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Annual report 2011

perfecting structures

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Contents

Scope of report IFCDisclaimer IFCGroup overview

Financial summary IINon-financial highlights IIIGroup profile IVOur future value position IVOur values and principles VIIGroup structure VIIIManagement of risk 1Board of directors 2

Chairman’s report 4Chief executive officer’s report 6Review of operations

FloorworX 8Environmental solutions division 10

Sustainability and corporate governanceSustainability report 12Corporate governance 16Remuneration philosophy 19Shareholders’ analysis 20Shareholders’ diary 21

Annual financial statementsDirectors’ responsibilities and approval 22Declaration by company secretary 22Report of the independent auditors 23Audit committee report 24Directors’ report 25Statement of financial position 28Statement of comprehensive income 29Statement of changes in equity 30Statement of cash flows 31Notes to the annual financial statements 32

Notice of annual general meeting 64Form of proxy 67Corporate information IBC

Scope of reportAccéntuate’s annual report aims to provide a balanced, understandable and complete view of our

business by reporting on the financial and non-financial performance of the group. The previous year’s

report was published in September 2010. This report was compiled by Accéntuate Limited and its

subsidiaries and covers the financial year from 1 July 2010 to 30 June 2011. The financial statements

were prepared according to International Financial Reporting Standards (“IFRS”), the requirements of the

South African Companies Act, regulations of the JSE Limited (“JSE”) and recommendations of King III.

In a continuing quest to improve the level of our sustainability reporting, an enhanced

sustainability report is included and additional information provided on potential business

risks. This report has not been independently assured and Accéntuate continues to focus

attention towards the delivery of a fully integrated annual report in the coming years.

At year-end the board of directors of Accéntuate took a decision to dispose of Centurion Glass & Aluminium

(“CGA”) since the business had not delivered on strategic imperatives and, in addition, required a disproportionate

amount of management time and resources. The financial results, split into continuing and discontinued

operations, take into account the losses incurred in CGA, however the front section of the annual report is

structured in such a way as to demonstrate to the market the future of Accéntuate, which is believed to be better

positioned with entities and industries known and able to benefit from management’s vast years of experience.

For additional financial information and recent announcements please go to

www.accentuateltd.co.za

DisclaimerThe annual report may contain certain forward-looking statements concerning Accéntuate’s operations,

business strategy, financial conditions, growth, plans and expectations. These statements include,

without limitation, those concerning the economic outlook, business climate and changes in the market.

Such views involve both known and unknown risks, assumptions, uncertainties and important factors

that could materially influence the actual performance of the group. No assurance can be given that

these will prove to be correct and no representation or warranty, expressed or implied, is given as to the

accuracy or completeness of such views or as to any of the other information in the annual report.

I

The Chambered Nautilus is a living fossil

that has survived in the earth’s oceans for

the last 500 million years. A cross-section of

the shell shows a series of chambers arranged

in a precise Golden Mean spiral.

The spiral is a common element of Sacred

Geometry, a term used to describe the

basic building blocks of the universe. The key to

Sacred Geometry is the relationship between

growth and proportion – necessary when

perfecting structures.

II

Financial summaryRevenue (R’000)

300 000

250 000

200 000

150 000

100 000

50 000

0’11’10’09’08’07

Headline earnings per share (cents)

20

15

10

5

0’11’10’09’08’07

*

* From continuing operations

Operating pro�t (R’000)

25 000(%)10

8

6

4

2

20 000

15 000

10 000

5 000

0’11’10’09’08’07

Cash generated from operations (R’000)

25

15

20

10

5

0’11’10’09’08’07

III

Non-financial highlights

Position the company for long-term growth and viability

l Ensure cash flow returns that allow for continued reinvestment

l Increased market share through quality and innovation

l Lower production costs and improved efficiencies

l Skilled and motivated staff complement, complying with employment and transformation objectives

Utilising our operational resources on a responsible level

l Minimisation of waste and an increased level of environmental impacts against targets and benchmarks

l Measurement of environmental impacts against targets and benchmarks

l Reduce non-renewable resource requirements by optimising the level of extenders in the final product

l Reduce energy consumption

Maintaining positive relationships with major stakeholders

l Implementation of our strategy – remain focused on areas where expertise presides

l Continue to uphold an open culture of communication through all channels

We continue to promote social upliftment

l We initiate and support corporate social investment (“CSI programmes”) in our community

l Skills transfer and development, training and support in disadvantaged communities

l Uplift disadvantaged communities by investing in and using materials and resources from local communities

Significant progress has been made on our sustainable development framework

IV

Group profile

Our future value position

The board of Accéntuate is committed to profitable growth as the primary generator of value. Growth will be achieved by organic expansion into economic sectors that are aligned to our business strategy, cross-selling within the group and through the acquisition of appropriate new business platforms.

The future of Accéntuate will be to remain engaged in the manufacturing and distribution of infrastructural supplies and maintenance solutions into the flooring sector and chemical cleaning and collateral supplies. Synergies between these two specialised areas of Accéntuate have benefited the group and organic growth is still possible.

The consistent performance of both the flooring and chemical divisions will allow Accéntuate to concentrate on expanding these operations, both through organic growth as well as identified strategic acquisitions.

Accéntuate is a group of world-class companies serving the construction and infrastructural development markets in South Africa and Africa. Strategically, the company is a market leader in the supply of products and services to both the public and private sectors in most floor covering materials. The chemical blending business is further positioning itself to become a significant supplier to the public and private sectors.

V

Into areas to supply finishing products and maintenance products (not bricks and mortar) to Accéntuate buildings

Criterial Cash generativel Correctly pricedl Culture fitl Earnings

enhancing

Acquisition1 –

3 YE

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Growth

Organic – flooringl Growth fairly limited in

vinyl flooring marketl Supply manufactured

product, not be involved in contract installation

l Carpeting and hard flooring seen as areas for expansion

IMM

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Organic

Identification of complementary offerings

Strive to deliver strong returns to shareholders

Organic – Saficl Organic growth in traditional

marketsl Focus on growth of annuity

revenuel Increased supply of flooring

collateral to group companiesl Acquisitions of complementary

businesses– Adhesives – Chemical flooring products– Cementitious products

The future structure of Accéntuate will consist of the infrastructure supplies division comprising FloorworX and the environmental solutions division made up of Safic, Accéntuate’s specialist chemical blending business. The performance of the flooring and chemical divisions has been consistent and acceptable from the listing of the company in November 2006 to date.

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VII

Our values and principles

Vision – As a truly African company operating within the global economy, we strive to provide comprehensive, innovative and cost-effective solutions to accentuate sustainable development of infrastructure on the African continent.

Mission – We strive to become the partner of choice to industry and government through the application of innovative technologies, world-class products and the effective management of the value chain. This will be done within a framework embracing global benchmarks while taking cognisance of local realities.

Values – We accept our position as a responsible corporate citizen and therefore uphold and respect:l The rule of lawl Responsible developmentl Trust and respect for individualsl Conducting business without compromising integrity

VIII

SaficFloorworX

Group structure

Contribution to group

Business description

Eric PlattManaging director

26% Safic is a specialist chemical blending business which provides customised, environmentally acceptable chemical and adhesive solutions directed at the industrial and retail markets.

Infrastructure supplies

Environmental solutions

BEE participation equates to approximately 26% held mainly by Thebe Investment Corporation

Safic Black Empowerment EnterprisesSafic AcademySafic Facilities Management

Contribution to group

Business description

Donald PlattManaging director

74% As the only local manufacturer of vinyl flooring, FloorworX supplies approximately 68% of the resilient flooring market in South Africa.

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Management of risk

Accéntuate has identified issues that could have a material impact on the group into five categories, namely strategic, financial, operational, human resources and reputational risks. Management continually analyse the risks affecting the business, with control processes in place to mitigate against such risks.

Accéntuate, at this stage, does not have a group risk officer, but the managing directors as well as the board review and assess positions, together with plans to reduce risk on a continual basis.

Description Mitigating factors Area of business affectedStrategic

Skills development

• Focus on recruitment of young and developing skills for long-term retention career planning

• Skills development and training (formal and informal)• Focus on the FloorworX Academy for the training and

development of certified installers

Accéntuate GroupFloorworXSafic

B-BBEE • Identification of possible new BEE strategic business partners• Careful management of the transformation process• Promotion from within is encouraged

Accéntuate Group

FinancialLoan covenants

• Managed by group treasury• Tight control of working capital management• Hedging of exposure

Accéntuate Group

Foreign currency exposure

• Ongoing monitoring and management through group treasury• Hedging of exposure


OperationalCost of energy

• Electricity price increases mitigated through manufacturing efficiency enhancement programmes

• Fuel cost managed and reviewed

FloorworXSaficFloorworX

Inputs • Rising commodity costs• Variable sourcing methods and suppliers• Timeous supply of finished goods and raw materials

FloorworXSafic

Over trading • Tight controls for declining prospective contracts FloorworXSafic

Informationtechnology

• Data and equipment protected through appropriate access control

• Information disaster recovery programmes in place, housed in an off-site facility

Accéntuate GroupFloorworXSafic Accéntuate GroupFloorworXSafic

Human resourcesChange management

• B-BBEE development managed• Succession planning


ReputationStakeholder • Continual communication to and with all stakeholders Accéntuate Group

FloorworXSafic

Quality control • Continuous quality control measures in place to ensure standards are maintained and/or exceeded

FloorworXSafic

StrategicThe strategic risk considers brand,

reputation, skills development and B-BBBE.

OperationalOperational risks include factors which influence the effective operation of the two segments including, but not limited

to the cost of energy, input costs, information technology and the trading

environment.



Human resourcesThe human resources function

including change management and skills development are crucial for

Accéntuate.



FinancialFinancial risks pertain to compliance of regulations, reporting structures,

accounting, taxation, foreign currency exposure and loan covenants.



StrategicThe strategic risk considers brand, reputation, skills development and

B-BBEE.Strategic

The strategic risk considers brand, reputation, skills development and B-BBBE.

ReputationStakeholder and product

quality control are essential

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Board of directors

BA, Postgraduate Diploma in Marketing, Diploma in Business Management (Wharton School of Business, Philadelphia), DCom (Unisa)

Dr Malesela Motlatla worked for South African Breweries for more than 20 years where his main job functions included marketing and sales management, research, business development and training, corporate affairs, management consultancy and employee relations. He then established Malesela Holdings (Pty) Limited, the first black business consortium in the Northern Cape region, which operates in the areas of logistics, health, power and energy. He serves as chairman on the board of several companies, including Crossroads Distribution (Pty) Limited and the Office of the Banking Adjudicator. His commitment to community development and education was recognised when he became the recipient of the Nelson Mandela Award for Black Education Upgrade Projects.

Bachelor’s and master’s degrees in Business Administration and PhD in Management (Pacific Western University, California), SeniorExecutive Programme (Harvard Business School), course in Moral and Political Philosophy (Oxford), Global Management – INSEAD, France

Dr Platt started his working career in sales and marketing, spending 12 years in the industrial gas industry and thereafter served as a director of a subsidiary of Conshu Limited. He joined Marley SA as sales and marketing director in 1998 and was promoted to managing director of Marley Flooring in 2001. The division was acquired by EFIC (Empowerment and Financial and Investment Company) in 2004 and became part of Accéntuate. Dr Platt is managing director of FloorworX Africa.

CA(SA), MBA (Brunel University, UK)

After qualifying as a chartered accountant in 1993, Mr Voogt joined Conshu Limited as financial manager, and during his seven years with the group was appointed financial director and thereafter managing director of a leading manufacturing company within the group. He then joined Group 5 Limited as group financial director: Construction Operations. In 2004 he joined Digicore Holdings Limited where he retained the position of group financial director until 2005, when he was appointed financial director of the Safic group, now Accéntuate Limited.

BA (Industrial Psychology), MBA (Brunel University, UK)

Mr Platt began his career in human resources management in 1990 at Fram Footwear (a division of Conshu Holdings Limited) progressing to HR director. He represented Conshu on the South African Breweries human resources committee before joining Safic in 1997. Mr Platt moved rapidly through the corporate ranks serving as operations director in 1998, managing director in 2000 and finally group managing director for Safic in 2003. His vision for the organisation facilitated the strategic acquisition of Marley Flooring in 2004 and the consolidation of the various companies into Accéntuate Limited, which culminated in the listing on the AltX of the JSE in 2006. Mr Platt serves on the board of several group companies and, furthermore, is a member of the Institute of Directors.

Dr Malesela David Clement Motlatla (71)

Non-executive chairman

Frederick Cornelius Platt (44)

Chief executive officer

Andreas Jacobus Voogt (45)

Financial director

Dr Donald Ernest Platt (52)

Executive director

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Chartered Accountant (SA),master’s degree in International Accounting

Mrs Molefe joined the Thebe group in September 2007 as finance executive at Thebe Securities, and then moved to Thebe Investment Corporation in March 2008 as group financial manager. In April 2010 she was appointed as group financial director. Mrs Molefe qualified as a chartered accountant in 2003 after serving articles at Grant Thornton from 1996 to 2000. Previous working experience includes being a business analyst in the mining division at the Industrial Development Corporation (“IDC”). She was also a senior internal auditor at the IDC’s internal audit division and a senior financial adviser to Eskom generation division.

BCom (Wits), MBL (SBL)Stanford Executive Programme (Stanford University, USA)

Mr Patmore was appointed as lead independent non-executive director and head of the audit committee. He has an impeccable management career in South African industry, having most recently served as the chief executive officer of Iliad Africa Limited for 10 years, stepping down in 2008. This experience in the building material supply area will be critical to Accéntuate as the company moves forward to capture additional market share. Mr Patmore currently holds non-executive directorships on four other companies listed on the JSE. His experience, not only of management, strategy, mergers and acquisitions and accounting matters, but also his vast knowledge of the construction, building and retail environment, will benefit Accéntuate immensely.

BA (Hons) Sociology, University of the North Developmental Programme in Labour Relations, University of South Africa Advanced Programme in Labour Relations, University of South AfricaMaster of Management, University of the WitwatersrandSenior Executive Programme, Harvard School of Business

Eric Ratshikhopha was appointed as an independent non-executive director. He currently holds a number of directorships on foundations and serves as a trustee on a number of trusts. His background includes vast work experience in the mining sector, having been involved in industrial relations, health and safety, strategic management and corporate social investment. Eric Ratshikhopha has worked in Gencor, Genmin, Billiton S.A and most recently as corporate development director at Xstrata. His wealth of experience in transformation, stakeholder relations and community development, as well as general management practices, will be a massive advantage to Accéntuate.

Master’s degree in Sociology and Politics (University of Glasgow)

Ms Gadd is the head of Thebe enterprises division, a diversified investment portfolio within the Thebe group. She previously served as group services executive and corporate affairs manager. Ms Gadd is a member of the Thebe executive committee and director and chairperson of a number of companies within the group. Prior to working at Thebe, she ran her own management consultancy and was CEO of Freedom Park Trust.

Lindiwe Gadd (40)

Non-executive director

Dineo Molefe (34)

Non-executive alternate director

Head of the audit committee

Ralph Patmore (59)

Lead independent non-executive director

Eric Ratshikhopha (60)

Independent non-executive director

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We do not anticipate macro-economic

pressures to change dramatically within the

short term, however, we are confident that

the business will meet stakeholder expectations

and we believe that the interventions and

programmes embarked on by management will

provide a platform for sustainable growth.

Chairman’s report

Introduction and positioningThe year under review has been a particularly challenging one for Accéntuate Limited; not only have we had to deal with a depressed macro-economic environment but management had to address some structural weaknesses identified within the organisation, ultimately resulting in the decision to dispose of CGA, the company’s division operating within the glass and aluminium sector. The decision has been based on a number of factors, including the outlook for the sector in general, dealing with a number of internal weaknesses within CGA, as well as the fact that the business requires a disproportionate amount of management time relative to its potential return.

The difficulties experienced were, however, not totally unexpected. As alluded to in earlier reports, a drop-off in activity after the conclusion of the World Cup was anticipated; the extent and severity of this was, however, underestimated. The performance and structural integrity of CGA has also been a concern for some time.

Decisive action by management has, however, seen Accéntuate return to its roots and focus on the areas of strength within the business. A strong and cohesive culture and a decisive work ethic has seen the necessary remedial action being taken and we are of the opinion that the corrective steps in place will ensure a strong and sustainable platform for growth.

Macro-economic factors have been challenging, with increasing energy related costs and rising commodities impacting costs quite dramatically. In addition to this, the relative strength of the rand has supported importers of flooring and impacted negatively on the ability of both the flooring and chemical businesses to export into the African market. The lack of private sector fixed investment and that of government infrastructure spend has further negatively impacted trading conditions.

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It is important to note that to date, the promised government infrastructure spend has not yet materialised and the figures presented contain very few projects that can be ascribed to this well-publicised intention on behalf of government. This, coupled with tardy payment by government for projects completed, had a dramatic impact on contractors operating within the infrastructure space. Although Accéntuate is not directly impacted by non-payment on behalf of government, this does indirectly affect the ability of contractors that are our customers. Although we are unsure when government spend will resume in earnest and all our projections exclude this anticipated spend, we are of the opinion that pent-up demand will inevitably force government to spend, especially in the areas of healthcare and education, and that when this does happen it will have a tremendously positive impact on the performance of Accéntuate.

What is, however, important to reiterate, is that Accéntuate is not dependent on this anticipated revenue, as is evident in the current reporting period. The sustainability of ongoing operations has undoubtedly been proven from listing in 2006 to date. Strategically, Accéntuate is well positioned to take advantage of government’s infrastructure spend as and when it happens, as we have the products, the capacity and the infrastructure to assist government in meeting their strategic imperatives.

Accéntuate has long identified the incredible synergies that exist between both FloorworX and Safic. Much attention has been paid towards exploiting these synergies to the best interest of the group. Major successes in this regard include, but are not limited to, the development, manufacture and supply of a range of products by Safic and distributed by FloorworX. These include vinyl adhesives, cementitious screeds, as well as a comprehensive range of maintenance products specifically formulated for the flooring industry. The success of this product category has, during the current reporting period, led to a number of research and development programmes aimed at further entrenching Safic’s position as a credible supplier to the flooring industry. This has resulted in the expansion of the range into a carpet adhesive and further development of additional cementitious products. Announcements in this regard will be made in due course.

Expanding the footprint of Accéntuate within the African market remains a priority for Accéntuate. This will be done through increased attention and activity within identified markets on the continent. A weaker rand relative to the US dollar will enable both FloorworX and Safic to be much more price competitive and will contribute towards increased revenue in markets outside of South Africa.

Dividend distributionAlthough the dividend policy remains unchanged, showing commitment to shareholder value, the board feels it prudent not to pay a dividend at this point in time. Opportunities that exist within both the flooring and chemical sectors are currently being explored.

Changes to the board of directorsThere were no changes to the board during the reporting period. Although certain shareholders convened a special general meeting with the intention of electing new directors onto the board, current and longstanding shareholders did not concur with their appointment and management received a resounding vote of confidence from the majority of shareholders at this meeting.

Subsequent to the reporting period and in line with the requirements of the new Companies Act, the board announced the appointment of two independent non-executive directors. Ralph Patmore was appointed as lead independent non-executive director. He has an impeccable management career in South African industry, having most recently served as the chief executive officer of Iliad Africa Limited. This experience in the building material supply area will be critical to Accéntuate as the company moves forward to capture additional market share. Eric Ratshikhopha was appointed as an independent non-executive director. Eric has worked in Gencor, Genmin, Billiton S.A and most recently as corporate development director at Xstrata. His wealth of experience in transformation, stakeholder relations and community development, as well as general management practices, will be a massive advantage to Accéntuate.

