CONTENTS TO THE ANNUAL FINANCIAL STATEMENTS

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2 CONTENTS TO THE ANNUAL FINANCIAL STATEMENTS PAGE Certification by company secretary 1 Statement of responsibility and approval by the board of directors 2 Report of the audit committee 3 Directors report 6 Independent auditor s report 14 Consolidated and separate income statements 15 Consolidated and separate statements of comprehensive income 16 Consolidated and separate statements of financial position 17 Consolidated statement of changes in equity group 18 Consolidated statement of changes in equity company 19 Consolidated and separate statements of cash flows 20 Accounting policies 21 Notes to the annual financial statements 40 Interest in subsidiaries, associate companies and joint ventures 127 Analysis of shareholding 129 Corporate information 131

3 LeveL Of assurance These annual financial statements have been audited in compliance with the applicable requirements of the Companies Act of South Africa. auditors PricewaterhouseCoopers Inc. Registered Auditors PreParer Prepared by Yolandi van den Berg (CA(SA)), senior group financial accountant, under the supervision of Hanré Bester (CA(SA)), acting financial director. PubLISheD 14 July CERTIFICATION BY COMPANY SECRETARY In terms of Section 88(2)(e) of the Companies Act 71 of 2008, as amended, I certify that, to the best of my knowledge and belief, the company has, in respect of the financial year reported upon, lodged with the Companies and Intellectual Property Commission all returns required of a public company in terms of the Act and that all such returns are true, correct and up to date. Claire Middlemiss On behalf of: ithemba Governance and Statutory Solutions (Pty) Ltd Company secretary 14 July 1

4 STATEMENT OF RESPONSIBILITY AND APPROVAL BY THE BOARD OF DIRECTORS for the twelve months ended 31 March The directors are required in terms of the Companies Act, No 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 (IFRS) and are presented in terms of the disclosure requirements as set out in the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings Requirements and the requirements of the Companies Act, The annual financial statements 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 next 12 months 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 going concern basis has therefore been adopted in preparing the annual financial statements. The external auditors are responsible for independently auditing 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 14. The annual financial statements set out on pages 3 to 129, which have been prepared on the going concern basis, were approved by the board of directors on 14 July and were signed on its behalf by: 2 Diederik fouché Chairman hanré bester Acting financial director

5 REPORT OF THE AUDIT COMMITTEE for the twelve months ended 31 March The audit committee was established with terms of reference from the board. The audit committee terms of reference was reviewed, updated and approved by the board on 14 July and is available for inspection at the company s registered office. PurPOSe The audit committee meets three times during the financial year to discuss issues of accounting, auditing, internal controls and financial reporting. The audit committee s terms of reference deals adequately with its membership, authority and duties. The committee has an independent role with accountability to both the board and shareholders. The committee does not assume the functions of management, which remain the responsibility of the executive directors, officers and other members of senior management. The audit committee fulfils an oversight role regarding financial reporting risks, internal financial controls, fraud risk as it relates to financial reporting and information technology risks as it relates to financial reporting. The committee considers whether or not the interim report should be subject to an independent review by the auditors. Further information on risk policies, strategies, management and indicators appear in the corporate governance report of the integrated report. MeMberShIP Following Osman Arbee s resignation as independent non-executive director and as chairman of the audit committee on 13 February 2015, the lead independent director, Lou Alberts, in the interim assumed the role of chairman of the audit committee. Saleh Mayet was appointed chairman of the audit committee on 29 May Tak Hiemstra s retirement as chairman of the board and member of the audit committee took effect from 1 November Dinga Mncube was appointed as a member of the audit committee to replace Tak Hiemstra on his retirement. On 20 November 2015 shareholders approved the appointment of Saleh Mayet (chairman), Lou Alberts and Dinga Mncube as members of the audit committee. Saleh Mayet (Chairman), Lou Alberts and Dinga Mncube are proposed as members of the audit committee for the 2017 financial year. These directors brief curriculum vitae can be found in the integrated report. A resolution to this effect will be presented to shareholders at the annual general meeting to be held on 18 November. The board is satisfied that the directors integrity, impartiality and objectivity are not in any way compromised and as such satisfies the requirements of section 94(4) of the Companies Act, Attendance at meetings held during the period 1 April 2015 to 31 March was as follows: 19 Jun 4 nov Saleh Mayet (chairman) Lou Alberts Tak Hiemstra ¹ apology n/a Dinga Mncube ¹ Retired on 31 October The external auditors and appropriate members of executive management attend the meetings by invitation. Internal audit attends audit committee meetings and provides reports to the committee. 3

6 REPORT OF THE AUDIT COMMITTEE 4 Year under review The audit committee has met periodically to consider and to act upon its statutory duties and functions and the board confirms that the committee has during the review year performed the duties mandated to it by the board. The committee oversaw the integrated reporting process in accordance with its terms of reference and, in particular, the committee: regarded all factors and risks that may impact on the integrity of the Integrated Report, including factors that may predispose management to present a misleading picture, significant judgements and reporting decisions made, as well as any evidence that brings into question previously published information and forward-looking statements or information; reviewed the annual financial statements and summarised integrated information; reviewed the disclosure of sustainability issues in the sustainability report and in the Integrated Report to ensure that it is reliable and does not conflict with the financial information; recommended the Integrated Report for approval by the board; and reviewed the content of the summarised financial information for whether it provides a balanced view. The board has assigned oversight of the group s risk management function to the risk committee. The chairman of the audit committee is also the chairman of the risk committee and ensures that information relevant to these committees is transferred regularly. external audit In terms of the Companies Act, the Committee had nominated PricewaterhouseCoopers Inc. as the independent auditor and Mr I Buys as the designated partner, for appointment for the audit. This appointment was approved by shareholders at the annual general meeting on 20 November The committee has satisfied itself through enquiry that the auditor of DAWN is independent as defined by the Companies Act 2008, as amended, and as per the standards stipulated by the auditing profession. Requisite assurance was sought and provided by the auditor that internal governance processes within the audit firm support and demonstrate the claim to independence. The committee, in consultation with executive management, agreed to the engagement letter, terms, nature and scope of the audit function and audit plan for the financial year. The budgeted fee is considered appropriate for the work that could reasonably have been foreseen at that time. The final adjusted fee will be agreed on completion of the audit. Audit fees are disclosed in note 4 on page 44 of the annual financial statements. There is a formal procedure that governs the process whereby the auditor is considered for non-audit services and each engagement letter for such work is reviewed and approved by the committee. Meetings are held with the auditor where management is not present and no matters of concern were raised. The external auditors have unrestricted access to the chairman of the audit committee. The committee has again nominated, for approval at the annual general meeting to be held on 18 November, PricewaterhouseCoopers Inc. as the external auditor, and Isak Buys as the designated auditor, for the 2017 financial year. The committee confirms that the auditor and designated auditor are accredited by the JSE Limited. Internal audit The group internal audit function operates within defined terms of reference in accordance with the internal audit charter and the group internal audit executive reports to the group risk and compliance officer on day-to-day activities and functionally to the chairman of the audit committee. The internal audit function is regarded as being sufficiently independent of activities audited. The internal audit plan is reviewed and adjusted on a continuous basis to ensure effectiveness and is based on the relevant degree of inherent risk. The internal audit plan for the financial year was rev iewed and approved by the audit committee. In compliance with internal auditing standards, the board, through its audit committee, ensures that the Internal audit function is subject to independent quality review at periods of at least once every five years, with the first review conducted in October 2013 and the next one scheduled for March Internal control The group maintains systems of internal control, which include financial, operational and compliance controls. The committee is responsible for reviewing the functioning of the internal control system, the reliability and accuracy of the financial information provided by management as well as that provided for dissemination to other users of financial information, whether the group should continue to use the services of the current external auditors, any accounting or auditing concerns identified as a result of the external audit, the group s compliance with legal and regulatory provisions, its memorandum of incorporation, code of ethical conduct and by-laws. The board of directors is accountable for establishing appropriate risk and control policies. Executive management is responsible for monitoring, reviewing and communicating these controls and policies through the organisation. Corrective actions are taken to address control deficiencies and other opportunities for improving the systems, as they are identified. All processes have been in place for the year under review and up to the date of the approval of the annual financial statements and the directors are not aware of and there is no known material breakdown in the functioning of the internal financial controls that has occurred during the year under review to render the control environment ineffective.

7 REPORT OF THE AUDIT COMMITTEE annual financial STaTeMenTS and accounting POLICIeS The audit committee has reviewed the accounting policies and the financial statements of the group and the company and is satisfied that they are appropriate and comply with International Financial Reporting Standards. The transactions described in the annual financial statements in note 44 restatement, reclassification and consistency of presentation under restatement 1 and 2, were initiated and executed at the time by certain executive directors and senior management respectively. Both transactions were executed without the knowledge and approval of the board. A reportable irregularity has therefore been reported by the external auditors to the Independent Regulatory Board of Auditors with respect to these transactions. The external auditors have also confirmed to the Independent Regulatory Board of Auditors that these irregularities are not continuing. After considering the circumstances of these transactions, as a matter of good governance, the board has instituted the following corrective actions: engaged with external legal counsel to clarify DAWN s legal position with respect to these matters and its relationship with the individuals in question, including DAWN s right of recourse against any relevant individuals; engaged with parties involved in the above matters to ensure the board acts in the best interests of DAWN; accounted for and restated the comparative results in the annual financial statements for these transactions; and the internal audit department launched detailed investigations into these transactions. The audit committee and the board are confident that it has taken and continues to take all the necessary steps to execute its responsibilities in terms of the Companies Act of South Africa and the principles of good governance as contemplated by the King Code on Corporate Governance. The JSE proactive monitoring panel reviewed DAWN s 2015 annual financial statements and raised matters pertaining to additional disclosure, reclassification of entries and consistency of presentation in the annual financial statements. All the comments raised have been addressed by DAWN and the process has been concluded. The audit committee has considered the JSE letter of 15 February (JSE Proactive Monitoring Process) and has taken the appropriate action. The audit committee fulfilled its mandate and recommended the annual financial statements for the year ended 31 March for approval to the board. The board approved the annual financial statements on 14 July and the financial statements will be open for discussion at the annual general meeting. evaluation Of The financial DIreCTOr and The finance function On 14 July the chief financial officer of the group, Dries Ferreira, resigned, effective 31 October. On the same date Hanré Bester was appointed as acting financial director. The audit committee confirms that it has satisfied itself of the expertise and experience of the acting financial director. The audit committee has considered, and has satisfied itself of, the appropriateness of the expertise and adequacy of resources of the finance function and experience of the senior members of management responsible for the finance function. whistle-blowing The code of ethical conduct and whistle-blowing policy are intended to assist individuals who believe they have discovered serious malpractice or impropriety to take the appropriate action. The committee is assured that these arrangements provide for proportionate and independent investigation of matters reported and for suitable follow-up action. The committee is satisfied that instances of whistle-blowing were appropriately dealt with during the year under review. Copies of the code of ethical conduct and fraud policy are available on the company s website assurance The audit committee is satisfied that DAWN has optimised the assurance coverage obtained from management and internal and external assurance providers in accordance with an appropriate combined assurance model. approval The report of the audit committee has been approved by the board of directors of DAWN. Signed for and on behalf of the audit committee Saleh Mayet Chairman of the audit committee 5 14 July

8 DIRECTORS REPORT for the 12 months ended 31 March Following the sale in November 2014 of 51% of DAWN s Watertech and Sanware clusters to Grohe Luxemburg Four AG, Europe s largest and the world s leading single-brand manufacturer and supplier of sanitary fittings, DAWN changed its year-end to 31 March, resulting in a nine-month reporting period for F2015. As per JSE requirements, the group is required to report its last published comparative results. The annual financial statements are therefore prepared for the 12-months to 31 March compared to the ninemonth period to 31 March The directors take pleasure in presenting their report, which forms part of the summary consolidated financial statements for the year ended 31 March. The consolidated financial statements presented on pages 15 to 126 set out fully the financial position, results of operations and cash flows of the group for the year ended 31 March. GrOuP results SuMMarY Restated 12 months 9 months ended ended 31 March 31 March 2015 % r 000 R 000 change Statement of financial position Total assets (29) Total liabilities (13) Financial gearing ratio (%) 29,5 8,4 >100 Net asset value per share (cents) 440,66 794,97 (45) Net tangible asset value per share (cents) 412,95 788,68 (48) Income statement Revenue Operating loss before impairments and derecognitions (23 948) (80 065) (70) Impairments and derecognitions ( ) >(100) Operating (loss)/profit ( ) >(100) Net finance charges (71 070) (36 484) 95 Share of (loss)/profit in investments accounted for using the equity method (5 891) >(100) Income tax (expense)/income (19 613) >(100) Profit from discontinued operations (attributable to owners of the parent) (100) Attributable earnings ( ) >(100) Headline earnings ( ) (66 508) >(100) Earnings per share (cents) (318,31) 202,11 >(100) Headline earnings per share (cents) (65,55) (28,1) >100 The group s operations are classified into three main operating segments, namely building, infrastructure and solutions. The most prominent markets in which the building segment operates are the residential market and the recorded and unrecorded additions and alterations markets, whereas the infrastructure segment carries its dominant exposure to the civils sector, specifically the water and sewer-related infrastructure and allied market activity. Both the building and the infrastructure segments are supported by the solutions segment. Details of the segmental analysis of the group are set out on page 40. The table below summarises the impact of the impairments and write-downs on attributable earnings: r m Cents per share 6 attributable loss as reported (726,9) (318,3) Net impairments and other HEPS add-backs controlled entities 155,6 64,9 Net impairments and other HEPS add-backs associates and joint ventures 450,2 187,8 headline loss as reported (157,1) (65,6) Further write-downs undertaken (not qualifying for HEPS add-back) controlled entities 155,9 65,1 Further write-downs undertaken (not qualifying for HEPS add-back) associates and joint ventures Core headline loss (1,2) (0,5)

9 DIRECTORS REPORT for the 12 months ended 31 March The reconciliation of core headline earnings below includes non-headline earnings per share adjustments reviewed by the chief operating decision-maker, DAWN s executive committee. Core headline earnings The core headline earnings presented above and below has been prepared for illustrative purposes only to provide information on how the core headline earnings adjustments might have impacted on the financial results of the group. Because of its nature, the core headline earnings may not be a fair reflection of the group s results of operation, financial position, changes in equity or cash flows. The underlying information used in the preparation of the core headline earnings has been prepared using the accounting policies that comply with International Financial Reporting Standards. These are consistent with those applied in the published consolidated group results of the group and company for the year ended 31 March. The directors are responsible for compiling the core headline earnings on the basis of the applicable criteria specified in the JSE Listings Requirements and as described below. The reconciliation of core headline earnings should be read in conjunction with the unmodified independent reporting accountants report thereon, issued by PricewaterhouseCoopers Inc, which is available for inspection at DAWN s registered office. The table below summarises the reconciliation of headline earnings to core headline earnings: r m Cents per share headline loss as reported (157,1) (65,6) Core headline earnings adjustments: 155,9 65,1 Onerous lease provisions raised on premises not in use by the group 11,1 Remeasurement of a written put 37,8 Additional working capital impairments due to the current economic conditions 56,4 Additional provisions related to the sale of a subsidiary 14,7 Derecognition of deferred tax assets 45,0 Tax impact of the above adjustments (9,1) Core headline loss (1,2) (0,5) TraDInG STaTeMenT The measure adopted for the trading statement has not changed and will continue to be earnings per share and headline earnings per share. For the financial year, core headline earnings and core headline earnings per share constituted additional disclosure due to the number of adjustments, as shown above. Treasury shares Shares repurchased by a subsidiary and held in treasury amounted to shares (2015: Nil shares), which are disclosed as a reduction of equity in the statement of changes in equity. During the 2015 and financial years a further and shares, respectively, were acquired in order to cover the group s obligations in terms of the share incentive schemes at a total cost of R7,02 (2015) and R5,61 () per share. These obligations were settled in the respective years. Year under review In the interim results to 30 September 2015, DAWN reported significant progress in the implementation of its turnaround strategy. However, the second half of the financial year, was severely impacted by a sharp economic slowdown and a lag in government spend on water projects which resulted in losses in a number of businesses. Grohe DAWN Watertech (GDW), in which DAWN holds a minority (49%) stake was also impacted by delayed approval of working capital funding, which disrupted the supply chain and had an impact on earnings at the associate company investment level as well as on the building trading segment of DAWN, GDW s largest customer. Lower resource prices, foreign exchange volatility and scarcity, and political instability also impacted adversely on DAWN s rest of Africa business. Thus, group sales came under severe pressure in the second half. The management team responded by lowering prices to maintain historical volumes. This only served to exacerbate the impact of the reduction in sales by also reducing gross margins. Although the group s operating expenses were trimmed back aggressively, it has a high fixed cost base which does not allow further cost reductions in the shortterm. Group operating margin therefore decreased from 3,5% in H1 F to a loss for F. The subsidiary businesses which moved into losses were Sangio, Incledon, Pro-Max, Kitchen Fittings, DAWN Africa and DPI International as well as associates GDW and some Africa operations. Total losses after tax (including GDW) amounted to R130,0 million. Based on historical results and future expectations of investments, the board has decided to make significant impairments to the carrying value of these investments. 7

