A s s e t M a n a g e r s C o m m i t t e e R e p o r t |BUS2019S

Asset Managers Committee Report

Report compiled by

Shezaad Sunderji Henry Fenn Siphosethu Mangcu Tariro Taruvinga

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A s s e t M a n a g e r s C o m m i t t e e R e p o r t |BUS2019S Contents

Executive Summary The report complied is an analysis of the key components that have contributed to South African Based Holding Company performance. The analysis starts from how it was founded, to its overall performance relative to competitors (the benchmark test), to its financial analysis and the expected future performance of the company and the share price. Company and Industry description In this section, the factors that are addressed are the founding or the coming of existence of the company and the events that took place in the company and the economic environment that has contributed to its performance and that explains its current position financially and socially as a corporate entity. Competition: This section seeks to find out how SABVEST performs relative to its competitors and how much it contributes in terms of market share in the industry in which it operates. Financial Analysis: In this section, we seek to analyze financial information and performance using financial information that dates back to previous years. The ratios that are used to calculate performance are short term and long term debt solvency ratios, profitability and market measures ratio. Share Price Analysis: This section provides investors with volatility of the share price of SABVEST in the previous years. Conclusion and Recommendation: In the final section of the report, we will combine the factors discussed above to provide an overall view of the company in terms of the company and the industry in which it is operating, how the company performs relative to competitors and the financial and share analysis. It will provide the benefits and disadvantages of having SABVEST in a portfolio investment. Introduction & Overall description

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Sabvest Limited based in Sandhurst, South Africa is one of the many investment/ holding companies listed on the JSE SE. The company was listed more than two decades ago in 1988, with the main intention of holding minority and significant interests in other firms listed and unlisted. The company specialises in investing its interest in the following sectors of the economy; information technology, industrial, services, financials and distribution. The Sabvest group has interests five associates i.e. it exerts significant control by owning 10% - 40% of interest in another company. Some of the associates include; Set point Group Ltd, Flowmax Holdings Limited (BVI/UK), Ridge Empowerment Capital (Pty) Limited, SA Bias Industries (Pty) Limited and Sunspray Food Ingredients (Pty) Limited. The Group does not focus on investments that require turnarounds they rather invest in firms which are at their growth or maturity phases. The group does not have any alternative sources of revenue apart from its interests in the joint ventures and associates. Therefore, the groups profitability is entirely dependent upon the performance of its investments and the economic environment surrounding these investments such as GDP growth, inflation and other macroeconomic variables. The market capitalisation of the group stands at R 108, 272, 859 which forms 0.002% of the JSE. Considering this information the company does not lie among the top 100 companies and hence does not significantly contribute to the ALSI. Consequently, the Group only contributes to 0.01% to the investment companies sector which consists of 14 other listed companies among many other private companies. The investment industry/sector is highly saturated hence making it a difficult industry to operate in and providing stiff competition for the Sabvest Group. The three main objectives of Sabvest according to the 2009 Annual Report are to maximise earnings per share, dividends per share and intrinsic value of the share, these are the main objectives of the company as they cannot seek to maximise sales or any other factor for that matter as they do not have any operating activities apart from investing in other firms. Hence, after looking at an overall description of the Sabvest group this report seeks to analyse the company on the basis of its financial performance, market performance and overall performance which are further based on the share price, the industry the company

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A s s e t M a n a g e r s C o m m i t t e e R e p o r t |BUS2019S

operates in, the competitors, financial profitability and lastly the expected future performance. After which a suitable judgement can be made whether the Sabvest share can be included in a pension fund portfolio.

Comparison with Competition

The investment equity market in which Sabvest operates is much diversified, consisting of companies with investment holdings in different markets and industries.

Thus, making comparisons between companies in this industry is not as easy considering the companies are not in direct competition with each other.

We have chosen to compare the performance of Sabvest with another JSE listed investment company, namely Brimstone Investment Corporation Limited.