The board of Accéntuate welcomes Ralph and Eric and looks forward to a long and valued working relationship.

OutlookAlthough we do not anticipate macro-economic pressures to change dramatically within the short term, we are confident that the business will meet stakeholder expectations and we believe that the interventions and programmes embarked on by management will provide a platform for sustainable growth.

AppreciationI would like to take this opportunity to thank all stakeholders for their commitment towards our wonderful organisation, especially our shareholders for their commitment and support during this challenging period within the development of Accéntuate. Also to management for their tenacity and for never giving up on the vision that we hold for the organisation, resulting in a solid performance in the ongoing operations. Finally to our staff, our suppliers and our customers, thank you for your support, loyalty and co-operation, without which we would not be able to achieve the things that we have done.

Dr Malesela Motlatla Chairman23 September 2011

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Chief executive officer’s report

Market conditionsThe construction and construction supply industries have seen a dramatic deterioration in demand in the post “World Cup” period. The results presented for the period ending 30 June 2011 bear testimony to a severely depressed macro-economic environment. These factors were identified in Accéntuate’s interim results commentary but continued throughout the balance of the financial year. Although a fall-off in activity was expected and predicted for the conclusion of the Soccer World Cup, there has been no meaningful pick-up through the first half of 2011.

The International Business Report (IBR) index released by Grant Thornton at the beginning of February 2011 indicated that South African Business Owners were less hopeful for investment in buildings in the year ahead, noting expected investment in buildings to decline by a further 17% compared to the 25% in 2010. According to the IBR, a tough 2011 for the construction industry in general was predicated – and this was certainly felt by suppliers to the construction sector, such as Accéntuate.

Major infrastructural bottlenecks have resulted in delays, a reduction in the number of contracts awarded, as well as fierce competition and massive margin pressure resulting in relatively difficult trading conditions. This impacted severely on the Glass & Aluminium division, and to a lesser degree, on the chemical operations. The flooring division produced an acceptable set of financial results even under these most challenging macro-economic conditions. These results are therefore presented in the context of a severely depressed macro-economic environment.

Disposal of CGAThe performance of the flooring and chemical divisions has been consistent and acceptable from the listing of the company in November 2006 to date. The acquisition of the Glass & Aluminium division was concluded in 2008, with management believing that this acquisition would enhance market presence

in the construction industry and on the understanding that it would be earnings-enhancing to shareholders. It has, however, become evident that the CGA has not delivered on either of these strategic imperatives. In addition, the business has required a disproportionate amount of management time and resources which finally led to the decision to dispose of this asset and to concentrate on the exceptional businesses originally brought to the market and leverage off these to deliver shareholder value.

The performance of CGA was impacted by macro-economic factors, as evidenced by many peers, but this has been further impacted due to the fact that the board is of the opinion that the warranties presented in terms of the acquisition have not been fulfilled by the vendors. To this end, a legal process has been embarked on in an attempt to recover the lost value.

The reasons that led the board to agree to the disposal of this company is summarised as follows:• The exposure to contracting is far more challenging than

initially anticipated;• The macro-economic environment is challenging and we do

not anticipate a dramatic change within the short to medium term;

• Relationships with key customers stakeholders have been substantially damaged historically;

• The cultural integration of the business has proved to be difficult; and

• The business requires a disproportionate amount of Accéntuate management time and resources relative to its potential returns.

Discussions regarding the disposal of CGA are currently underway and management will make the necessary announcements in due course. Management is confident that the disposal of this company will be completed in the not too distant future and all anticipated costs and losses relating to this disposal have been provided during the current accounting period.

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Operational reviewThe consistent performance of both the flooring and chemical divisions allow Accéntuate to concentrate on expanding these operations, both through organic growth, as well as identified strategic acquisitions. In line with the original strategic direction of the organisation, management has realigned its efforts in order to leverage off the dominant position that FloorworX has within the resilient flooring market and to expand both its product offering and its footprint in the southern African market.

The year under review has thus been one of repositioning and refocusing the organisation along the original vision that brought Accéntuate to the market in 2006. Management has identified the fact that the opportunities that initially brought the company to market still exist and, with focus and determination, we can put the difficulties experienced behind us and focus on what is an exciting purpose and direction for Accéntuate.

The strategy of extracting synergies between FloorworX and Safic have progressed to a point where the inter-company trade is becoming quite significant. The introduction of a vinyl adhesive manufactured by Safic and distributed by FloorworX has seen significant growth over the past year. We have also introduced a range of cementitious screeds and currently developments are underway for the introduction of a carpet adhesive and expansions in the cementitious product range. Safic also manufactures a complete range of maintenance products to complement the flooring range offered by FloorworX. Expansion of this collaboration is envisaged for the year ahead.

The relative strength of the rand has had a negative impact on the activities of the group into the African continent, as many of the products sold into these markets are essentially US$ denominated commodities. The state of the currency also contributed towards greater domestic competition and margin pressure due to increased import activity, especially in the flooring sector.

Financial reviewFinancial results were reported taking into account the decision to dispose of CGA. All costs relating to the disposal of CGA were accrued for during the period under review.

Continuing operations profitability of R8,8 million was negatively impacted by a R12,6 million loss from the discontinued operations. An impairment relating to discontinued operations of R70,8 million resulted in a loss of R74,6 million for the period.

Continuing operations reported a reduction in turnover from R254,8 million to R249,4 million. The pressure on revenue has been offset by an increase in gross margin from 52,9% to 54,5% over the comparative period. Other operating expenses have been contained by overheads increasing by only 1,1% over the period under review despite inflationary pressure and the impact of rising energy prices. Continuing operations reported a headline earning per share of 8,32 cents.

ProspectsAlthough it is anticipated that the macro-environment within which Accéntuate operates will remain challenging during the forthcoming year, management is confident that the dominant position that it holds within the niche in which it operates will offer the necessary protection in order to ensure that Accéntuate delivers an acceptable set of results.

The focus of the business going forward remains expanding both our product range into a well established customer base, as well as the geographical distribution footprint. This will be achieved through collaboration with leading global players within the floor coverings market. Other focus areas include the maintenance of margins through effective pricing, cost control and productivity initiatives, as well as minimising the effect of currency fluctuations, the rise in commodity prices and rampant energy escalations.

Safic will continue its focus on building strong annuity income streams in the institutional markets and through further extraction between group companies and the Thebe invested companies. Expansion within the construction chemical sector is also envisaged.

Africa remains a major potential market for the products and services offered by Accéntuate and focused attention will be paid to expanding our distribution presence on the continent.

Although government infrastructure spend has not yet materialised and has played no significant role in the financial results for the year ended 30 June 2011, management remains confident that pent-up demand will result in this long-anticipated spending materialising within the not too distant future. Positive government spending within the areas of healthcare and education will have a material impact on the profitability of FloorworX.

Accéntuate’s growth strategy includes both targeted organic growth within predetermined market segments as well as targeted acquisitions that meet our stringent criteria for growth that is earnings-enhancing.

AcknowledgementsI would like to take this opportunity to thank the executive team for their absolute dedication, loyalty and hard work displayed during what can only be described as an extremely challenging year. The support received from the chairman and the non-executive directors enabled us to concentrate on the vision that we hold for this great organisation. I would also like to thank our customers and suppliers, without whom we would not exist. The faith that our shareholders have shown in us and the loyalty and support of our employees have ultimately ensured that we can address the necessary issues in order to position Accéntuate for growth within the years ahead.

Frederick Platt Chief executive officer23 September 2011

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Review of operations

FloorworX is a dominant player within the resilient flooring market in southern Africa and this has allowed Accéntuate to concentrate on expanding its influence in the general flooring market.

Highlights

l Strong financial performance by FloorworX

l Forward order book is full

l 57 years of innovation and experience

l 15km of flooring is produced and sold daily from the FloorworX factory

Challenges

l Extremely tough market conditions

l Increased electricity costs and commodity prices

l Relative strength of rand

l Lack of government infrastructure spend

Outlook

l Stable flooring industry remains

l Enhanced growth dependent on government’s roll-out of infrastructure programme

l Inordinate number of classrooms and clinics that require repair, maintenance and/or to be upgraded

Khayelitsha Hospital

Size of project: 12 600m2 Marmoleum Real

Location: Western Cape

FloorworX

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OverviewFloorworX is the leading player in South Africa in the resilient

flooring market with a two-thirds market share. FloorworX is a

trusted brand in the local market with an ever-growing presence

in the rest of Africa.

Market conditionsFloorworX performed extremely well considering the existing

conditions in the construction industry that have been severely

affected by the economic situation, particularly after the

hosting of the World Cup. The flooring division managed to

deliver an excellent set of results under very challenging trading

conditions. Notwithstanding the fact that FloorworX reported a

dramatic downturn at interims, resulting in reduced revenues,

margins and earnings, the incredible efforts of the management

team saw the promised recovery during the second half of the

financial reporting period.

Although revenue for the period was down to R185 million

(2010: R191 million), a dramatic improvement in profit before

tax of R12,8 million (2010: R12,5 million) was achieved. Year-on-

year volumes were down as a result of the continued downturn

in the construction industry. The gross margin percentage was

49,4% versus 47,8% in the previous year.

Major factors influencing the profitability of the organisation

remain the excessive increase in energy costs, volatility in

commodity pricing as well as the relative strength of the rand

against major global currencies. Although the strength of the rand

acts as a hedge against rising global commodity prices, especially

fuel and petro-chemical derivatives, the effect negatively impacts

on the ability of FloorworX to export into Africa.

Overall market share increased slightly with significant increases

in the wood, wood laminate and luxury vinyl segments. Interior

Wooden Floor (“IWF”) has been successfully integrated into

FloorworX and is making a meaningful contribution towards the

profitability of the company. The Signature range continues to

grow in acceptance and popularity and the progress made in

this area of the business is extremely pleasing to management.

Further growth has been evidenced in the Flotex Carpet

segment and FloorworX is currently finalising the introduction

of a carpet tile range as alluded to in the interim results.

Strengthening relationships with global suppliers of floor

coverings remain central to our strategy of dominating the

resilient flooring market segment within the southern African

market.

Significant projectsImportant projects undertaken during the year under review

include:

Project Size Product

UCT Student Residence 14 000m2 SuperflexTC Neuman Hospital 3 000m2 Colorflex PURPort Shepstone Hospital 5 000m2 SuperflexVarious Clinics KZN 20 000m2 SuperflexSAPS Regional Offices KZN 3 000m2 ArmofloorMaputo Private Hospital 5 000m2 SuperflexOshakati Hospital 4 500m2 MarmoleumVarious Mine Hostels 16 000m2 Floorflex TilesNurses Residences Gauteng 8 000m2 Floorflex TilesBotswana Hospital 2 600m2 Marmoleum

2012 strategyThe following areas will be focused on during the coming year:

• Expanding the current product range into the existing

customer base through collaboration with global players

within the floorcovering market;

• Expanding the distribution network geographically including

further expansion on the African continent;

• Ensuring the maintenance of margins through effective

pricing, cost control and productivity initiatives; and

• Wherever possible, minimising the volatility of global

commodity and currency fluctuations.

ProspectsThe outlook for the foreseeable future will depend on

government’s capacity to roll out the much publicised

infrastructure programme. Although this spend has not yet

materialised and has played no significant role in the financial

results for the year ended 30 June 2011, management remains

confident that pent-up demand will result in this long-anticipated

spending materialising within the not too distant future. Positive

government spending within the areas of healthcare and

education will have a material impact on the profitability of

FloorworX. Management remain cautiously optimistic about the

continued positive performance of the flooring division within

Accéntuate and to this end a number of strategic initiatives to

expand this area of the operation are currently being evaluated.

Management is further quite bullish considering the projects

that are in the pipeline for the next financial year.

Our strategy will be to ensure that we remain the supplier of

choice and ensuring that our product offering remains wide at

competitive prices. We continue to focus on service excellence

and are proud of our record of supplying the major centres

within 24 hours and the outlying areas within 48 hours.

Donald Platt

Managing director

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Review of operations continued

The environmental solutions division has continued along its stated strategy of repositioning the business away from the traditional “down the street”, direct representation model to an emphasis on centrally managed accounts that provide steady annuity income.

Highlights

l Growth of volume within the period has resulted in a far more sustainable business

l Approximately 28% of the revenue now secured contractually

l New product innovationsl Forward looking order book of R22 million

Challenges

l Continued depressed economical climatel High price of crude oil and other related productsl High cost of distributionl Increasing electricity cost

Outlook

l Expansion within institutional and industrial (blue chip) markets, specifically the contract cleaning industry

l Extend footprint within the construction chemical sector

l Expand into Africa through identified distributors with capacity to support our vision

l Focus on revenue growth, cash flow and return on investment

Continual sales to FloorworX

Size of project: R6 million and growing

Location: Countrywide

Completion: Ongoing

Environmental solutions division

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5

6

4

3

2

1

0’11’10’09

■ FloorworX sales by product category

(R m

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OverviewThe division is a specialist chemical blending operation which provides customised, environmentally acceptable solutions to the industrial, institutional and construction industry.

Market conditionsRevenue increased to R66,3 million (2010: R59,2 million) and operating profit decline from R1,6 million to R855 000. Despite the increase in revenue, gross margin reduced by approximately 4%. This was due to the fact that the growth was achieved on more sustainable revenue at reduced margins. Operating overheads only increased by 0,32% year on year.

Much improved cash generation was brought about by strict working capital management. We have continued to focus our efforts to extract profit from inter-group opportunities, namely the supply of adhesive and cementitious products to FloorworX, grow our presence within the institutional and industrial markets and at the same time maintain good quality environmental health and safety standards.

Challenges remain the continued depressed macro-economic environment within which Safic operates, the relatively high cost of petro-chemical derivative raw material inputs, the increase in energy costs as well as those relating to the distribution of the products.

Major focus has been placed on the growth of sustainable revenue within the division. This has forced us to redefine our product and market offering, and at the same time strengthen our sales, marketing and research and development structures to support this objective.

Innovations that have taken place over the past year include the development, manufacture and supply of a range of easy dilution super-concentrates in sachets for use in the general cleaning industry, the development of a carpet adhesive and the further adding of a broader range of equipment to support the offering of a total solution package for key clients allowing overall cost savings.

Owing to the high cost of transport, we continued to appoint identified distributors to service the needs of customers in outlying areas, as well as targeting greater order quantities through blue-chip clients. This has proven in the past to reduce our transport cost substantially, and will be fast tracked in the next year.

On the operational side we have focused on the efficiencies in the operation. A huge emphasis was placed on quality, environment and the health and safety standards. This was strengthened by the appointment of a full-time SHEQ manager, and we are proud to announce that we recently received a 99,2% compliance result in a third-party responsible care audit done on our facility.

Significant projectsSupply of cleaning solutions to:• Sasol;• Tshwane Municipality;

• Baragwanath Hospital;• Eskom;• City Power;• Supercare Group; and• Thebe Investment related companies.

Strengthened relationship with Angolan customer Prometéus Servicos to supply raw materials and final product to their blending operation.

2012 strategyThe strategy for the division includes:• A major focus on growth within the institutional markets,

specifically the contract cleaning industry;• Further extraction of synergies between group companies

and the Thebe invested companies;• Expansion of the footprint within the construction chemical

sector;• Expansion of our key account initiatives with the intent of

ensuring stronger secured annuity income; and• The Africa market remains a huge opportunity, and will

be expanded through identified distributors that have the capacity to support our vision.

ProspectsAlthough progress in this division has been slower than anticipated, we are confident that this company will become a major contributor towards the profitability of the group within the foreseeable future. This will be done through focused attention on building strong relationships with identified blue chip clients and the systematic exploitation of the synergies that exist between itself and FloorworX, especially in the areas of cementitious screeds, adhesives and maintenance products to the flooring industry.

The future operating environment looks cautiously optimistic. Commodity prices are set to be reasonably stable for the foreseeable future. We are looking at a number of new product introductions, as well as total solution packages which will result in long-term beneficial relationships with identified customers. Further focus will be placed on increasing order size, improving our distribution network, growing our revenue and moving away from the supply of commodity cleaning materials to one of a value-added solution provider. We will continue to focus on growth of annuity income and have set ourselves high goals for this financial year and believe that, with the commitment shown by all our employees and a focused approach, we will achieve these.

Eric PlattManaging director

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Paresh Dayah Company secretary

Sustainability and corporate governance

Accéntuate views sustainability within the context of the well-being of the company and the environment within which it operates over the long term. It encompasses the concept of stewardship and the responsible management of resource use. We understand and respect our responsibility towards transformation of the organisation and the society within which we operate and where we have influence. The communication of our governance, social and environmental performance to all stakeholders is thus of critical importance and this sustainability report offers us the platform to advise stakeholders of our performance to date as well as the aspirations that we hold for the organisation in a context broader than just shareholder value.

Accéntuate continues to view itself as a “good corporate citizen” and to this end we are committed to not only complying but striving to a leadership position within the realms of responsible business practices. Our commitment is to transparently disclose information that is material and relevant as part of the company’s reporting process; in addition to this and wherever practical and affordable to obtain independent assurance in an integrated manner. Currently we aim to grow off the foundation that was laid in our first sustainability report published last year.

TransformationAccéntuate understands and endorses the concept of transformation of the South African business environment and to this end we have embarked on a number of initiatives and programmes aimed at transforming the organisation at all levels. The transformation programme within Accéntuate was launched over 11 years ago in order to redress the imbalances that exist because of the historical inequalities in the South African society.

Effective transformation of ownership is an area that we are committed to and, with the help of Thebe Investment Corporation and other empowerment partners, we have ensured ownership of HDIs remained in excess of 26%. Accéntuate has also been rated in terms of the B-BBEE scorecard and has achieved level 4 status across the group.

Broad-based black economic empowerment (B-BBEE)Accéntuate views itself as a responsible employer and is committed to transformation at all levels of society and therefore all employment practices are regularly evaluated and aligned to these principles. To this end we will not allow discriminatory practices and all employment needs to be conducted within a framework of giving preference to suitably qualified and skilled employees from a disadvantaged background without compromising on quality and deliverables. Wherever possible, preference is given to employees within the group when a position becomes vacant.

Accéntuate realises the value to be gained from a diversified workforce and is fully committed to affirmative action at all levels of the company. All vacant positions are targeted and preference is given to PDIs of black origin. In addition, Accéntuate also targets persons with disabilities for positions where they can be accommodated.

At FloorworX, more than 5% of our workforce consists of black persons with disabilities and one of our departments is made up predominantly of persons with disabilities.

Division B-BBEE scorecardBlack

workforce

FloorworX Level 4 70,5% 71,3%

Safic Level 4 70,0% 84,0%

Sustainability report

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Paresh Dayah Company secretary

Skills development and trainingThe development and maintenance of the identified and required skills base has always been a leading priority within Accéntuate and to this end formal structures have been established to monitor progress in this regard. Management, together with the employment equity committees, strive to uplift staff by ensuring that they are equipped with the necessary skills and competencies to perform at their best. In addition to this there is an active programme to identify and eliminate the effects of past discriminatory practices, should they exist within the group, in order to move towards an organisation that adequately reflects the racial demographics of the various regions in which we operate.

Accéntuate is a learning organisation, relying heavily on the collective human capital of its workforce to respond to a highly competitive and dynamic environment. Its learning culture starts at the top of the organisation, permeating through the various echelons of management down to shop floor level.