10 DIRECTORS REPORT for the 12 months ended 31 March These losses continued into the first quarter of F2017. Under the guidance of new management, the group prioritised plans to halt the losses, move back into profit and bring working capital back to normal levels. A plan to achieve this was approved by the executive committee and the board of directors at the end of June and significant progress toward these goals is expected during the second quarter of F2017. Earnings for F are therefore as follows: an operating loss before tax, interest, impairments and derecognitions of R23,9 million (nine months F2015: a loss of R80,1 million); a headline loss per share of 65,6 cents (nine months F2015: a headline loss of 28,1 cents per share); and a loss per share of 318,3 cents (nine months F2015: loss per share of 202,1 cents). Income statement Revenue for the 12 months increased by 38% to R5,0 billion, compared to the nine months to 31 March Volumes declined by 3%, price inflation amounted to 8% with the annualisation of the nine months added a further notional 33%. Gross margins decreased to 21,9% from the 23,4% achieved during the nine months to 31 March Net operating expenses reduced by 9% measured against an annualised 2015, reducing the expense to sales ratio from 34,1% in F2015 to 22,4% in F. A total of R90 million in costs net of inflation and acquisitive increases (which amounted to R168 million in real terms) have been removed during the year under review. Group PBIT, after the write-downs that do not qualify for headline earnings add-backs, was a loss of R23,9 million. Impairments include an appropriate write-down of the group s exposure to the rest of Africa operations. Net finance costs increased by 2% to R37,1 million (F2015: R36,5 million) excluding the charge of R34,0 million relating to the increase in value associated with the discovery of a written put over the remaining 49% of the equity in Swan Plastics (see restatements on page 121). Income from associates and joint ventures decreased to a loss of R5,9 million (F2015: profit of R10,9 million) mainly as a result of the R32,2 million loss (for DAWN s 49%) by GDW. As a result of the impairments and write-downs, the group s effective tax rate is low at -2,6%. Non-controlling interests share of group earnings increased from R1,7 million to R5,0 million, mainly reflecting an earnings increase from Swan Plastics. The group incurred a net loss after tax, impairments and write-downs of R757,9 million. Statement of financial position The reduction in net working capital during the 12 months to 31 March amounted to R55.0 million and a further reduction is targeted in F2017. The group s net working capital has come down from a high of 65 days in December 2014 to 59 days in March. The group s stated target for working capital is 55 days. The four days difference amounts to R54 million. Management has, however, identified a further R146 million of working capital reduction opportunities (making a total of R200 million). The table below summarises the group s working capital movements in days, calculated on a rolling 12-month basis. 8 Mar Sept Mar Dec Comment on working capital days net working capital Solid improvement Debtors Pressure as industry experiences cash constraints Stock R134,6 million reduction in stock levels; more planned Creditors Creditor funding reduced in line with recent stock reduction; objective is for stock and creditor days to contract The group s net asset value decreased to R1 056,2 million as at 31 March compared to R1 884,5 million at 31 March The large reduction in net asset value stems mainly from the net impairments during the period, amounting to R637 million. Compared to the group s net interest bearing debt, the financial position has deteriorated to a gearing ratio of 29,5% at 31 March (8,4% at 31 March 2015). Short-term debt amounts to R357,4 million (R277,4 million net of cash). Absa Bank Limited has, subsequent to year-end, renewed the R200 million revolving credit facility (out of a total of R300 million working capital facilities) and requires repayment on an amortising profile between 7 October and 7 October DAWN has negotiated to repay R50 million by 31 March 2017 and the balance of R150 million between 1 April 2017 and 7 October 2017 to align repayment commitments with the cash generation of the group.

11 DIRECTORS REPORT for the 12 months ended 31 March Statement of cash flows Cash generated from operating activities before working capital changes was impacted by the losses incurred in the second half and decreased to R49,0 million (F2015: R56,6 million). Working capital showed an inflow of R25,3 million (F2015: outflow of R297,5 million). Net finance and tax payments amounted to R58,8 million (F2015: R59,1 million). Investing and financing activities, however, showed a net inflow of R53.5 million (F2015: inflow of R104,3 million). Investing activities showed a R89,9 million inflow for the period. Included in this number are the following main items: R45,4 million additions to property, plant and equipment and intangible assets. The capital expenditure comprised spend on the software for the new ERP system, capital expenditure on fleet, plant and equipment and an outlay for generators, making the group more resilient to the effects of future power disruptions; and R119,5 million inflows from the repayment of loans owed to DAWN by associate investment companies. Financing activities, on the other hand, amounted to a net outflow of R36,4 million and included: R209,2 million in proceeds from debt raising, offset by R207,0 million in repayments of various borrowings and finance leases; R30,9 million spent on treasury shares to acquire five million DAWN shares in the open market during F1 H; and R7,3 million in dividend payments to minority shareholders. The group closed with a net cash of R69,9 million at 31 March compared to a net cash of R1,4 million at March restatements During the year under review the comparative results were restated/reclassified for the following matters: Restatement Other as addendum restatements/ previously to lease written reclassistated agreement put fications restated financial statement line item r m r m r m r m r m Statement of changes in equity 2014 (1 523,0) 78,5 31,2 (1 413,3) 2015 (2 004,1) 82,4 33,4 3,8 (1 884,5) Statement of financial position non-current assets Derivative financial instruments 4,0 25,9 29,9 Deferred tax 71,1 32,1 103,2 non-current liabilities Derivative financial instruments (30,0) (25,9) (56,0) Deferred profit (16,0) (23,4) (39,4) Trade and other payables (3,3) (3,3) Operating lease liability (91,6) (13,7) (105,2) Current liabilities Trade and other payables (1 053,2) 15,4 (1 037,8) Borrowings (501,6) (3,8) (505,4) Operating lease liability (1,8) (1,8) Deferred profit (5,8) 0,5 (5,3) restatement 1 An addendum to the existing lease agreement on the Germiston Distribution Centre in 2009 was not disclosed to the board. As a result, the lease liability had to be restated based on a 15-year lease at an escalation of 8% per annum, ending in December Payments under the operating lease are recognised as expenses on a straight-line basis over the lease term. The expense treatment therefore does not reflect the cash profile of the lease. The difference between the cash and the expense is accounted for as a lease liability. The lease liability of R85,8 million as at 31 March will reduce during the remaining period of the lease to Rnil. These entries do not affect DAWN s historical or future cash flow and any increases or reduction in the lease liability will not impact on DAWN s cash flow. 9

12 DIRECTORS REPORT for the 12 months ended 31 March restatement 2 In August 2013, a subsidiary of DAWN gave the remaining 49% shareholders in Swan Plastics Pty Ltd (Swan) the right to put their shares at a 5 price earnings ratio, based on the average of the prior two years earnings. This written put was not disclosed to the board. The opposite entry to the written put liability is represented by a debit to equity. The put represents an asset in that the minority shareholders equity in Swan will belong to DAWN shareholders if the written put is triggered. The difference between the final purchase consideration and the value of the non-controlling interest in Swan will be accounted for as part of the Change in ownership reserve. restatement 3 An obligation was raised as a share-based payment obligation in equity to acquire the remaining non-controlling interest shareholding of 18,1% in DAWN Human Resource Solutions Proprietary Limited. The above treatment transferring the liability to equity was incorrect as per paragraph 4 of IFRS 2. DAWN has updated the statement of changes in equity (SOCIE) and share-based payment obligation. This incorrect treatment was highlighted by the JSE proactive monitoring process. Other matters The transactions described in 1 and 2 on page 9, respectively, were initiated and executed at the time by certain executive directors and senior management respectively. Both transactions were executed without the knowledge and approval of the board. A reportable irregularity has therefore been reported by the external auditors to the Independent Regulatory Board of Auditors with respect to these transactions. After considering the circumstances of these transactions, as a matter of good governance, the board has instituted the following corrective actions: engaged with external legal counsel to clarify DAWN s legal position with respect to these matters and its relationship with the individuals in question, including DAWN s right of recourse against any relevant individuals; engaged with parties involved in the above matters to ensure the board acts in the best interests of DAWN; accounted for and restated the comparative results in the annual financial statements for these transactions; and the internal audit department launched detailed investigations into these transactions. Please refer to note 44 restatement, reclassification and consistency of presentation for further disclosure. The board is confident that it has taken and continues to take all the necessary steps to execute its responsibilities in terms of the Companies Act of South Africa and the principles of good governance as contemplated by the King Code on Corporate Governance. business COMbInaTIOnS boutique baths On 1 April 2015, the group acquired a 76% share in Boutique Baths Proprietary Limited (Boutique Baths), a manufacturer of freestanding, skirted and solid cast baths with matching basin sets, for a consideration of R7 million. Boutique Baths contributed operating profit of R0,7 million and revenue of R11,8 million since the acquisition date. The amount of net assets acquired amounted to R5,6 million and non-controlling interests of R1,9 million was recognised. Goodwill recognised on this acquisition amounts to R3,3 million. Refer to note 36 for further disclosure. 10 SPeCIaL resolutions At the annual general meeting of the company held on 20 November 2015, shareholders approved three special resolutions. Special resolution number 1 granted the company a general authority for the repurchase of its own shares. Special resolution number 2 approved the non-executive directors fees for the 2015 financial year. Special resolution number 3 granted the company the authority to provide financial assistance to any company or corporation which is related or inter-related to the company in terms of the requirements of section 45 of the Companies Act, No 71 of At the forthcoming annual general meeting of the company to be held on Friday, 18 November, the special resolutions above will again be presented to shareholders for approval.

13 DIRECTORS REPORT for the 12 months ended 31 March DIvIDenD The group s policy is to pay dividends once per year at year-end, on an approximately four times cover. The board considers it prudent to conserve cash due to working capital requirements and therefore does not propose a dividend in respect of the financial year. It is the board s intention to resume dividend payments in due course. Share CaPITaL Further details of the authorised and issued share capital of the company are provided in note 19 to the consolidated annual financial statements. Dawn Share SCheMe The aggregate number of shares available to the scheme at year-end, but not issued, is outlined below. All the shares have been taken up. Restated 12 months 9 months ended ended 31 March 31 March Aggregate number of shares available to the new scheme Shares rights and awards granted (new schemes) (7 423) (16 010) Number of share rights and awards available, but not engaged DIreCTOrS Date of Date of Details of directors Designation appointment resignation Mohammed Akoojee Non-executive director 23 June November 2015 Lou Alberts Lead independent director 30 August 2001 Hanré Bester Financial director 14 July Jan Beukes Risk and compliance officer 20 August July, effective 31 October Stephen Connelly Independent non-executive director Interim CEO of DAWN 1 April 1 June Dries Ferreira Financial director 30 November July, effective 31 October Diederik Fouché Non-executive chairman 1 November 2015 Tak Hiemstra Independent non-executive chairman 30 June 1998 Retired 31 October 2015 Gerhard Kotzee CEO Africa operations and DAWN manufacturing 6 November February Saleh Mayet Independent non-executive director 29 May 2015 Dinga Mncube Independent non-executive director 1 May 2014 Veli Mokoena Non-executive director 22 June 2011 George Nakos Non-executive director 12 November 2015 Derek Tod Chief executive officer 30 June 1998 Retired 31 May 11

14 DIRECTORS REPORT for the 12 months ended 31 March In terms of the company s memorandum of incorporation, Veli Mokoena retires by rotation at the forthcoming annual general meeting. The retiring director is eligible and available for re-election. George Nakos was appointed to the board on 12 November 2015 as a non-executive director. Stephen Connelly was appointed to the board on 1 April as an independent non-executive director and, subsequently, as interim chief executive officer effective 1 May, following the announcement by the board of Derek Tod s retirement as chief executive officer, effective 31 May. Hanré Bester was appointed to the board as acting financial director with immediate effect, following Dries Ferreira s resignation as chief financial officer on 14 July. Resolutions for ratification by shareholders of George, Stephen and Hanré s appointments are included in the notice of annual general meeting in the integrated report. SeCreTarY The secretary of the company is ithemba Governance and Statutory Solutions (Pty) Ltd. 12 DIreCTOrS SharehOLDInG The directors held in aggregate direct and indirect beneficial interests of 10,5% (2015: 10,5%) in the issued share capital of the company at the end of the reporting period. number of ordinary shares beneficial Direct Indirect Total at 31 March Directors Executive directors Jan Beukes ¹ Dries Ferreira René Roos Derek Tod Non-executive directors Lou Alberts Diederik Fouché Veli Mokoena Prescribed officers Dave Ferguson Graeme Johnston At 31 March Directors Executive directors JA Beukes JAI Ferreira RD Roos DA Tod GD Kotzee Non-executive directors LM Alberts RL Hiemstra VJ Mokoena Prescribed officers CJ Bishop DK Ferguson GR Johnston ¹ Resigned on 14 July, effective 31 October. 2 Resigned on 14 July, effective 31 October. 3 Retired on 31 May. The company has not been notified of any material change in directors interests during the period 31 March to the date of this report.

15 DIRECTORS REPORT for the 12 months ended 31 March DIreCTOrS emoluments Details of the directors emoluments are set out in note 42 on pages 117 to 120 of the annual financial statements and in the report of the remuneration committee in the integrated report. DIreCTOrS InTereST In COnTraCTS No material contracts involving directors interest were entered into during the current year. SharehOLDInG analysis A presentation of the company s shareholding is set out on page 129. SubSIDIarIeS, associate COMPanIeS and JOInT ventures Details of the holding company s interest in subsidiaries, associate companies and joint ventures are set out on pages 127 and 128 of the annual financial statements. Details of indebtedness to the holding company are set out on page 114 of the annual financial statements. events after The reporting PerIOD Changes to the board of directors Chief executive officer As announced on SENS on 26 April, Derek Tod has taken a decision to retire as chief executive officer, effective 31 May. He has agreed with the board that he will participate in an organised hand-over to the board and interim chief executive officer, as and when required. Stephen Connelly, who was appointed to the board as independent non-executive director on 1 April, has accepted the role of interim chief executive officer of DAWN, effective 1 June. He will fulfil this role until the board has selected a permanent successor to Derek Tod. He will also assist the DAWN executive committee in the turnaround strategy, which commenced recently. The board will immediately commence with the process of identifying and appointing a permanent successor and will in this process consider both internal and external candidates. Chief financial officer The chief financial officer, Dries Ferreira, resigned from DAWN on 14 July, but agreed to remain in employment until 31 October to ensure a smooth transition. Hanré Bester ((CA (SA), MCom (Tax)), the group financial manager who joined DAWN during 2010, has been appointed as acting financial director until a permanent placement can be made. Risk and compliance officer The risk and compliance officer and executive director, Jan Beukes, resigned from DAWN on 14 July, but agreed to remain in employment until 31 October to ensure a smooth transition. A suitable replacement will be recruited in due course. borrowings covenants DAWN has breached some of its covenants and accordingly approached Absa for a waiver of the relevant covenant measures. On 28 June Absa consented to the non-compliance (breach) of covenants and waived the event of default. DAWN s current facility ends on 7 October and has been re-negotiated to 7 October The new facility has similar characteristics, but will have a quarterly step-down of R25 million per quarter in respect of the revolving credit facility (RCF) starting 7 October and ending 7 July The pricing has provisionally been indicated and reflects a deteriorated credit position as well as movements in the general yield curve. Disposal Braveheart Financial Services Proprietary Limited a DAWN investment of 30% was sold to the majority shareholder on 30 May for an amount of R1 million. auditors The auditors, PricewaterhouseCoopers Inc., and the designated auditor, Isak Buys, have indicated their willingness to continue in office for the ensuing year. The audit committee has satisfied itself of the independence of the auditors and the designated auditor. A resolution to reappoint them as auditors will be proposed at the next annual general meeting scheduled to take place on 18 November. 13

16 INDEPENDENT AUDITOR S REPORT To the shareholders of Distribution and warehousing network Limited We have audited the consolidated and separate financial statements of Distribution and Warehousing Network Limited set out on pages 15 to 128, which comprise the statements of financial position as at 31 March, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information. DIreCTOrS responsibility for The financial STaTeMenTS The company s directors are responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. auditor S responsibility Our responsibility is to express an opinion on these consolidated and separate 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 about whether the consolidated and separate financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. OPInIOn In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the financial position of Distribution and Warehousing Limited as at 31 March, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa. OTher reports required by The COMPanIeS act As part of our audit of the consolidated and separate financial statements for the year ended 31 March, we have read the Directors Report, the Audit Committee s Report and the Company Secretary s Certificate for the purpose of identifying whether there are material inconsistencies between these reports and the audited financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports. report On OTher LeGaL and regulatory requirements We report that we have identified certain items which constitute reportable irregularities ( RI ) in terms of the Auditing Profession Act and have reported such matters to the appropriate regulatory authority. Details relating to these RIs are more fully set out in note 44 to the annual financial statements. The RIs are no longer continuing. 14 PricewaterhouseCoopers Inc. Director: I buys Registered Auditor Sunninghill 14 July

17 CONSOLIDATED AND SEPARATE INCOME STATEMENTS for the 12 months ended 31 March GrOuP COMPanY Restated 12 months 9 months 12 months 9 months ended ended ended ended 31 March 31 March 31 March 31 March Note r 000 R 000 r 000 R 000 revenue Cost of sales 4 ( ) ( ) Gross profit Operating expenses 4 ( ) ( ) (5 174) (29 680) Administrative and selling expenses ( ) ( ) (2 728) (6 450) Distribution and warehousing expenses ( ) ( ) Other operating expenses (20 599) (46 288) (2 446) (23 230) Other operating income Operating (loss)/profit before impairments and derecognitions of previously held interests (23 948) (80 065) (25 675) Net (loss)/gain on derecognition of subsidiaries 4; 37 (4 592) Impairments 4 ( ) ( ) ( ) (13 532) Operating (loss)/profit ( ) ( ) (39 207) Finance income Finance expenses 7 (74 530) (52 194) (37 250) (34 549) (Loss)/profit after net financing costs ( ) ( ) (12 242) Share of (loss)/profit in investments accounted for using the equity method 14 (5 891) (Loss)/profit before taxation ( ) ( ) (12 242) Income tax (expense)/income 9 (19 613) (4 340) (7 761) (Loss)/profit from continuing operations ( ) ( ) (20 003) Profit from discontinued operations (Loss)/profit for the year ( ) ( ) (20 003) Profit attributable to: Owners of the parent ( ) Non-controlling interests (Loss)/profit for the year ( ) ( ) (20 003) Earnings per share (cents) 10 (318,31) 202,11 Diluted earnings per share (cents) 10 (317,34) 200,25 The notes as set out on pages 40 to 126 are an integral part of these consolidated financial statements. 15

