the date of the notice of the annual general/general meeting;

• working capital of the company and the group will be adequate for ordinary business purposes for a period of 12 months after the date of the notice of the annual general/general meeting; and

• a resolution by the board of directors that they authorised the repurchase, that the company passed the solvency and liquidity test and that since the test was done there have been no material changes to the financial position of the group.

14. Special Resolution number two

Directors fees Resolved that the company be and is hereby authorised,

in terms of the Companies act, to pay remuneration to its directors for their services as directors:

(a) in relation to services rendered from the 1 May 2011 to the date of this agM; and

(b) for a period of two years from the passing of this resolution (unless such remuneration is proposed to be amended at a meeting of shareholders), on the terms set out overleaf.

Fees per meeting from 1 May 2011 to 31 May 2011:

Board meeting Audit committee Remuneration committee

Member Chairman Member Chairman Member Chairman

M Kaplan 22 000 16 500 11 000

a groll 16 500 11 000 5 500

a Varachhia 16 500

F Boner 16 500

Fees per meeting from 1 June 2011:

Board meeting Audit committee Remuneration committee

Member Chairman Member Chairman Member Chairman

M Kaplan 24 200 12 100 12 100

a groll 18 150 6 050

F Boner 18 150 12 100

a Varachhia 18 150

a Darko 18 150 18 150

EXPLANATORy NOTES Appointment of directors – ordinary resolutions numbers

two, three and four

In terms of section 68(2) of the Companies act, unless the company’s articles of association provides otherwise, the election of directors is to be conducted as a series of votes, each of which is on the candidacy of a single individual to fill a single vacancy.

Election of the audit committee members – ordinary resolution number five, six and seven

In terms of the Companies act, the audit committee is no longer a committee of the board, but a committee elected by the shareholders at each agM.

The audit committee, acting as a collective, should be adequately skilled to perform its role having regard to the size and circumstances of the company. In accordance with regulation 42 of the Companies Regulations, 2011, at least one-third of the shareholders of the company’s audit committee at any particular time must have academic qualifications, or experience, in economics, law, corporate governance, finance, accounting, commerce, industry, public affairs or human resource management.

The directors, whose names are given on page 6 of the annual report in which this notice was included collectively and individually accept full responsibility for the accuracy of the information given in this notice and certify that to the best of

their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the annual report and notice contains all information required by law and the Listings Requirements.

There has been no material change in the financial or trading position of the company and its subsidiaries that has occurred since 28 February 2011.

PARTICIPATION IN MEETING ELECTRONICALLy Shareholders may participate (but not vote) in the agM

via teleconference, details of which are available from Ms L Mazor. access to the meeting by way of electronic participation will be at the shareholder’s expense. However, only persons physically present at the agM or represented by a valid proxy will be entitled to cast a vote on any matter put to a vote of shareholders.

By order of the board

l mazorCompany Secretary

23 May 2011

registered office:8 Monza Road Killarney gardens, 7441 (pO Box 60635 Table View, 7439)

Sponsor: Bridge Capital advisors (pty) Limited



mazor annual report | 2011

*please indicate with an ‘X’ in the appropriate spaces above how you wish your votes to be cast.Unless otherwise instructed, my/our proxy may vote as he/she thinks fit.

Signed at....................................................................................................... on............................................................................................................2011

Member’s signature ..............................................................................................................................................................................................................

assisted by (if applicable) ......................................................................................................................................................................................................please read the notes on the reverse side.

Form of Proxy

For uSe at tHe annual General meetInG oF tHe CompanY to Be HelD at 12:00 on tHurSDaY, 30 June 2011 at tHe oFFICeS oF mazarS, mazarS HouSe, rIalto roaD, GranD moorInGS preCInCt, CenturY CItY, 7441 anD at anY aDJournment tHereoF.For use by the holders of the company’s certificated ordinary shares (‘certificated shareholder’) and/or dematerialised ordinary shares held through a Central Securities Depository participant (‘CSDp’) who have selected own name registration (‘own name’) dematerialised shareholders).

Not for the use by holders of the company’s dematerialised ordinary shares who are not own name dematerialised shareholders. Such shareholders must contact their CSDp or broker timeously if they wish to attend and vote at the annual general meeting and request that they be issued with the necessary authorisation to do so, or provide the CSDp or broker timeously with their voting instructions should they not wish to attend the annual general meeting in order for the CSDp or broker to vote thereat in accordance with their instructions.