FloorworX falls within the domain of the Metals and Engineering Related Services Seta (MERSETA), which, guided by the National Skills Strategy, has identified critical skills shortages within the industry, such as management, engineering, financial and sales. FloorworX focuses many of its skills-development initiatives around these disciplines, thereby not only satisfying the business need for specific skills, but also contributing to the economy at large.

As an accredited Chartered Institute of Management (CIMA) training provider, FloorworX has contracted its second learnership, registered through this internationally recognised institution. In addition, FloorworX also has finance staff studying through the widely respected Association of Chartered Certified Accountants (ACCA), the Institute of Certified Bookkeepers (ICB) and the Institute of Credit Management (ICM).

During the period under review, two apprenticeship contracts were successfully completed. Previously unemployed and unskilled, these two individuals have been trade tested and are now a qualified fitter and electrician respectively. In association with Walter Sisulu University, FloorworX also facilitated the practical training of eight students in completion of their National Diploma in Mechanical Engineering.

The FloorworX sales force is kept abreast of the latest sales techniques and market trends through continuous training and development initiatives.

Safic belongs to the Services Seta where a strong focus is on improving skills of all individuals in the services and related industries. A well-prepared training matrix identifies the various skill requirements and forms the basis of manpower planning. Training requirements are integrated into management performance measures and include continuous identification of needs managed and recorded for WSP, ATR, ISO and B-BBEE purposes.

Succession planning has been identified as a key performance area and currently systems are being developed to monitor progress against predetermined objectives.

Our learning culture starts at the various echelons of management and permeates throughout the organisation. As well as being responsible for building the capacity of their various departments, management is actively encouraged to enhance their own knowledge and skills through continuous learning. Personal development plans are in place, resulting in most managers being involved in learning, whether studying towards a formal qualification in their field of expertise, post-graduate studies or through attending continuous professional development programmes.

Accéntuate also recognises that the legacies of the past have resulted in many PDIs not undergoing formal education up to senior certificate level. Employees are able to improve their literacy levels through ABET electronic learning, which is offered at the FloorworX site and during working hours.

Over the past financial period, six ABET learners progressed to the next level, thereby achieving a 70% pass rate in the first year of facilitation. Inspired by their colleagues’ successes, additional learners have now joined the ABET classes and look forward to improving their literacy levels and mathematical skills.

In addition to the internal training initiatives, Accéntuate contributes greatly to the upliftment of skills broadly within the industry. A number of initiatives are embarked upon whereby our customers and their staff are trained on the efficient and effective use of our products. This training is conducted to the highest international standards and within a framework embracing quality, safety, environmental awareness and ultimate customer satisfaction and service. A fully operational training centre has been established at our Steeledale facility that constantly trains and uplifts skills of floor fitters within the southern African region.

Attracting and retaining talent Accéntuate attracts the desired quality of employees by ensuring that the company offering is set competitively coupled with a range of added benefits, such as medical aid and opportunities for further studies. In terms of our succession planning policy, several PDIs have been identified for fast tracking. Some have undergone psychometric assessments to establish their suitability for target positions and are now being developed through formal training and mentorship for management positions.

The remuneration strategy has two objectives: firstly, to attract the very best employees and secondly, to retain them. The former is achieved through rigorous selection techniques, including targeted selection and approved psychometric testing, while the latter relies on personal development opportunities, a competitive compensation offering and a supportive organisational culture.

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Sustainability and corporate governance continued

Preferential procurementAccéntuate views preferential procurement as an effective tool to facilitate transformation of society and to this end Accéntuate has developed effective preferential procurement strategies that are implemented at divisional level. These procurement policies are integrated as part of the ISO 9001 system. A number of factors are evaluated before awarding orders which included price, quality, customer service and B-BBEE status. The availability of certain raw materials from a single source does however impede the effectiveness of our preferential procurement initiatives around many of our high-value spend items. Continuous improvement in this critical area of the business is encouraged and monitored on an ongoing basis.

Safety, health and the environmentHuge emphasis is placed on the safety of our staff, our customers and the communities within which we operate. As a responsible corporate citizen the issues of health safety and environmental responsibility are core to the way in which Accéntuate operates. Divisions within Accéntuate have a proud history of compliance and best practice in the areas of health and safety as well as environmental awareness. All divisions must ensure that they comply with all relevant legislation and wherever possible best practice. Statistics are kept by the divisions to measure the impact of health and safety initiatives as well as environmental initiatives.

Key drivers of our health and safety philosophy include:• All business units will comply with the Legal Compliance

Health and Safety management system as a minimum standard;

• Continuously identifying and assessing health and safety hazards with a view to implementing measures to mitigate or control these elements;

• Establishing ongoing communication and training programmes to increase individual awareness levels of health and safety issues, responsibilities and accountabilities;

• Promoting responsible actions to exercise a high level of waste management;

• Performing internal and external audits on the business processes to ensure stated performance levels are achieved and maintained;

• Ensuring that subcontractors and service providers to our company conform to laid-down requirements in line with the principles of the Legal Compliance Health and Safety management system; and

• Providing adequate financial and physical resources to achieve health and safety management objectives in an effective and productive manner.

Safic has obtained the prestigious international OHSAS 18001 certification and FloorworX is currently embarking on this certification. As an accredited OHSAS 18001 company, strict control is exercised in order to ensure that the health and safety of our employees comes first and all incidents and accidents are reported and recorded. Annual check-ups take place on all employees who work with the chemicals and one-on-one consultations are held with a medical examiner.

FloorworX operates within a concept of legal compliance and has commissioned the Health and Safety programme from SEIFSA to assist in monitoring and auditing the systems in place. There is a central committee set in place by the relevant managing director to ensure that procedures are established and conformed to. All employees are provided with training which has included: Basic Fire, Health and Safety principles for managers, Health and Safety for Safety Representatives, Incident Investigation, Hazard Identification and Risk Assessment, First Aid and Forklift procedures. Safety induction is presented annually to all staff, as well as on and ad hoc basis to new employees entering the organisation.

Accéntuate places emphasis on the following health and safety issues:• Legal compliance;• Elimination and prevention of risks;• Protection of employees and communities;• Maintenance of a clean and healthy workplace; and• Developing, enhancing and maintaining a health and safety

culture.

Environmental issues Much attention is also paid to environmental issues. This has become a critical issue for the group for a number of reasons, including the need for conservation of energy as well as the focus on “green building”. Accéntuate has for many years taken the lead in the area of responsible manufacturing and the development of environmentally acceptable products. Safic was voted the Mail & Guardian’s “Greening the Future” company for two consecutive years and has developed an environmentally acceptable range of chemical products that comply with the highest EU environmental directives.

In order to ensure a culture of environmental awareness and responsibility, all companies within the Accéntuate group currently comply with the highest international environmental certification, this being ISO 14001. A number of other awareness initiatives are currently supported by Accéntuate including the World Wildlife Fund (WWF), Arbor Day and the 1 billion tree campaign.

HIV/Aids FloorworX is part of the Siyakhana project, which provides regular HIV/Aids awareness programmes and voluntary counselling and testing on-site annually. Employees are also able to visit the Siyakhana clinic for testing, counselling and guidance. Through this project, HIV positive employees also receive access to a network of doctors and antiretroviral medication at no cost to them. In addition, FloorworX has seven trained HIV peer educators who are responsible for creating awareness and distributing HIV information at their department meetings and also for counselling HIV infected and affected employees.

A number of other HIV initiatives are conducted at the various divisions and it is our intention to raise the level of awareness of HIV and Aids within the group even further during the coming year.

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Labour relationsAccéntuate recognises the right of employees to collective bargaining arrangements and work hard towards creating harmonious working relationships between organised labour and the company. Employees at the FloorworX factory in East London belong to the Metals and Engineering Bargaining Council and relations with the unions are regulated by this body. Strikes are prohibited during the period of any wage agreement, which is normally for a period of three years. Currently Safic employees are not unionised.

Corporate social investment Accéntuate retains its strategic objective to spend 1% of NPAT on corporate social investment. The programme is deliberate, focused and progressive and projects are carefully selected. Focus remains on education and is granted through support:• Bursaries; and• School upliftment programmes.

Bursary assistance is available to children of Accéntuate employees who wish to study in disciplines such as architecture, quantity surveying, engineering, accounting, bookkeeping, plastics and plastic sciences, science and physics, building and construction science and computer science. Full bursaries are available which cater for tuition and books.

FloorworX is currently contracted to three full-time bursary students from previously disadvantaged backgrounds. A number of schools have also been assisted with donations of floor coverings, especially in areas struggling with financial resources.

The focus of Safic’s corporate social investment programme for 2011 was to provide assistance to employees who have children furthering their education in a recognised college or university.

Third-party certificationsThroughout the group we have obtained a number of third-party accreditations and certifications:

Division Certifications Accreditations AwardsFloorworX ISO 9001, ISO 14001 SABS Marks

WWF50-year SABS

Safic ISO 9001, ISO 14001, OHSAS 18001

SABS MarksCAIA Responsible CareWWF

Greening the Future, Chemical Safety AwardMail & Guardian

Accéntuate’s sustainability strategyAccéntuate’s strategy on sustainability is outlined by our commitment to the eight e’s:• Earnings and shareholder value.• Employment of resources.• Excellence in products and services.• Empowerment of individuals and communities.• Enforced corporate governance.• Ensured sustainability.• Equitable individual development.• Engaging stakeholders and the value chain.

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Statement of complianceAccéntuate will continue to accept its position as a responsible corporate citizen and will, wherever possible, contribute towards enhancing itself as such. The board is satisfied that the group, in all material respects, has applied the provisions and the spirit of the King III code and that the group is in compliance with all the required JSE codes. The group endeavours to incorporate into its actions the best possible mutual interests of all stakeholders, including investors, employees, suppliers, customers and the community in which we operate.

The board ensures that the group complies with all relevant laws, regulations and codes of business practice and it communicates with its shareholders and relevant internal and external shareholders openly and promptly. Internal governance structures and roles are being reviewed and improved at a board and management level on a continuing basis.

Board of directors The group has a unitary board, which comprises four non-executive directors, of which one acts as the chairman, and three executive directors. The board recognises that it is not in compliance with King III and is seeking to appoint an additional independent non-executive director. The roles of the chairman and the CEO have been separated. The chairman, Dr Motlatla, an independent non-executive director, leads the board.

The executive management is the responsibility of the CEO, Fred Platt, and his team of executive directors. The executive directors are directly involved in the day-to-day management and operation of the group’s activities and are full-time salaried employees of the group.

The non-executive directors are not directly involved in the day-to-day management of the group and are not full-time salaried employees of the group. Non-executive directors are individuals of high calibre and credibility and have the necessary skills and experience to bring judgement to bear, independently of the management, on issues of strategy formulation, performance management, resources planning and allocation, transformation and employment equity, and standards of conduct.

The board meets at least quarterly, with additional meetings convened when necessary. The board is responsible for the effective management and control of the group and sets the strategic direction and policies of the group. The board participates in all discussions regarding transactions and disposals, approval of major capital expenditure, oversight of financial and administrative activities and any other matters that

may materially impact the business of the group. Directors are entitled to seek independent and professional advice relating to the affairs of the group. The board and its committees are supplied with full and timely information, which enables them to discharge their responsibilities and have unrestricted access to all company information, records, documents and property. Non-executive directors have access to management and may meet separately with management, without the attendance of executive directors.

Appointment and re-election of directorsAppointment of directors to the board is agreed to in line with the company’s policy relating to the appointment of directors, which appointments are transparent and formal and are a matter for the board as a whole. New appointments and rotations are ratified by shareholders annually at the annual general meeting (AGM).

In terms of the articles of association, all the directors shall retire at the first annual general meeting of the company, and thereafter one-third of the directors shall retire, providing that all the directors retire every three years. All directors are subject to election by shareholders at the first opportunity of their initial appointment. In terms of the company’s articles of association, the directors retire at the age of 75 years.

Board responsibility The board of directors is responsible for the proper management and ultimate control of the group. In order to meet this responsibility to the members and all other stakeholders, the board is responsible for setting the strategic objectives of the company, determining investment and performance criteria and taking responsibility for the proper management and ethical behaviour of the business of the group. There exists a clear division of responsibility at board level that ensures a balance of power and authority.

The board has ultimate responsibility for the internal, financial and operating systems of the group and for monitoring their effectiveness. These systems are designed to provide reasonable assurance against material misstatement and loss. 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.

Various policies and procedures exist to address conflicts of interests. These cover areas such as interests of directors of Accéntuate in companies with which Accéntuate has contractual relationships.

The board ensures that the group complies with all relevant laws, regulations and codes of business practice.

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Board charterThe board has adopted a board charter, which salient features include:• Demarcation of the roles, functions, responsibilities and

powers of the board;• Terms of reference of the various board committees;

• Matters reserved for decisions by the board; and• Policies and practices of the board on matters such as

corporate governance, board meetings and documentation, disclosure of conflicts of interest and trading by directors in the securities of the company.

Directors’ attendance at board meetingsThe number of meetings attended by each of the directors of Accéntuate for the year ended 30 June 2011:

Name Designation Meetings attended

Meetings held in the periodwhile the director was appointed to the board

Dr MDC Motlatla Chairman 4 4FC Platt Chief executive officer 4 4AJ Voogt Chief financial officer 4 4Dr DE Platt Executive director 4 4AJ Kerrod* 1 1L Gadd Non-executive director 3 4

* Mr A Kerrod resigned from the board of directors of Accéntuate with effect from 19 October 2010.

Audit committeeThe audit committee is chaired by Dineo Molefe, the alternate non-executive director. The committee consists of two non-executive directors. The internal and external auditors have unrestricted access to the audit committee and its chairman.

The committee is responsible for reviewing the functioning of the internal control systems, risk areas of the group’s operations and the reliability and accuracy of the financial information provided to management and other users of the financial information. The duties include reviewing the scope and results of the external audit and its cost effectiveness.

The committee discharges its duties with regard to its widely held subsidiaries in the same meetings that are held for Accéntuate Limited.

The audit committee operates in terms of a formal mandate that sets out the functions and duties of the committee. These functions are based on the relevant provisions of the Companies Act, Act 71 of 2008, as amended, as well as relevant corporate governance recommendations. These include, inter alia, to:• review the annual financial statements to ensure that they

present a true, balanced and understandable assessment of the financial position and performance of the company;

• ensure an effective internal control environment in the company;

• nominate the external auditor for appointment as the registered independent auditor after satisfying itself through enquiry that the external audit firm and the designated audit partner are independent;

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

• ensure that the appointment of the external auditor comply with the provisions of the Companies Act of 2008, as amended, and any other legislation relating to the appointment of auditors;

• evaluate the independence and effectiveness of the external auditors;

• approve a non-audit service policy which determines the nature and extent of any non-audit services which the external auditor may provide to the company; and

• pre-approve any proposed contract with the external auditor for the provision of non-audit services to the company.

The audit committee has also reviewed and satisfied itself with the appropriateness of the expertise and experience of the financial director as required in terms of the JSE Listings Requirements.

During the year the following meetings took place:

Name Designation

Meetings attended Meetings held in the periodwhile the director wasappointed to the boardMember Invitee

D Molefe Non-executive alternate director 3 – 3L Gadd Non-executive director 3 – 3Dr MDC Motlatla Chairman 2 – 3FC Platt Chief executive officer – 3 3AJ Voogt Chief financial officer – 3 3

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Internal auditThe group internal audit function reports directly to the chairman of the audit committee. The internal audit function is regarded as being sufficiently independent of the activities being audited. The internal audit plan is reviewed and adjusted on a continual basis to ensure effectiveness and is based on the relevant degree of inherent risk of the business.

External auditThe board has appointed PKF to perform an independent and objective audit on the group’s annual financial statements. The financial statements are prepared in terms of IFRS. The board has considered the extent of non-audit related services provided by the external auditors and is satisfied that the independence of the external auditors is not compromised.

Risk committeeThe board is responsible for the total risk-management process. The committee supports the board to formulate the risk management strategy, which is based on the need to identify, assess, manage and monitor all known forms of risk across the group. The board defines the group’s tolerance for risk and has the responsibility to ensure that the group has implemented an effective ongoing process to identify risk, to measure its impact against a broad set of assumptions and then to activate processes required to proactively manage these risks.

Remuneration committeeThe committee determines the remuneration arrangements, profit participation and benefits of the executive directors and executive management. The committee is responsible for ensuring that levels of remuneration are sufficient to attract, retain and motivate executives of the calibre required for high-level management and key personnel. It is also responsible for measuring the performance of the executive directors in discharging their functions and responsibilities.

Remuneration is performance related and is designed to provide incentives for directors and staff to perform at the highest operational levels. The remuneration committee is further responsible for the assessment and approval of the board’s remuneration strategy for the group.

Please see additional information in the remuneration philosophy on page 19 of this annual report.

Designated adviserOn 24 February 2011 Accéntuate notified the market of a change in designated advisers, with the appointment of Bridge Capital Advisors (Pty) Limited. Their services include advising the board on the interpretation of, and compliance with, the Listings Requirements of the JSE and reviewing all notices required in terms of its statutes and JSE rules and regulations. Bridge Capital is required to attend all board meetings and audit committee meetings.

Business Trust As a proud member of the Business Trust since its inception, Accéntuate continues to participate in and contribute to this noble and highly successful initiative launched by responsible business to contribute towards addressing the social and economic ills of our country.

Share tradingThe group has a formal policy, established by the board and implemented by the company secretary, prohibiting dealing in securities by directors, officers and other selected employees from the end of the respective reporting period to the date of the announcement of the financial results, or in any other period considered sensitive.

The company secretaryWesley Delport has stepped down as the company secretary and Accéntuate announced the appointment of Paresh Dayah as company secretary to Accéntuate. For the past two years, Paresh has fulfilled the position of company secretary for all the subsidiary companies in Accéntuate and has acted as an additional support to the holding company when required. He is well qualified with a BCompt degree, majoring in auditing and finance, from the University of South Africa. The company secretary is responsible for providing the board collectively, and each director individually, with detailed guidance on the discharge of their duties and responsibilities in terms of the specific legislation, regulatory requirements and best practice.

Share dealingsThe group has a written policy in place where the dealings of directors are regulated and monitored, and disclosure is made as required in terms of the Listings Requirements of the JSE. This policy is monitored by the company secretary. No trading by directors is authorised without clearance being first received from the chairman. Should the chairman wish to trade in his shares, clearance must be obtained from the board prior to any dealing. This policy is reviewed and updated from time to time to ensure that it is compliant with any changes in legislation and regulation.

Shareholder communicationThe Group holds regular meetings with analysts and institutional shareholders, primarily following the announcement of the financial and interim results. Communication with other investors and shareholders is conducted via the annual and interim reports, the AGM, and a detailed website.

FC Platt AJ VoogtChief executive officer Chief financial officer

Steeledale23 September 2011

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The remuneration philosophy reflects Accéntuate’s commitment

to be compliant with best practice in the areas of remuneration,

retention and reward in an effort to attract and retain exceptional

talent. The remuneration packages and incentives are regularly

evaluated against market related surveys, primarily that of

Deloitte. Packages are structured on a cost-to-company basis

and included contributions to healthcare, disability, life insurance

and retirement benefits.

The Accéntuate Limited remuneration committee consists of

non-executive directors only. The chief executive officer may

attend by invitation only. Executive directors are not involved in

determining their remuneration packages. Much attention has

recently been paid to the effective set up and functioning of a

fully independent remuneration committee.

The remuneration committee establishes the remuneration

policy for the group and reviews the terms and conditions of

employment of the executive directors and other senior

executives, as well as developing and implementing incentive

schemes.