18 CONSOLIDATED AND SEPARATE STATEMENTS OF COMPREHENSIVE INCOME for the 12 months ended 31 March GrOuP COMPanY Restated 12 months 9 months 12 months 9 months ended ended ended ended 31 March 31 March 31 March 31 March Note r 000 R 000 r 000 R 000 (Loss)/profit for the year ( ) ( ) (20 003) Other comprehensive income Items that will not be reclassified to profit or loss: Effects of retirement benefit obligations (43) Tax related components (282) (31) Items that may be subsequently reclassified to profit or loss: Exchange differences recycled through profit/loss (6 611) (2 972) Exchange differences on translating foreign operations Cash flow hedging reserve 23 (1 023) Tax-related components (6 722) (2 695) Total other comprehensive loss (5 995) (2 726) Total comprehensive (loss)/income ( ) ( ) (20 003) Total comprehensive (loss)/income attributable to: Owners of the parent ( ) Non-controlling interests ( ) Total comprehensive income attributable to equity shareholders arising from: Continuing operations ( ) Discontinued operations ( ) The notes as set out on pages 40 to 126 are an integral part of these consolidated financial statements. 16

19 CONSOLIDATED AND SEPARATE STATEMENTS OF FINANCIAL POSITION as at 31 March GrOuP COMPanY Restated Restated 31 March 31 March 30 June 31 March 31 March Note r 000 R 000 R 000 r 000 R 000 assets non-current assets Property, plant and equipment Intangible assets Investments in subsidiaries Investments in associates and joint ventures Derivative financial instruments Deferred tax assets Trade and other receivables Current assets Inventories Trade and other receivables Cash and cash equivalents Derivative financial instruments Current tax assets assets of disposal group classified as held-for-sale Total assets equity and LIabILITIeS equity Capital and reserves attributable to equity holders of the company Share capital Share premium Retained income Treasury shares (30 875) (6 733) Share-based payment reserve Hedging reserve 23 (737) Foreign currency translation reserve (6 267) (282) Change in ownership reserve 21 (8 020) (8 378) (17 989) Retirement benefit obligation reserve 494 (233) (202) Share capital and reserves Non-controlling interests Total equity LIabILITIeS non-current liabilities Borrowings Derivative financial instruments Deferred profit Deferred tax liability Retirement benefit obligation Share-based payment liabilities Operating lease liabilities Trade and other payables Current liabilities Trade and other payables Borrowings Operating lease liabilities Derivative financial instruments Deferred profit Current tax liabilities Share-based payment liabilities Liabilities directly associated with assets held-for-sale Total liabilities Total equity and liabilities The notes as set out on pages 40 to 126 are an integral part of these consolidated financial statements.

20 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY GROUP for the 12 months ended 31 March Attributable to owners of the parent foreign Change retire- Share- currency in ment equity nonbased trans- owner- benefit attribu- control- Share Share Treasury payment hedging lation ship obligation retained table to ling capital premium shares reserve reserve reserve reserve reserve earnings company interests Total note r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 balance at 1 July 2014 as reported (6 733) (17 989) (202) restatements ( ) ( ) ( ) restatement 1 Operating lease liabilities and deferred profit 44 (78 452) (78 452) (78 452) restatement 2 written put 44 (31 236) (31 236) (31 236) balance at 1 July 2014 as restated (6 733) (17 989) (202) Total comprehensive income for the period (2 695) (31) Profit for the period Continuing operations Discontinued operations Other comprehensive income for the period (2 695) (31) (2 726) (2 726) Dividends paid (40 017) (40 017) (40 017) Total contributions by and distributions to owners of the company recognised directly in equity (5 359) (2 159) Share-based payment charge for the period Share-based payment vesting of options (14 717) (8 958) (8 958) (8 958) Treasury shares acquired (7 984) (7 984) (7 984) Dividends paid to non-controlling interests (447) (447) Transactions with non-controlling interests 21 (8 057) (8 057) (2 538) (10 595) Business combinations Transfer from liabilities Derecognition of subsidiary 20, Derecognition of joint venture Foreign currency translation reserve balance at 31 March 2015 as restated (282) (8 378) (233) balance at 1 april 2015 as reported (282) (8 378) (233) restatements (3 780) ( ) ( ) ( ) restatement 1 to 3 Prior year impact 44 ( ) ( ) ( ) restatement 1 Operating lease liabilities and deferred profit 44 (3 976) (3 976) (3 976) restatement 2 written put 44 (2 142) (2 142) (2 142) restatement 3 acquisition vendor 44 (3 780) (3 780) (3 780) balance at 1 april 2015 as restated (282) (8 378) (233) Total comprehensive income for the year (737) (5 985) 727 ( ) ( ) ( ) Profit for the year ( ) ( ) ( ) Other comprehensive income for the year (737) (5 985) 727 (5 995) (415) (6 410) 18 Dividends paid (7 260) (7 260) (7 260) The notes as set out on pages 40 to 126 are an integral part of these consolidated financial statements.

21 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY GROUP continued for the 12 months ended 31 March Attributable to owners of the parent foreign Change retire- Share- currency in ment equity nonbased trans- owner- benefit attribu- control- Share Share Treasury payment hedging lation ship obligation retained table to ling capital premium shares reserve reserve reserve reserve reserve earnings company interests Total note r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 Total contributions by and distributions to owners of the company recognised directly in equity (30 875) (26 354) 358 (953) (57 824) 686 (56 723) Share-based payment charge for the year 27 (953) (926) (926) Treasury shares acquired (30 875) (30 875) (30 875) Transfer to liability 20 (26 381) (26 381) (26 381) Transactions with non-controlling interests (823) (465) Business combinations balance at 31 March (30 875) (737) (6 267) (8 020) Note The notes as set out on pages 40 to 126 are an integral part of these consolidated financial statements. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY COMPANY for the 12 months ended 31 March Share Share retained Total capital premium income Total equity r 000 r 000 r 000 r 000 r 000 balance at 1 July Total comprehensive income for the period (20 003) (20 003) (20 003) Profit for the period (20 003) (20 003) (20 003) Dividends (39 969) (39 969) (39 969) balance at 31 March balance at 1 april Total comprehensive income for the year ( ) ( ) ( ) Profit for the year ( ) ( ) ( ) balance at 31 March Note The notes as set out on pages 40 to 126 are an integral part of these consolidated financial statements.

22 STATEMENTS OF CASH FLOWS for the 12 months ended 31 March GrOuP COMPanY 20 Restated 12 months 9 months 12 months 9 months ended ended ended ended 31 March 31 March 31 March 31 March Note r 000 R 000 r 000 R 000 Cash flows from operating activities Cash generated from operations ( ) (4 755) Finance income received Finance expense paid (41 318) (52 403) (37 250) (34 549) Income tax paid 32 (20 950) (18 453) (7 766) (3 772) Dividends received net cash generated from/(utilised in) operating activities ( ) Cash flows from investing activities Additions to property, plant and equipment 33 (41 534) (46 414) Additions and development of intangible assets 35 (3 847) (29 200) Finance lease receipts Proceeds on disposals of property, plant and equipment Acquisition of businesses through business combinations 36 (7 003) (43 642) Acquisition of interest in associates 14 (20 982) Acquisition of further interest in subsidiary 13 ( ) ( ) Loan proceeds from subsidiaries Loan advances granted to joint ventures and associates (64 204) (24 500) Loan proceeds from joint ventures and associates Proceeds on derecognition of investment in Grohe DAWN Watertech Disposal of held-for-sale asset Dividends received from associates/joint ventures net cash generated by/(utilised in) investing activities ( ) Cash flows from financing activities Proceeds from borrowings Repayment of borrowings ( ) ( ) ( ) ( ) Instalment sale payments (15 342) (24 865) Finance lease payments (12 525) (9 733) (16 120) (45) Treasury shares acquired (30 875) (7 984) Acquisition of non-controlling interest 21 (465) (12 168) Dividends paid to non-controlling interest holders (7 260) (447) Dividends paid (40 017) (39 970) net cash (utilised in)/generated by financing activities (36 418) ( ) ( ) Total cash movement for the year ( ) (41 382) Translation effects on foreign cash and cash equivalents balances (531) (518) Cash and cash equivalents of held-for-sale group derecognised (4 282) Cash and cash equivalents of disposal group held-for-sale at end of the year Cash and cash equivalents at beginning of the year (41 302) 80 Cash and cash equivalents at end of the year (41 302) The notes as set out on pages 40 to 126 are an integral part of these consolidated financial statements.

23 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the 12 months ended 31 March 1. SuMMarY Of SIGnIfICanT accounting POLICIeS The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. 1.1 basis of preparation The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and the requirements of the South African Companies Act, as amended. These consolidated financial statements have been prepared under the historical cost convention as modified by the revaluation of financial assets and financial liabilities at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 1.25 to the accounting policies. Going concern The group s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the group should be able to operate within the level of its current financing. After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its consolidated financial statements. Accounting policy developments Accounting policy developments include new standards issued, amendments to standards, and interpretations issued on current standards. These developments resulted in the first time adoption of new and revised Standards which require additional disclosures. Standards, amendments and interpretations effective in Amendment to IAS 19 Employee benefits These narrow scope amendments apply to contributions from employees or third parties to defined benefit plans. The objective of the amendments is to simplify the accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary. The amendments had no impact on the group. Standards and amendments issued but not effective The group has evaluated the effect of all new standards, amendments and interpretations that have been issued but which are not yet effective. Based on the evaluation, management does not expect these standards, amendments and interpretations to have a significant impact on the group s results and disclosures. The expected implications of applicable standards, amendments and interpretations are dealt with below. 21

24 for the 12 months ended 31 March 22 Amendments to IFRS 10 Consolidated financial statements and IAS 28 Investments in associates and joint ventures The changes introduced by the IASB in 2014 through narrow-scope amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures have been postponed. Those changes affect how an entity should determine any gain or loss it recognises when assets are sold or contributed between the entity and an associate or joint venture in which it invests. The changes do not affect other aspects of how entities account for their investments in associates and joint ventures. The reason for making the decision to postpone the effective date is that the IASB is planning a broader review that may result in the simplification of accounting for such transactions and of other aspects of accounting for associates and joint ventures. Effective date has been postponed. The proposed amendments are not expected to have an impact on the group. Amendments to IFRS 10 Consolidated financial statements and IAS 28 Investments in associates and joint ventures The amendments clarify the application of the consolidation exception for investment entities and their subsidiaries. Effective for annual periods beginning on or after 1 January. The proposed amendment is not expected to have an impact on the group. Amendment to IFRS 11 Joint arrangements This amendment adds new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. The amendments specify the appropriate accounting treatment for such acquisitions. Effective for annual periods beginning on or after 1 January. The proposed amendment is not expected to have an impact on the group. IFRS 14 Regulatory deferral accounts The IASB has issued IFRS 14, Regulatory deferral accounts specific to first-time adopters ( IFRS 14 ), an interim standard on the accounting for certain balances that arise from rate-regulated activities ( regulatory deferral accounts ). Rate regulation is a framework where the price that an entity charges to its customers for goods and services is subject to oversight and/or approval by an authorised body. Effective for annual periods beginning on or after 1 January. The proposed new standard is not expected to have an impact on the group. Amendments to IAS 1 Presentation of financial statements In December 2014 the IASB issued amendments to clarify guidance in IAS 1 on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies. Effective for annual periods beginning on or after 1 January. Management is currently considering the effect of the changes. No significant impact is expected. Amendment to IAS 16 Property, plant and equipment and IAS 38 Intangible assets In this amendment the IASB has clarified that the use of revenue based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. The IASB has also clarified that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. Effective for annual periods beginning on or after 1 January. The amendments currently have no impact on the group.

25 for the 12 months ended 31 March Amendments to IAS 16 Property, plant and equipment and IAS 41 Agriculture In this amendment to IAS 16 the IASB has scoped in bearer plants, but not the produce on bearer plants and explained that a bearer plant not yet in the location and condition necessary to bear produce is treated as a selfconstructed asset. In this amendment to IAS 41, the IASB has adjusted the definition of a bearer plant to include examples of non-bearer plants and remove current examples of bearer plants from IAS 41. Effective for annual periods beginning on or after 1 January. The proposed amendments are not expected to have an impact on the group. Amendments to IAS 27 Separate financial statements In this amendment the IASB has restored the option to use the equity method to account for investments in subsidiaries, joint ventures and associates in an entity s separate financial statements. Effective for annual periods beginning on or after 1 January. The proposed amendment is not expected to have an impact on the group. Amendments to IAS 12 Income taxes The amendments were issued to clarify the requirements for recognising deferred tax assets on unrealised losses. The amendments clarify the accounting for deferred tax where an asset is measured at fair value and that fair value is below the asset s tax base. They also clarify certain other aspects of accounting for deferred tax assets. The amendments clarify the existing guidance under IAS 12. They do not change the underlying principles for the recognition of deferred tax assets. Effective for annual periods beginning on or after 1 January The proposed amendments are not expected to have an impact on the group. Amendment to IAS 7 Cash flow statements In January, the International Accounting Standards Board (IASB) issued an amendment to IAS 7 introducing an additional disclosure that will enable users of financial statements to evaluate changes in liabilities arising from financing activities. The amendment responds to requests from investors for information that helps them better understand changes in an entity s debt. The amendment will affect every entity preparing IFRS financial statements. However, the information required should be readily available. Preparers should consider how best to present the additional information to explain the changes in liabilities arising from financing activities. Effective for annual periods beginning on or after 1 January Management is currently considering the effect of the standard. No significant impact is expected. IFRS 15 Revenue from contracts with customers The FASB and IASB issued their long awaited converged standard on revenue recognition on 29 May It is a single, comprehensive revenue recognition model for all contracts with customers to achieve greater consistency in the recognition and presentation of revenue. Revenue is recognised based on the satisfaction of performance obligations, which occurs when control of goods or services transfers to a customer. Effective for annual periods beginning on or after 1 January Management is currently considering the effect of the standard. No significant impact is expected. IFRS 9 Financial Instruments (2009 and 2010) Financial liabilities, Derecognition of financial instruments, Financial assets, General hedge accounting This IFRS is part of the IASB s project to replace IAS 39. IFRS 9 addresses classification and measurement of financial assets and replaces the multiple classification and measurement models in IAS 39 with a single model that has only two classification categories: amortised cost and fair value. 23

26 for the 12 months ended 31 March 24 The IASB has updated IFRS 9, Financial instruments to include guidance on financial liabilities and derecognition of financial instruments. The accounting and presentation for financial liabilities and for derecognising financial instruments has been relocated from IAS 39, Financial instruments: Recognition and measurement, without change, except for financial liabilities that are designated at fair value through profit or loss. Effective for annual periods beginning on or after 1 January Management is currently considering the effect of the standard. No significant impact is expected. Amendment to IFRS 9 'Financial instruments', on general hedge accounting The IASB has amended IFRS 9 to align hedge accounting more closely with an entity s risk management. The revised standard also establishes a more principles-based approach to hedge accounting and addresses inconsistencies and weaknesses in the current model in IAS 39. Early adoption of the above requirements has specific transitional rules that need to be followed. Entities can elect to apply IFRS 9 for any of the following: The own credit risk requirements for financial liabilities. Classification and measurement (C&M) requirements for financial assets. C&M requirements for financial assets and financial liabilities. The full current version of IFRS 9 (that is, C&M requirements for financial assets and financial liabilities and hedge accounting). The transitional provisions described above are likely to change once the IASB completes all phases of IFRS 9. Effective for annual periods beginning on or after 1 January The amendment currently has no impact on the group. IFRS 16 Leases After ten years of joint drafting by the IASB and FASB they decided that lessees should be required to recognise assets and liabilities arising from all leases (with limited exceptions) on the statement of financial position. Lessor accounting has not substantially changed in the new standard. The model reflects that, at the start of a lease, the lessee obtains the right to use an asset for a period of time and has an obligation to pay for that right. In response to concerns expressed about the cost and complexity to apply the requirements to large volumes of small assets, the IASB decided not to require a lessee to recognise assets and liabilities for short-term leases (less than 12 months), and leases for which the underlying asset is of low value (such as laptops and office furniture). A lessee measures lease liabilities at the present value of future lease payments. A lessee measures lease assets, initially at the same amount as lease liabilities, and also includes costs directly related to entering into the lease. Lease assets are amortised in a similar way to other assets such as property, plant and equipment. This approach will result in a more faithful representation of a lessee s assets and liabilities and, together with enhanced disclosures, will provide greater transparency of a lessee s financial leverage and capital employed. One of the implications of the new standard is that there will be a change to key financial ratios derived from a lessee s assets and liabilities (for example, leverage and performance ratios). IFRS 16 supersedes IAS 17, Leases, IFRIC 4, Determining whether an Arrangement contains a Lease, SIC 15, Operating Leases Incentives and SIC 27, Evaluating the Substance of Transactions Involving the Legal Form of a Lease. Effective for annual periods beginning on or after 1 January Management is currently considering the effect of the standard.