Brimstone Investment Corporation Limited is a black controlled and run investment company. Its aim is to achieve above average returns for its shareholders by investing in wealth creating businesses and entering into strategic alliances to which it contributes capital, innovative ideas, management expertise, impeccable empowerment credentials and a value driven corporate identity. (www.brimstone.co.za)

The number of ordinary shares in issue is important to make comparisons. The ordinary shares in issue as at 31 December 2009 were:

Sabvest

17 295 984

Brimstone 239 324 000 From Mcgregor BFA

Company

2010

2009

2008

2007

2006

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SABVEST (December) Dividend / Share (c) Earnings/ Share (C) N A V / Share (C) Price / Earnings Price / Share (C) Return On Equity % #N/A 14.00 14.00 14.00 12.00

#N/A 118.80

89.90 108.30 182.70

#N/A 835.98 766.83 704.47 603.51 #N/A 5.05 8.06 8.17 #N/A #N/A 30.75

#N/A 600.00 725.00 885.00 #N/A 16.91 2.30 14.36

Company

2010

2009

2008

2007

2006

BRIMSTON (December) Dividend / Share (c) Earnings/ Share (C) N A V / Share (C) Price / Earnings Price / Share (C) Return On Equity % #N/A #N/A 32.00 130.90 24.00 -33.00 32.00 16.00

321.50 474.20

#N/A 1,226.19 1,093.51 1,180.75 759.89 #N/A #N/A #N/A 5.74 752.00 13.21 -14.15 467.00 -5.02 2.36 1.45

760.00 689.00 35.48 69.92

Brimstone had a poor year in 2008, when they made a net loss of 77 839 000, this meant that they had negative earnings/share, price earnings ratio and percentage return on equity.

It seems that they were worse hit by the recession than Sabvest.

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Despite this information, Brimstones dividend per share has been better than Sabvests for the four years under review, even in 2008 and with a larger shareholder base.

Brimstones NAV per share is on average almost double that of Sabvest. This indicates that Brimstone has a large number of assets compared to liabilities. (Trade Receivables is their only liability)

Sabvests price history shows that their shares are priced well below the ALSI and industry averages, and in 2009, their shares were priced lower than Brimstones at 600 as opposed to 7.52. Shareholders are willing to pay more for Brimstones shares because they have more earnings potential. Price History

Red line is Sabvest Blue line is ALSI Yellow line is investment industry
Comparing the Risk

Compared to the market risk beta of 1, Sabvest has a lower systematic risk, Beta vs. JALSH of Sabvest is 0.453 (Bloomberg), however Brimstone has even lower risk - Beta vs. JALSH of Brimstone is 0.263 (Bloomberg)
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Overall, Brimstone seems to have recovered from 2008s poor performance and have outperformed Sabvest in all respects except for % ROE.
History of Share price

The share performance of SABVEST (SBV) over the past four years has fluctuated. If we consider the growth of the share price over the past three years it would be 0% as in 2007 the share price was 600cents, which was the current price of the share in July 2010. Currently the price of the share is going for 626cents (29 September). However, as depicted on the graph above and as expected, the share price did not remain constant over the past years. The price of the share fluctuated up and down due to market volatility, which is considered below.

The share prices seemed to have been doing very well in the first quarter of 2007, the share price climbed well over 800cents. In 2006 the companys financial statements included some large once-off gains, which increased its headline earnings and could have attributed to the increase in the share price. In 2008 stock markets were experiencing some weaknesses but because of the associates investments, subsidiaries, the share price still rose after a short inclination in the first half of the year. In the latter half of 2008 the share price plummeted. Many aspects contributed to this. Firstly the groups earning per share
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went down by 69% due to a negative IFRS fair value adjustment of three of its listed investments. Secondly in August that year, the group settled legal actions and disputes with creditors of New Republic Bank Ltd and liquidators of NRB Holdings Ltd. The settlement resulted in any an expense having to be recognised in that current year, which would decrease the earnings per share that year. Thirdly the announcement of the resignation of 14 ministers, including the Minister of Finance, Trevor Manual, caused uncertainty and affected the market as a whole. One of the groups associates did agree to pay special dividends in order to compensate for settlement which picked up the price of the share. Due to the economic recession in 2009 and movements in fair values, the profitability of the group was adversely affected. The market overall did not perform well. SBVs share price inclined below 600cents that year. The share price rose slightly near year-end after the group sold some of its investments that were trading at higher prices on the JSE and the one of the groups associates completed a business transaction which was said would benefits the groups results that year. Thus the group estimated an increase in its earning to be between 16% and 35%. During 2010 the economy was still recovering from the recession and thus a delay from the recovery was being felt. In July the group announced that its earnings is expected to rise between 82% and 95% which saw the share price climb slightly over 600cents to close at 626cents.