The remuneration committee is mandated to:

• review the chairman’s and directors’ fees, as well as the

remuneration packages of the CEO and other senior

executives;

• undertake annual performance assessments as the basis for

annual salary adjustments;

• monitor incentive and share schemes; and

• avail itself of the advisory services of independent consultants

as may be required to ensure best practice in the areas of

remuneration and reward strategy.

As the mandate of the remuneration committee has been

expanded and with the recent inclusion of two additional

independent non-executive directors, we hope to provide

stakeholders with a more comprehensive remuneration report

in the next annual report.

Non-executive remunerationNon-executive directors enjoy no benefits from the company for their services as directors, other than their fees and the potential gains and dividends on their interest in ordinary shares. It is proposed that the new non-executive directors are to be paid as follows:

Description AmountIndependent chairman of the board R360 000 per annumLead independent director R120 000 per annumIndependent non-executive Directors Fee

R60 000 per annum

The fee structure is set out in the table below:

Type of fee (per meeting) Existing fee in rands – 2011 Proposed fee in rands – 2012

BoardChairman – R10 000Board member – R10 000Audit committeeChairman – R10 000Member – R10 000Risk committeeChairman – R5 000Member – R5 000Remuneration committeeChairman – R5 000Member – R5 000

Directors’ remuneration is set out in note 30 of the annual financial statements.

Salaries for the three highest paid members of management (excluding executive directors) are set out below:

30 June 2011 Salaries Bonus Total

Total aggregate earnings 2 992 000 394 000 3 386 000

Remuneration philosophy

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Analysis of ordinary shareholders as at 30 June 2011

Size of holdingsNumber of

shareholdings% of total

shareholdingsNumber

of shares% of

shares in issue

1 – 1 000 shares 38 9,18 22 757 0,021 001 – 10 000 shares 160 38,65 968 420 0,8710 001 – 100 000 shares 153 36,96 5 817 225 5,24100 001 – 1 000 000 shares 44 10,63 12 292 919 11,061 000 001 shares and over 19 4,58 92 006 798 82,81

Total 414 100,00 111 108 119 100,00

Distribution of shareholdersNumber of


shareholdingsNumber

of shares% of

shares in issue

Retail shareholders 338 81,65 34 201 388 30,79 Private companies 18 4,36 23 828 039 21,45 Trusts 29 7,00 17 542 575 15,79 Custodians 3 0,72 12 432 192 11,19 Close corporations 7 1,69 9 067 208 8,16 Share trusts 1 0,24 7 293 000 6,56 Investment partnerships 10 2,42 3 581 253 3,22 Collective investment schemes 2 0,48 2 502 304 2,25 Treasury 1 0,24 471 534 0,42 Retirement benefit funds 3 0,72 124 760 0,11 Medical aid funds 1 0,24 63 863 0,06 Public companies 1 0,24 3 0,00

Total 414 100,00 111 108 119 100,00

Shareholder typeNumber of


shareholdingsNumber

of shares% of

shares in issue

Non-public shareholders 8 1,93 34 123 659 30,70Directors of the company or its subsidiaries 5 1,21 13 005 682 11,70Directors and associates (direct holding) 3 4 701 004 4,23Directors and associates (indirect holding) 2 8 304 678 7,47Holders holding more than 10% (excluding directors’ holding) 3 0,72 21 117 977 19,00Marble Gold 127 (Pty) Limited 1 13 353 443 12,02Share schemes 1 7 293 000 6,56Treasury 1 471 534 0,42Public shareholders 406 98,07 76 984 460 69,30

Total 414 100,00 111 108 119 100,00

Shareholders’ analysis

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Beneficial shareholders with a holding greater than 3% of the shares in issueTotal

shareholding% of

shares in issue

Thebe Investment Corporation (Pty) Limited* 17 653 443 15,89Collins Stewart Limited*** 9 001 911 8,10Willow Securities CC 7 391 054 6,65Accéntuate Limited Share Trust 7 293 000 6,56The Elm Trust 7 249 955 6,53Mr Robert Cron Von Seidel 5 500 000 4,95Kotula Trust (Mr FC Platt) 5 405 575 4,87Mr Michael Ivan Sacks 5 301 276 4,77Inyanga Trading 167 (Pty) Limited** 5 271 096 4,74Garner Family Trust 4 199 066 3,78

Total 74 266 376 66,84

* Thebe Investment Corporation, over and above their beneficial holding of 4 300 000 shares, has an indirect beneficial interest via Marble Gold 127 (Pty) Limited.

** MDC Motlatla has an indirect beneficial interest in Inyanga Trading 167 (Pty) Limited of 2 899 103 shares.*** Beneficial shareholder has not been identified as required by Article 56(7) of Act 71 of 2008.

The holding of Thebe Investment Corporation comprises two accounts, one held by Marble Gold and the other in Thebe Investment Corporations’ own name.Total number of shareholdings 414

Total number of shares in issue 111 108 119

Share price performance Opening price 1 July 2010 55 centsClosing price 30 June 2011 46 centsClosing high for the period 78 centsClosing low for the period 40 cents

Number of shares in issue 111 108 119Volume traded during period 26 330 146Ratio of volume traded to shares in issue (%) 23,70

Financial year-end 30 June

Annual general meeting 1 December 2011

Reports and financial statements

Annual results announcement September 2011

Publication of annual report November 2011

Interim results announcement February 2012

Shareholders’ diary

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Directors’ responsibilities and approval

The directors are required in terms of the South African Companies Act, Act 71 of 2008, to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is their responsibility to ensure that the annual financial statements fairly present the state of affairs of the group as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with International Financial Reporting Standards. The external auditors are engaged to express an independent opinion on the annual financial statements.

The annual financial statements are prepared in accordance with International Financial Reporting Standards and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

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 the directors to meet these responsibilities, the board of directors sets standards for internal control aimed at reducing the risk of error or loss in a cost-effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, 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. The focus of risk management in the group is on identifying, assessing, managing and monitoring all known forms of risk across the group. While 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, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The directors have reviewed the group’s cash flow forecast for the year to 30 June 2012 and, in the light of this review and the current financial position, they are satisfied that the group has, or has access to, adequate resources to continue in operational existence for the foreseeable future.

The external auditors are responsible for independently reviewing and reporting on the group’s annual financial statements. The annual financial statements have been examined by the group’s external auditors and their report is presented on page 23.

The annual financial statements set out on pages 28 to 63, which have been prepared on the going concern basis, were approved by the board of directors on 23 September 2011 and were signed on its behalf by:

MDC Motlatla AJ VoogtNon-executive chairman Chief financial officer

Steeledale23 September 2011

Declaration by the company secretary

I confirm that the group has lodged with the Registrar of Companies, in respect of the year ended 30 June 2011, all the returns which are required to be lodged by a public company in terms of the Companies Act, Act 71 of 2008, and that all such returns are true, correct and up to date.

Paresh DayahCompany secretary

23 September 2011

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Report of the independent auditors

We have audited the accompanying annual financial statements of Accéntuate Limited, which comprise the directors’ report, the statement of financial position as at 30 June 2011, the statement of comprehensive income, the statement of changes in equity and statement of cash flows for the year then ended, a summary of significant accounting policies and other explanatory notes, as set out on pages 32 to 63.

Directors’ responsibility for the annual financial statementsThe directors are responsible for the preparation and fair presentation of these annual financial statements in accordance with International Financial Reporting Standards, and the requirements of the South African Companies Act, Act 71 of 2008. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of annual 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.

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the annual financial statements, whether due

to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the annual 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 annual financial statements.

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

OpinionIn our opinion, the annual financial statements present fairly, in all material respects, the financial position of the company as at 30 June 2011, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the South African Companies Act, Act 71 of 2008.

PKF (Pta) Inc. Registered Auditors Chartered Accountants (SA) Registration number: 2000/026635/21

Per: S Ranchhoojee Johannesburg 23 September 2011

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Audit committee report

The audit committee met three times during the year and the internal and external auditors presented formal reports to the committee and attended meetings by invitation. In accordance with the South African Companies Act, Act 71 of 2008, the committee reports as follows:• The scope, independence and objectivity of the external

auditors was reviewed.• The audit firm PKF (Pta) Inc. and audit partner S Ranchhoojee,

are, in the committee’s opinion, independent of the company, and have been proposed to the members for approval to be the group’s auditor for the 2012 financial year.

• On an ongoing basis, the committee reviews and approves the fees proposed by the external auditors.

• The appointment of the external auditor complies with the Companies Act, as amended, and with all other legislation relating to the appointment of external auditors.

• The nature and extent of non-audit services provided by the external auditors have been reviewed to ensure that the fees for such services do not become so significant as to call into question their independence.

• The nature and extent of future non-audit services have been defined and pre-approved.

• As at the date of this report, no complaints of substance have been received relating to accounting practices and internal audit of the company or to the content or auditing of the company’s annual financial statements, or to any related matter.

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Directors’ report

The directors submit their report for the year ended 30 June 2011.

Review of activities Main business and operations The group is engaged in the manufacturing, distribution and installation of flooring solutions. The Accéntuate group also manufactures and supplies chemical infrastructural maintenance solutions to these sectors. The group principally operates in southern Africa.

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

Net loss of the group was R74 607 612 (2010: profit R12 243 495), after taxation of R3 738 413 (2010: R2 625 732).

Going concern The financial statements have been prepared on the going-concern basis. This basis presumes that management neither intends to cease trading nor has no realistic alternative but to do so.

Events after statement of financial position date The directors are not aware of any matter or circumstance occurring between the statement of financial position date and the date of this report that materially affects the results of the group for the year ended 30 June 2011 or the financial position at that date.

Directors’ interest in contracts Various group companies lease certain office, manufacturing and parking space from Accéntuate Management Services (Pty) Limited at market-related rates.

Accéntuate Management Services (Pty) Limited entered into a lease agreement with GSIX Properties (Pty) Limited during 2006 in respect of the lease of certain office, manufacturing and parking space. Accéntuate Management Services (Pty) Limited recovers the lease expense from the companies based on the usage of space by the companies. The following directors/members of executive management were also directors/shareholders of GSIX Properties (Pty) Limited: CR Garner, FC Platt, DE Platt and GW Delport. The operating lease is in respect of stand 30, Steeledale, and is situated at 32 Steele Street, Steeledale, totalling 25 500 square metres rentable area, which lease expires on 30 November 2020. The disclosed shareholders of GSIX Properties (Pty) Limited have disposed of this investment during November 2010.

Accéntuate Management Services (Pty) Limited entered into a lease agreement with Dovelight Trading 26 (Pty) Limited in respect of the lease of certain office and parking space. The following directors/members of the executive management are also shareholders of Dovelight Trading 26 (Pty) Limited: FC Platt, DE Platt and AJ Voogt. The operating lease is in respect of portion 26 of erf 3062 Durban and is situated at 62 Marriot Road, Durban, which lease expires on 31 October 2019.

CGA Fenestrations (Pty) Limited has a lease agreement with erf 81 Sunderland Ridge CC, in which AJ Kerrod has an interest. The operating lease is in respect of stand 81, Sunderland Ridge totalling 1 500 square metres rentable area. The lease agreement expires on 31 October 2015. A Kerrod has resigned as director on 19 October 2010.

Director’s shareholding in Accéntuate LimitedThe table below shows the comparative direct and indirect holding of directors of Accéntuate:

Holdings of ACE shares by directors

2011 2010

NameDirect

holdingIndirect holding

Direct holding

Indirect holding

Dr DE Platt 2 767 000 – 2 500 000 –Mr AJ Voogt 1 979 004 – 1 634 902 –Mr AJ Kerrod – – 196 335 –KJA Share Trust (Mr AJ Kerrod) – – – 17 777 487 Kotula Trust (Mr FC Platt) – 5 405 575 – 5 405 575 Mr FC Platt 437 000 – – –Inyanga Trading 167 (Pty) Limited (MDC Motlatla) – 2 899 103 – 2 899 103

4 331 237 26 082 165 4 331 237 26 082 165

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Directors’ report continued

Share optionsThe directors are authorised to issue, allot and grant options to acquire up to a maximum of 25 000 000 ordinary shares in the issued share capital of the company in terms of the share incentive scheme. As at 30 June 2011, this represented 23% of shares in issue. The unexercised options under the scheme represent 4% of shares in issue. Details of share options granted under the scheme are as follows:

Options as at 30 June 2010 7 790 000Options granted during the year –Options exercised during the year 982 500Options forfeited during the year 2 733 000Options as at 30 June 2010 4 074 500

Share incentive scheme Refer to note 16 for detail about share-based payments during the current year. AJ Voogt has been appointed as the compliance officer to the Accentuate Limited Share Trust.

Authorised and issued share capital During the year under review no shares have been issued.

Borrowing limitations In terms of the articles of association of the company, the directors may exercise all the powers of the company to borrow money, as they consider appropriate. At 30 June 2011 the group’s borrowing powers are as described in note 13.

Non-current assets Details of major changes in the nature of the non-current assets of the group during the year are as follows:

Property, plant and equipment to the value of R2 833 999 (2010: R4 092 541) was acquired for cash, and items of property, plant and equipment with a book value of R383 576 (2010: R1 412 974) were disposed of during the year.

Dividend policy No dividends were declared during the period under review.

Litigation statement On 25 March 2011 an action was launched against the vendors of CGA Fenestrations in which Accéntuate is suing the vendors for damages arising from a breach of certain warranties provided by the vendor when Accéntuate purchased the shares in CGA in 2007. The amount claimed by Accéntuate is R10,4 million.

Share capital Refer to note 15 on page 52.

Directors’ remuneration Refer to note 30 on page 57.

Directors The directors of the company during the year and to the date of this report are as follows:

Name Nationality

MDC Motlatla South African FC Platt South African AJ Voogt South African DE Platt South African L Gadd South African D Molefe (alternate) South African AJ Kerrod South African

(Resigned 19 October 2010)R Patmore* South African

(Appointed 20 September 2011)E Ratshikhopha* South African

(Appointed 20 September 2011)

* Two new independent directors have been appointed to the Accéntuate board, please see pages 2 and 3 of the annual report for their respective resumés.

Company secretary The company secretary is P Dayah.

Business address Postal address Safic Business Park PO Box 1754 32 Steele Street Alberton Steeledale 1450 Alberton 2197

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Details of the company’s investment in subsidiaries are set out in note 6 on page 47 of the financial statements.

Independent auditors PKF (Pta) Inc. continued in office as the group’s auditors in accordance with the South African Companies Act, Act 71 of 2008. At the annual general meeting shareholders will be requested to reappoint PKF (Pta) Inc. as auditors to the group.

Compliance with financial reporting standardsThe Accéntuate Limited annual financial statements comply with International Financial Reporting Standards, the South African Companies Act, Act 71 of 2008, and the JSE Listings Requirements.

Interest in subsidiaries

Name of subsidiaryPercentage

held

R’000 Net

income/(loss)

after tax

FloorworX Africa (Pty) Limited 100 9 535CGA Fenestrations (Pty) Limited 100 (14 498)Safic (Pty) Limited 100 (640)Accéntuate Management Services (Pty) Limited 100 556Empowerment Financial Investment Company (Pty) Limited (dormant) 100 –Safic Black Empowerment Enterprises (Pty) Limited 100 147Safic Facilities Management Services (Pty) Limited 100 700*Safic Technologies (Pty) Limited 100 –*Safic Environmental Services (Pty) Limited 100 –*Safic Staff Share Trust 100 –*Southern Supplies (Pty) Limited 100 –**SAFESCO North (Pty) Limited 51 –Safic Academy (Pty) Limited 100 35

*This subsidiary was dormant in the current year. **The subsidiary is currently in liquidation.

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Statement of financial positionas at 30 June 2011

Group Company

Note2011

R’0002010

R’0002011

R’0002010

R’000

ASSEtSNon-current assetsProperty, plant and equipment 3 48 348 37 153 – –Goodwill 4 34 928 96 290 – –Intangible assets 5 1 169 2 440 – –Investments in subsidiaries 6 – – 69 743 138 397 Deferred tax 10 2 940 3 512 – –

87 385 139 395 69 743 138 397

Current assetsInventories 11 41 360 46 994 – –Loans to group companies 7 – – 5 661 22 050 Other financial assets 8 368 368 368 368 Current tax receivable 2 647 3 013 84 84 Trade and other receivables 12 34 918 57 230 592 592 Cash and cash equivalents 13 15 729 1 170 15 632 105

95 022 108 775 22 337 23 199

Assets of disposal groups 14 16 281 – – –

total assets 198 688 248 170 92 080 161 596

EquIty AND LIABILItIESEquity 15Share capital 125 555 124 916 132 580 132 579 Reserves 23 924 10 557 139 138 Accumulated (loss)/profit (32 428) 43 984 (66 999) 1 341

117 051 179 457 65 720 134 058

LiabilitiesNon-current liabilitiesOther financial liabilities 8 550 14 500 8 550 14 250 Finance lease obligation – 233 – –Deferred tax 10 5 247 2 915 – –

13 797 17 648 8 550 14 250

Current liabilitiesLoans from group companies 7 – – 11 726 1 291 Other financial liabilities 6 007 6 006 5 700 5 700 Current tax payable 551 526 – –Finance lease obligation 18 269 433 – – Operating lease liability 794 1 040 – –Trade and other payables 19 31 999 37 304 384 541Bank overdraft 13 21 496 5 756 – 5 756

61 116 51 065 17 810 13 288

Liabilities of disposal groups 14 6 724 – – –

total liabilities 81 637 68 713 26 360 27 538

total equity and liabilities 198 688 248 170 92 080 161 596

Net asset value per share (cents) 105 162 – –

Tangible net asset value per share (cents) 73 73 – –

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Statement of comprehensive incomefor the year ended 30 June 2011

Group Company

Note2011

R’0002010

R’0002011

R’0002010

R’000

CONtINuING OPERAtIONSRevenue 20 249 390 254 828 3 251 2 943 Cost of sales (113 556) (120 041) – –

Gross profit 135 834 134 787 3 251 2 943 Other income 250 1 021 2 530 2 176 Operating expenses (120 768) (119 560) (169) (116)

Operating profit 15 298 16 248 5 612 5 003Investment revenue 23 165 27 – –Impairment of assets 24 (70 836) – (68 655) –Finance costs 25 (2 942) (4 068) (2 852) (3 848)

(Loss)/profit before taxation (58 315) 12 207 (65 895) 1 155 Taxation 26 (3 738) (2 626) (222) (222)

(Loss)/profit from continuing operations (62 053) 9 581 (66 117) 933 Discontinued operations (12 554) 2 662 – –

(Loss)/profit for the year (74 607) 12 243 (66 117) 933 Other comprehensive income

Gains on property revaluation 355 315 – –Taxation related to components of other comprehensive income 62 52 – –

Other comprehensive income for the year net of taxation 417 367 – –

Total comprehensive (loss)/income for the year (74 190) 12 610 (66 117) 933

Earnings per share (cents)(Loss)/earnings per share from continuing operations (59.53) 9.41Headline earnings per share from continuing operations 8.32 9.34(Loss)/earnings per share from discontinued operations (12.04) 2.61Headline (loss)/earnings per share from discontinued operations (12.04) 2.61(Loss)/earnings per share combined (71.58) 12.02Diluted (loss)/earnings per share combined (71.58) 12.02Headline (loss)/earnings per share combined (3.72) 11.95Diluted headline (loss)/earnings per share combined (3.72) 11.95Final dividend per share – 2

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Statement of changes in equityfor the year ended 30 June 2011