27 for the 12 months ended 31 March Annual improvement project Improvements to IFRSs were issued in December 2013 by the IASB as part the annual improvements process resulting in the following amendments to standards issued and effective for the first time for 31 March yearends: The following standards have been affected by the project: IFRS 8 Operating segments IFRS 13 Fair value measurement IAS 16 Property, plant and equipment IAS 38 Intangible assets IAS 24 Related party disclosures The amendments have been adopted by the group. The IASB published the final standard for the cycle of the annual improvements with amendments that affected four standards issued and effective for the first time for 31 March year-ends: The following standards have been affected by the project: IFRS 1 First-time adoption of International Financial Reporting Standards IFRS 13 Fair value measurement IAS 40 Investment property IFRS 3 Business combinations The amendments have been adopted by the group. In September 2014, the IASB issued annual improvements to IFRSs Cycle, which contains five amendments to four standards, excluding consequential amendments. The amendments are effective for annual periods beginning on or after 1 January. The following standards have been affected by the project: IFRS 5 Non-current Assets Held-for-Sale and Discontinued Operations IFRS 7 Financial Instruments; Disclosures IFRS 7 Financial Instruments; Disclosures IAS 19 Employee Benefits IAS 34 Interim Financial Reporting The amendments are effective for annual periods beginning on or after 1 January. Management is currently considering whether any of these changes have an effect on the group. 1.2 Consolidation Subsidiaries Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to effect those returns through its power over the entity. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Investments in subsidiaries are carried at cost in the separate financial statements of the parent company. Subsidiaries are fully consolidated from the date on which control is transferred to the group and are no longer consolidated from the date that control ceases. 25

28 for the 12 months ended 31 March 26 The acquisition method of accounting is used to account for the acquisition of subsidiaries by the group. The consideration transferred for the acquisition of a business is measured as the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of the exchange. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the group recognises any noncontrolling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets. Subsequently, the carrying amount of non-controlling interest is the amount of the interest at initial recognition plus the non-controlling interest's share of the subsequent changes in equity. Total comprehensive income is attributed to non-controlling interest even if it results in the non-controlling interest having a deficit balance. Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Costs also include direct attributable costs of investments. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the statement of comprehensive income. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Accounting policies of subsidiaries have been changed, where necessary, to ensure consistency with the policies adopted by the group. Refer to pages 127 and 128 for a list of the subsidiaries. Transactions with non-controlling interests The group treats transactions with non-controlling interests, that do not result in a loss of control, as transactions with equity owners of the group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. When the group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate. Associates Associates are all entities over which the group has significant influence, but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The group s investment in associates includes intangible assets (net of any accumulated impairment loss) identified on acquisition (note 14). The group s share of its associates post-acquisition profits or losses is recognised in the income statement, and its

29 for the 12 months ended 31 March share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the group s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealised gains on transactions between the group and its associates are eliminated to the extent of the group s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed, where necessary, to ensure consistency with the policies adopted by the group. Dilution gains and losses arising in investments in associates are recognised in the income statement. Refer to page 128 for a list of the associates. Joint arrangements The group has applied IFRS 11 to all joint arrangements as of 1 July Under IFRS 11 investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investment. The group has assessed the nature of its joint arrangements and determined them to be joint ventures. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The group s interest in jointly controlled entities is accounted for by applying the equity method. In applying the equity method, account is taken of the group's share of accumulated retained earnings and movements in reserves from the effective dates on which the companies became joint ventures and up to the effective dates of disposal. The group does not recognise its share of profits or losses from the joint venture that result from the group s purchase of assets from the joint venture until it resells the assets to an independent party. However, a loss on the transaction is recognised immediately if the loss provides evidence of a reduction in the net realisable value of the current assets, or an impairment loss. Under the equity method, the investment in joint ventures is initially recognised in the statement of financial position at cost. Subsequent to acquisition date the carrying amount of the investment is adjusted with changes in the group s share of net assets of the joint venture. Goodwill relating to the joint venture is included in the carrying amount of the investment and is not amortised or separately tested for impairment. The share of the results of operations of joint ventures is reflected in profit or loss. This is the profit or loss attributable to equity holders of joint ventures and is therefore profit after tax and non-controlling interests in the subsidiaries of joint ventures. Accounting policies of joint ventures have been changed, where necessary, to ensure consistency with the policies adopted by the group. After application of the equity method, the group determines whether it is necessary to recognise an impairment loss on the group s investments in joint ventures. The group determines at each reporting date whether there is any objective evidence that the investments in joint ventures are impaired. If this is the case the group calculates the amount of impairment as the difference between the recoverable amount of joint ventures and its carrying value and recognises the amount in profit or loss. Upon loss of joint control over the joint venture, the group measures and recognises any remaining investment at its fair value. Any difference between the carrying amount of the joint venture upon loss of joint control and the fair value of the retained investment and proceeds from disposal, is recognised in profit or loss. Refer to page 128 for a list of the joint ventures. 27

30 for the 12 months ended 31 March 28 Common control transactions Where applicable, common control transactions are accounted for on a predecessor accounting basis. 1.3 black economic empowerment (bee) Shares were issued to Ukhamba at par value during December These shares vested upon issuance. The group elected to apply the exemption available in IFRS 1 to share-based payment transactions. The BEE transaction with Ukhamba was therefore not subject to the provisions of IFRS 2 as the rights to the shares were granted and vested prior to 1 January Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, who is responsible for allocating resources, assessing performance of the operating segments and making strategic decisions. The chief operating decision-maker has been identified as the executive committee. 1.5 foreign currency translation Functional and presentation currency Items included in the financial statements of each of the group s entities are measured using the currency of the primary economic environment in which the entity operates ( the functional currency ). The consolidated financial statements are presented in Rands, which is the company s functional and presentation currency. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency balances are translated into the functional currency using the exchange rates prevailing at the statement of financial position date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within finance income or cost. All other foreign exchange gains and losses are presented in the income statement within other (losses)/gains net. Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on nonmonetary financial assets, such as equities classified as available for sale, are included in other comprehensive income. Group companies The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position; income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and all resulting exchange differences are recognised as a separate component of equity.

31 for the 12 months ended 31 March On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to other comprehensive income. If a foreign entity were to be sold, such exchange differences would be recognised in the income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing rate. 1.6 Property, plant and equipment Property, plant and equipment are tangible assets held by the group for use in supply of goods or for administrative purposes and are expected to be used during more than one period. Land and buildings comprise mainly of factories and offices. Land and buildings are shown at historical cost less depreciation for buildings and impairments. Property, plant and equipment are stated at historical cost less depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows: Item estimated useful life Buildings 10 to 25 years Plant and machinery 10 to 25 years Furniture and fixtures 3 to 5 years Motor vehicles delivery 6 years; 20% residual other 5 years The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date. An asset s carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are recognised in the income statement. 1.7 Intangible assets Goodwill Goodwill arises on the acquisition of subsidiaries, associates and joint ventures and represents the excess of the consideration transferred over the group s interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and is carried at cost less accumulated impairment losses. Any impairment is recognised immediately in profit or loss, in the income statement, and is not subsequently reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill allocated to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segment. Trademarks, brand names and customer relationships Trademarks, brand names and customer relationships are recognised at fair value of the intangible assets acquired in business combinations. Certain trademarks and brand names have been assessed by management as indefinite useful life intangible assets. 29

32 for the 12 months ended 31 March These indefinite life intangible assets are tested for impairment annually. Separately acquired trademarks and licenses are shown at historical cost. Software costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the group are recognised as intangible assets when the following criteria are met: it is technically feasible to complete the software product so that it will be available for use; management intends to complete the software product and use it or sell it; there is an ability to use or sell the software product; it can be demonstrated how the software product will generate probable future economic benefits; adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and the expenditure attributable to the software product during its development can be reliably measured. Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Amortisation and useful lives Amortisation is calculated using the straight-line method to allocate the cost of intangible assets over their estimated useful lives. The useful lives of trademarks, brand names, customer relationships and software are assessed annually. The trademarks and brand names have estimated useful lives of between five and ten years and the customer relationships' useful lives have been estimated between five and ten years. The software has an estimated useful life of between five and twelve years. The useful lives of the above assets are reviewed at each reporting period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. If they do not, the change in the useful life assessment from indefinite to finite will be accounted for as a change in an accounting estimate. Subsequently impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment (for indefinite life trademarks). Information used in post-tax discount rates are sourced from independent sources and calculated for each cash-generating unit based on current market information and specific cash-generating unit risk. Impairment of non-financial assets Assets that have indefinite useful lives or intangible assets that are still in development are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). The identified cash-generating units are not bigger than the identified operating segments. Non-financial assets other than goodwill that could suffer potential impairment are reviewed for possible reversal of the impairment at each reporting date. 30 For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level. Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed.

33 for the 12 months ended 31 March 1.8 Government grants Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance that the grant will be received and the group will comply with all the conditions attached to the grant. Government grants relating to assets are deducted against the carrying amount of the assets. 1.9 Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously Impairment of financial assets Assets carried at amortised cost The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a loss event ) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. The criteria that the group uses to determine that there is objective evidence of an impairment loss include: significant financial difficulty of the issuer or obligor; a breach of contract, such as a default or delinquency in interest or principal payments; the group, for economic or legal reasons relating to the borrower s financial difficulty, granting to the borrower a concession that the lender would not otherwise consider; and it becomes probable that the borrower will enter bankruptcy or other financial reorganisation. The group first assesses whether objective evidence of impairment exists. For loans and receivables category, the amount of the loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor s credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated income statement financial instruments Classification The group classifies financial assets and financial liabilities into the following categories: Financial assets and liabilities at fair value through profit or loss Loans and receivables Classification depends on the purpose for which the financial instruments were obtained / incurred and takes place at initial recognition. Classification is re-assessed on an annual basis, except for derivatives and financial assets designated as at fair value through profit or loss, which shall not be classified out of the fair value through profit or loss category. 31

34 for the 12 months ended 31 March Financial assets and liabilities at fair value through profit or loss Financial assets and liabilities at fair value through profit and loss are financial assets and liabilities held for trading. These financial assets and liabilities are classified in this category if acquired principally for the purpose of selling or settling in the short term. Derivatives are also classified as held for trading unless they are designated as hedges. Assets and liabilities in this category are classified as current assets and liabilities if they are expected to be settled within 12 months, otherwise they are classified as non-current. Derivative financial instruments Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The group designates certain derivatives as either: hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow hedge). The group documents at the inception of the transaction the relationship between hedging instruments and the hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The group documents its assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair value or cash flows of hedged items. The fair value of various derivative instruments used for hedging purposes is disclosed in note 23. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability. Cash flow hedge The effective portion of changes in fair value of derivative financial instruments that are designated and qualify as cash flow hedges are recognised in other comprehensive income and are presented within equity in the hedge reserve. The cumulative gain or loss in the hedge reserve is recognised in the consolidated income statement in the periods when the hedged item will affect the profit or loss (i.e. when the underlying income or expense is recognised). Where the hedged item is of a capital nature, the cumulative gain or loss recognised in the hedge reserve is transferred to the carrying amount of the asset when the asset is recognised. When a hedging instrument expires or is sold, or when the group revokes the designation of the hedge relationship but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in the hedge reserve and is recognised in accordance with the above policy when the transaction occurs. If the underlying hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss recognised in the hedge reserve with respect to the hedging instrument is recognised immediately in the income statement. From time to time certain derivative financial instruments do not qualify for hedge accounting, notwithstanding that the derivatives are held to hedged identified exposures. Any changes in the fair value of a derivative instrument, or part of a derivative instrument that do not qualify for hedge accounting are classified as 'ineffective' and recognised immediately in the income statement. 32 Fair value hedge Foreign Exchange Contracts Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributed to the hedged risk.

35 for the 12 months ended 31 March Trade and other receivables Trade receivables Trade Receivables are amounts due from customers for merchandise sold or services rendered in the ordinary course of business. If collection is expected within one year (or in the normal operating cycle is longer), they are classified as current assets. If not, they are presented as non-current assets. Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset s carrying amount and the recoverable amount. The amount of the provision is recognised in the income statement within other operating expenses. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as noncurrent assets. Other receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The group's loans and receivables comprise loans to group companies which are recognised initially at fair value plus transaction costs and subsequently measured at amortised cost. Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position. Cash and bank overdraft balances per the bank statement at the reporting date are reflected as the cash and overdraft balance. Trade and other payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method. Loans to/(from) group companies These include loans to and from holding companies, fellow subsidiaries, subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs. Loans to group companies are classified as loans and receivables. Loans from group companies are classified as financial liabilities measured at amortised cost Inventories Inventories are stated at the lower of cost and net realisable value. Cost is predominantly determined on a weighted average cost basis. However for the manufacturing entities mainly standard costing is used which is evaluated against the first-in firstout (FIFO) method, the trading entities mainly use the weighted average method. The cost of finished goods and 33

36 for the 12 months ended 31 March work-in-progress comprises raw materials, direct labour, transport and handling costs, other direct costs and related production overheads (based on normal operating capacity) and excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses Disposal groups held-for-sale Disposal groups are classified as assets and liabilities held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered to be highly probable. They are stated at the lower of the carrying amount and fair value less cost to sell. In respect of the elimination of intercompany balances and intercompany transactions, the group elected to view the situation post-disposal. The group determined whether the arrangements between the continuing and discontinuing operations will continue subsequent to the disposal. If the arrangement is expected to continue, it recorded the sales and costs in continuing operations and, therefore, recorded the elimination entries in discontinued operations. This would give an indication of the results of the continuing business on an ongoing basis. The results of the discontinued operation would include only those revenues and costs that will be eliminated from the group on disposal Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds Treasury shares Shares in the company held by wholly-owned subsidiaries, are classified as treasury shares and are held at cost on consolidation. These shares are disclosed as a deduction from the issued and weighted average number of shares and the cost price of these shares is deducted from the group s equity. Dividends received on treasury shares are eliminated on consolidation borrowings 1.17 Tax Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost and any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the statement of financial position date. Current income tax The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the countries where the company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. 34 Deferred tax assets and liabilities Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

37 for the 12 months ended 31 March Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liabilities where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis employee benefits Pension obligations The group pays fixed contributions into defined contribution plans (a defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity (a fund)). The group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The group pays the contributions to publicly administered pension insurance plans on a mandatory, contractual or voluntary basis. The group has no further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense in the income statement when they are due. Other post-employment obligations The group provides post-employment medical care for certain of their retirees. The expected costs of these benefits are accrued over the period of employment using a methodology similar to that of defined benefit pension plans. Typically, defined benefit plans define an amount of benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognised in the statement of financial position in respect of defined benefit post-employment medical aid obligations is the present value of the defined benefit obligation at statement of financial position date adjusted for actuarial gains or losses. The present value of the expected future defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds. The expected costs of these benefits are accrued over the period of employment. Actuarial profit and losses arising from experience adjustments, and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise. Valuations of these obligations are carried out on a periodic basis by professionally qualified independent actuaries using the projected unit credit method. The post-employment obligations are not funded. Termination benefits Termination benefits are payable when employment is terminated by the group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The group recognises termination benefits when the entity can no longer withdraw the offer of these benefits and when the entity recognises costs for a restructuring that is within the scope of IAS 37 and includes the payment of termination benefits. Profit-sharing and bonus plans The group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the company s shareholders after certain adjustments. The group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation. In instances where these liabilities are calculated with reference to DAWN shares, but to be settled in cash, the liability is disclosed as a share-based payment liability (note 20). 35

38 for the 12 months ended 31 March 36 Short-term employee benefits Employee entitlements to short-term bonus, annual leave and long service awards are recognised when they accrue to employees. An accrual is made for the estimated liability for short-term bonus, annual leave and long service awards as a result of services rendered by employees up to the statement of financial position date. Share incentive scheme The group also operates a share incentive scheme through Share Appreciation Rights, Long-Term Incentive Plans and Deferred Bonus Plans. In terms of these schemes the beneficiaries are offered incentives for contributing towards the group s overall performance with specific reference to earnings growth expectations and share performance in comparison to peer groups. These schemes have vesting periods of three years and lapse after seven years, if not exercised. The group s intension is to settle these schemes with equity. IFRS 2 (share-based payments) is applied to account for these schemes. The IFRS 2 value is recognised in the income statement over the vesting period attached to each tranche of allocations. An IFRS 2 equity reserve is created in anticipation of settling the obligations created in terms of the abovementioned equity-settled schemes. Non-market performance and service conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. In addition, in some circumstances employees may provide services in advance of the grant date and therefore the grant date fair value is estimated for the purposes of recognising the expense during the period between service commencement period and grant date. At the end of each reporting period, the group revises its estimates of the number of options that are expected to vest based on non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity Provisions Provisions are recognised when the group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as an interest expense. Onerous contracts A contract is considered as onerous when the expected economic benefits to be derived by the group from the contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision for an onerous contract is measured at the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. The provision is calculated based on discounted cash flows to the end of the contract. Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note revenue recognition The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the group s activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the group s activities. Revenue is shown, net of value-added tax, estimated returns, rebates and discounts and after eliminating sales within the group. Revenue is recognised as follows:

39 for the 12 months ended 31 March Sales of goods The vertically integrated group manufactures and distribute products through its operating segments namely, the building and infrastructure segments. Building focuses on the manufacture and distribution of quality branded sanitaryware, plumbing, hardware and kitchen products to building merchants, on a wholesale basis. Infrastructure focuses on engineering and civil products, including pipes and pipe fittings, for a range of customers, including local and provincial governments and contractors. Refer to the segment note (note 2) for businesses in the respective segments. Sales of goods are recognised when a group entity has delivered products to the customer, the customer has accepted the products and all risks and rewards associated with them have been transferred from the entity to the customer, there is no further group management involvement in the products and collectability of the related receivables is reasonably assured. Sales are recorded net of volume discounts. Sales are recorded based on prices specified in sales contracts, net of volume discounts. Volume discounts are assessed based on anticipated annual purchases. Products are often sold with a right of return. Accumulated experience is used to estimate and provide for such returns at the time of sale. Services rendered Services rendered are recognised in the accounting period in which the services are rendered, by reference to the stage of completion of the specific transaction, assessed on the basis of the actual service provided as a proportion of the total services to be provided. Services rendered by the solutions segment comprise of various logistical, IT, marketing, packaging and HR services to mainly in-group companies. Refer to the segment note (note 2). Interest income Interest income is recognised on a time-proportion basis using the effective interest rate method. When a loan receivable is impaired, the group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans and receivables is recognised using the original effective interest rate. Dividend income Dividend income is recognised when the right to receive payment is established Cost of sales Cost of sales includes the historical cost of merchandise and overheads appropriate to the distribution thereof Leases Finance leases The group leases certain property, plant and equipment. Leases of property, plant and equipment, where the group has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the lease s commencement at the lower or the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in long-term payables. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Depreciation is recognised over the shorter of the useful life of the asset or the lease term. Operating leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of a penalty is recognised as an expense in the period in which termination takes place. 37

40 for the 12 months ended 31 March Deferred profit on sale-and-operating leaseback transactions Profit in respect of properties sold in terms of sale-and-operating leaseback transactions are recognised in the income statement on a straight-line basis over the term of the lease. Finance lease agreements DAWN leases property, plant and equipment to companies in the group through finance lease agreements. These intercompany finance lease agreements are treated as receivables. Finance income is allocated to accounting periods over the duration of the leases by the effective interest rate method, which reflects the extent and cost of lease finance income earned in each accounting period Dividend distribution Dividend distribution to the company s shareholders is recognised as a liability in the group s financial statements in the period in which the dividends are approved by the company s shareholders borrowing costs General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred Critical accounting estimates and judgements Management makes judgements, estimates and assumptions in the preparation of the financial statements that affect the disclosures and amounts of assets, liabilities, income, expenses and equity. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Estimated impairment of goodwill and intangible assets classified as having indefinite useful lives The group tests annually whether goodwill and intangible assets with indefinite lives have suffered any impairment, in accordance with the accounting policy stated in note 1.7. The recoverable amounts of certain cashgenerating units have been determined based on value-in-use calculations. These calculations require the use of estimates (note 12). The group assesses on an annual basis whether the classification of indefinite life intangible assets is appropriate. As per the group s assessment, goodwill, trademarks and brand names are appropriately classified as indefinite life intangible assets. Demand forecasting impacting on working capital investment and impairment The group has made investment in working capital based on management s assumptions and estimates of future demand for the group s products and the customers ability to settle outstanding debts for credit sales when it becomes due. 38 Impairment risk is managed through policies and provisions and raised based on various factors including age and quality of inventory and trade receivables. Fair value of derivatives and the financial instruments The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The group uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period. The group used various methods as set out in note 23.