Another aspect that needs to be considered is the relationship of the share price with the All Share Index (ALSI). As depicted in the graph below, the two are negatively correlated. As the performance of the ALSI inclined, the performance of Subvests share price declined. As stated above, during 2008 the share price fell due to the weakness in the stock markets, the negative fair value adjustments, the legal settlement and the political instability in the country. In 2009 the groups share price declined due to the recession however as the ALSI inclined in latter half of the year, the groups share price plummeted. This is of concern as it means the performance of the share price is uncertain compared to the index and thus, cannot be estimated with this index.

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In conclusion the overall performance of the share price has not done significantly well, the share price is susceptible to adjustments in the assets of the business and has suffered adversely due to the economic recession. The fluctuation in the share price proves to be an instable environment for the pension fund.

Financial Analysis Financial analysis is a very important tool when trying to evaluate a companys performance relative to the industry in which it is operating or previous financial periods. In this section we will compare SABVESTs performance relative to past periods because if we compare with a firm in the industry the comparison may be distorted due the fact that firms uses different methods of reporting their financial statements in terms of policies and principles. The ratios used in this section are the long term and short term solvency ratio, profitability and market value ratios.

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Short term and Long term solvency Ratios Debt management Debt Ratio= 2009= 2008= = 4.43% =8.63%

Debt Ratio represents the amount of assets that are invested through debt. In 2009 for every R1 invested in assets 4.43c was funded by debt whereas in 2008 for every R1 invested in assets 8.63c was funded by debt. This indicates that in the year 2009 there was a decrease in the amount of debt available meaning that SABVEST repaid some of its debt. The decrease in Debt ratio was 48.6%

Liquidity Ratio Current Ratio= 2009= 2008= =252% = 62.77%

Current ratio measures the ability of SABVEST to settle short term obligations using short term assets. In 2009, SABVEST could cover current liabilities by more than enough but the danger behind a high ratio was that it indicated there was idle cash that was lying in the form of trade receivables and cash and which could be put in other areas of investment. In 2008, the current ratio was a quarter than in 2009 but was moderately high. This analysis indicates that it is highly unlikely that SABVEST is going to go illiquid.

Profitability Ratios
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Return on Equity Analysis This measure shows the ability of SABVEST utility of investor equity to generate profit. Return on Equity:

2009= 2008=

= 1.866% = -11.65%

In 2009, for every R1 of Net asset value at the end of the year, Net Asset Value was increased by 1.86c. In 2008, for every R1 of Net asset Value at the end of the year, the net asset value decreased by 11.65c. This indicates the amount of profit that SABVEST makes with the funds invested by shareholders. In 2008, it can be seen that SABVEST did not manage to utilize investor funds into earning a profit as can be seen with the loss. This might have been caused by the beginning of the recession in 2008. In 2009, it can be seen that the company started channeling the funds into making profit with the return of equity resurrecting from an all time low of -11.65% to 1.866%. Return on Assets: 2009: 2008: = 2.55% = -15.37%

In 2009: For every R1 invested in Assets, the assets produced 2.55c in profit. In 2008: For every R1 invested in Assets, the assets earned -15.37c in profit. This indicates that in 2008, the assets were not used efficiently to generate a profit as can be seen with a negative ROA. This might have been a result of the financial crisis which led to the downward spiral of many firms in the economy. However in 2009, assets were being
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utilized efficiently and with the recovery of the economy SABVEST ROA increased by 1.165%. Which indicated an improvement in the company operations. Market Value Measures. Dividend Yield Type Declaration Date Dividend Share price on date of declaration Final Final Final Interim Interim Interim 03 Mar 2010 26 Feb 2009 28 Feb 2008 29 July 2010 31 Jul 2009 29 June 2008 11 11 11 4 3 3 538 725 700 600 600 900 20.44% 15.17% 15.71% 0.66% 0.5% 0.33% Dividend yield

The dividend yield is a very important ratio for financial analysis, as it is an indicator on the return on investment a shareholder is going to get in respect to their investment. (Accounting for management: 2010). If the dividend yield is too high it is an indication that the share price is understated, vice versa. The use of dividend yield as a tool for financial analysis has become irrelevant over the years, as it is highly dependent on the appreciation and depreciation of the market value of the share as the main form of determining the return on investment. From the above table, the final dividend seems to remain fixed over the 3 years meaning that the dividend yield is highly dependent on the appreciation and depreciation of the share price.

Earnings per Share

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2009= 118.80 2008=89.90 Earning per share is one important tool used to calculate profitability of a company and is used in determining the stock price of the shares. It measures the dilution of net profit due to share issue. In 2009 the earning per share ratio increased by 32.15%. This could have been due to an increase in Net profit rather than an issue of shares.