Attributable to equity holders of the parent

Share capitalR’000

Share premium

R’000

Totalreserves

R’000

RetainedincomeR’000

Totalattributable

to equityholders ofthe group

R’000

Minority interest

R’000

Total equityR’000

GROuPBalance at 1 July 2009 1 125 074 10 872 33 583 169 530 13 169 543Total comprehensive (loss)/income for the year – – (315) 12 610 12 295 – 12 295Share premium expenses – (4) – – (4) – (4)Purchase of own/treasury shares – (155) – – (155) – (155)Dividends – – – (2 222) (2 222) – (2 222)Changes in ownership interests – – – 13 13 (13) –

Balance at 30 June 2010 1 124 915 10 557 43 984 179 457 – 179 457

Total comprehensive loss for the year – – (354) (74 190) (74 544) – (74 544)Revaluation of property, plant and equipment – – 13 721 – 13 721 – 13 721Share options exercised – 639 – – 639 – 639Dividends – – – (2 222) (2 222) – (2 222)

Balance at 30 June 2011 1 125 554 23 924 (32 428) 117 051 – 117 051

COMPANyBalance at 1 July 2009 1 130 583 138 2 629 – – 133 352Total comprehensive (loss)/income for the year – – – 933 – – 933Purchase of own/treasury shares – (4) – – – – (4)Dividends – – – (2 222) – – (2 222)Employee share option scheme – 2 000 – – – – 2 000

Total changes – 1 996 – (1 289) – – 706

Balance at 30 June 2010 1 132 578 138 1 340 – – 134 059

Total comprehensive loss for the year – – – (66 117) – – (66 117)Dividends – – – (2 222) – – (2 222)Total changes – – – (68 340) – – (68 340)

Balance at 30 June 2011 1 132 578 138 (66 999) – – 65 719

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Statement of cash flowsfor the year ended 30 June 2011

Group Company

Notes2011

R’0002010

R’0002011

R’0002010

R’000

Cash flows from operating activities Cash generated from operations 27 15 667 19 366 2 925 2 587Investment income 163 29 5 24Dividends received – – 2 525 2 152Finance costs (2 949) (4 069) (2 852) (3 848)Tax paid 28 (3 000) (1 434) (222) (222)

Net cash from operating activities 9 881 13 892 2 381 693

Cash flows from investing activitiesPurchase of property, plant and equipment (2 834) (4 092) – –Proceeds on sale of property, plant and equipment 384 1 486 – –Purchase of other intangible assets (173) (1 416) – –Loans advanced to group companies repaid – – 26 825 6 030

Net cash from investing activities 2 623 (4 022) 26 825 6 030

Cash flows from financing activitiesProceeds on share issue – – – 1 996Reduction of share capital or buy-back of shares – (159) – –Repayment of other financial liabilities (6 002) (6 008) (5 700) (5 700)Finance lease payments (228) (510) – –Dividends paid 29 (2 208) (2 210) (2 222) (2 210)

Net cash from financing activities (8 438) (8 887) (7 922) (5 914)

total cash movement for the year (1 180) 983 21 284 809Cash and cash equivalents at the beginning of the year (4 586) (5 569) (5 651) (6 460)

total cash and cash equivalents at the end of the year (5 766) (4 586) 15 632 (5 651)

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Notes to the annual financial statementsfor the year ended 30 June 2011

1. Presentation of annual financial statements The annual financial statements have been prepared in accordance with International Financial Reporting Standards, the AC 500

statements and interpretations, the South African Companies Act, Act 71 of 2008 and JSE Listings Requirements. The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below.

These accounting policies are consistent with the previous period.

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

including special purpose entities, which are controlled by the company.

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

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

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

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

Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the group’s interest therein, and are recognised within equity. Losses of subsidiaries attributable to non-controlling interests are allocated to the non-controlling interest, even if this results in a debit balance being recognised for non-controlling interest.

Transactions which result in changes in ownership levels, where the group has control of the subsidiary both before and after the transaction, are regarded as equity transactions and are recognised directly in the statement of changes in equity.

The difference between the fair value of consideration paid or received and the movement in non-controlling interest for such transactions is recognised in equity attributable to the owners of the parent.

Where a subsidiary is disposed of and a non-controlling shareholding is retained, the remaining investment is measured to fair value with the adjustment to fair value recognised in profit or loss as part of the gain or loss on disposal of the controlling interest.

Business combinations The group 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, liabilities 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 group) 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 cost 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 group assesses the classification of the acquiree’s assets and liabilities and reclassifies them where the classification is inappropriate for group purposes. This excludes lease agreements and insurance contracts, whose classification remains as per their inception date.

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Non-controlling interest arising from a business combination is measured either at their share of the fair value of the assets and liabilities of the acquiree, or at fair value. The treatment is not an accounting policy choice but is selected for each individual business combination and disclosed in the note for business combinations.

In cases where the group held a non-controlling shareholding in the acquiree prior to obtaining control, that interest is measured to fair value as at acquisition date. The measurement to fair value is included in profit or loss for the year.

Where the existing shareholding was classified as an available-for-sale financial asset, the cumulative fair value adjustments recognised previously to other comprehensive income and accumulated in equity are recognised in profit or loss as a reclassification adjustment.

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.

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

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

trade receivables and trade payables Normal trade credit terms in South Africa have been judged to be equal to 60 days. Where trade receivables and

payables are settled beyond the normal trade credit terms, the transaction is deemed to include a financing arrangement. The resulting trade receivable or trade payable is discounted from the date of settlement to day 60 using an appropriate discount rate. The group discounts its trade receivables using a discount rate equivalent to that which it could earn on funds placed on call for a similar term. Trade payables are discounted using the group’s incremental borrowing rate which it could obtain from its commercial bankers for borrowing funds on similar terms.

The group assesses its trade receivables for impairment at each reporting period date. In determining whether an impairment loss should be recorded in the statement of comprehensive income, the group makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

The impairment for trade receivables is calculated on a portfolio basis, based on historical loss ratios, adjusted for national and industry-specific economic conditions and other indicators present at the reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period.

Options granted Management determined the value of options in issue based on current market prices and the terms and conditions of

the share option plan. Additional details regarding the estimates are included in note 16 – Share-based payments.

Fair value estimation The fair value of financial instruments traded in active markets (such as trading and available-for-sale securities) is based

on quoted market prices at the reporting period date. The quoted market price used for financial assets held by the group is the current bid price.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. The group uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting period date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at the reporting period date.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the group for similar financial instruments.

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Notes to the annual financial statements continuedfor the year ended 30 June 2011

1. Presentation of annual financial statements continued 1.2 Accounting estimates and judgements continued Impairment testing The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of

value in use calculations and fair values. These calculations require the use of estimates and assumptions. It is reasonably possible that the assumption may change, which may then impact our estimations and may then require a material adjustment to the carrying value of goodwill and tangible assets.

The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time. They are significantly affected by a number of factors, including current market conditions and interest rates.

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

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

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

Residual values and useful lives of items of property, plant and equipment Plant and machinery Due to the specialised nature of the group’s plant and machinery, the residual value attached to these assets has been

estimated to be nil. The group estimates that the useful life of the plant and machinery, being the period of time for which the assets can be utilised without significant modifications, replacements or improvements, is 10 years based on current levels of production and repairs and maintenance costs incurred.

1.3 Property, plant and equipment The cost of an item of property, plant and equipment is recognised as an asset when: • it is probable that future economic benefits associated with the item will flow to the company; and • the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

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

Major spare parts and stand-by equipment which are expected to be used for more than one period are included in property, plant and equipment. In addition, spare parts and stand-by equipment which can only be used in connection with an item of property, plant and equipment are accounted for as property, plant and equipment.

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses except for land, buildings and plant which is carried at revalued amount being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

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

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When an item of property, plant and equipment is revalued, any accumulated depreciation at the date of the revaluation is restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount.

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

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

The revaluation surplus in equity related to a specific item of property, plant and equipment is transferred directly to retained earnings as the asset is used. The amount transferred is equal to the difference between depreciation based on the revalued carrying amount and depreciation based on the original cost of the asset.

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

The useful lives of items of property, plant and equipment have been assessed as follows: Item Average useful life Land Indefinite Buildings 40 years Leasehold property Over the shorter of the useful life or term of the lease Plant and machinery 5 to 10 years Furniture and fixtures 5 to 6 years Motor vehicles 5 years Office equipment 5 to 10 years IT equipment 3 years Computer software 2 years Special patterns and tools 4 years

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

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

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

1.4 Goodwill Goodwill is initially measured at cost, being the excess of the acquisition over the group’s interest of the net fair value

of the identifiable assets, liabilities and contingent liabilities. Subsequently goodwill is carried at cost less any accumulated impairment. The excess of the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of the business combination is immediately recognised in profit or loss. Internally generated goodwill is not recognised as an asset.

1.5 Intangible assets Intangible assets are shown at historical cost less accumulated amortisation and impairment losses.

Amortisation periods and methods are reviewed annually and adjusted if appropriate.

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1. Presentation of annual financial statements continued 1.5 Intangible assets continued Amortisation is charged to the statement of comprehensive income on a straight-line basis over the estimated useful

lives of the intangible assets, unless such lives are indefinite. Intangible assets with an indefinite useful life are tested for impairment at each reporting period date. Other intangible assets are amortised from the date that they are available for use. The useful lives are as follows:

Item useful life Computer software, other 2 years Patents, trademarks and other rights 5 to 15 years 1.6 Investments in subsidiaries Company annual financial statements In the company’s separate annual financial statements, investments in subsidiaries are carried at cost less any

accumulated impairment.

The cost of an investment in a subsidiary is the aggregate of: • the fair value, at the date of exchange, of assets given, liabilities incurred or assumed and equity instruments issued

by the company; plus • any costs directly attributable to the purchase of the subsidiary.

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

1.7 Financial instruments Classification The group classifies financial assets and financial liabilities into the following categories: • Loans and receivables. • Financial liabilities measured at amortised cost.

Classification depends on the purpose for which the financial instruments were obtained/incurred and takes place at initial recognition.

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

instruments.

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

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

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

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

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

accumulated impairment losses.

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

Fair value determination The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and

for unlisted securities), the group establishes fair value by using valuation techniques. These include the use of recent arm’s-length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis and option pricing models, making maximum use of market inputs and relying as little as possible on entity specific inputs.

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

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

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

Impairment losses are recognised in profit or loss. Impairment losses are reversed when an increase in the financial asset’s recoverable amount can be related objectively

to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the financial asset at the date that the impairment is reversed shall not exceed what the carrying amount would have been had the impairment not been recognised.

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

Loans to/from group companies Loans to group companies are classified as loans and receivables.

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

Loans to shareholders, directors, managers and employees These financial assets are classified as loans and receivables.

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

the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. 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 the statement of comprehensive income 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 the statement of comprehensive income.

Trade and other receivables are classified as loans and receivables.

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

interest rate method.

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

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

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

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

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1. Presentation of annual financial statements continued 1.8 tax Income tax assets and liabilities Income tax is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior

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

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

Deferred tax assets and liabilities Deferred tax is provided in full, using the statement of financial position liability method. Deferred tax is the future tax

consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities shown on the statement of financial position. Deferred tax assets and liabilities are not recognised if they arise in the following situations: the initial recognition of goodwill; or the initial recognition of assets and liabilities that affect neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of recovery or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the reporting period date.

The group does not recognise deferred tax liabilities, or deferred tax assets, on temporary differences associated with investments in subsidiaries, as it is not considered probable that the temporary differences will reverse in the foreseeable future. It is the group’s policy to reinvest undistributed profits arising in group companies.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. The carrying amount of the deferred tax assets are reviewed at each reporting period date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

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

to the extent that the tax arises from: • a transaction or event which is recognised, in the same or a different period, directly in equity, or • a business combination.

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

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

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

Finance leases – lessee Finance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair

value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

The lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate on the remaining balance of the liability.

Operating leases – lessor Operating lease income is recognised as an income on a straight-line basis over the lease term. The difference between

the amounts recognised as income and the contractual income is recognised as an operating lease asset. This asset is not discounted.

Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income.

Income for leases is disclosed under revenue in the statement of comprehensive income.

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

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

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

1.10 Inventories Inventories are measured at the lower of cost and net realisable value on the first-in first-out basis.

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

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

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

1.11 Construction contracts and receivables Where the outcome of a construction contract can be estimated reliably, contract revenue and costs are recognised by

reference to the stage of completion of the contract activity at the reporting period date, as measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs.

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 period in which they are incurred.

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

1.12 Non-current assets held-for-sale and disposal groups Non-current assets and disposal groups are classified as held-for-sale if their carrying amount will be recovered through

a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets held-for-sale or disposal group are measured at the lower of the carrying amount and fair value less costs to sell.

A non-current asset is not depreciated or amortised while it is classified as held-for-sale, or while it is part of a disposal group classified as held-for-sale.

Interest and other expenses attributable to the liabilities of a disposal group classified as held-for-sale are recognised in profit or loss.

1.13 Impairment of assets The group assesses at each reporting period date whether there is any indication that an asset may be impaired. If any

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

Irrespective of whether there is any indication of impairment, the group also: • tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually

by comparing the carrying amount with the recoverable amount. This impairment test is performed during the annual period and at the same time every period; and

• tests goodwill acquired in a business combination for impairment at least annually.

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1. Presentation of annual financial statements continued 1.13 Impairment of assets continued If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it

is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash generating unit to which the asset belongs is determined.

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

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

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

Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination.

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

• First, to reduce the carrying amount of any goodwill allocated to the cash-generating unit. • Then, to the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill 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, other than goodwill attributable to a reversal of an impairment loss, does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

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

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

liabilities.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

1.15 Share-based payments 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 transaction or a liability if the goods or services were acquired in a cash-settled share-based payment transaction.

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.

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.

For cash-settled share-based payment transactions, the goods or services acquired and the liability incurred are measured at the fair value of the liability. Until the liability is settled, the fair value of the liability is remeasured at each reporting date and at the date of settlement, with any changes in fair value recognised in profit or loss for the period.

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If the share-based payments granted do not vest until the counterparty completes a specified period of service, the group accounts for those services as they are rendered by the counterparty during the vesting period, or on a straight-line basis over the vesting period.

If the share-based payments vest immediately, the services received are recognised in full.

For share-based payment transactions in which the terms of the arrangement provide either the entity or the counterparty with the choice of whether the entity settles the transaction in cash or other assets or by issuing equity instruments, the components of that transaction are recorded as a cash-settled share-based payment transaction if, and to the extent that, a liability to settle in cash or other assets has been incurred, or as an equity-settled share-based payment transaction if, and to the extent that, no such liability has been incurred.

1.16 Employee benefits Short-term employee benefits The cost of short-term employee benefits (such as paid vacation leave and bonuses), is recognised in the period in which

the service is rendered and is not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of profit-sharing and 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.

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

Payments made to industry-managed retirement benefit schemes are dealt with as defined contribution plans where the group’s obligation under the schemes is equivalent to those arising in a defined contribution retirement benefit plan.

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

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

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

1.18 Revenue Revenue comprises sales and services to external customers. Consideration received from customers is only recorded

as revenue to the extent that the company has performed its contractual obligations in respect of that consideration.

Revenue from services rendered is recognised with reference to the stage of completion of the transaction at reporting period date using the percentage of completion method.

Rental income from operating leases is recognised in income on a straight-line basis over the lease term.

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

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

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

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

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

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1. Presentation of annual financial statements continued 1.20 Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are

capitalised as part of the cost of that asset until such time as the asset is ready for its intended use. The amount of borrowing costs eligible for capitalisation is determined as follows:

• Actual borrowing costs on funds specifically borrowed for the purpose of obtaining a qualifying asset less any temporary investment of those borrowings.

• Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of obtaining a qualifying asset. The borrowing costs capitalised do not exceed the total borrowing costs incurred.

The capitalisation of borrowing costs commences when: • expenditures for the asset have occurred; • borrowing costs have been incurred; and • activities that are necessary to prepare the asset for its intended use or sale are in progress.

Capitalisation is suspended during extended periods in which active development is interrupted.

Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

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

mandatory for the group’s accounting periods beginning on or after 1 July 2011 or later periods: 2010 Annual Improvements project: Amendments to IFRS 3 Business Combinations Transition requirements for contingent consideration from a business combination that occurred before the effective

date of the revised IFRS. Measurement of non-controlling interests. Unreplaced and voluntarily replaced share-based payment awards.

The effective date of the amendments is for years beginning on or after 1 January 2011. The impact of the amendments is not material.

2010 Annual Improvements project: IFRS 7 Financial Instruments Disclosures Clarification of disclosures.

The effective date of the amendment is for years beginning on or after 1 January 2011. The impact of the amendment is not material.

2010 Annual Improvements project: IAS 1 Presentation of Financial Statements Clarification of statement of changes in equity. New requirements to group together items within OCI that may be reclassified to the profit or loss section of the income

statement in order to facilitate the assessment of their impact on the overall performance of an entity.

The effective date of the amendment is for years beginning on or after 1 January 2011.

The impact of the amendment is not material.

2010 Annual Improvements project: IAS 34 Interim Financial Reporting Significant events and transactions.



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New Standard: IFRS 9 Financial Instruments New standard that forms the first part of a three-part project to replace IAS 39 Financial Instruments: Recognition and

Measurement.



New Standard: IFRS 10 Consolidated Financial Statements New standard that replaces the consolidation requirements in SIC 12 Consolidation – Special Purpose Entities and

IAS 27 Consolidated and Separate Financial Statements. Standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company and provides additional guidance to assist in the determination of control where this is difficult to assess.

The effective date of the amendment is for years beginning on or after 1 January 2013. The impact of the amendment is not material.

2.2 Standards and interpretations not yet effective or relevant The following standards and interpretations have been published and are mandatory for the group’s accounting periods

beginning on or after 1 July 2011 or later periods, but are not relevant to its operations:

New Standard: IFRS 11 Joint Arrangements New standard that deals with the accounting for joint arrangements and focuses on the rights and obligations of the

arrangement, rather than its legal form. Standard requires a single method for accounting for interests in jointly controlled entities.


The group does not envisage the adoption of the standard until such time as it becomes applicable to the group’s operations.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

New Standard: IFRS 12 Disclosure of Interests in Other Entities New and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint

arrangements, associates, special purpose vehicles and other off statement of financial position vehicles.

The effective date of the amendment is for years beginning on or after 1 January 2013. The group does not envisage the adoption of the standard until such time as it becomes applicable to the group’s

operations.


Amendment to IAS 12 Income taxes Rebuttable presumption introduced that an investment property will be recovered in its entirety through sale.



Amendments to IAS 19 Employee Benefits Amendments to the accounting for current and future obligations resulting from the provision of defined benefit plans.



Amendments to IAS 24 Related Party Disclosure Simplification of the disclosure requirements for government related entities. Clarification of the definition of related party. The effective date of the amendment is for years beginning on or after 1 January 2011.