41 for the 12 months ended 31 March Taxation Judgement is required in determining the provision for income taxes due to the complexity of legislation in various jurisdictions where the group operates. 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 end of the reporting period could be impacted. IFRS 2 Equity-settled schemes IFRS 2 adjustments were calculated based on option pricing models for the share option schemes in operation. The charge is based on certain assumptions applied to the calculation models such as vesting period, conditions, risk free rate, volatility factors and dividend yields. IFRS 2 charges are reversed to the income statement where there is not an expectation, based on management s earnings projections, of vesting. Refer to the share incentive schemes (equity settled) note (note 20) for the major assumptions made on the new share incentive scheme. Deferred profit The deferred profit realised on the sale of property is recognised in the income statement on a straight line basis over the term of the lease. The term of the lease is based on management s best estimate of the period of occupation, being the shortest renewable lease period from commencement (note 24). Residual values and useful lives The useful economic lives and residual values of items of property, plant and equipment and tangible assets are estimated annually. The actual lives and residual values may vary depending on a variety of factors. Retirement benefit obligation Certain of the employees of DPI Plastics Proprietary Limited are entitled to post-employment medical aid benefits. The present value of the obligation is based on the projected unit credit basis and depends on a number of factors that are determined on an actuarial basis using a number of assumptions. Any changes in these assumptions will impact the carrying amount of the obligations. Actuarial valuations are carried out every three years. Additional information is disclosed in note 26. Estimates made of contingent liabilities By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of such contingencies inherently involves the exercise of significant judgement and estimates of the outcome of future events. Disclosure is made in note 29 of the contingent liabilities that the group is exposed to. 39

42 for the 12 months ended 31 March 2. SeGMenT InfOrMaTIOn The operating segments are based on reports reviewed by the executive committee who makes the strategic decisions of the group, and who is therefore the chief operating decision-making body of the group. reportable segments The executive committee assesses the performance of these operating segments based on operating profit. Corporate office and other reconciling items mainly comprise corporate office and other operating segments not meeting the quantitative thresholds required by IFRS 8. building Corporate office (1) Discon- (3) and other Discon- (3) Continuing tinued Infra- Dawn reconciling tinued operations operations Total structure Solutions items operations Total (4) r 000 r 000 r 000 r 000 r 000 r 000 r 000 r months ended 31 March Revenue ( ) Depreciation and amortisation (11 974) (11 974) (34 017) (23 053) (368) (69 412) Operating (loss)/profit before impairments and derecognitions of previously held interests (54 128) (54 128) (1 871) (23 948) Impairments and derecognitions of previously held interests ( ) ( ) ( ) (65 829) (4 592) ( ) Operating (loss)/profit after impairments and derecognitions of previously held interests ( ) ( ) ( ) (61 243) ( ) Net finance expense (25 766) (25 766) (32 981) (1 885) (10 438) (71 070) Share of (losses)/profit from associates and joint ventures (12 171) (12 171) (5 891) Tax income/(expense) (31 965) (11 744) (19 613) Net (loss)/profit after tax from continuing operations ( ) ( ) ( ) (44 936) 691 ( ) Assets (15 865) Liabilities ( ) Capital expenditure (2) (3 997) months ended 31 March 2015 (restated) Revenue ( ) ( ) Depreciation and amortisation (9 544) (9 660) (19 204) (25 232) (13 365) (180) (48 321) Operating profit/(loss) before impairments and derecognition of previously held interests (2 847) ( ) (39 638) (80 065) Impairments and derecognitions of previously held interests (9 606) (9 606) (720) Operating profit/(loss) after impairments and derecognitions of previously held interests (2 847) (39 638) Net finance (expense)/income (20 318) (3 077) (23 395) (20 600) (2 047) (36 484) Share of profit/(losses) from associates and joint ventures (8 079) 205 (1 214) Tax (expense)/income (3 633) (9 731) (13 364) Net profit/(loss) after tax from continuing operations (18 230) (3 421) Net profit after tax from discontinued operations Assets Liabilities ( ) Capital expenditure (2) (35 917) (1) Other reconciling items consist of corporate and consolidation adjustments. These predominantly include elimination of intergroup sales, profits, losses and intergroup receivables and payables and other unallocated assets and liabilities contained within the vertically integrated group. Corporate office and other reconciling items is not considered to be an operating segment. (2) Includes expenditure on property, plant and equipment and intangibles. Government grants received are deducted from the capital expenditure amount. (3) Discontinued operations include results from the Watertech group of companies as well as consolidation and elimination adjustments related to the Watertech group of companies. (4) Total excludes the building segment s discontinued operations amount.

43 for the 12 months ended 31 March 2. SeGMenT InfOrMaTIOn continued reportable segments The group is organised into three reportable segments: building segment: Consists of manufacture and wholesale trading of hardware, sanitaryware, bathroomware, plumbing, kitchen and other building materials The building segment includes the following: Trading Wholesale Housing Supplies (trading as Saffer Bathroom & Plumbing and WHDsa) DAWN Business Development a division of Wholesale Housing Supplies (trading as Wholesale Building Materials, DAWN Power Tools, Electroline and Stability) and DAWN Kitchen Fittings (trading as AFF and Roco) Saffer International Distribution and Warehousing Network Africa (DAT) [formerly Africa Saffer Trading (AST)] Pro-Max Welding Consumables Hamilton s Brushware Boutique Baths Manufacturing Heunis Steel associate Grohe DAWN Watertech associate º Cobra º ISCA º Apex Valves º Vaal Sanitaryware (Ceramic) º Libra Bathrooms and Plexicor (Acrylic) º Exipro Manufacturing Infrastructure segment: Consists of manufacture and wholesale trading of engineering, civil products, piping systems, valves and related accessories. The infrastructure segment consists of trading and manufacturing clusters: Trading Incledon Manufacturing DPI (trading as DPI Plastics) DPI International Sangio Pipe Swan Plastics Ubuntu Plastics Solutions segment: Consists of services such as warehousing, distribution, marketing, IT support, pre-packaging, merchandising and HR, provided mainly to Group companies. The solutions segment includes the following: DAWN Business Systems DMD Marketing SA DAWN Financial Solutions DAWN HR Solutions DAWN Logistics (DAWN Cargo and DAWN Distribution Centres) DAWN Merchandising DAWN Projects College of Production Technology associate Management has determined that the operating segments are sufficiently aggregated. 41

44 for the 12 months ended 31 March 2. SeGMenT InfOrMaTIOn continued General Intersegment transactions are entered into under the normal commercial terms and conditions. The revenue from external parties is measured in a manner consistent with that in the income statement. Segment assets consist primarily of property, plant and equipment, intangible assets (including goodwill), investments in associates, deferred tax assets, inventories, trade and other receivables and cash and cash equivalents. Segment liabilities comprise borrowings, deferred profit, deferred tax liabilities, derivative instruments, trade and other payables and income tax liabilities. Capital expenditure comprises additions to property, plant and equipment and intangible assets (notes 11 and 12). The group s reporting currency is in South African Rand. The majority of group companies are domiciled in South Africa and mainly serve the South African market. The result of revenue from external customers in South Africa is R4,7 billion (2015: R3,4 billion) and the total revenue from external customers from other countries is R322,8 million (2015: R214,4 million). The total of non-current assets, other than financial instruments and deferred tax assets located in South Africa, is R715,6 million (2015: R1,2 billion). INCOME STATEMENTS 3. revenue GrOuP 12 months 9 months 31 March 31 March 2015 r 000 R 000 Sale of goods Services rendered expenditure by nature Cost of sales Cost of goods and services sold Cost of inventories expensed during the period Employee compensation and benefit expense (note 8) Transportation expenses Depreciation Operating expenses a. Depreciation on property, plant and equipment Depreciation for the group Less: Depreciation included in cost of sales (23 189) (13 821) Less: Depreciation included in transportation expenses (9 747) (4 718) b. Amortisation Intangible assets Interest capitalised amortised

45 for the 12 months ended 31 March GrOuP COMPanY Restated 12 months 9 months 12 months 9 months 31 March 31 March 31 March 31 March r 000 R 000 r 000 R expenditure by nature continued c. Auditors remuneration Audit fees current prior year Taxation services Other services Transaction-related fees Grohe DAWN Watertech d. Operating lease rentals Land and buildings * Plant, equipment and vehicles e. Operating expenses Employee compensation and benefit expense (note 8) * # Transportation expenditure (including depreciation) Computer expenditure Onerous lease (note 30) Consultancy services # Bad debts Repairs and maintenance Security Communication Travel Insurance Commissions to third parties Impairment of receivable in respect of Wilhelm Import Network Proprietary Limited available-for-sale asset Electricity Bank charges Postage, printing and stationery Legal fees Advertising costs Settlement of guarantee Corporate Social Investment (930) Facility fees Profit on disposal of property, plant and equipment (1 623) (1 051) Contingencies relating to investments Other expenses * For restatement detail see note 44. # For reclassification detail see note 44.

46 for the 12 months ended 31 March GrOuP COMPanY Restated 12 months 9 months 12 months 9 months 31 March 31 March 31 March 31 March r 000 R 000 r 000 R expenditure by nature continued f. Impairments and (gain)/loss on derecognition of subsidiaries, joint ventures and associates Impairment of loans and other receivables Wilhelm Import Network Proprietary Limited Impairment of intangible assets (note 12) Indefinite life Defined life Impairment of investment in associate (note 14) Grohe DAWN Watertech Fibrex S.A.R.L Impairment of investment in joint venture (note 14) DPI Simba Limited Aqualia DPI Proprietary Limited Impairment of property, plant and equipment (note 11) Impairment of assets held-for-sale (Saffer Union (West Africa) Limited) Impairment on loan receivable Incledon (formerly IPS & Distribution) Impairment of investment in subsidiary Wholesale Housing Supplies Proprietary Limited Impairment on loan receivables Impairment on loan receivable DAWN Africa Trading (DAT) Impairment on loan receivable Pro-Max Welding Consumables Proprietary Limited Impairment on loan receivable Sangio Pipe Proprietary Limited Impairments Net loss on derecognition of investment in Saffer Union (West Africa) Limited (SUWA) Net (gain)/loss on derecognition of investment in Wilhelm Import Network Proprietary Limited (2 807) Net gain on derecognition of investment in Grohe DAWN Watertech ( ) Net gain on derecognition of investment in Distribution and Warehousing Network Africa Proprietary Limited (formerly Africa Saffer Trading Proprietary Limited) (15 045) Derecognitions of net loss/(gain) on subsidiaries and associates (note 37) ( ) Total impairments and derecognitions ( ) net operating expenses Total cost of sales, distribution costs, other operating expenses, impairments and derecognitions

47 for the 12 months ended 31 March GrOuP COMPanY Restated 12 months 9 months 12 months 9 months 31 March 31 March 31 March 31 March r 000 R 000 r 000 R OTher OPeraTInG InCOMe Receipt of contingent asset (Grohe DAWN Watertech) Commission income related parties (note 41) Commission income Deferred profit released (note 24) # Derivative financial instrument fair value adjustment put option Prescription of old debtor balances Rental income Management fees received joint venture (note 41) Net foreign exchange (loss)/gain (848) (214) 55 Other income finance InCOMe Related parties (note 41) Bank deposits Revenue authorities 7 61 Disposal group interest Other interest finance expenses Written put Swan Plastics Proprietary Limited (note 23) Bank borrowings Instalment sale agreements Finance lease agreements Trade finance Post-employment benefit obligation Related parties (note 41) Revenue authorities Disposal group interest Other interest # For reclassification detail see note

48 for the 12 months ended 31 March GrOuP COMPanY 8. employee benefit expense Restated 12 months 9 months 12 months 9 months 31 March 31 March 31 March 31 March r 000 R 000 r 000 R 000 Salaries and wages * Repayment of bonuses (Derek Tod and Dries Ferreira) (7 000) Commissions to sales force Pension costs defined contribution plans Net share-based payments share scheme BEE scheme Grohe DAWN Watertech related ~ # Medical aid Post-employment medical aid Included in: Cost of sales Operating expenses * # ~ Relates to a once-off acceleration of vesting for participants employed in the Watertech division as a result of the Grohe transaction. * For restatement detail see note 44. # For reclassification detail see note 44 Directors and prescribed officers emoluments are included in the above and also disclosed separately in note 42. number of persons employed by subsidiaries of the group at year-end GrOuP Restated 12 months 9 months 31 March 31 March 2015 number Number Full-time Fixed term Angola Botswana Democratic Republic of the Congo Mauritius 10 Mozambique Namibia Nigeria 5 South Africa Zambia

49 for the 12 months ended 31 March GrOuP COMPanY Restated 12 months 9 months 12 months 9 months 31 March 31 March 31 March 31 March % % % % 9. InCOMe Tax expense normal tax expense Current tax Current income tax current period Current income tax arising from prior year adjustments (2 341) (411) Deferred tax Originating and reversing temporary differences current year (33 350)* Deferred tax arising from prior period adjustments (31 854) Tax expense/(income) for the period (23 328) Reconciliation of rate of taxation based on profit before tax and results of discontinued operations, associates and joint ventures South African normal tax rate ~ 28,0 28,0 28,0 28,0 Adjusted for: Disallowed expenditure (23,2) 9,6 (29,2) (84,0) Capital items¹ (6,8) 5,4 (29,8) (53,1) Impairments and derecognitions² (16,4) 4,2 0,6 (30,9) Exempt income³ 0,4 (2,3) 3,0 Prior year adjustments 0,4 0,3 Current tax 0,3 (0,1) Deferred tax 0,1 0,4 Tax losses for which no deferred tax asset was recognised⁴ (7,6) 1,0 Derecognitions⁵ (44) Foreign tax rate difference⁶ (0,3) 0,2 Withholding tax (0,1) 0,1 Capital Gains Tax (0,2) 1,5 (10,4) Effective rate (2,6) (5,6)* (1,2) (63,4) ~ The effective tax rate reconciliation base rate is the South African statutory tax rate of 28%. * For restatement detail see note Disallowed expenditure Capital items relate to expenditure of a capital nature not deductible for tax purposes. 2 Disallowed expenditure Impairment and derecognitions relate to impairments of intangibles. 3 Exempt income relates to non-taxable income. 4 The group did not recognise deferred tax of R46,3 million (2015: R2,9 million) in respect of losses amounting to R165,3 million (2015: R11,7 million) which can be carried forward against future taxable income. 5 Derecognitions relate mainly to derecognition of subsidiaries and joint ventures. 6 The foreign tax rate difference adjustment relates to the difference between the South African tax rate and the various tax rates of other countries. Refer to note 23 for tax relating to components of other comprehensive income. 47

50 for the 12 months ended 31 March 10. earnings Per OrDInarY Share basic Basic earnings per ordinary share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares acquired by the company, incentive shares and treasury shares. Diluted Diluted earnings per ordinary share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. GrOuP Restated 12 months 9 months ended ended 31 March 31 March 2015 weighted average number of ordinary shares in issue ( 000) Number of shares in issue at the end of the year Less: Treasury shares held in a subsidiary at the end of the year weighted (2 557) (5 186) weighted average number of ordinary shares in issue ( 000) Add: Shares to be issued in terms of share incentive schemes weighted average number of ordinary shares for diluted earnings per share ( 000) basic earnings per share (cents) (318,31) 202,11 from continuing operations (cents) (318,31) 190,54 Attributable earnings (R 000) ( ) Weighted average number of ordinary shares in issue ( 000) from discontinued operations (cents) 11,57 Attributable earnings (R 000) Weighted average number of ordinary shares in issue ( 000) fully diluted earnings per share (cents) (317,34) 200,25 from continuing operations (cents) (317,34) 188,78 Attributable earnings (R 000) ( ) Weighted average number of ordinary shares in issue ( 000) from discontinued operations (cents) 11,47 Attributable earnings (R 000) Weighted average number of ordinary shares in issue ( 000)