Price Earnings Ratio =

2009: 2008:

= 5.05 = 8.06 according to Mcgregor bfa

The purpose of price earnings ratio is that it shows us what investors are willing to pay per rand for current earnings. (Firer C, et al, 2008:67). The higher price earnings ratio means that the firm has high prospects for growth. However, great care has to be addressed when interpreting this figure as earnings of close to 0 can result in a large ratio. (Firer C, et al, 2008:67). In respect to SABVEST, in 2009 the price earnings ratio declined by 37.3% meaning that there must have been a decline in the share price and an increase in profit. The decline must have been influenced by the financial crisis last year and the increase in profit must have been as a result of the spiral increase in inflation.

In conclusion using: The long term liquidity ratio: the debt ratio indicated that most of the assets Sabvest has are not financed by debt and thus the firm is highly unlikely to go insolvent.
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The short term liquidity ratio: the current ratio indicates that Sabvest has too much idle assets in the form of cash and account receivables that could be put in other areas of investment as shareholder do not invest funds in the company for them to lie idle. The profitability ratios: Return equity ratio indicates that Sabvest was not channeling most of investor equity into making profits. However, this might not have been caused by the inability of management but rather the state of the economy as Sabvest was not the only company to make a loss during 2009 as one of its competitors Brimstone also recorded a loss and thus a negative return on equity. Return on assets: Sabvest also did not manage to use their assets to generate income but this could have been caused by internal and external factors as mentioned above. Market Value Measures: The price earnings share indicates that it is highly unlikely that the issue of shares will dilute SABVEST profit per share. The price earnings ratio indicates that there are high prospects for growth and thus Sabvest should be strategic on planning its future operations.

Expected Future Performance of Sabvest Limited The future performance of Sabvest plays an integral part as to whether an investor should include this share in their portfolio. The future profitability or performance of the company will affect the return of the whole portfolio. Hence, it is crucial that some of the factors affecting performance be examined as shown below.

I.

Analysis of the Income statement.

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From the above income statement it is possible to see that Sabvests profits increased by 677% showing significant growth in profits. Furthermore, the Earnings per share increased by 699%. It is also quite essential to note that Sabvest maintained a constant dividend of R 0.14 over 2008 and 2009. This further exemplifies stability. Although, it is quite concerning that the profits of the entity fluctuate a great deal and this increases the volatility or risk of investing in Sabvest. If the profits continue to grow at the current rate of 677%, which is highly unlikely, then Sabvest can be considered as a worthwhile investment. II. Gordon-Growth Model

An alternative method of determining the expected future return of the Sabvest shares is the Gordon Growth model. The dividends of the company have been quite stable as seen from the table below: Year
Page

Dividend per Share (R)

Dividend Growth (g)

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2006 2007 2008 2009

0.12 0.14 0.14 0.14 0.1667 0 0

Average Dividend Growth

0.0556 (5.56%)

One can compute the growth in dividends by taking an average of the growth year on year, as shown above, and a value of g is determined to be 5.56%. Using the current share price as at 29/09/2010 which is R6.26, g = 5.56% and D0 = R0.14 a value of RE (cost of equity) can be computed.

The return given by the model suggests that for every one rand invested in the business shareholders can expect a return of 7.9 cents. This is quite a low expected return which is not good. It also indicates that investors have a low market sentiment regarding the Sabvest share and this is a sign that investors lack confidence in the future performance of the Sabvest share. Moreover the Growth model can also be used to determine the market value of the Sabvest share. In order to determine this value the Mcgregor BFA statistical software was used and the results have been illustrated below:

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The software calculated g = 1.80%, D0 = R0.14, RE = 7.27% (return on the R 157 bond used as the discount rate). The Sabvest share was valued at R 2.6 which is significantly lower than the current market price of R 6.26. This is an indication that share is of much lower value and the market has over-valued it. Therefore, at this point an investor should not buy these shares as they would be buying it at a loss of R 3.66 (6.26 2.6). III. Capital Asset Pricing Model (CAPM)

The CAPM model proved to be another useful tool in analysing the volatility of the Sabvest share and also the expected return on the share, which are both indicators of future performance of the company. Volatility (Risk)

The systematic risk associated with the Sabvest share was determined by using the Mcgregor BFA statistical package. The Sabvest share returns were plotted against the ALSI share returns and the value of beta () = 0.0128. This shows that there is almost zero correlation between the market and the companys share, hence making it a risky investment. Furthermore, R2 = 0.0000 which again showed that none of the variation in the Sabvest returns can be explained by the market. Thus, due to the insignificant correlation between the ALSI and the Sabvest share, future performance becomes less predictable and hence a riskier investment.