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3. Property, plant and equipment2011 2010

Cost/valuation

R’000

Accumu-lated

depre-ciationR’000

Carrying valueR’000

Cost/valuation

R’000

Accumu-lated

depre-ciationR’000

Carrying value

R’000

GroupLand 5 000 – 5 000 900 – 900 Buildings 25 399 (56) 25 343 18 015 (1 354) 16 661 Leasehold property 3 267 (1 579) 1 688 3 294 (1 395) 1 898 Plant and machinery 18 667 (7 298) 11 369 19 527 (9 063) 10 463 Furniture and fixtures 3 540 (1 625) 1 915 3 689 (1 437) 2 252 Motor vehicles 1 268 (737) 531 3 272 (1 573) 1 701 Office equipment 2 669 (1 985) 684 2 691 (1 687) 1 004 IT equipment 3 301 (2 689) 612 4 094 (3 111) 983 Assets under construction 1 150 – 1 150 928 – 928 Special patterns and tools 143 (87) 56 141 (129) 11 Site tools – – – 413 (62) 352

total 64 404 (16 056) 48 348 56 964 (19 811) 37 153

Reconciliation of property, plant and equipment – Group – 2011

Openingbalance

R’000Additions

R’000Disposals

R’000

Classifiedas held-for-sale

R’000

Re-valuations

R’000

Depre-ciationR’000

totalR’000

Land 900 – – – 4 100 – 5 000 Buildings 16 661 14 – – 9 134 (466) 25 343 Leasehold property 1 898 119 – – – (329) 1 688 Plant and machinery 10 463 1 138 (2) (927) 3 252 (2 555) 11 369 Furniture and fixtures 2 252 43 – (5) – (375) 1 915 Motor vehicles 1 701 – (191) (704) – (275) 531 Office equipment 1 004 155 (13) 2 – (464) 684 IT equipment 983 314 (22) (157) – (506) 612 Assets under construction 928 222 – – – – 1 150 Special patterns and tools 11 66 – – – (21) 56 Site tools 352 – – (352) – – –

37 153 2 071 (228) (2 143) 16 486 (4 989) 48 348

Reconciliation of property, plant and equipment – Group – 2010

Openingbalance

R’000Additions

R’000

Additionsthrough

businesscom-

binationsR’000

DisposalsR’000

Depre-ciationR’000

TotalR’000

Land 900 – – – – 900 Buildings 17 079 29 – – (446) 16 661 Leasehold property 2 097 253 – – (452) 1 898 Plant and machinery 10 084 2 450 (2) – (2 068) 10 463 Furniture and fixtures 2 774 10 – (160) (371) 2 252 Motor vehicles 2 296 189 (155) – (631) 1 701 Office equipment 1 141 202 (3) 160 (495) 1 004 IT equipment 987 546 – – (551) 983 Assets under construction 2 180 – (1 252) – – 928 Special patterns and tools 54 – – – (43) 11 Site tools – 413 – – (62) 352

39 592 4 092 (1 412) – (5 119) 37 153

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3. Property, plant and equipment continuedPledged as security

Group Company

2011R’000

2010R’000

2011R’000

2010R’000

Carrying value of assets pledged as security:Land and buildings 30 343 17 561 – – Land and buildings are pledged as security for a mortgage bond and other facilities granted to the group as detailed in note 3.Motor vehicles 1 770 1 770 – – Certain motor vehicles of the group are pledged as security for liabilities under finance lease liabilitiesAssets subject to finance lease (net carrying amount)Leasehold property 1 688 1 898 – –Motor vehicles 914 843 – –

2 602 2 741 – –

RevaluationsThe effective date of the revaluations was 1 June 2011. Revaluations were performed by independent valuer, Valuation Network Property Valuers & Consultants. Valuation Network are not connected to the company.

Land and buildings are revalued independently every three years or, if any indicators of impairment exists, as per the group policy.

The valuation was performed using the discounted cash flow (of future rental income) approach and the following assumptions were used:Discount rate: 11,50%Term: 12 months

Management estimates that the carrying amount of the land and buildings at year-end approximates their fair values and that no impairment indicators were present at year-end suggesting otherwise.

These assumptions were based on current market conditions present at 30 June 2011.

The carrying value of the revalued assets under the cost model would have been:

Group Company

2011R’000

2010R’000

2011R’000

2010R’000

Land 988 988 – –Buildings 5 704 5 851 – –

Details of propertiesFloorworX Factory PremisesErf 56825, Bert Kipling Street, Wilsonia, East London– Purchase price: 1 October 2004 7 821 7 831 – –– Additions since purchase or valuation 886 526 – –– Revaluation surpluses 23 967 10 698 – –– Accumulated amortisation (1 820) (1 494) – –

30 854 17 561 – –

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4. Goodwill2011 2010

CostR’000

Accumu-lated

impair-ment

R’000

CarryingvalueR’000

CostR’000

Accumu-lated

impair-ment

R’000

Carryingvalue

R’000

GroupCGA Fenestrations (Pty) Limited – – – 61 362 – 61 362Safic (Pty) Limited 13 983 – 13 983 13 983 – 13 983Safic Facilities Management 5 828 – 5 828 5 828 – 5 828Safic Academy (Pty) Limited 622 – 622 622 – 622Safic Black Empowerment Enterprises (Pty) Limited 2 333 – 2 333 2 333 – 2 333FloorworX Africa (Pty) Limited 12 162 – 12 162 12 162 – 12 162

total 34 928 – 34 928 96 290 – 96 290

Reconciliation of goodwill – Group – 2011

Openingbalance

R’000

Impair-ment loss

R’000total

R’000

CGA Fenestrations (Pty) Limited 61 362 (61 362) –Safic (Pty) Limited 13 983 – 13 983Safic Facilities Management 5 828 – 5 828Safic Academy (Pty) Limited 622 – 622Safic Black Empowerment Enterprises (Pty) Limited 2 333 – 2 333FloorworX Africa (Pty) Limited 12 162 – 12 162

96 290 (61 362) 34 928

Reconciliation of goodwill – Group – 2010

Opening balance

R’000Total

R’000

CGA Fenestrations (Pty) Limited 61 362 61 362Safic (Pty) Limited 13 983 13 983Safic Facilities Management 5 828 5 828Safic Academy (Pty) Limited 622 622Safic Black Empowerment Enterprises (Pty) Limited 2 333 2 333FloorworX Africa (Pty) Limited 12 162 12 162

96 290 96 290

Goodwill has been allocated to the operating subsidiaries that form the group.

The recoverable amount of the operating subsidiaries are determined as the value in use.

Management has estimated the future cash flows expected to be generated by each subsidiary, based on the most recent budgets and forecasts. These expected cash flows were discounted at a pre-tax rate, similar to that at which the company has financed recent acquisition over a period of five years.

Budgets and forecasts are prepared based on past experience in the industries in which the company operates and information obtained to the date of this report. Growth rates applied to extrapolate future cash flows were judged to be equal to current inflation rates.

Goodwill allocated to CGA Fenestrations (Pty) Limited was impaired during the current year as the assets and liabilities of the subsidiary have been classified as a disposal group. Refer to note 14.

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5. Intangible assets2011 2010

Cost/valuation

R’000

Accumu-lated

amor-tisation

R’000

CarryingvalueR’000

Cost/valuation

R’000

Accumu-lated

amor-tisationR’000

Carryingvalue

R’000

GroupPatents, trademarks and other rights 3 598 (2 594) 1 004 3 592 (1 567) 2 025Computer software, other 1 549 (1 384) 165 1 427 (1 012) 415

total 5 147 (3 978) 1 169 5 019 (2 579) 2 440

Openingbalance

R’000Additions

R’000

Amor-tisation

R’000total

R’000

Reconciliation of intangible assets – Group – 2011Patents, trademarks and other rights 2 025 6 (1 027) 1 004Computer software, other 415 167 (417) 165

2 440 173 (1 444) 1 169

Reconciliation of intangible assets – Group – 2010Patents, trademarks and other rights 1 767 1 250 (992) 2 025Computer software, other 620 166 (371) 415

2 387 1 416 (1 363) 2 440

6. Investments in subsidiaries

Name of company

%holding

2011

% holding

2010

Carryingamount

2011R’000

Carryingamount

2010R’000

Safic (Pty) Limited 100 100 18 844 18 844FloorworX Africa (Pty) Limited 100 100 41 342 41 342Accéntuate Management Services (Pty) Limited 100 100 – –Empowerment Financial Investment Company (Pty) Limited 100 100 – –CGA Fenestrations (Pty) Limited 100 100 9 557 78 211

69 743 138 397

CGA Fenestrations (Pty) Limited has been impaired in the current year to its fair value.

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7. Loans to (from) group companiesGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

SubsidiariesAccéntuate Management Services (Pty) Limited – – (595) 1 569Safic (Pty) Limited – – (206) 10 028Empowerment Financial Investment Company (Pty) Limited – – 46 43Accéntuate Limited Share Trust – – 5 513 6 550CGA Fenestrations (Pty) Limited – – 102 3 860FloorworX Africa (Pty) Limited – – (10 925) (1 291)The above loans are unsecured, bear interest at the prime lending rate and no terms for repayment have been set.

– – (6 065) 20 759Current assets – – 5 661 22 050Non-current liabilities – – – –Current liabilities – – (11 726) (1 291)

– – (6 065) 20 759

Current assets – – 5 661 22 050Non-current liabilities – – – –Current liabilities – – (11 726) (1 291)

– – (6 065) 20 759

Fair value of loans to and from group companiesLoans to group companies – – 5 661 22 050Loans from group companies – – (11 726) (1 291)

The fair value has been determined as the amortised cost of the assets or liabilities. The directors are of the opinion that this value is a fair determination of amounts due or receivable in the future.

8. Other financial assetsGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

Loans and receivablesPurchase of Kalahari Environmental and Mining Supplies (Pty) Limited 368 368 368 368Legal action has been initiated to recover this amount.Current assetsLoans and receivables 368 368 368 368

9. Financial assets by categoryThe accounting policies for financial instruments have been applied to the line items below:

Loans andreceivables

R’000Total

R’000

Group – 2011Other financial assets 368 368Trade and other receivables 34 918 34 918Cash and cash equivalents 15 729 15 729

51 015 51 015

Group – 2010Other financial assets 368 368Trade and other receivables 57 230 57 230Cash and cash equivalents 1 170 1 170

58 768 58 768

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10. Deferred taxGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

Deferred tax assetAccelerated capital allowances for tax purposes (1 626) (1 714) – –Timing differences – expense items 2 155 1 875 – –Revaluation, net of related depreciation (4 846) (2 145) – –Tax losses available for set off against future taxable income 2 010 2 581 – –

(2 307) 597 – –

Reconciliation of deferred tax asset (liability)At beginning of the year 597 218 – –Increase/(decrease) in tax losses available for set off against future taxable income

(572) (249) – –

Originating temporary difference on tangible fixed assets 89 57 – –Reversing temporary difference on revaluation of property, plant and equipment

(2 763) – – –

Temporary difference on realisation of revaluation surplus 62 51 – –Originating timing differences related to income/expenses 280 520 – –

(2 307) 597 – –

unrecognised deferred tax assetUnused tax losses not recognised as deferred tax assets 1 911 1 929 979 1 929

use and sales ratesThe deferred tax rate applied to the fair value adjustments of investment properties/financial assets is determined by the expected manner of recovery. Where the expected recovery of the investment property/financial assets is through sale, the capital gains tax rate of 14% (2010: 14%) is used. If the expected manner of recovery is through indefinite use, the normal tax rate of 28% (2010: 28%) is applied.

If the manner of recovery is partly through use and partly through sale, a combination of capital gains tax rate and normal tax rate is used.

tax consequences of undistributed reservesGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

STC on dividends – 222 – 222

11. InventoriesGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

Raw materials 5 861 8 097 – –Work in progress 3 024 9 434 – –Finished goods 32 144 29 293 – –Production supplies 167 97 – –Machinery, spares and consumables 704 785 – –

41 900 47 706 – –

Inventories (write-downs) (540) (712) – –41 360 46 994 – –

Inventory pledged as securityInventory pledged as security 41 360 46 994 – –

Inventory was pledged as security for banking facilities as detailed in note 13.

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12. trade and other receivablesGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

Trade receivables 32 697 54 694 592 592Prepayments 2 018 2 206 – –Deposits 202 263 – –Value added tax 1 67 – –

34 918 57 230 592 592

trade and other receivables pledged as securityTrade and other receivables (excluding value added tax) were pledged as security for banking facilities as set out in note 14.trade and other receivables past due but not impairedTrade and other receivables which are less than three months past due are not considered to be impaired. At 30 June 2011, R4 120 852 (2010: R5 661 262) was past due but not impaired.The ageing of amounts past due but not impaired is as follows:One month past due 2 842 3 925 – –Two months past due 872 256 – –Three months past due 406 1 000 – –trade and other receivables impairedAs of 30 June 2011, trade and other receivables of R456 592 (2010: R1 173 989) were impaired and provided for.The ageing of these debtors is as follows:Over six months 456 1 173 – –Reconciliation of provision for impairment of trade and other receivablesOpening balance 1 174 415 – –Provision for impairment – 838 – –Amounts written off as uncollectable (694) (79) – –Unused amounts reversed (23) – – –

457 1 174 – –

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

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13. Cash and cash equivalentsCash and cash equivalents consist of:

Group Company

2011R’000

2010R’000

2011R’000

2010R’000

Cash on hand 43 61 – –Bank balances 15 686 1 109 15 632 105Bank overdraft (21 496) (5 756) – (5 756)

(5 767) (4 586) 15 632 (5 651)

Current assets 15 729 1 170 15 632 105Current liabilities (21 496) (5 756) – (5 752)

(5 767) (4 586) 15 632 (5 651)

The total amount of undrawn facilities available for future operating activities and commitments 19 572 20 744 19 572 20 744Credit quality of cash at bank and short-term deposits, excluding cash on handThe credit quality of cash at bank and short-term deposits, excluding cash on hand, that are neither past due nor impaired, can be assessed by reference to external credit ratings (if available) or historical information about counterparty default rates:Credit ratingAAA 15 686 1 109 15 632 105

All lending facilities of the group are secured by the following:General Notarial Bond to the value of R40 million over all moveable assets of Accéntuate in favour of ABSA Bank Limited.

Special Notarial Bond to the value of R10 million over specific assets of Accéntuate in favour of ABSA Bank Limited.

First Covering Mortgage Bond of R10 million over the FloorworX Property in East London (refer note 3).

First ranking cession and pledge by the group of its right, title and interest in: • all accounts receivable;• all bank accounts, retentions, deposits, prepayments, cash and the like; and• all insurance policies, with ABSA’s interest therein specifically noted.

Total facilities granted are as set out below:• Term loans: R27 500 000• Permanent lending facility: R33 500 000• Forward exchange contract facility: R14 000 000

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14. Discontinued operations or disposal groups or non-current assets held-for-saleThe group has decided to discontinue its operations in the Glass & Aluminium segment. The assets and liabilities of the disposal group are set out below.The decision was made by the board of directors to discontinue these operations due the lack of return on investment. The assets and liabilities are to be sold as a going concern. The carrying value of the disposal group was impaired by R9 473 710 to reflect its fair value less cost to sell.

Group Company

2011R’000

2010R’000

2011R’000

2010R’000

Profit and lossRevenue 27 320 50 702 – –Cost of sales (22 731) (26 263) – –

Gross profit 4 589 24 439 – –Expenses (16 950) (21 064) – –

Profit before tax (12 361) 3 375 – –Tax (193) (713) – –

(12 554) 2 662 – –

Assets and liabilitiesAssets of disposal groupsProperty, plant and equipment 2 121 – – –Other financial assets 39 – – –Inventories 4 295 – – –Trade and other receivables 9 826 – – –

16 281 – – –

Liabilities of disposal groupsOther financial liabilities 273 – – –Deferred tax 45 – – –Finance lease obligation 62 – – –Trade and other payables 6 344 – – –

6 724 – – –

Cash flow of disposal groupsNet changes in operating activities (8 238) (3 947) – –Net changes in investing activities (4 360) 4 692 – –Net changes in financing activities (471) (747) – –

(13 069) (2) – –

15. Share capitalGroup Company

2011R

2010R

2011R

2010R

Authorised500 000 000 ordinary shares of R0,00001 each 5 000 5 000 5 000 5 000Reconciliation of number of shares issued:Reported as at 1 July 2010 101 855 628 101 980 628 111 108 119 106 108 119Issue of shares – ordinary shares – – – 5 000 000Shares repurchased – (125 000) – –

101 855 628 101 855 628 111 108 119 111 108 119

The unissued ordinary shares are under the control of the directors in terms of a resolution of members passed at the last annual general meeting. This authority remains in force until the next annual general meeting.IssuedOrdinary 1 018 1 018 1 111 1 111Share premium 125 554 295 124 915 037 132 578 732 132 578 732

125 555 313 124 916 055 132 579 843 132 579 843

The directors have a general mandate under which they may repurchase the shares of the company on the open market, if and when they deem fit. This authority remains in place until the next annual general meeting.

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16. Share-based payments

Share option group Number

Weightedexercise

priceCents

total valueR’000

Outstanding at the beginning of the year – Tranche A 1 312 000 1,03 1 351Outstanding at the beginning of the year – Tranche B 534 000 1,80 961Outstanding at the beginning of the year – Tranche C 944 000 0,41 387Outstanding at the beginning of the year – Tranche D 5 000 000 0,35 1 750

Outstanding options

Exercise date within

one year

Exercise date from

two to three years total

Options with exercise price of R1,03 656 000 – 656 000Options with exercise price of R1,80 178 000 178 000 356 000Options with exercise price of R0,41 264 500 – 264 500Options with exercise price of R0,35 1 401 000 1 397 000 2 798 000

Information on options granted during the yearNo share options were granted for the year under review. If options are granted, fair value is determined using the Black Scholes option model. The following inputs were used:• Exercise price.• Expected volatility.• Option life.• The risk-free interest rate.• How expected volatility was determined, including an explanation of the extent to which expected volatility was based on

historical volatility.• How any other features of the option grant were incorporated into the measurement of fair value, such as a market condition.

Options are issued to staff members at the discretion of the board of directors. Exercise price is determined as the last sales price or, if there was no sale, the middle market price on the most recent trading day on the JSE immediately preceding the offer date as the option date, as the case may be. All options vest over a period of three years at a vesting rate of 33,3% per annum. All options that are not exercised are forfeited back to the share trust.

17. Other financial liabilitiesGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

Held at amortised costABSA term loan 9 000 13 400 9 000 13 400The loan is secured as detailed in note 14, bears interest at 2,5% over the Johannesburg Interbank (JIBAR) lending rate and is repayable in 18 quarterly instalments.

ABSA term loan 5 250 6 550 5 250 6 550The loan is secured as detailed in note 14, bears interest at 3% over the JIBAR lending rate and is repayable in 18 quarterly instalments.

Industrial Development Corporation 282 556 – –The liability consists of two loans and is repayable in 33 monthly instalments. The loans bear interest at 10,5%.

14 532 20 506 14 250 19 950

Non-current liabilitiesAt amortised cost 8 550 14 500 8 550 14 250Current liabilitiesAt amortised cost 5 982 6 006 5 700 5 700

14 532 20 506 14 250 19 950

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18. Finance lease obligationGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

Minimum lease payments due– within one year 298 501 – –– in second to fifth year inclusive – 255 – –

298 756 – –Less: Future finance charges (29) (90) – –

Present value of minimum lease payments 269 666 – –

Present value of minimum lease payments due– within one year 269 433 – –– in second to fifth year inclusive – 233 – –

269 666 – –

Non-current liabilities – 233 – –Current liabilities 269 433 – –

269 666 – –

It is group policy to lease certain motor vehicles under finance leases.

The average lease term was two to four years and the average effective borrowing rate was 10% (2010: 11%).

Interest rates are linked to prime at the contract date. All leases have fixed repayments and no arrangements have been entered into for contingent rent.

The group’s obligations under finance leases are secured by the lessor’s charge over the leased assets. Refer to note 3.