51 for the 12 months ended 31 March GrOuP Restated 12 months 9 months ended ended 31 March 31 March earnings Per OrDInarY Share continued headline earnings (r 000) Attributable earnings ( ) Adjustment for the after-tax and non-controlling interest effects of: Net profit on disposal of property, plant and equipment (1 623) (1 051) Impairment of intangible assets Impairment of property, plant and equipment Impairment of assets held-for-sale Impairment of other assets Tax effect on disposal of property, plant and equipment and impairment of intangible assets (trademarks) (20 545) (9 498) Non-controlling interest (949) (919) Net loss/(profit) on derecognition of previously held interest ( ) Headline earnings adjustments related to associates and joint ventures (4 579) 232 Headline earnings adjustments related to disposal group (4) headline earnings ( ) (66 508) headline earnings per share (cents) (65,55) (28,06) from continuing operations (cents) (65,55) (39,63) Headline earnings (R 000) ( ) (93 942) Weighted average number of shares in issue ( 000) from discontinued operations (cents) 11,57 Headline earnings (R 000) Weighted average number of shares in issue ( 000)

52 for the 12 months ended 31 March 50 STATEMENTS OF FINANCIAL POSITION 11. PrOPerTY, PLanT and equipment GrOuP 31 March 31 March 2015 accumu- accumulated lated deprecia- depreciation and tion and impair- Carrying impair- Carrying Cost ments value Cost ments value r 000 r 000 r 000 r 000 r 000 r 000 Land and buildings (31 783) (14 236) Plant and machinery ( ) ( ) Furniture and fixtures (42 670) (36 174) Motor vehicles (48 815) (48 734) Total ( ) ( ) furniture Land and Plant and and Motor buildings machinery fixtures vehicles Total r 000 r 000 r 000 r 000 r 000 reconciliation of property, plant and equipment GrOuP Balance at the beginning of the year Additions Additions through business combinations (note 36) Disposals (1 087) (1 774) (429) (1 332) (4 622) Disposals of subsidiaries (217) (217) Transfers 70 (615) 545 Foreign exchange movements (42) 340 (131) (81) 86 Government grant received (2 417) (5 874) (8 291) Impairments (12 948) (33 232) (1 541) (8) (47 729) Depreciation (4 440) (27 101) (9 536) (14 316) (55 393) balance at the end of the year reconciliation of property, plant and equipment GROUP 2015 Balance at the beginning of the period Additions Additions through business combinations (note 36) Disposals (129) (21) (488) (10 726) (11 364) Disposals of subsidiaries (148) (2 492) (251) (2 891) Transfers (1 282) (108) Foreign exchange movements (137) 43 (15) (146) (255) Impairments (195) (525) (720) Depreciation (3 392) (15 749) (8 204) (8 146) (35 491) balance at the end of the period

53 for the 12 months ended 31 March 11. PrOPerTY, PLanT and equipment continued Depreciation expense of R23,2 million (2015: R13,8 million) has been charged in cost of goods and services sold, R9,7 million (2015: R4,7 million) in transportation expenses and R22,5 million (2015: R17,0 million) in operating expenses (refer note 4). The group received grants from the Department of Trade and Industry (DTI) under its Manufacturing Competitiveness Enhancement Programme (MCEP) for the construction of its long-term assets. The MCEP is one of the key action programmes of the Industrial Policy Action Plan of the DTI. The MCEP encourages manufacturers to upgrade their production facilities in a manner that sustains employment and maximises value-addition in the short and medium-term. MCEP grants to the value of R5,9 million (2015: R nil) have been deducted from the carrying value of machinery and equipment and R2,4 million (2015: R nil) have been deducted from the carrying value of land and buildings. assets subject to finance lease at 31 March At 31 March 2015 accumu- accumulated lated deprecia- depreciation and tion and impair- Carrying impair- Carrying Cost ments value Cost ments value r 000 r 000 r 000 r 000 r 000 r 000 GrOuP Land and buildings (2 224) (1 555) 669 Plant and machinery (17 298) (12 390) Furniture and fixtures (4 571) (5 670) Motor vehicles (4 608) (7 132) Total (28 701) (26 747) A register containing the information required by Regulation 25(2) of the Companies Regulations, 2011 is available for inspection at the registered office of the company. Assets acquired under instalment sale and finance lease agreements are encumbered as security for repayment of the instalment sale and finance lease liabilities (note 22). Lease rentals amounting to R98,6 million (2015: R79,9 million) relating to the lease of land and buildings and R13,7 million (2015: R11,0 million) relating to the lease of plant, equipment and vehicles are included in the income statement (note 4). 51

54 for the 12 months ended 31 March 11. PrOPerTY, PLanT and equipment continued 31 March Property, plant and equipment to the value of R47,7 million was impaired during, consisting of leasehold improvements over property of R12,9 million, plant and machinery of R33,2 million, furniture and fittings of R1,5 million and R0,008 million of motor vehicles. During 2015 impairment of property, plant and equipment of R0,7 million related to Pipex Plastics Botswana Proprietary Limited. Impairments breakdown furniture Land and Plant and and Motor buildings machinery fixtures vehicles Total r 000 r 000 r 000 r 000 r 000 building Pro-Max Welding Consumables Proprietary Limited DAWN Africa Trading Mozambique LDA Infrastructure Sangio Pipe Proprietary Limited Solutions DAWN Distribution Centre, a division of Wholesale Housing Supplies Proprietary Limited Impairments in the building, infrastructure and solutions segments amounted to R5,8 million, R23,2 million and R18,7 million, respectively. These assets were impaired on the basis that the discounted cash flows did not support the carry value of the property, plant and equipment of the businesses. Pro-Max Welding Consumables Proprietary Limited, Distribution and Warehousing Network Africa Proprietary Limited and Sangio Pipe Proprietary Limited had impairments in the prior year relating to intangibles. The further impairments were necessitated by a deterioration in the markets the entities operate in, further losses and reduction in turnover volume. Due to reduced volumes, but greater handling cost, the assets in DAWN Distribution Centre were impaired. The following pre-tax discount rates were used for impairment testing purposes: Company Pre-tax discount rate Pro-Max Welding Consumables Proprietary Limited 29,54% DAWN Africa Trading Mozambique LDA 38,96% Sangio Pipe Proprietary Limited 25,12% DAWN Distribution Centre, a division of Wholesale Housing Supplies Proprietary Limited 26,45% 52

55 for the 12 months ended 31 March Indefinite life Defined life Trademarks Customer and brand Trade- relation- Goodwill names marks ships Software Total r 000 r 000 r 000 r 000 r 000 r InTanGIbLe assets GrOuP at 31 March Cost Accumulated amortisation and impairment (54 013) (17 166) (13 365) (30 502) (57 509) ( ) Carrying value At 31 March 2015 Cost Accumulated amortisation and impairment (62 384) (25 114) (41 992) (5 906) ( ) Carrying value Indefinite life Defined life Trademarks Customer and brand Trade- relation- Goodwill names marks ships Software Total r 000 r 000 r 000 r 000 r 000 r 000 at 31 March Balance at the beginning of the year Additions Additions through business combinations (note 36) Interest capitalised Government grants received (21 568) (21 568) Impairments (54 013) (17 166) (3 918) (5 151) (47 232) ( ) Amortisation (2 560) (5 182) (6 277) (14 019) balance at the end of the year At 31 March 2015 Balance at the beginning of the period Additions Additions through business combinations (note 36) Interest capitalised Impairments (62 301) (15 766) (18 848) (96 915) Amortisation (3 974) (6 237) (2 619) (12 830) balance at the end of the period Amortisation expense of R14,0 million (2015: R12,8 million) is included in operating expenses (note 4). Borrowing costs of R2,0 million (2015: R2,4 million) directly attributable to the qualifying assets pertaining to the Enterprise Resource Planning project, which take a substantial period of time before it is brought into use, were capitalised. 53

56 for the 12 months ended 31 March 12. InTanGIbLe assets continued 31 March Intangible assets identified through business combinations Additions to intangible assets through business combinations were as follows: GrOuP Intangibles identified at 31 March Customer Indefinite relation- Defined Goodwill life ships life Total r 000 r 000 r 000 r 000 r 000 building Boutique Baths Proprietary Limited Additions to intangible assets through business combinations of R4,5 million in the current year relate to the acquisition of a 76% share in Boutique Baths Proprietary Limited on 1 April Goodwill recognised on this acquisition amounts to R3,3 million. The pre-discount rate used was 25,5%. 54 Details relating to impairment of intangible assets were as follows: Customer Trade- Indefinite Trade- relation- Defined Goodwill marks life marks ships Software life Total r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 GrOuP Impairments breakdown at 31 March building Hamilton s Brushware Proprietary Limited Boutique Baths Proprietary Limited DAWN Business Development, a division of Wholsesale Housing Supplies Proprietary Limited WHS Trading, a division of Wholesale Housing Supplies Proprietary Limited Infrastructure Ubuntu Plastics Proprietary Limited Incledon Proprietary Limited (IPS division) Incledon Proprietary Limited (Incledon division) Solutions DAWN Business Systems, a division of Wholesale Housing Supplies Proprietary Limited

57 for the 12 months ended 31 March 12. InTanGIbLe assets continued Intangible assets totalling R7,3 million were impaired in Hamilton s Brushware Proprietary Limited (Hamilton s). Hamilton s specialises in the manufacturing and retail distribution of brushware. These intangible assets were impaired on the basis that the discounted cash flows did not support the carry value of the non-monetary assets of the business. Synergies identified at acquisition did not materialise, further exacerbated by the current economic outlook. Intangible assets totalling R4,3 million were impaired in Boutique Baths Proprietary Limited (Boutique Baths). Boutique Baths specialises in the manufacturing and distribution of unique, luxury baths. These intangible assets were impaired on the basis that the business is not aligned with DAWN's model of distribution and wholesale on an economies of scale basis and did not meet the return criteria set at acquisition date. Intangibles totalling R0,9 million were impaired in Wholesale Housing Supplies (Business Development and WHS Trading divisions). DAWN Business Development and WHS Trading are the wholesale distribution arms of DAWN focussing on the sanitaryware and hardware business. These intangible assets were impaired on the basis that the discounted cash flows did not support the carry value of the business units to which it relates to. The discount rates used for additions during the year were as follows: Company Pre-tax discount rate Hamilton s Brushware Proprietary Limited 27,8% Boutique Baths Proprietary Limited 25,5% DAWN Business Development, a division of Wholesale Housing Supplies Proprietary Limited 26,8% WHS Trading, a division of Wholesale Housing Supplies Proprietary Limited 24,6% Ubuntu Plastics Proprietary Limited fabricates pipe and pipe fittings in both PVC and HDPE markets. These intangible assets were impaired on the basis that the discounted cash flows did not support the carry value of the non-monetary assets of the business, mainly due to a slowdown in the HDPE market, also experienced in other areas of DAWN over the last two years. IPS and Incledon, both divisions of Incledon Proprietary Limited, are the wholesale arm of the infrastructure segment. Intangibles in this business were impaired due the losses incurred, mainly due to reduced government and mining spend, as well as losing market share. Company Pre-tax discount rate Ubuntu Plastics Proprietary Limited 26,9% Incledon Proprietary Limited 23,5% Impairments of R47,1 million in the solutions segment consisted mainly of impairments to the recently developed IT software project in Incledon and DAWN Distribution Centres, where the the discounted cash flows did not support the carry value of the non-monetary assets of the business unit. Company Pre-tax discount rate DAWN Business Systems, a division of Wholesale Housing Supplies Proprietary Limited 21,3% 55

58 for the 12 months ended 31 March 12. InTanGIbLe assets continued 31 March 2015 Additional information is provided to expand on the published 2015 disclosure. Intangible assets identified through business combinations Additions to intangible assets through business combinations were as follows: At 31 March 2015 Intangibles identified Customer Trade- Indefinite Trade- relation- Defined Goodwill marks life marks ships Software life Total r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 building Pro-Max Welding Consumables Proprietary Limited DAWN Africa Trading Proprietary Limited Hamiltons Brushware Proprietary Limited Saffer Union (West Africa) Limited Infrastructure IPS & Distribution Proprietary Limited Additions to intangible assets through business combinations of R18,7 million in the prior year relate to the acquisition of a 60% share in Pro-Max (Pro-Max Welding Consumables Proprietary Limited and Weld-D Proprietary Limited) on 1 July Goodwill recognised on this acquisition amounts to R9,6 million and was subsequently impaired. The group acquired an additional 39% shareholding in Africa Saffer Trading Proprietary Limited (AST) as at 31 October The total goodwill attributed to this transaction amounts to R29,5 million and was impaired. On 1 December 2014 the group acquired a 69% share in Hamilton s Brushware SA Proprietary Limited (Hamilton s) with a goodwill amount of R2,1 million recognised. An additional 51% was also acquired in IPS & Distribution Proprietary Limited (IPS) as at 1 January The 49% disclosed as an investment in associate was derecognised. Subsequently, IPS was rerecognised as a 100% owned subsidiary with goodwill to the value of R2,3 million recognised. The group acquired an additional 50% in Saffer Union (West Africa) Limited (SUWA) on 31 March Goodwill of R4,2 million was recognised on this transaction and was subsequently impaired (see below). During the 2012 financial year the group initiated a project to consolidate all its computer systems into an Enterprise Resource Planning system. The total cost of the project is estimated at R118 million (2014: R118 million) and the phased approach is expected to be concluded within the next three years. The group s transport and warehouse systems were also upgraded. Amortisation has been recognised to the extent that the software has been brought into use. During the year there were additions to internally generated software of R17,6 million (2014: R20,5 million). Interest capitalised to internally generated software amounted to R2,4 million (2014: R1,2 million) and will be amortised over the estimated useful life of the asset. Interest is capitalised at the prevailing prime interest rate of 9,25% (2014: 9%). Software with a carrying value of R2,7 million (2014: R3,6 million) is subject to finance lease.

59 for the 12 months ended 31 March 12. InTanGIbLe assets continued The discount rates used for additions during the year were as follows: Company Pre-tax discount rate Pro-Max Welding Consumables Proprietary Limited 26,5% Africa Saffer Trading Proprietary Limited 23,5% Hamilton s Brushware Proprietary Limited 17,9% IPS & Distribution Proprietary Limited 20,0% Saffer Union (West Africa) Limited 19,7% Sangio Pipe Proprietary Limited 20,3% Impairment of intangible assets Details relating to impairment of intangible assets were as follows: Customer Trade- Indefinite Trade- relation- Defined Goodwill marks life marks ships Software life Total r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 building Pro-Max Welding Consumables Proprietary Limited Africa Saffer Trading Proprietary Limited Saffer Union (West Africa) Limited Infrastructure Sangio Pipe Proprietary Limited AST is the wholesale distribution business covering the rest of Africa and operates similarly to the South African trading businesses. The control of AST is critical for the group to expand into Africa and to align the growth strategy into Africa. The step-up of DAWN s interest, from a 51% joint venture to a 90% subsidiary, triggered new intangible assets which had to be recognised. These intangible assets were impaired on the basis that the consideration paid did not support the discounted cash flows of the business. Future expectations relating to business performance were also not materially different from the prior year, where an impairment of the investment in joint venture was accounted for. The SUWA acquisition was forced due to the fact that there was a contractual obligation to exit out of Nigeria as well as to settle a guarantee provided by DAWN before it could exit. Intangible assets to the value of R29,5 million were impaired in the AST group and R4,2 million on SUWA, a subsidiary in the AST group. Pro-Max was acquired to enhance and complement the wholesale of welding equipment already established in the wholesale distribution model. The Pro-Max impairment was due to the short delivery against an earn-out target not being achieved as well as a business partner who did not share DAWN's views in running the business. The business partner subsequently absconded and, on further consequential investigations, certain anomalies were uncovered which necessitated the impairment. 57

60 for the 12 months ended 31 March 12. InTanGIbLe assets continued The following discount rates were used for impairment testing purposes: Company Pre-tax discount rate Africa Saffer Trading Proprietary Limited 23,5% Saffer Union (West Africa) Limited 19,7% Pro-Max Welding Consumables Proprietary Limited 26,5% Intangible assets to the value of R45,6 million were impaired at Sangio Pipe Proprietary Limited (Sangio Pipe), a company in the infrastructure segment, consisting of R19,0 million of goodwill, R11,3 million of trademarks and R15,4 million of customer relationships. The additional 51% in Sangio Pipe, a high density polyethylene (HDPE) manufacturer, was acquired to complement the existing PVC and HDPE pipe ranges in the DAWN group. The impairment arose due to the slowdown in the economy and, specifically, in the mining industry as well as a slowdown in exports. The following discount rates were used for impairment testing purposes: Company Pre-tax discount rate Sangio Pipe Proprietary Limited 20,3% General Goodwill, trademarks and brand names are allocated to their respective underlying cash-generating units. The respective companies acquired are defined as the underlying cash-generating units which support the valuation of the goodwill, trademarks and brand names. Where a cash-generating unit is identified as a separate unit within a business, this unit is classified as a separate cashgenerating unit. Trademarks and brand names are recognised as indefinite useful life intangible assets when an analysis of the relevant underlying factors confirm that there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity. This assumption is further underpinned by the strong presence these trademarks and brand names carry in the marketplace. Goodwill and indefinite life intangible assets are allocated to the following cash-generating units: Indefinite life goodwill and intangible assets Goodwill Trademarks and brand names March 31 March 31 March 31 March r 000 R 000 r 000 R 000 building Wholesale Housing Supplies Proprietary Limited Hamilton s Brushware SA Proprietary Limited Boutique Baths Proprietary Limited Infrastructure Incledon Proprietary Limited (formerly Incledon a division of IPS & Distribution Proprietary Limited) Sangio Pipe Proprietary Limited Swan Plastics Proprietary Limited Ubuntu Plastics Proprietary Limited Solutions DAWN Human Resource Solutions Proprietary Limited