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Expected return of the Sabvest share

A risk-free rate of 7.27% which represented the return on the R 157 bond and a risk premium of 6% were used to determine the return on the Sabvest share.

Again, the result of 7.35% is in line with the return provided by the Gordon growth model of 7.9% and also an indication that the expected return on the Sabvest share is slightly above the risk-free rate of return. Therefore, future performance of the company seems uncertain, an investor would be better off buying the R 157 bond and earning a risk free return of 7.27%. From the above analysis, it can be noticed that Sabvest has a very erratic profit growth; also the share seems to be very volatile as none of the variation in its share price can be explained by the ALSI returns. Consequently, the share provides a very low future expected return based on the Gordon growth model which takes in to account future dividend payments to shareholders and also the same is seen with the CAPM where an investor would be better of investing in a bond.
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Conclusion and Recommendations From the above analysis we conclude that it would not be feasible to invest in this group. In comparison to its competition, the group performed as badly as Brimstone, both companies having exhibited negative net profits over the past year, which was due amongst many things, the delay of recovery from the economic recession. The share price of the group has fluctuated over the years which is not ideal for a pensions funds portfolio. Even though the financial ratios indicate that the company is highly liquid and liquidation due to insolvency is highly unlikely, the decrease in net profits indicates inefficient utilization of assets. The market did however seem to show prospects of growth. Nevertheless, the share provides a low return with an inconsistent profit growth with the expected return being slightly above the risk-free rate and inflation rate. In essence, we reject the investment and recommend consideration of an alternative investment with more certainty.

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A s s e t M a n a g e r s C o m m i t t e e R e p o r t |BUS2019S Appendix 1- The Balance Sheet

Balance Sheet [Year: 2009 - 2005, Financials: Published] Year Months Covered Year End Month Balance Sheet Published (000)
001 Ordinary Shareholders Interest 002 Ordinary Share Capital 003 Share Premium 004 Non-distributable Reserves 005 Distributable Reserves 006 Adjusted Market/ Direct Value In Investment 007 Ordinary Shareholders Interest After Adjustments 008 Preference Shares 009 Irredeemable 010 Redeemable 011 Convertible 012 Outside Shareholders Interest 013 Total Shareholders Interest 014 Deferred Tax 015 Other 016 Long Term Liabilities 017 Convertible Debentures 018 Director's & Shareholders Loans 019 Long Term Non Interest Bearing 020 Long Term Interest Bearing 021 Capital Employed 022 Total Liabilities 023 Fixed Assets 024 Mining Assets 025 Intangible Assets 026 Goodwill 027 Patents & Trademarks 028 Cost Of Control 029 Other Intangible Assets 030 Non Current Assets 031 Investments & Loans 032 Investment At Cost/Market Value 033 Long Term Loans 034 Current Assets 035 Inventory 036 Trade Debtors 037 Cash & Near Cash 038 Dividends Receivable 039 Tax Receivable 040 Other Current Assets 041 Current Liabilities

2009 12 Dec ZAR

379,071 867 48,874 241,789 87,541 164,532 543,603 0 0 0 0 0 543,603 5,212 0 0 0 0 0 0 548,815 17,576 1,070 0 0 0 0 0 0 7,375 356,997 356,997 0 31,205 0 12,672 6,533 12,000 0 0 12,364

2008 12 Dec ZAR

350,636 862 50,033 253,060 46,681 155,589 506,225 0 0 0 0 0 506,225 3,486 0 0 0 0 0 0 509,711 33,138 1,380 0 0 0 0 0 0 6,031 357,749 357,749 0 18,614 0 9,517 96 9,001 0 0 29,652

2007 12 Dec ZAR

324,786 867 50,729 196,897 76,293 196,893 521,679 0 0 0 0 0 521,679 4,645 0 0 0 0 0 0 526,324 17,640 1,501 0 3,430 3,430 0 0 0 6,119 293,026 293,026 0 38,350 0 20,450 9,650 8,250 0 0 12,995

2006 12 Dec ZAR

279,371 869 50,852 165,066 62,584 139,771 419,142 0 0 0 0 0 419,142 3,338 0 0 0 0 0 0 422,480 16,589 1,787 0 3,430 3,430 0 0 0 5,868 227,469 227,469 0 57,406 0 13,721 41,135 0 0 2,550 13,251