19. trade and other payablesGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

Trade payables 25 982 24 951 362 519Value added tax 1 009 3 346 – –Accrued leave pay 2 231 1 572 – –Accrued bonus 1 656 2 324 – –Accrued payroll expenses 812 1 676 – –Accrued operating expenses 102 2 950 – –Accrued audit fees 96 463 – –Other accrued expenses 111 22 22 22

31 999 37 304 384 541

20. RevenueSale of goods 241 330 246 064 – –Rendering of services 8 060 8 764 – –Interest received (trading) – – 3 251 2 943

249 390 254 828 3 251 2 943

21. Operating profitOperating profit for the year is stated after accounting for the following:Operating lease chargesPremises– Straight-line amounts 266 6 274 – –– Motor vehicles– Straight-line amounts 3 116 2 940 – –Equipment– Straight-line amounts 741 906 – –Profit/(loss) on sale of property, plant and equipment 101 65 – –Profit/(loss) on exchange differences 23 (203) – –Amortisation on intangible assets 1 360 1 321 – –Depreciation on property, plant and equipment 5 074 4 512 – –Employee costs 61 160 59 875 – –

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22. Auditors’ remunerationGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

Fees 737 728 36 –Tax and secretarial services 9 29 – –

746 757 36 –

23. Investment revenueInterest revenueBank 165 27 – –

24. Impairment of assetsMaterial impairment losses (recognised) reversedDisposal groupThe carrying value of the cash-generating unit relating to the Glass & Aluminium operating segment was impaired as the assets and liabilities of the cash-generating unit was classified as a disposal group. The recoverable amount of the cash-generating unit was based on its fair value less costs to sell. Refer to note 15.

(9 474) – – –

Significant goodwillGoodwillCGA Fenestrations (Pty) Limited goodwill was impaired as the assets and liabilities of the subsidiary was classified as a disposal group. The recoverable amount of the asset was based on its fair value less costs to sell. Refer to note 15.

(61 362) – – –

total impairment losses (70 836) – – –

25. Finance costsNon-current borrowings 1 699 2 425 1 468 2 235Bank 1 236 1 623 1 231 1 613Penalty interest – 9 – –Other interest paid 7 11 – –

2 942 4 068 2 852 3 848

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26. taxationGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

Major components of the tax expenseCurrentLocal income tax – current period 3 010 4 473 – –Local income tax – recognised in current tax for prior periods – (1 028) – –Secondary tax on companies 222 222 222 222

3 232 3 667 222 222

DeferredOriginating and reversing temporary differences 506 (328) – –

3 738 3 339 222 222

Reconciliation of the tax expenseReconciliation between accounting profit and tax expenseAccounting profit/(loss) (58 315) 15 582 (65 895) 1 155Tax at the applicable tax rate of 28% (16 328) 4 363 323 323tax effect of adjustments on taxable incomeNon-taxable income – – (602) (602)Tax losses utilised – (387) – –Non-deductible expenses 19 565 84 – –Unrecognised tax losses 279 279 279 279Secondary tax on companies 222 222 222 222Overprovision prior period – (1 222) – –

3 738 3 339 222 222

27. Cash generated from operations(Loss)/profit before taxation (70 650) 15 582 (65 895) 1 155Adjustments for:Depreciation and amortisation 7 246 6 482 – –(Profit)/loss on sale of assets (111) (73) – –Dividends received – – (2 525) (2 152)Interest received (163) (27) (5) (24)Finance costs 2 942 4 069 2 852 3 848Impairments to non-current assets 70 836 – 68 655 –Movements in operating lease assets and accruals (247) 487 – –Movements in provisions – – – –Other non-cash items – – – –Changes in working capital:Inventories 1 339 1 039 – –Trade and other receivables 3 447 (6 292) – 4Trade and other payables 1 038 (1 901) (157) (244)

15 667 19 366 2 925 2 587

28. Current tax paidBalance at beginning of the year 2 487 4 719 84 84Current tax for the year recognised in profit or loss (3 232) (3 666) (222) (222)Balance at the end of the year (2 256) (2 487) (84) (84)

(3 000) (1 434) (222) (222)

29. Dividends paidDividends (2 208) (2 222) (2 222) (2 222)Balance at the end of the year – 12 – 12

(2 208) (2 210) (2 222) (2 210)

Dividends paid to owners of the parent are from revenue profits.

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30. Directors’ emoluments

Emolu-mentsR’000

Pension paid

R’000

Bonuses and per-

formancebased

remune-ration R’000

totalR’000

Executive2011FC Platt 1 687 132 259 2 078 AJ Voogt 1 312 102 84 1 498 DE Platt 1 436 293 494 2 223

4 435 527 837 5 799

2010FC Platt 1 570 125 401 2 096 AJ Voogt 1 230 96 228 1 554 DE Platt 1 355 276 387 2 018 AJ Kerrod 719 – 52 771

4 874 497 1 068 6 439

Emoluments paid for services rendered as employees.

Optionsgranted

Date granted

Expiry date

Issue price

Optionsexercisedpreviously

Options exercised

in the period

Numberof options

expired

Number of options

issued and not realised

Executive

FC Platt 382 000 18 January

200718 January

2012 1,03 76 400 – 229 200 76 400

175 000 20 November

200720 November

2012 1,80 – – 105 000 70 000

194 000 26 June

200926 June

2012 0,41 65 000 64 500 – 64 500

1 000 000 21 December

200921 December

2012 0,35 – 334 000 – 666 000

AJ Voogt 382 000 18 January

200718 January

2012 1,03 76 400 – 229 200 76 400

175 000 20 November

200720 November

2012 1,80 – – 105 000 70 000

150 000 26 June

200926 June

2012 0,41 50 000 50 000 – 50 000

800 000 21 December

200921 December

2012 0,35 – 267 000 – 533 000

DE Platt 382 000 18 January

200718 January

2012 1,03 76 400 – 229 200 76 400

175 000 20 November

200720 November

2012 1,80 – – 105 000 70 000

150 000 26 June

200926 June

2012 0,41 50 000 – 50 000 50 000

800 000 21 December

200921 December

2012 0,35 – 267 000 – 533 000

Directorsfees

R’000

Bonuses and per-

formancebased

remune-ration R’000

total R’000

Non-executives2011MDC Motlatla 381 17 398

381 17 398

2010MDC Motlatla 415 16 431

415 16 431

Emoluments paid until April 2011.

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31. CommitmentsGroup Company

2011R’000

2010R’000

2011R’000

2010R’000

Operating leases – as lessee (expense)Minimum lease payments due– within one year 7 274 10 428 – –– in second to fifth year inclusive 29 099 36 753 – –– later than five years 31 097 11 251 – –

67 470 58 432 – –

The total future minimum sublease payment expected to be received under non-cancellable sublease 996 961 – –

Operating lease payments represent rentals payable by the group for certain of its office properties, motor vehicles and plant and machinery. Leases are negotiated for an average term of three to five years (10 years for the head office) and rentals are subject to annual escalation. No contingent rent is payable.

Operating leases – as lessor (income)Minimum lease payments due– within one year 996 961 – –– in second to fifth year inclusive – – – –

996 961 – –

Certain of the group’s premises are sublet to third parties. Lease agreements are non-cancellable and have terms from three to five years. There are no contingent rents receivable.

32. Related partiesRelationshipsSubsidiaries Refer to note 6.Post-employment benefit plan for employees of entity and/or other related parties Accéntuate Limited Share TrustCompany owned by key management until November 2010 GSix Props (Pty) Limited

Group Company

2011R’000

2010R’000

2011R’000

2010R’000

Related party balancesLoan accounts – owing (to)/by related partiesFloorworX Africa (Pty) Limited (10 925) (1 291) – –Accentuate Management Services (Pty) Limited (597) 1 569 – –Safic (Pty) Limited (206) 10 027 – –Empowerment Financial Investment Corporation (Pty) Limited 45 44 – –Accéntuate Limited Share Trust 5 513 6 550 – –CGA Fenestrations (Pty) Limited 102 3 860 – –Related party transactionsInterest paid to (received from) related partiesSubsidiaries – – (3 205) (2 943)Rent paid to (received from) related partiesGSIX Props (Pty) Limited until October 2010 1 937 6 111 – –Erf 81 Sunderland Ridge CC until October 2010 213 600 – –Dovelight Trading 26 (Pty) Limited 589 72 – –

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33. Risk managementFinancial risk managementThe group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the group’s financial performance. The group uses derivative financial instruments to hedge certain risk exposures. Risk management is carried out by a central treasury department (group treasury) under policies approved by the board of directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the group’s operating units. The board of directors provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

Liquidity riskThe 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.

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

The table below analyses the group’s financial liabilities and net settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

Less than one year

R’000

Between one and

two yearsR’000

Between two and

five yearsR’000

Overfive

yearsR’000

GroupAt 30 June 2011Borrowings (6 007) (5 700) (2 850) –Finance lease obligations (233) – – –Trade and other payables (32 053) – – –Bank overdraft (21 496) – – –

At 30 June 2010Borrowings (6 006) (6 256) (8 244) –Finance lease obligations (433) (233) – –Trade and other payables (31 999) – – –Bank overdraft (5 756) – – –

Interest rate riskThe group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the group to cash flow interest rate risk.

At 30 June 2011, if interest rates on rand-denominated borrowings had been 1% higher, with all other variables held constant, post-tax profit for the year would have been R145 317 (2010: R152 441) lower, mainly as a result of higher/lower interest expense on floating rate borrowings.

The table below analyses the group’s exposure to interest-bearing assets and liabilities at the statement of financial position date and the periods in which such instruments are expected to be received or paid.

Cash flow interest rate risk

Financial instrument

Currentinterest

rate

Due inless than

a yearR’000

Due inone to

two yearsR’000

Due intwo to

three yearsR’000

Due in three to

four yearsR’000

Due after five years

R’000

Cash balances 5,50% 15 729 – – – –Overdraft facilities used 9,50% (21 496) – – – –IDC loans 10,00% (307) – – – –Term loans 9,50% (5 700) (2 850) – – –Finance lease liabilities 11,50% (269) – – – –

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33. Risk management continuedCredit riskCredit risk is managed on a group basis.

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

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

No credit limits were exceeded during the reporting period, and management does not expect any losses from non performance by these counterparties.

Foreign exchange riskThe group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar and the euro. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

At 30 June 2011, if the currency had weakened by 10% against the US dollar, with all other variables held constant, post-tax profit for the year would have been R22 700 (2010: R14 616) lower, mainly as a result of foreign exchange gains/losses on translation of US dollar-denominated trade payables.

At 30 June 2010, if the currency had weakened by 10% against the euro, with all other variables held constant, post-tax profit for the year would have been R126 440 (2009: R349 428) lower, mainly as a result of foreign exchange gains/losses on translation of US dollar-denominated trade payables.

Foreign currency exposure at statement of financial position dateLiabilitiesTrade payables (USD41 343 (2009: USD199 588)) – 316 – –Trade payables (EUR188 020 (2009: EUR414 303)) – 1 756 – –

Exchange rates used for conversion of foreign items were:1,00 USD ZAR7,651,00 EUR ZAR9,34

Forward exchange contracts which relate to future commitments

Amount in foreign currency purchased Forward exchange rate Maturity date

EUR3 575,46 1 EUR= R9,92200 5 July 2011USD112 590,00 1 USD = R7,02810 5 July 2011USD77 220,00 1 USD = R6,96810 30 August 2011USD17 600,00 1 USD = R6,91100 12 July 2011EUR47 140,80 1 EUR = R10,00780 1 September 2011EUR23 588,90 1 EUR = R9,98820 15 August 2011EUR3 374,00 1 EUR = R9,98360 11 August 2011EUR23 177,33 1 EUR = R9,98240 10 August 2011EUR10 840,00 1 EUR = R9,97660 5 August 2011EUR12 686,53 1 EUR = R9,76350 8 July 2011EUR8 220,08 1 EUR = R9,76350 8 July 2011USD114 750,00 1 USD = R6,92110 15 August 2011EUR4 482,00 1 EUR = R10,00000 18 August 2011EUR26 183,16 1 EUR = R9,97350 26 July 2011EUR22 604,61 1 EUR = R10,09650 18 August 2011EUR5 414,56 1 EUR = R10,05320 12 July 2011EUR43 838,40 1 EUR = R10,05670 15 July 2011EUR26 998,23 1 EUR = R10,15330 11 August 2011EUR15 317,22 1 EUR = R10,14410 3 August 2011EUR36 732,87 1 EUR = R10,11730 11 July 2011EUR21 351,61 1 EUR = R10,11970 13 July 2011EUR10 840,00 1 EUR = R9,82800 5 July 2011EUR20 906,61 1 EUR = R9,83140 8 July 2011

The group reviews its foreign currency exposure, including commitments, on an ongoing basis. The company expects its foreign exchange contracts to hedge foreign exchange exposure.

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33. Risk management continuedCapital managementThe group’s objectives when managing capital are to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for members and benefits for other stakeholders, and to provide an adequate return to members by pricing products and services commensurately with the level of risk.

The group sets the amount of capital in proportion to risk. The group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to members, return capital to members, issue new shares, or sell assets to reduce debt.

Consistently with others in the industry, the group monitors capital on the basis of the debt to adjusted capital ratio. This ratio is calculated as net debt ÷ adjusted capital. Net debt is calculated as total debt (as shown in the statement of financial position) less cash and cash equivalents. Adjusted capital comprises all components of equity (ie ordinary shares, share premium, accumulated profit/(loss), and other reserves) other than amounts recognised in equity relating to cash flow hedges, and includes some forms of subordinated debt.

Group Company

2011R’000

2010R’000

2011R’000

2010R’000

Total debt 81 643 68 713 – –Less: Cash and cash equivalents (21 496) (5 756) – –Net debt 60 148 62 957 – –Total equity 117 032 179 444 – –Adjusted capital 177 180 242 401 – –Debt to adjusted capital ratio 0,34 0,26 – –

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

35. Events subsequent to reporting dateThe directors are unaware of any events that have occurred since the statement of financial position date and the date of this report that would have a significant impact on these annual financial statements.

36. Earnings per shareReconciliation of headline earnings

Group Company

2011R’000

2010R’000

2011R’000

2010R’000

Profit after tax (74 607 612) 12 243 497 – –Less: Minority interest – – – –Attributable to shareholders (74 607 612) 12 243 497 – –Adjusted for:(Profit)/loss on sale of property, plant and equipment 111 389 (73 489) – –Impairment of assets 70 835 694 – –

Headline earnings (3 660 529) 12 170 008 – –

Reconciliation of diluted earningsProfit after tax (74 626 612) 12 243 497 – –Less: Minority interest – – – –

Attributable to shareholders (74 626 612) 12 243 497

Diluted earnings (74 626 612) 12 243 497 – –Weighted average number of ordinary shares 104 231 138 101 843 234 – –Adjusted for:Exercise of share options – 1 847 – –

Diluted weighted average number of ordinary shares 104 231 138 101 845 081 – –

Earnings per share (71,59) 12,02 – –Headline earnings per share (3,53) 11,95 – –Diluted earnings per share (71,59) 12,02 – –

Diluted headline earnings per share (3,53) 11,95 – –

Basic earnings and headline earnings per share are calculated by dividing the relevant earnings amount by the weighted average number of shares in issue. Diluted earnings and diluted headline earnings per share are calculated by dividing the relevant earnings by the weighted average number of shares in issue after taking the dilutive impact of potential ordinary shares to be issued into account.

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37. Segment report

Audited30 June

2011R’000

Audited30 June

2011R’000

Audited30 June

2011R’000

Environmentalsolutions

division

Audited30 June

2011R’000

Audited30 June

2011R’000

Infrastructure supplies division

FlooringGlass –

discontinuedCorporate and

eliminations total

Revenue 185 286 27 318 66 262 (29 476) 249 390Total segment revenue 185 286 – 66 262 (29 476) 249 390Gross profit 91 553 4 587 39 132 562 135 834ResultSegment result (profit before interest and tax) 12 860 (12 361) 2 058 (57 930) (55 373)Finance costs (637) – (1 203) (1 102) (2 942)Segment operating result 12 223 (12 361) 855 (59 032) (58 315)Income tax – – – – (3 738)Loss from discontinued operations – – – – (12 554)Loss from ordinary activities – – – – (74 607)Other informationCapital expenditure 1 625 – 319 127 2 071Depreciation and amortisation (3 300) – (1 482) (1 635) (6 435)Impairments – – – (70 836) (70 836)Statement of financial positionAssetsSegment assets 126 234 16 281 23 372 (2 127) 163 760Goodwill – – – 34 928 34 928Consolidated total assets 126 234 16 281 23 72 32 801 198 688Segment liabilities 32 697 6 724 16 600 25 616 81 637Consolidated total liabilities 32 697 6 724 16 600 25 616 81 637

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37. Segment report continued

Audited30 June

2011R’000

Audited30 June

2011R’000

Audited30 June

2011R’000

Audited30 June

2011R’000

Audited30 June

2011R’000

Infrastructure supplies division

FlooringGlass –

discontinued

Environmentalsolutions division

Corporate andeliminations Total

Revenue 191 056 50 668 59 217 (46 113) 254 828Total segment revenue 191 056 50 668 59 217 (4 420) 254 828Gross profit 91 383 24 405 39 291 (20 292) 134 787ResultSegment result (profit before interest and tax) 12 493 3 375 3 254 (2 847) 16 275Finance costs (1 099) – (1 579) (1 390) (4 068)Segment operating result 11 394 3 375 1 675 (4 237) 12 207Income tax – – – – (2 626)Loss from discontinued operations – – – – 2 662Loss from ordinary activities – – – – 12 243Other informationCapital expenditure 2 217 941 870 – 4 028Depreciation and amortisation (2 851) (648) (1 150) (1 833) (5 186)Statement of financial positionAssetsSegment assets 101 939 33 836 24 625 (8 520) 151 880Goodwill – – – 96 290 96 290Consolidated total assets 101 939 33 836 24 625 87 770 248 170Segment liabilities 30 121 13 104 17 505 7 983 68 713Consolidated total liabilities 30 121 13 104 17 505 7 983 68 713

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Notice of annual general meeting

This document is important and requires your immediate attention. If you are in any doubt as to what action you should take arising from the following resolutions, please consult your CSDP, stockbroker, banker, attorney, accountant or the professional adviser immediately.

Accéntuate Limited(Registration number 2004/029691/06)JSE code: ACE ISIN: ZAE000115986(“Accéntuate” or “the company”)

NOTICE is hereby given that the annual general meeting of Accéntuate Limited will be held at Safic Business Park, 404 Southern Klipriviersberg Road, Steeledale, on Thursday, 1 December 2011 at 10:00 with the record date for the annual general meeting being 3 November 2011 for the following purposes and to transact the following business:

1. To receive and adopt the auditors’ report in respect of the year ended 30 June 2011.

2. To receive and adopt the annual financial statements including the director’s report and the audit committee report of the company for the year ended 30 June 2011.