61 for the 12 months ended 31 March 12. InTanGIbLe assets continued The impairment test for goodwill, intangible assets and property, plant and equipment identifies the recoverable amount of a cash-generating unit determined based on value-in-use. Value-in-use calculations use pre-tax cash flow projections based on financial budgets approved by management and cover a three-year period. Pre-tax discount rates are used which equate to the cash-generating unit s Weighted Average Cost of Capital. The estimated growth rates applied are in line with that of the industry in which the cash-generating unit operates and are materially similar to assumptions of external market sources. The cash-generating unit s recoverable amount is most sensitive to the growth rate assumptions applied. Growth rates for impairment testing purposes beyond three years were assumed at 6%. Assumptions were based on management s past experience and best estimates regarding forecasts. Management determined budgeted gross margin based on past performance and its expectations of market developments. The discount rates used are pre-tax and reflect the appropriate risk associated with the industry and respective businesses. A segment-level summary of the key assumptions used for value-in-use calculations is as follows: Infrabuilding structure Solutions % % % 31 March Growth rate Pre-tax discount rate 24,2 24,5 23,9 31 March 2015 Growth rate 1 6,0 6,0 6,0 Pre-tax discount rate 23,6 23,9 22,8 1 Compounded weighted average growth rate used to extrapolate cash flows beyond the budget period. Intangible assets with defined useful lives and property, plant and equipment are tested for impairment if conditions are identified which might be indicative of a potential reduction in the value in use or net realisable value compared to its carrying value. amortisation of intangible assets carried at defined useful lives: Intangible assets recognised as defined life intangible assets are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of these assets over their useful lives. Trademarks are amortised over periods ranging from six to twenty years and customer relationship over periods ranging from five to ten years. The impairment calculations were tested for sensitivity to significant changes in the key assumptions used. The basis for sensitivity testing was the budgeted operating profit used in the value-in-use calculation which was 10% and 20% lower. If the budgeted operating profit used in the value-in-use calculation had been 10% or 20% lower in the cash-generating units, this would have resulted in impairments over intangible assets and property, plant and equipment as follows: Building segment R60,4 million (2015: Rnil) and R1,3 million (2015: Rnil), respectively; and Infrastructure segment R71,4 million (2015: Rnil ) and R20,7 million (2015: R1,1 million), respectively. 59

62 for the 12 months ended 31 March GrOuP COMPanY 31 March 31 March 31 March 31 March r 000 R 000 r 000 R InveSTMenTS In SubSIDIarIeS Shares at cost less amounts written off Impairment of investment in Wholesale Housing Supplies Proprietary Limited ( ) Loans receivable from subsidiaries (refer note 41 related parties) * net investment in subsidiaries Loans to the value of R816,0 million have been capitalised to the investment in the current year. * Loans were repaid in the current financial year. A listing of the group s principal subsidiaries is set out on pages 127 and 128 of the annual financial statements. 14. InveSTMenTS In associates and JOInT ventures The amounts recognised in the statement of financial position are as follows: Associates Joint ventures as at 31 March reconciliation of investments in associates and joint ventures GrOuP COMPanY Joint associates ventures Total associates r 000 r 000 r 000 r as at 31 March Balance at the beginning of the year Share of losses (9 096) (1 966) (11 062) Share of losses prior to amortisation (4 702) (1 966) (6 668) Amortisation of intangible assets (net of deferred tax) (4 246) (4 246) Share of losses allocated against loan account (148) (148) Foreign currency translation reserve (385) Dividend received (note 41) ^ (567) (567) Impairment of investments Grohe DAWN Watertech ( ) ( ) Fibrex S.A.R.L. (48 736) (48 736) Aqualia DPI Proprietary Limited (2 630) (2 630) DPI Simba Limited (14 206) (14 206) balance at the end of the year ^ Dividend received by DPI Holdings Proprietary Limited from Aqualia DPI Proprietary Limited.

63 for the 12 months ended 31 March 14. InveSTMenTS In associates and JOInT ventures continued reconciliation of investments in associates and joint ventures (continued) GrOuP COMPanY Joint associates ventures Total associates r 000 r 000 r 000 r 000 As at 31 March 2015 Balance at the beginning of the period Share of profits/(losses) (2 508) Share of profits/(losses) prior to amortisation (2 508) Amortisation of intangible assets (net of deferred tax) (2 020) (2 020) Share of losses allocated against loan account Foreign currency translation reserve Loan capital advancement ^ Acquisitions # * Derecognition of investment in Distribution and Warehousing Network Africa Proprietary Limited (DAT) (formerly Africa Saffer Trading Proprietary Limited (AST)) (28 236) (28 236) Balance at the end of the period # Acquisitions relate to the 49% re-acquired in the Grohe DAWN Watertech group for an amount of R741,7 million, a 49% share in Grome for R19,5 million and a 49% share in CPT for R5,2 million. * Acquisitions relate to investments held by the DAT group (formerly AST group) in DAT Tanzania and DAT Zimbabwe to the value of R8,3 million included in the business combination of DAT (formerly AST). ^ Relates to loans advanced to Incledon Proprietary Limited (formerly IPS & Distribution Proprietary Limited). Impairment of investments 31 March Associates Impairment of investments in associates in the Building segment relates to investments in Grohe DAWN Watertech Proprietary Limited (GDW) and in the Infrastructure segment in Fibrex S.A.R.L. (Fibrex). GDW consists of the Watertech companies, mainly situated in South Africa, and includes brands like Cobra, ISCA, Grohe in South Africa, Vaal, Libra, Apex and Exipro. During October 2014, a transaction to dispose of 51% to Grohe Luxembourg Four S.A. (Grohe) was concluded. Synergies, including export opportunities, did not materialise. Management disruptions, supply chain and funding shortfalls caused severe losses, which will take some time to correct. This exacerbated price and volume pressures. Fibrex, a pipe factory in Angola experienced a reducing turnover profile over the last number of years, with major pressures in respect of political instability, reduction in infrastructure spend by government, increased local competition and availability of foreign exchange, all of which contributed to the impairment. In both instances value-in-use calculations indicated that discounted cash flows did not support the carry value of the entities non-monetary assets nor its carry value. The following discount rates were used for impairment testing purposes: Company Pre-tax discount rate Grohe DAWN Watertech Proprietary Limited 20,0% Fibrex S.A.R.L. 24,7% 61

64 for the 12 months ended 31 March 14. InveSTMenTS In associates and JOInT ventures continued Joint ventures Impairment of investments in joint ventures occurred in the Infrastructure segment in respect of Aqualia DPI Proprietary Limited and DPI Simba Limited. Aqualia DPI Proprietary Limited is situated in Mauritius and the reduction in demand for infrastructure spend in the captive market, with reduced export opportunities, resulted in negative returns. DPI Simba Limited is situated in Tanzania and political instability and elections dampened the demand for infrastructure spend and DPI Simba Limited experienced negative returns for consecutive years. In both instances value-in-use calculations indicated that discounted cash flows did not support the carry value of the entities non-monetary assets nor its carry value. The following discount rates were used for impairment testing purposes: Company Pre-tax discount rate DPI Simba Limited 24,5% Aqualia DPI Proprietary Limited 23,4% 62 Associates and joint ventures have control over their cash. Loan advances and receipts and dividends require the approval of DAWN and the joint venture partners. Associates and joint ventures may be subject to regularatory restrictions, including exchange control, in their respective countries from time to time. Acquisitions and derecognitions of investments in associates and joint ventures 31 March No new acquisitions in associates or joint ventures have been made during the current year. 31 March 2015 Derecognition of IPS & Distribution Proprietary Limited (IPS) An additional 51% was acquired in IPS as at 1 Jan 2015 for a cash consideration of R51. The 49% disclosed as an investment in associate was subsequently derecognised. IPS was re-recognised as a 100% owned subsidiary. Acquisition of Grohe DAWN Watertech As part of the Grohe DAWN Watertech transaction the group disposed of 100% of their share in the Grohe DAWN Watertech group and re-acquired a 49% interest as an investment in associates for an amount of R741,7 million. Refer to note 20 for additional information. The group also acquired a 49% share in Grome for R19,5 million. Acquisition of College of Production Technology Proprietary Limited A 49% share was acquired in College of Production Technology Proprietary Limited on 1 March 2015 for R5,2 million. College of Production Technology Proprietary Limited provides part-time courses to students of industry in the fields of production, technology, logistics, quality, work engineering, human resources and strategic management. The outstanding amount has been disclosed as an acquisition vendor of R1,5 million, included in current borrowings and R2,5 million, included in non-current borrowings. An amount was R1,5 million was paid during the year. Loans advanced to associates and joint ventures 31 March During the year no loans advanced to associates or joint ventures were capitalised to investments. The balance at the end of the year is nil. 31 March 2015 None of the loans are in default nor have they been impaired. Loan to IPS & Distribution Proprietary Limited The loan to IPS & Distribution was recognised as part of the investment in associate to the extent that losses of R8,5 million were incurred. Refer to note 41 for additional disclosure on loans receivable from associates.

65 for the 12 months ended 31 March 14. InveSTMenTS In associates and JOInT ventures continued Summarised financial information for associates and joint ventures of the group * 31 March heunis Steel GrOhe Total Proprietary Dawn Other Joint 31 March Limited watertech associates ^ ventures # r 000 r 000 r 000 r 000 r 000 Income statement information Revenue Finance income Finance expense (2 664) (52 249) (2 486) (7 193) (64 592) Income tax expense (11 778) (31 096) (4 408) (1 457) (48 739) Profit/(loss) after tax before non-controlling interest (54 977) (4 208) (16 422) Profit/(loss) after tax after non-controlling interest (53 729) (4 208) (15 174) Depreciation and amortisation (2 746) (46 196) (6 291) (8 439) (63 672) Dividends received from joint venture Other comprehensive income/(loss) (4 882) Total comprehensive income/(loss) (53 729) (9 090) (8 220) Statement of financial position information Current assets Non-current assets Current liabilities Non-current liabilities Current financial liabilities (excluding trade and other payables and provisions) Non-current financial liabilities (excluding trade and other payables and provisions) Total cash/(overdraft) ( ) (32 279) ( ) Net asset value (at 100%) DAWN s interest (%) Net asset value of joint venture (at DAWN s share) Group adjustment to investment ( ) (44 340) (16 836) ( ) Intangible assets recognised net of deferred tax Amortisation of intangible assets recognised net of deferred tax (5 924) (4 808) (382) (11 114) Control premium ( ) ( ) Net debt adjustment Impairment of investment ( ) (48 736) (16 836) ( ) Equity accounted losses allocated against loan account (17) (17) Carrying amount of investment * Only associates and joint ventures at year-end have been included in the summarised financial information. ^ Includes Fibrex S.A.R.L, DPI Rooftiles Proprietary Limited and College of Production Technology Proprietary Limited. # Includes Aqualia DPI Proprietary Limited, DPI Simba Limited, ASTIZ (Private) Limited (formerly Africa Saffer Trading Proprietary Limited (Zimbabwe)) and DAWN Africa Tanzania Limited (formerly Africa Saffer Trading Proprietary Limited (Tanzania)). 63

66 for the 12 months ended 31 March 14. InveSTMenTS In associates and JOInT ventures continued Summarised financial information for associates and joint ventures of the group * 31 March 2015 heunis Steel GrOhe Total Proprietary Dawn Other Joint 31 March Limited watertech associates ^ ventures # 2015 r 000 r 000 r 000 r 000 r 000 Income statement information Revenue Finance income Finance expense (625) (12 131) (4 863) (4 672) (22 291) Income tax expense (9 074) (10 567) (1 535) (1 279) (22 455) Profit/(loss) after tax before non-controlling interest (663) Profit/(loss) after tax after non-controlling interest (663) Depreciation and amortisation (2 068) (13 506) (3 603) (6 169) (25 346) Other comprehensive income/(loss) (7 300) (536) (7 836) Total comprehensive income/(loss) (1 199) Statement of financial position information Current assets Non-current assets Current liabilities Non-current liabilities Current financial liabilities (excluding trade and other payables and provisions) Non-current financial liabilities (excluding trade and other payables and provisions) Total cash/(overdraft) (15 965) (19 717) (25 973) (46 889) Net asset value (at 100%) DAWN's interest (%) Net asset value (at DAWN s share) Group adjustment to investment ( ) (80 131) Intangible assets recognised net of deferred tax Amortisation of intangible assets recognised net of deferred tax (5 455) (1 414) (6 869) Control premium ( ) ( ) Net debt adjustment Equity accounted losses allocated against loan account Carrying amount of investment * Only associates and joint ventures at year-end have been included in the summarised financial information. ^ Includes Fibrex S.A.R.L., DPI Rooftiles Proprietary Limited and College of Production Technology Proprietary Limited. # Includes Aqualia DPI Proprietary Limited, DPI Simba Limited, Africa Saffer Trading Proprietary Limited (Zimbabwe) and Africa Saffer Trading Proprietary Limited (Tanzania). 64 There are no contingent liabilities relating to the group s interest in associates. The year-end of Fibrex S.A.R.L. and Saffer Union (West Africa) Limited is 31 December, as required by legislation in Angola and Nigeria, respectively.

67 for the 12 months ended 31 March GrOuP 31 March 31 March 2015 r 000 R InvenTOrIeS The amounts attributable to the different categories are as follows: Raw materials Components and consumables Work-in-progress Finished goods Inventory balances are presented at the lower of cost and net realisable value The cost of inventories recognised as an expense and included in inventories expensed during the year amounted to R3,6 billion (2015: R2,6 billion) (note 4). A write-down of inventories of R51,9 million (2015: R18,9 million) was recognised in cost of sales. A general notarial bond has been registered as security over inventory (note 22). GrOuP COMPanY 31 March 31 March 31 March 31 March r 000 R 000 r 000 R TraDe and OTher receivables Trade receivables ~ Less: Provision for receivables impaired (78 249) (39 730) Trade receivables net Discounts receivable Prepayments and deposits Related party loans (note 41) Current Non-current Insurance claims Value Added Tax Other receivables Intercompany finance lease Current Non-current Trade and other receivables Included in: Non-current assets Current assets ~ Trade receivables are shown net of provisions for discounts and delayed discounts received. 65

68 for the 12 months ended 31 March 16. TraDe and OTher receivables continued The fair values of current trade and other receivables approximate their carrying values. Trade receivables have been ceded as security for borrowings (note 22). Trade receivables that are within the prescribed trading terms are considered to be fully performing. As at 31 March, trade receivables of R555,3 million (2015: R577,2 million) were fully performing. Trade receivables can be categorised in the following performance categories: Past due Impaired fully and not and partially r 000 performing impaired provided for Total 31 March Building Infrastructure DAWN Solutions Corporate office and other reconciling items March 2015 Building Infrastructure DAWN Solutions Corporate office and other reconciling items Credit quality of trade and other receivables The credit quality of trade and other receivables that are neither past nor due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. Trade receivables past due but not impaired As at 31 March, trade receivables of R178,2 million (2015: R215,4 million) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. Payment cessions over contractors and credit insurance exist over these trade receivables. 66

69 for the 12 months ended 31 March 16. TraDe and OTher receivables continued The ageing analysis of these trade receivables is as follows: GrOuP COMPanY 31 March 31 March 31 March 31 March r 000 R 000 r 000 R 000 Up to three months Three to six months Total past due but not impaired Trade and other receivables impaired As at 31 March, trade receivables of R70,9 million (2015: R45,1 million) were impaired and the risk component of R78,2 million (2015: R39,7 million) was provided for. The individually impaired receivables mainly relate to independent customers, who trade in difficult economic circumstances. It was assessed that a portion of the receivables is expected to be recovered. The ageing of these receivables is as follows: Three to six months Over six months Total impaired and partially provided for There is no concentration of credit risk with respect to trade receivables, as the group has a large and fragmented number of customers. The carrying amounts of the group s trade and other receivables are denominated in the following currencies (all balances are disclosed in South african rand): South African Rand Other currencies

70 for the 12 months ended 31 March GrOuP COMPanY 31 March 31 March 31 March 31 March r 000 R 000 r 000 R TraDe and OTher receivables continued Movements on the group provision for impairment of trade receivables are as follows: Balance at the beginning of the year Held-for-sale (3 509) Provision for receivables impaired Receivables written off as uncollectible (3 738) Acquisition of subsidiaries Foreign exchange movements on conversion 313 (165) Unused amounts reversed (50) balance at the end of the year The creation and usage of provision for impaired receivables have been included in other operating expenses in the income statement. Amounts charged to the provision account are generally written off, when there is no expectation of recovering additional cash. The other classes within trade and other receivables do not contain impaired assets. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. Intercompany finance lease receivables Gross finance lease liabilities minimum lease payments No later than one year Later than one year and no later than two years Later than two years no later than five years Future finance charges (7 839) (1 749) Present value finance lease liabilities The present value of finance lease liabilities is as follows: 68 No later than one year Later than one year and no later than two years Later than two years no later than five years