20

18

5 12

26

26

26

15

14 1

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042 Trade Creditors 043 Dividends Payable 044 Tax Payable 045 Short-term Interest Bearing 046 Short-term Non Interest Bearing 047 Net Current Assets 048 Adjusted Market/Direct Value In Investment 049 Employment Of Capital 050 Total Assets 5,014 0 0 7,350 0 18,841 164,532 548,815 396,647 5,552 0 0 24,100 0 -11,038 155,589 509,711 383,774 5,894 0 0 7,101 0 25,355 196,893 526,324 338,996 5,636 0 0 7,615 0 44,155 139,771 422,480 292,530

8 26 18

General Supplementary
201 Shares In Issue Y/E Ordinary 202 Shares In Issue Y/E 'N' 203 Shares In Issue Y/E 'A' 204 Shares In Issue Y/E 'B' 248 Shares In Issue Y/E 'C' 251 Shares In Issue Y/E 'E' 273 Shares In Issue Y/E Deferred 259 Shares Authorised Ordinary 260 Par Value Ordinary Shares (cents) 261 Shares Authorised 'N' 262 Par Value 'N' Shares (cents) 263 Shares Authorised 'A' 264 Par Value 'A' Shares (cents) 265 Shares Authorised 'B' 266 Par Value 'B' Shares (cents) 267 Shares Authorised 'C' 268 Par Value 'C' Shares (cents) 269 Shares Authorised 'E' 270 Par Value 'E' Shares (cents) 271 Shares Authorised Deferred 272 Par Value Deferred Shares (cents) 206 Shares In Issue Weighted Average 207 Shares In Issue Fully Diluted 232 Treasury Shares (Number '000) 233 Treasury Shares (Value R'000) 249 Share Trusts and Other (Number '000) 250 Share Trusts and Other (Value R'000) 274 Share Buyback (Number '000) 275 Share Buyback (Value R'000) 238 Preference shares issued by a subsidiary 208 Revaluation Reserve 209 Minority Revaluation Reserve 210 Minority Equity Accounted Reserve 228 Foreign Currency Translation Reserve - Cumulative 211 Commitments: Land & Buildings 212 Commitments: Other 213 Foreign Borrowings 214 Convertible Preference Shares 215 Convertible Debentures & Loans 216 Share In Issue Latest 217 Mining Assets at Cost 218 Depreciation / Amortisation on Mine Assets 219 Medical Aid Liabilities 220 Pension Fund Liabilities 221 Long Term Loans - Interest Bearing 222 Long Term Loans - Interest Free 223 Short Term Loans - Interest Bearing 224 Short Term Loans - Interest Free 225 Property Revaluation Surplus - I/S 226 Profit /Loss Forex Translations - B/S 227 Profit /Loss Forex Transactions - B/S 229 Foreign Assets 230 Foreign Liabilities 17,292 28,676 0 0 0 0 0 24,000 5 80,000 0 0 0 0 0 0 0 0 0 0 0 46,078 0 0 0 308 1,855 0 0 0 0 0 0 1,798 2,726 0 575 0 0 0 0 0 0 0 0 0 7,350 0 0 0 0 0 0 17,200 28,980 0 0 0 0 0 24,000 5 80,000 0 0 0 0 0 0 0 0 0 0 0 46,260 0 0 0 96 701 0 0 0 0 0 0 7,044 289 0 1,391 0 0 0 0 0 0 0 0 0 24,100 0 0 0 0 0 0 0 0 0 0 7,559 1,000 0 1,420 0 0 0 0 0 0 0 0 0 7,101 0 0 0 0 0 0 0 0 0 0 8,082 1,199 0 1,907 0 0 0 0 0 0 0 0 0 7,615 0 0 0 0 0 0 17,296 28,980 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 46,276 0 0 0 0 0 46,272 0 31 58 17,296 28,980 0 0

1 2

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276 Asset Retirement Obligations - Mining Assets 231 Provisions 236 Provisions - Long term 237 Provisions - Short term 234 Share Trust scheme 235 Capital Distributions (Cash) 239 Non Current Assets held for sale - Land & Buildings 240 Non Current Assets held for sale - Investments 241 Non Current Assets held for sale - Other 258 Total Bookvalue Land & Buildings 252 Total Bookvalue Other Fixed Assets 253 Bookvalue Plant & Machinery/Manufacturing Equipment 254 Bookvalue Furniture & Office Equipment 255 Bookvalue Vehicles 256 Bookvalue Computer Hardware & Software 257 Bookvalue Other fixed assets 242 Listed Unconsolidated Subsidiaries 243 Market Value of Listed Unconsolidated Subsidiaries 244 Unlisted Unconsolidated Subsidiaries 245 Directors Valuation of Unlisted Unconsolidated Subsidiaries 246 Minority dividends declared - B/S 247 BEE Share of accumulative profits - B/S