3. To consider and, if deemed fit, to pass, with or without modification, the following resolutions:

Special resolutionsSpecial resolution number 1: Share repurchases“Resolved, as a special resolution, that the directors be authorised pursuant, inter alia, to the company’s articles of association, (the MOI”) until this authority lapses at the next annual general meeting of the company, unless it is then renewed at the next annual general meeting of the company and provided that this authority shall not extend beyond 15 (fifteen) months from date of passing this special resolution, for the company or any subsidiary of the company to acquire shares of the company, subject to the Listings Requirements of the JSE Limited (JSE), provided that:

1. any repurchase of securities (which includes shares) must be effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the company and the counterparty;

2. the company may only appoint one agent to effect any repurchases on its behalf;

3. the company must be authorised thereto by its MOI;4. the number of shares which may be acquired pursuant

to this authority in any financial year (which commenced 1 July 2011) may not in the aggregate exceed 20% (twenty percent) of the company’s issued share capital as at the date of passing of this special resolution;

5. repurchases of shares may not be made at a price greater than 10% (ten percent) above the weighted average of the market value of the securities for the 5 (five) business days immediately preceding the date on which the transaction was effected;

6. repurchases may not be undertaken by the company or one of its wholly owned subsidiaries during a prohibited period (as defined in paragraph 3.67 of the Listings Requirements of the JSE);

7. after the company has acquired shares which constitute, on a cumulative basis, 3% (three percent) of the number of shares in issue (at the time that authority from shareholders for the repurchase is granted), the company shall publish an announcement to such effect, or any other announcements that may be required in such regard in terms of the Listings Requirements of the JSE which may be applicable from time to time; and

8. the company’s designated adviser shall confirm the adequacy of the company’s working capital for purposes of undertaking the repurchase of shares in writing to the JSE prior to entering the market to proceed with the repurchase.

In accordance with the Listings Requirements of the JSE, the directors record as follows:

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

The directors, after considering the maximum number of securities (which includes shares) which may be purchased and the price at which the repurchases may take place pursuant to the buy-back general authority, are of the opinion that for a period of 12 (twelve) months after the date of notice of this annual general meeting:• the company and the group will be able to pay their debts in

the ordinary course of business;• the consolidated assets of the company and of the group,

fairly valued in accordance with international financial reporting standards, will exceed the consolidated liabilities of the company and of the group after the buy-back;

• the share capital and reserves of the company and of the group will be adequate for the purposes of the business of the company and its subsidiaries; and

• the working capital available to the company and its subsidiaries will be adequate for the purposes of the business of the company and its subsidiaries.”

The following additional information, some of which may appear elsewhere in the annual report of which this notice forms part, is provided in terms of paragraph 11.26 of the Listings Requirements of the JSE for purposes of this general authority:• Directors – pages 2 and 3.• Major beneficial shareholders – pages 20 and 21.• Directors’ interests in ordinary shares – page 25.• Share capital of the company – page 52.

Litigation statementAccéntuate has instituted legal proceedings against vendors of the CGA business for alleged breaches of warranties. Shareholders will be informed as proceedings unfold.

Directors’ responsibility statementDirectors whose names appear on pages 2 and 3 of the annual report collectively and individually accept full responsibility for the accuracy of the information pertaining to this special resolution 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, that all reasonable enquiries to ascertain such facts have been made and that the special resolution contains all information required in terms of the Listings Requirements of the JSE.

Material changesOther than the facts and developments reported on in the annual report, there have been no material changes in the affairs or financial position of the company and its subsidiaries since the date of signature of the audit report for the year ended 30 June 2011 and up to the date of this notice.

Reasons for and effects of special resolution number 1The reason for special resolution number 1 is to afford directors of the company or a subsidiary of the company a general authority to effect a buy-back of the company’s shares on the JSE. The effect of the resolution will be that the directors will have the authority, subject to the Rules and Requirements of the JSE, to effect acquisitions of the company’s shares on the JSE.

For a special resolution to be approved by shareholders, it must be supported by at least 75% of the voting rights exercised on the resolution.

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Special resolution number 2 – Approval of non-executive directors’ fees“Resolved that, the non-executive directors’ fees paid for the period ended 30 June 2011, as set out on page 19 in the Remuneration philosophy, be and are hereby approved.

Further, that the non-executive directors’ fees payable for the period from 1 July 2011 until 30 June 2012 be and are hereby approved:

Description AmountIndependent chairman of the Board R360 000

per annumLead independent director R120 000

per annumIndependent non-executive directors fee R60 000

per annumMeeting fees:Board R10 000Group audit committee R10 000Group risk committee R5 000Remuneration committee R5 000

ExplanationSpecial resolution number 2 is required in terms of section 66 of the Companies Act to authorise the company to pay remuneration to non-executive directors of the company in respect of their services as directors. Furthermore, in terms of the JSE Listings Requirements and King III, remuneration payable to non-executive directors should be approved by shareholders in advance or within the previous two years. Only independent non-executive directors are remunerated for services rendered.

EffectFor a special resolution to be approved by shareholders, it must be supported by at least 75% of the voting rights exercised on the resolution.

Special resolution number 3: Financial assistance to related or inter-related entities to the company“Resolved that the board of directors is authorised, in terms of and subject to the provision of section 45 of the Companies Act, No 71 of 2008, as amended (“Companies Act”), to cause the company to provide any financial assistance to any company or corporation that is related or inter-related to the company (including, without limitation its subsidiaries) and the provision of such financial assistance is hereby approved under this special resolution number 3”.

Reason and effectSpecial resolution number 3 is required in terms of section 45 of the Companies Act to grant the directors of the company the authority to cause the company to provide financial assistance to any entity which is related or inter-related to the company. This special resolution does not authorise the provision of financial assistance to a director or prescribed officer of the company. For a special resolution to be approved by shareholders, it must be supported by at least 75% of the voting rights exercised on the resolution.

Special resolution number 4 – Financial assistance for subscription of securities to related or inter-related entities to the company“Resolved that the board of directors is authorised, in terms of and subject to the provisions of section 44 of the Companies Act, to cause the company to provide any financial assistance to any persons (as considered by the board as appropriate) for

the purpose of, or in connection with, the subscription of any option, or any securities issued or to be issued by the company, or a related or inter-related company, or for the purchase of any securities of the company or a related or inter-related company, and that the provision of such financial assistance is hereby approved under this special resolution number 4”.

Reason and effectSpecial resolution number 4 is required in terms of section 44 of the Companies Act to grant the directors of the company the authority to cause the company to provide financial assistance for the subscription or purchase of securities to any entity which is related or inter-related to the company. This special resolution does not authorise the provision of financial assistance to a director or prescribed officer of the company. For a special resolution to be approved by shareholders, it must be supported by at least 75% of the voting rights exercised on the resolution.

Ordinary resolutionsFor an ordinary resolution to be approved by shareholders, it must be supported by more than 50% of the voting rights exercised on the resolution (except for ordinary resolution number 3).

Ordinary resolution number 1: to receive and adopt the auditors’ report in respect of the year ended 30 June 2011“Resolved to receive and adopt the auditors’ report in respect of the year ended 30 June 2011 as contained on page 23 of the annual financial statements”.

Ordinary resolution number 2: to receive and adopt the annual financial statements of the company for the year ended 30 June 2011“Resolved to receive and adopt the annual financial statements including the director’s report and the audit committee report of the company for the year ended 30 June 2011 as contained on pages 28 to 63.”

Ordinary resolution number 3: the general authority to issue unissued, but authorised shares for cash“Resolved that the directors be authorised pursuant, inter alia, to the company’s MOI, until this authority lapses at the next annual general meeting of the company, unless it is then renewed at the next annual general meeting of the company and provided that it shall not extend beyond 15 (fifteen) months, to allot and issue any ordinary shares for cash subject to the Rules and Requirements of the JSE on the following bases:

1. The allotment and issue of the shares must be made to persons qualifying as public shareholders as defined in the Listings Requirements of the JSE.

2. The shares which are the subject of the issue for cash must be of a class already in issue.

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

4. The maximum discount at which ordinary shares may be issued is 10% (ten percent) of the weighted average traded price on the JSE of those shares over the 30 (thirty) business days prior to the date that the price of the issue is determined or agreed by the directors of the company.

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Notice of annual general meeting continued

5. After the company has issued shares for cash which represent, on a cumulative basis within a financial year, 5% (five percent) or more of the number of shares in issue prior to that issue, the company shall publish an announcement containing full details of the issue (including the number of shares issued, the average discount to the weighted average traded price of the shares over the 30 business days prior to the date that the price of the issue is determined or agreed to by the directors and the effect of the issue on net asset value and earnings per share), or any other announcements that may be required in such regard in terms of the Listings Requirements of the JSE which may be applicable from time to time.”

In terms of the Listings Requirements of the JSE, a 75% (seventy-five percent) majority of the votes cast by shareholders present or represented by proxy at the general meeting must be cast in favour of ordinary resolution number 3 for it to be approved.

Ordinary resolution 4: unissued ordinary shares“Resolved that all the authorised but unissued ordinary shares in the capital of the company be and are hereby placed at the disposal and under the control of the directors, and that the directors be and are hereby authorised to allot, issue and otherwise to dispose of all or any of such shares at their discretion, in terms of and subject to the provisions of the Companies Act and the JSE Listings Requirements and subject to the proviso that the aggregate number of ordinary shares which may be allotted and issued in terms of this ordinary resolution 4 shall be limited to 15% (fifteen percent) of the number of ordinary shares in issue from time to time.”

Ordinary resolution number 5: Election of directors“Resolved that R Patmore be elected as director of the company.”

Ordinary resolution number 6: Election of directors “Resolved that E Ratshikhopha be elected as director of the company.”

Abbreviated curricula vitae of the aforementioned directors are set out on page 2 and 3 of this annual report.

Ordinary resolution 7: Election of audit committee member“Resolved that D Molefe be elected as a member of the audit committee.”

Ordinary resolution 8: Election of audit committee member“Resolved that R Patmore be elected as a member of the audit committee.”

Ordinary resolution 9: Election of audit committee member“Resolved that E Ratshikhopha be elected as a member of the audit committee.”

Abbreviated curricula vitae of the aforementioned directors are set out on page 2 and 3 of the annual report.

Ordinary resolution 10: Authorise the audit committee to determine the remuneration of the auditors for the past year’s audit“Resolved that the audit committee determine the remuneration of the auditors for the past year’s audit.”

Ordinary resolution number 11: Directors’ remuneration“Resolved that the remuneration of the directors, as set out on page 57 of the annual report of which this notice forms part, be and is hereby confirmed and ratified.”

Ordinary resolution number 12: Remuneration policy“Resolved to approve, by way of a non-binding, advisory vote, the remuneration policy of the company as set out on page 19 of the annual report”.

Ordinary resolution number 13: Reappointment of auditors“Resolved that, PKF (Pta.) Inc. be reappointed as auditors of the company for the financial year ending on 30 June 2012.”

Ordinary resolution number 14: Signature of documentation“Resolved that any director or the company secretary of the company be and is hereby authorised to sign all such documentation and do all such things as may be necessary for or incidental to the implementation of special resolution number 1 to 4 and ordinary resolutions numbers 1, 2, 3, 4 and 5 and 13 which are passed by the members in accordance with and subject to the terms thereof.”

Action requiredCertificated shareholders and “own name” dematerialised shareholdersIf you are unable to attend the annual general meeting of the company to be held at Safic Business Park, 404 Southern Klipriviersberg Road, Steeledale, on 1 December 2011 at 10:00 and wish to be represented thereat, you must complete and return the attached form of proxy in accordance with the instructions contained therein and lodge it with, or post it to, the transfer secretaries, namely Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg (PO Box 61051, Marshalltown 2107), so as to be received by them by no later than 10:00 on Tuesday, 29 November 2011.

Dematerialised shareholdersIf you hold dematerialised shares in the company through a CSDP or broker and do not have an “own name” registration, you must timeously advise your CSDP or broker of your intention to attend and vote at the general meeting or be represented by proxy thereat in order for your CSDP or broker to provide you with the necessary authorisation to do so, or should you not wish to attend the annual general meeting in person but wish to be represented thereat, you must timeously provide your CSDP or broker with your voting instruction in order for the CSDP or broker to vote in accordance with your instruction at the annual general meeting.

Each shareholder, whether present in person or represented by proxy, is entitled to attend and vote at the annual general meeting. On a show of hands, every shareholder who is present in person or by proxy shall have one vote, and, on a poll, every shareholder present in person or by proxy shall have one vote for each share held by him/her. A form of proxy, which sets out the relevant instructions for use, is attached for those members who wish to be represented at the annual general meeting of members. Duly completed forms of proxy must be lodged with the transfer secretaries of the company, namely Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg (PO Box 61051, Marshalltown 2107), to be received by not later than 10:00 on Tuesday, 29 November 2011.

A shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy to attend, participate in and vote at the meeting in the place of the shareholder. A proxy need not be a shareholder of the company.

Shareholders and proxies of shareholders are advised that they will be required to present reasonably satisfactory identification in order to attend or participate in the annual general meeting as required in terms of s63(1) of Companies Act of 2008.

Annual reports for the preceding financial year is available on www.accentuateltd.co.za

By order of the board

Paresh DayahCompany secretaryJohannesburg23 September 2011

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Form of proxy

ACCÉNtuAtE LIMItED(Incorporated in the Republic of South Africa)(Registration number 2004/029691/06)JSE code: ACE ISIN: ZAE000115986(“Accéntuate” or the “company”)

Form of proxy for the annual general meeting of the company to be held at 10:00 on 1 December 2011 at the company’s registered offices at Safic Business Park, 404 Southern Klipriviersberg Road, Steeledale (the annual general meeting).

For use by certificated shareholders, nominee companies of Central Securities Depository Participants (CSDP), brokers’ nominee companies and shareholders who have dematerialised their shares and who have elected “own name” registration, who wish to vote on the ordinary and special resolutions per the notice of the annual general meeting to which this form is attached.

Shareholders who have dematerialised their shares through a CSDP or broker must not complete this form of proxy and must provide their CSDP or broker with their voting instructions, except for shareholders who elected “own name” registration in the sub-register through a CSDP, which shareholders must complete this form of proxy and lodge it with Computershare Investor Services (Pty) Limited. Holders of dematerialised shares other than with “own name” registration wishing to attend the annual general meeting must inform their CSDP or broker of such intention and request their CSDP or broker to issue them with the necessary authorisation to attend.

I/We (name in block letters) of (address)

being the holder/s of ordinary shares in the company, do hereby appoint

1. or failing him/her

2. or failing him/her

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

Number of votes on a poll (one vote per ordinary share)

In favour Against AbstainSpecial resolution number 1: Share repurchasesSpecial resolution number 2: Approval of non-executive directors’ feesSpecial resolution number 3: Financial assistance to related or inter-related entities to the companySpecial resolution number 4: Financial assistance for subscription of securities to related or inter-related entities to the companyTo pass ordinary resolutions: 1. To receive and adopt the auditors’ report in respect of the year ended 30 June 2011 2. To receive and adopt the annual financial statements, including the Director’s Report

and the Audit Committee Report, for the period ended 30 June 2011 3. The general authority to issue unissued, but authorised shares for cash 4. To place the unissued shares under the control of the directors 5. To elect R Patmore as a director of the company 6. To elect E Ratshikhopha as a director of the company 7. To elect D Molefe as a member of the audit committee 8. To elect R Patmore as a member of the audit committee 9. To elect E Ratshikhopha as a member of the audit committee 10. Authorise the audit committee to determine the remuneration of the auditors for the

past year’s audit 11. To ratify director’s remuneration 12. To approve the remuneration policy of the company 13. The reappoint PKF (Pta) Inc. as the company’s auditors 14. To authorise the signature of documentation

Number of votes on a poll (one vote per ordinary share)

In favour Against Abstain

Signed at on 2011

Signature

Assisted by (if applicable)

A shareholder entitled to attend and vote at the meeting is entitled to appoint an individual as its proxy to attend, participate in, speak and vote at the meeting in the place of the shareholder, or two or more proxies if the company’s memorandum of incorporation so permits. A proxy may delegate the proxy’s authority to act on behalf of the shareholders to another person.

A proxy need not be a shareholder on the company.

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Notes to the form of proxy

1. A shareholder may insert the name(s) of one or more proxies (none of whom need be a company shareholder) in the space provided, with or without deleting the words “the chairperson of the annual general meeting of the ordinary shareholders”. The person whose name stands first on the form of proxy and has not been deleted and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of those whose names follow. In the event that no names are indicated, the proxy shall be exercised by the chairperson.

2. A shareholder’s instructions to the proxy must be indicated by the insertion of an “X” or the relevant number of votes exercisable by that shareholder in the appropriate box provided. Failure to comply with the above will be deemed to authorise the proxy to vote as he/she deems fit. Where the proxy is the chairperson, such failure shall be deemed to authorise the chairperson to vote in favour of the ordinary and special resolutions in respect of all the shareholders’ votes exercisable thereat.

3. The completion and lodging of this form of proxy shall in no way preclude the shareholder from attending, speaking and voting in person at the annual general meeting to the exclusion of any proxy appointed in terms hereof.

4. Should this form of proxy not be completed and/or received in accordance with these notes, the chairperson may accept or reject it, provided that, in respect of its acceptance, the chairperson is satisfied as to the manner in which the shareholder wishes to vote.

5. Documentary evidence establishing the authority of the 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 secretaries or waived by the chairperson of the meeting.

6. Where this form of proxy is signed under power of attorney, such power of attorney must accompany this form unless it has previously been registered with the company.

7. Where shares are held jointly, all joint holders are required to sign.

8. A minor must be assisted by his/her parent or guardian, unless the relevant documents establishing his/her legal capacity have been produced or have been registered by the transfer secretaries of the company.

9. Any alteration or correction made to this form of proxy must be signed in full and not initialled by the signatories.

10. This form of proxy must be lodged with, or posted to, the transfer secretaries, Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107), so as to be received by not later than 10:00 on Tuesday, 29 November 2011.

11. The completion and lodging of this form of proxy by the shareholders holding certificated shares, nominee companies of CSDPs or brokers and the shareholders who have dematerialised their shares and who have elected “own name” registration will not preclude the relevant shareholder from attending the annual general meeting and speaking and voting in person thereat, to the exclusion of any proxy appointed in terms thereof. The shareholders who have dematerialised their shares, other than with “own name” registration, and who wish to attend the annual general meeting, must instruct their CSDP or broker to issue them with the necessary authority to attend.

Corporate information

Non-executive directors

MDC Motlatla

L Gadd

D Molefe (alternative)

R Patmore

E Ratshikhopha

Executive directors

FC Platt

AJ Voogt

DE Platt

Company secretary and registered office

PS Dayah

32 Steele Street, Steeledale 2197

(PO Box 1754, Alberton 1450)

Telephone: (011) 406 4100

Facsimile: (011) 406 4047

Transfer secretaries

Computershare Investor Services (Pty) Limited

(Registration number 2004/003647/07)

Ground Floor

70 Marshall Street

Johannesburg 2001

(PO Box 61051, Marshalltown 2107)

Telephone: (011) 370 5000

Facsimile: (011) 688 5210

Attorneys

Knowles Husain Lindsay Inc Attorneys


(PO Box 782687, Sandton 2146)

Telephone: (011) 669 6000

Facsimile: (011) 669 6299

Designated adviser

Bridge Capital Advisors (Pty) Limited


2nd Floor, 27 Fricker Road, Illovo, 2196

(PO Box 651010, Benmore, 2010)

Telephone: (011) 268 6231

Facsimile: (011) 268 6538

Auditors and reporting accountants

PKF (Pta) Inc.

Chartered Accountants (SA)

Registered Accountants and Auditors

Practice number 928231A


(PO Box 98060, Waterkloof Heights 0065)

Telephone: (021) 460 9000

Facsimile: (012) 346 2380

Commercial bankers

ABSA Bank Limited


Telephone: (011) 556 6000

Facsimile: (011) 556 6901

Nedbank Limited


Telephone: (011) 723 0600

Facsimile: (011) 452 0459

BASTION GRAPHICS

Accéntuating

earnings and shareholder value

employment of resources

excellence in products and services

empowerment of individuals and communities

enforced corporate governance

ensured sustainability

equitable individual development

engaging stakeholders and the value chain

www.accentuateltd.co.za

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