I/We ........................................................................................................................................................................................... (full name in block letters)

Of ...................................................................................................................................................................................................... (please print address)

being a shareholder of Mazor and holding .......................................................................................... ordinary shares in the company, hereby appoint

1. ........................................................................................................... of .............................................................................................. or failing him/her

2. .......................................................................................................... of ............................................................................................... or failing him/her

3. the chairman of the annual general meeting,

as my/our proxy to act for me/us and on my/our behalf at the annual general meeting which will be held for the purpose of considering and, if deemed fit, passing, with or without modification, the ordinary resolutions to be proposed thereat and at any adjournment thereof; and to vote for and/or against the ordinary resolutions and/or abstain from voting in respect of the Mazor group ordinary shares registered in my/our name(s), in accordance with the following instructions:

For against abstainordinary resolution number oneadopt the annual financial statements for the year ended 28 February 2011ordinary resolution number two appointment of Mr a Darko as a directorordinary resolution number three Reappointment of Mr S Mazor as a directorordinary resolution number four Reappointment of Mr F Boner as a directorordinary resolution number fiveappointment of Mr a Darko to the audit committee as a directorordinary resolution number sixReappointment of Mr M Kaplan to the audit committee as a directorordinary resolution number sevenappointment of Mr F Boner to the audit committee as a directorordinary resolution number eightReappointment of Mazars as auditorsordinary resolution number nineFees paid to directorsordinary resolution number tengeneral paymentsordinary resolution number elevenControl of authorised but unissued sharesordinary resolution number twelvegeneral authority to issue shares for cashSpecial resolution number one general authority to repurchase sharesSpecial resolution number two Directors’ Fees

(Incorporated in the Republic of South africa)registration number: 2007/017221/06

Share code: MZR ISIn: Zae000109823

Notes:1. This form of proxy is to be completed only by those members who are:

a. holding shares in a certificated form; or b. recorded in the sub-register in electronic form in their ‘own name’.

2. Members who have dematerialised their shares other than own name dematerialised shareholders, and who wish to attend the annual general meeting must contact their Central Securities Depository participant (‘CSDp’) or broker who will furnish them with the necessary authority to attend the annual general meeting, or they must instruct their CSDp or broker as to how they wish to vote in this regard. This must be done in terms of the agreement entered into between the members and their CSDp or broker.

3. each member is entitled to appoint one or more proxies (who need not be a member(s) of the company) to attend, speak and, on a poll, vote in place of that member at the annual general meeting.

4. a member may insert the name of a proxy or the names of two alternative proxies of the member’s choice in the space provided, with or without deleting ‘the chairman of the annual general meeting’. The person whose name stands first on the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of those whose names follow.

5. a member’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that member in the appropriate box(es) provided. Failure to comply with the above will be deemed to authorise the chairman of the annual general meeting, if the chairman is the authorised proxy, to vote in favour of the ordinary resolutions at the annual general meeting, or any other proxy to vote or to abstain from voting at the annual general meeting as he/she deems fit, in respect of all the member’s votes exercisable thereat.

6. a member or his/her proxy is not obliged to vote in respect of all the ordinary shares held by such member or represented by such proxy, but the total number of votes for or against the ordinary resolutions and in respect of which any abstention is recorded may not exceed the total number of votes to which the member or his/her proxy is entitled.

7. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy, unless previously recorded by the company’s transfer office or waived by the chairman of the annual general meeting.

8. The chairman of the annual general meeting may reject or accept any form of proxy which is completed and/or received other than in accordance with these instructions, provided that he is satisfied as to the manner in which a member wishes to vote.

9. any alterations or corrections to this form of proxy must be initialled by the signatory(ies).

10. The completion and lodging of this form of proxy will not preclude the relevant member from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such member wish to do so.

11. a minor must be assisted by his/her parent or guardian unless the relevant documents establishing his/her legal capacity are produced or have been registered by the company’s transfer secretaries.

12. Where there are joint holders of any shares, only that holder whose name appears first in the register in respect of such shares need sign this form of proxy.

13. Forms of proxy must be lodged with the transfer secretaries at the address given below by no later than 10:00 on Tuesday, 28 June 2011:

transfer Secretaries Computershare Investor Services (pty) Limited

ground Floor, 70 Marshall Street

Johannesburg, 2001

pO Box 61051, Marshalltown, 2107

Telefax 011 688 5200

mazor annual report | 2011

SHoprIte FloW tHrouGH – BraCKenFell

on BaCKCoVer: tHe leGaCY

8 Monza Road, Killarney gardens, Cape Town, 7441, pO Box 60635, Table View, Cape Town, 7439, Telephone: +27 21 556 1555, Facsimile: +27 21 556 1575, electronic Mail: Mazor group: [email protected], www.mazorgroup.co.za

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