0 0 0 0 6,126 0 0 0 0 0 1,070 0 920 150 0 0 0 0 0 0 0 0

0 0 0 0 4,134 0 0 0 0 0 1,380 0 1,097 283 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 1,501 0 0 436 0 1,065 0 0 0 0 0 0

0 0 0 0 0 0 0 0

0 0 0 0 0 0

Appendix 2: The Income Statement Income Statement Year Months Covered Year End Month Income Statement Published (000)
060 Turnover 061 % Change In Turnover 053 Cost Of Sales 062 Investment Income 094 Operating Profit 064 Interest Received 095 Total Income 322 Intangible Assets Written Off 323 Amortisation of goodwill 301 Lease Charge: Land Building 302 Lease Charge: Other 303 Research & Development 088 Depreciation 089 Audit Fees 090 Directors Emoluments

2009 12 Dec ZAR

0 0 0 34,939 -8,144 1,567 28,362 0 0 1,064 0 0 330 520 11,523

2008 12 Dec ZAR

0 0 0 38,149 -124,781 3,938 -46,925 0 0 890 0 0 396 575 8,387

2007 12 Dec ZAR

0 0 0 36,300 439 6,423 25,902 0 0 825 0 0 408 954 6,585

2006 12 Dec ZAR

0 0 0 45,654 23,121 7,827 76,602 0 0 662 0 0 463 423 8,713

20

ZA

8,

7, 16,

4,

22 | Page

A s s e t M a n a g e r s C o m m i t t e e R e p o r t |BUS2019S
079 Extra Ordinary Items 077 Convertible Debenture Interest 097 Total Cost Shown 098 Earnings Before Interest & Tax (EBIT) 066 Interest & Finance Charges 099 Profit before Tax 067 Taxation 068 Current 069 Deferred 070 Other 100 Profit After Interest and Tax 074 Associate Companies 075 Discontinued Operations 072 Preference Share Dividends 073 Minority Interest 101 Profit Attributible To Ordinary Shareholders 081 Dividends Paid 082 Retained Earnings-current Year 083 Transfer To Reserve /life Funds 084 Retained Earnings-prior Year 085 Total Reserve 093 Total Headline Earnings 086 Headline Earnings Per Share 087 Dividends Per Share 091 Interest distribution per linked unit (cents) 092 Capital distribution per instrument (cents) 102 Earnings Before Interest, Tax, Depreciation And Amortisation (EBITDA) 0 0 12,373 15,989 3,467 12,522 2,374 0 2,374 0 10,148 53,936 0 0 0 64,084 6,479 57,605 -16,745 46,681 87,541 54,740 118.8 14.0 0 0 16,319 0 0 10,248 -57,173 2,335 -59,508 -512 0 -512 0 -58,996 67,056 0 0 0 8,060 6,385 1,675 -31,287 76,293 46,681 41,570 89.9 14.0 0 0 -56,777 0 0 8,772 -130 1,643 15,487 1,574 0 1,540 34 13,913 49,996 0 0 0 46,649 6,016 40,633 -30,674 66,334 76,293 50,110 108.3 14.0 0 0 278 0 0 10,261 66,341 1,594 64,747 5,269 0 5,269 0 59,478 26,419 0 0 0 85,897 3,703 82,194 -21,870 2,260 62,584 84,550 182.7 12.0 0 0 66,804

6,

10, 1, 8,

-3,

-3,

12, 20,

33, 1, 31, -23, -5, 2,

10,

General Supplementary
301 Lease Charge: Land Building 302 Lease Charge: Other 303 Research & Development 304 EPS-Equity Accounted 305 EPS-Bottom Line 306 EPS-Headline 307 EPS-Fully Diluted Headline 308 EPS-Fully Diluted Bottomline 374 EPS-Continuing Operations 359 Earnings per Linked Unit 375 Core Headline Earnings - Total Value 376 Core Headline Earnings Per Share 380 Dividend per Share 381 Interest Distribution per Unit 382 Capital Distribution per Share 309 Effective Tax Rate 310 Deferred Tax: Contingent Liability 311 Deferred Tax: Current 312 Deferred Tax: Other 318 Accumulated Assessed Tax Loss 319 Accumulated Computed Tax Loss 320 Prior Year Tax Adjustment 333 STC as Published 338 Foreign Tax 364 Foreign Tax - Normal 365 Foreign Tax - Previous year 366 Foreign Tax - Deferred 313 Interest Capitalised 373 Interest Paid - Debentures 314 Invest Allowance Benefit 315 Dilution: Interest Saved 316 Dilution: Dividends Saved 317 Dilution: Equity Income Converted 322 Intangible Assets Written Off 350 Impairments of intangible assets 349 Reversal impairments/Intangible Assets - prev years 383 Goodwill Written Off 351 Impairments of goodwill 346 Reversal of impairments of Goodwill - prev years 323 Amortisation of goodwill 324 Impairment of Investments 348 Reversal of impairments/Investments - prev years 1,064 0 0 139.1 139.1 118.8 0.0 0.0 0.0 0.0 0.0 0.0 14.0 0.0 0.0 4 0 2,374 0 165,400 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 181 890 0 0 17.4 17.4 89.9 0.0 0.0 0.0 0.0 0.0 0.0 14.0 0.0 0.0 -7 0 -512 0 155,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 45 825 0 0 100.8 100.8 108.3 0.0 0.0 0.0 0.0 0.0 0.0 14.0 0.0 0.0 3 0 1,540 0 123,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 662 0 0 185.6 185.6 182.7 0.0 0.0 0.0 0.0 0.0 0.0 12.0 0.0 0.0 6 0 5,269 0 122,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1,000 0

7 7 7

-3,

152,

23 | Page

A s s e t M a n a g e r s C o m m i t t e e R e p o r t |BUS2019S
325 Impairment of Loans 368 Reversal of impairments/Loans - prev years 326 Capital Profit /Loss on Financial Assets 360 Gains/Losses on Mark to Market Value of Financial Assets 327 Impairment of Fixed Assets 347 Reversal of impairm/Other Fixed assets - prev years 328 Capital Profit /Loss on Fixed Assets 329 Profit /Loss Forex Translations - I/S 330 Profit /Loss Forex Transactions - I/S 331 Profit /Loss Disposal of Subsidiaries/ Businesses 332 Profit /Loss Sundry Extraordinaries 352 Extraordinary items - unconsolidated subs 367 Share issue expenses written off 377 Expense in regard to BEE transaction 336 Foreign Turnover 337 Foreign Profit 339 Ordinary Dividends - Ordinary Shareholders 340 Ordinary Dividends - Minority Shareholders 357 Ordinary dividends declared 358 Ordinary dividends paid 341 Preference Dividends - Ordinary Shareholders 342 Preference Dividends - Minority Shareholders 353 Minority dividends paid 354 Minority dividends declared - I/S 321 Non Cash Dividends 334 Non-Cash Dividend (Current Year) 335 Non-Cash Dividend (Previous Year) 343 Auditors - Audit Fees - current year 378 Auditors - Audit Fees - previous year 379 Auditors - Audit Expenses 344 Auditors - Other Fees 345 Staff Costs(excluding directors remuneration) 372 Other Staff share based payments - I/S 361 Directors share based payments - I/S 362 Directors share based payments - B/S 355 Income from Endowment policies 356 Other Income from Fixed Asset Investments 363 BEE Share of profits - I/S 0 0 14,153 8,274 0 0 0 -1,536 0 0 0 0 0 0 0 0 6,438 0 6,438 6,479 0 0 0 0 0 0 0 500 0 0 20 11,607 0 0 0 0 0 0 0 0 0 -16,939 0 0 -1 0 0 -33,509 0 0 0 0 0 0 6,468 0 6,468 6,479 0 0 0 0 0 0 0 537 0 0 38 8,958 0 0 0 0 0 0 0 0 311 7,406 0 0 -12 0 0 0 -1,387 0 0 0 0 0 6,478 0 6,478 6,016 0 0 0 0 0 0 0 642 0 0 312 7,304 0 479 0 0 0 0 0 0 23,086 0 0 0 91 0 0 0 -366 0 0 0 0 0 5,553 0 5,553 3,703 0 0 0 0 0 0 0 357 0 0 66 8,934 0 0 0 0 0 0

-1,

2,

2, 1,

4,

24 | Page