71 for the 12 months ended 31 March GrOuP COMPanY 31 March 31 March 31 March 31 March r 000 R 000 r 000 R CaSh and CaSh equivalents Cash and cash equivalents consist of: Bank balances Short-term bank deposits 3 3 For purposes of the statements of cash flows, cash and cash equivalents include the following: Cash at bank and on hand and short-term bank deposits Bank overdrafts and call loans (included in note 22 (borrowings)) (10 114) ( ) ( ) The group s bank balances are managed through a cash management process and interest is charged on a net basis. The effective interest rate on short-term bank deposits averaged 7,3% (2015: 3,5%) for the year under review. Unutilised bank overdraft facilities amounted to R100 million at 31 March (2015: R22,6 million). Bank overdraft facilities carry an interest rate at the prime rate less 1,5% (2015: 1,5%). The carrying amounts of the group s cash and cash equivalents are denominated in the following currencies (all balances are disclosed in South african rand): (41 303) South African Rand Other currencies

72 for the 12 months ended 31 March 18. DISPOSaL GrOuP and OTher assets/liabilities held-for-sale 31 March The group has no disposal group or other assets/liabilities held for sale. 31 March 2015 Wilhelm Import Network Proprietary Limited (WiiN) As a requirement of the Grohe DAWN Watertech transaction, DAWN was required to exit out of any business ventures that are in direct competition with Grohe. On 31 March 2015 DAWN entered into an agreement for the disposal of its 60% holding in WiiN for a cash consideration of R15 million. As a result, WiiN has been derecognised and classified as held-forsale and a loss on derecognition of R7,1 million was realised. Kew property As a requirement of the Grohe DAWN Watertech transaction, the group acquired ISCA s premises, situated in Kew, for R18,5 million based on the net book value of the property. Subsequently, the market value of the property was determined to be R16 million. It is the group s intention to dispose of this property and it was classified as held-for-sale upon initial recognition. SuMMarY GrOuP 31 March 31 March 2015 r 000 R 000 Total assets of disposal group classified as held-for-sale Total liabilities of disposal group classified as held-for-sale wilhelm Import network Proprietary Limited (wiin) (a) Assets of disposal group classified as held-for-sale (b) Liabilities of disposal group classified as held-for-sale Kew property (a) Assets of disposal group classified as held-for-sale (b) Liabilities of disposal group classified as held-for-sale Analysis of the result of discontinued operations, and the result recognised on the re-measurement of assets of disposal group is as follows: Grohe Dawn watertech Revenue Expenses ( ) Profit before tax from discontinued operations Income tax expense (10 324) Profit after tax from discontinued operations Attributable to: Owners of the parent Non-controlling interests Operating cash flows (67 480) Investing cash flows (4 048) Financing cash flows (4 459) Total cash flows (75 987)

73 for the 12 months ended 31 March 18. DISPOSaL GrOuP and OTher assets/liabilities held-for-sale continued GrOuP 31 March 31 March 2015 r 000 R 000 wilhelm Import network Proprietary Limited (wiin) The cash flows as well as the Income Statement results have been included in the group results. (a) assets of disposal group classified as held-for-sale Property, plant and equipment Inventory Cash and cash equivalents 89 Other current assets Total (b) Liabilities of disposal group classified as held-for-sale Non-current liabilities Trade and other payables 965 Other current liabilities 917 Total Kew property (a) Assets classified as held-for-sale (b) Liabilities classified as held-for-sale Total GrOuP COMPanY 31 March 31 March 31 March 31 March r 000 R 000 r 000 R Share CaPITaL authorised at 31 March ordinary shares of 1 cent each deferred ordinary shares of 1 cent each balance at the end of the year Share premium

74 for the 12 months ended 31 March 19. Share CaPITaL continued The authorised share capital of the company consists of ordinary shares of 1 cent each and deferred ordinary shares of 1 cent each. 72 number of Deferred number of deferred Total Ordinary ordinary Share ordinary ordinary number of shares shares premiums Total Issued shares shares shares r 000 r 000 r 000 r 000 At 30 June Deferred ordinary shares converted to ordinary shares ( ) 4 (4) At 31 March at 31 March Shares repurchased by a subsidiary and held in treasury amounted to shares (2015: Nil shares), which are disclosed as a reduction of equity in the statement of changes in equity. During the 2015 and financial years a further and shares, respectively, were acquired in order to cover the group s obligations in terms of the share incentive schemes at a total cost of R7,02 (2015) and R5,61 () per share. These obligations were settled in the respective years. Deferred ordinary shares were converted into ordinary shares in terms of shareholders' approval in The remaining unissued shares are under the control of the directors until the next annual general meeting, subject to the Listings Requirements of the JSE Limited. 20. Share-baSeD PaYMenT reserve and Share-baSeD PaYMenT LIabILITY Share scheme (reserve) Share incentives in the form of Share Appreciation Rights (SARs), Long-Term Incentive Plan (LTIPs) awards and Deferred Bonus Plan (DBPs) awards are offered to directors and to selected employees with the aim to retain key skills in the group and to create a proper reward system. The schemes normally have a vesting period of three years and lapse after seven years, if not exercised. Allocation grants are approved by DAWN s remuneration committee. The grant price of these rights and awards are equal to the five-day volume weighted average traded market price of the shares preceding the date of the grant. Rights and awards are conditional on performance conditions being met. The conditions focus on the group s earnings growth. The vesting price of these rights and awards is the five-day weighted average traded market price of the shares preceding the date of vesting. The values accruing to participants are as follows: SAR: Appreciation between the strike price and the vesting price; LTIP: Difference between zero strike price and vesting price; and DBP: Appreciation between the strike price and the vesting price. Other share-based payment related transactions (liability) During the prior and current year, specific LTIP tranches were offered to employees which were modified during the current year and transferred from the share-based payment reserve to a share-based payment liability. These were settled in cash during the current year. During the prior year, shares were offered to employees employed by the Watertech structure, and due to the Watertech transaction, received share options. These options were modified during the current year and transferred from the sharebased payment reserve to a share-based payment liability. These were either settled in cash or will be settled in cash at a future date.

75 for the 12 months ended 31 March 20. Share-baSeD PaYMenT reserve and Share-baSeD PaYMenT LIabILITY continued Incledon Proprietary Limited entered into a transaction with a BEE partner on 1 April 2015 for the BEE partner to acquire 49% of a subsidiary for a nominal amount of R49. The value of the assets acquired by the BEE partner is R9,7 million. At 49% the value acquired is R4,9 million. The transaction is disclosed as a share-based payment transaction in terms of IFRIC 8. Movements in the number of share options outstanding and their related weighted average grant prices are as follows: Market 2 price per valuation 4 Total risk- right and allocation 3 per right number free Divi- award (strike) per of rights interest vola- dend per share price at share granted rate tility yield cents vesting cents 000 Share appreciation rights (Sars) 2011 rights granted 7,7 37 1, rights granted 1 7,0 45,7 1, Total Sars Long-Term Incentive Plans (LTIPs) rights granted 1 7,0 n/a 1, rights granted 7,0 n/a 1, rights granted 7,0 n/a 1, Total LTIPs Deferred bonus Plan (DbPs) 2011 rights granted 7,0 n/a 1, Total DbPs 388 Total number of share options granted Share grants are not expect to vest. Market price at date of grant. 3 Valuation for IFRS 2 Share-based payment charges to profit and loss. 4 LTIPs have a nil strike price. DAWN s share price at 31 March was 400 cents (31 March 2015: 650 cents). Based on management s earnings projections, it is estimated that the current and projected non-market vesting conditions relating to tranches 6 to 8 of the Share Appreciation Rights (SARs) and Long-Term Incentive Plan (LTIPs) schemes are unlikely to be achieved. The volatility input to the pricing model is a measure of the expected price fluctuations of the DAWN share price over the life option structure. Volatility is measured as the annualised standard deviation of the daily price changes in the underlying shares. The weighted average fair value of the rights and awards granted was determined using a modified binomial tree model to value the SARs and the Monte Carlo valuation model for the valuation of the LTIPs. 73

76 for the 12 months ended 31 March 20. Share-baSeD PaYMenT reserve and Share-baSeD PaYMenT LIabILITY continued The following table sets out the reconciliation of the share-based payment reserve: Sar LTIP DbP Other Total r 000 r 000 r 000 r 000 r March Share-based payment reserve reconciliation Opening balance Income statement charge (2 722) (2 722) Income statement charge other retention schemes Transferred from reserves to liability (26 381) (26 381) Specific LTIP tranches transferred to share-based payment liability 1 (8 906) (8 906) Watertech transaction scheme transferred to share-based payment liability 2 (17 475) (17 475) Closing balance Other retention schemes relate to employee benefit schemes approved by the remuneration committee, forming part of the LTIP scheme, subsequently transferred to share-based payment liability during. 2 Watertech transaction scheme refers to specific Watertech-related share transactions and subsequently transferred to share- based payment liability during. Sar LTIP DbP Other Total r 000 r 000 r 000 r 000 r 000 Share-based payment liability reconciliation Opening balance Income statement charge Incledon KZN Proprietary Limited Specific LTIP tranches transferred from share-based payment reserve to share-based payment liability Watertech transaction scheme transferred from share-based payment reserve to share-based payment liability Settlement 4 (18 440) (18 440) Closing balance Other relates to employee benefit schemes approved by the remuneration committee, which do not form part of the LTIP/SAR share scheme. 2 Watertech transaction scheme refers to specific Watertech-related share transactions and subsequently transferred to share- based payment liability during. 3 Incledon KZN Proprietary Limited expense relates to a BEE transaction explained above. 4 Other retention schemes relate to employee benefit schemes approved by the remuneration committee, forming part of the LTIP scheme, subsequently transferred to share-based payment liability during. GrOuP 31 March 31 March Included in: Non-current liabilities Current liabilities

77 for the 12 months ended 31 March 20. Share-baSeD PaYMenT reserve and Share-baSeD PaYMenT LIabILITY continued The following table reconciles the number of shares and rights outstanding in respect of the share-based payment reserve: Sar LTIP DbP Total number of number of number of Other number of shares shares shares schemes shares Share rights and awards granted Opening balance Issued Transferred to share-based payment liability and settled (1 901) (1 901) Forfeited and cancelled (160) (6 542) (484) (7 185) Closing balance GrOuP Restated 31 March 31 March Aggregate number of shares available to the new schemes Share rights and awards granted (new schemes) (7 423) (16 010) Number of share rights and awards available, but not engaged March 2015 Sar LTIP DbP Other Total r 000 r 000 r 000 r 000 r 000 Share-based payment reconciliation (restated) Opening balance Income statement charge share scheme # Income statement charge other retention schemes # Income statement charge Watertech-related Transfer from liabilities employee benefit obligations and non-controlling interests in term of share scheme ~# Vested (6 733) (7 984) (14 717) Closing balance shares granted to Collin Bishop as part of the Grohe DAWN Watertech transaction. Refer to note 2 under the prescribed officers section. + Relates to a once-off acceleration of vesting for participants employed in the Watertech group as a result of the Grohe DAWN Watertech transaction. ~ Other relates to employee benefit schemes approved by the remuneration committee which do not form part of the LTIP/SAR share scheme. # For reclassification detail see note

78 for the 12 months ended 31 March 20. Share-baSeD PaYMenT reserve and Share-baSeD PaYMenT LIabILITY continued The following table reconciles the number of shares and rights outstanding: Sar LTIP DbP Total number of number of number of Other number of shares shares shares schemes shares Share rights and awards granted (restated) Opening balance Issued # Forfeited and cancelled (425) (7 252) (7 677) Vested (7 663) (1 200) # (8 863) Closing balance # For reclassification detail see note non-controlling InTereSTS and ChanGeS In OwnerShIP reserve non-controlling interests GrOuP 31 March 31 March 2015 r 000 R 000 balance at the beginning of the year Share of attributable earnings for the year continuing operations Share of attributable earnings for the year discontinued operations 15 Dividends (447) Non-controlling interests in business combination (note 36) Foreign currency translation reserve (415) 99 Non-controlling interests acquired in subsidiaries (823) (2 538) balance at the end of the year March The transactions with non-controlling interest acquired related to the acquisition of Boutique Baths Proprietary Limited (note 36 Business Combinations). DAWN also acquired the remaining shareholding of 25,83% in Pro-Max Welding Consumables Proprietary Limited which resulted in a R0,39 million change to non-controlling interest. An additional 5% was acquired in Hamilton s Brushware SA Proprietary Limited for R0,38 million with a R0,43 million movement in noncontrolling interest. 31 March The transactions with non-controlling interests acquired relate to the acquisition of Africa Saffer Trading Proprietary Limited, Pro-Max Welding Consumables Proprietary Limited and Hamilton s Brushware SA Proprietary Limited (note 36 Business Combinations), the acquisition of the remaining shareholding in DAWN Human Resources and the disposal of a 51% share in the Watertech companies.

79 for the 12 months ended 31 March 21. non-controlling InTereSTS and ChanGeS In OwnerShIP reserve continued Summarised financial information for non-controlling interest of the group * 31 March Distribution and Total warehousing non- Swan boutique ubuntu hamilton s network controlling Plastics baths Plastics brushware africa interests Proprietary Proprietary Proprietary Proprietary Proprietary 31 March Limited Limited Limited Limited Limited ** r 000 r 000 r 000 r 000 r 000 r 000 Income statement information Revenue Finance income Finance expense (1 470) (57) (1 264) (2 525) (5 782) (11 098) Income tax (expense)/income (11 312) (176) (757) (10 316) Profit/(loss) after tax before non-controlling interest (1 301) (36 175) (5 655) Profit/(loss) after tax after non-controlling interest (1 301) (28 067) Depreciation and amortisation (4 761) (461) (1 307) (359) (1 907) (8 795) Dividends paid to non-controlling interest Other comprehensive income Total comprehensive income/(loss) (1 301) (32 577) (2 057) Statement of financial position information Current assets Non-current assets Current liabilities Non-current liabilities Current financial liabilities (excluding trade and other payables and provisions) Non-current financial liabilities (excluding trade and other payables and provisions) Total cash Operating cash flows (2 059) (39 764) (18 136) Investing cash flows (4 576) (9 678) (771) (889) (14 090) Financing cash flows (16 131) (5 105) Total cash flows (526) (2 386) * Only non-controlling interests at year-end have been included in the summarised financial information. ** Formerly Africa Saffer Trading Proprietary Limited. 77

80 for the 12 months ended 31 March 21. non-controlling InTereSTS and ChanGeS In OwnerShIP reserve continued Pro-Max Total wilhelm welding africa non- Swan import ubuntu Consu- hamilton s Saffer controlling Plastics network Plastics mables brushware Trading interests Proprietary Proprietary Proprietary Proprietary Proprietary Proprietary 31 March Limited Limited Limited Limited Limited Limited 2015 r 000 r 000 r 000 r 000 r 000 r 000 R March 2015 Income statement information Revenue Finance income Finance expense (741) (2 504) (667) (4 212) (617) (2 158) (10 926) Income tax expense (5 264) (1 430) (747) (594) (508) (8 542) Profit after tax before non-controlling interest (12 766) (725) (17 463) (14 023) Profit after tax after non-controlling interest (12 766) (725) (16 619) (13 179) Depreciation and amortisation (3 258) (1 283) (801) (1 386) (351) (857) (7 936) Statement of financial position Information Current assets Non-current assets Current liabilities Non-current liabilities Current financial liabilities (excluding trade and other payables and provisions) Non-current financial liabilities (excluding trade and other payables and provisions) Total cash/(overdraft) (1 596) (2 309) Operating cash flows (12 879) (10 731) (8 750) (18 220) (31 499) Investing cash flows (19 446) (3 604) (84) (648) Financing cash flows (800) (870) Total cash flows (1 015) (2 672)

81 for the 12 months ended 31 March 21. non-controlling InTereSTS and ChanGeS In OwnerShIP reserve continued Changes in ownership reserve GrOuP 31 March 31 March 2015 r 000 R 000 balance at the beginning of the year (8 378) (17 989) Current year transactions: Transactions with non-controlling interest 358 (8 058) Pro-Max Welding Consumables Proprietary Limited 310 (2 206) Hamilton s Brushware SA Proprietary Limited 48 DAWN Human Resource Solutions Proprietary Limited (4 716) Apex Valves South Africa Proprietary Limited acquisition (1 843) DMD Marketing SA Proprietary Limited 707 Derecognition of subsidiary Disposal of Apex Valves South Africa Proprietary Limited Disposal of Grohe group Derecognition of joint venture 496 Africa Saffer Trading Limitada (Mozambique)) 496 balance at the end of the year (8 020) (8 378) The changes in ownership reserve arise out of the additional shareholding acquired in subsidiaries, which did not result in a change of control. balance at the end of the year comprises of: DAWN Human Resource Solutions Proprietary Limited (5 623) (5 623) Pro-Max Welding Consumables Proprietary Limited (1 896) (2 206) Wholesale Housing Supplies East London Proprietary Limited (978) (978) Electroline Proprietary Limited (278) (278) Hamilton s Brushware SA Proprietary Limited 48 DMD Marketing SA Proprietary Limited (8 020) (8 378) acquisition breakdown amount paid effect per on non- effect on cash flow controlling changes in statement interest ownership acquisition of non-controlling interest in subsidiary r 000 r 000 r 000 Hamilton s Brushware SA Proprietary Limited additional 5% investment (69% to 75%) (48) Pro-Max Welding Consumables Proprietary Limited additional 25,84% investment (74,16% to 100%) (310) breakdown as at 31 March (358) 79

82 for the 12 months ended 31 March 21. non-controlling InTereSTS and ChanGeS In OwnerShIP reserve continued 31 March Additional shares of 12,5% and 13,33% were acquired in Pro-Max Welding Consumables Proprietary Limited on 30 June 2015 and 31 March, respectively. This resulted in a R0,3 million decrease in the changes in ownership reserve. An additional share of 5% was acquired in Hamilton s Brushware SA Proprietary Limited on 1 July 2015 for an amount of R0,4 million. This resulted in a R0,05 million decrease in the changes of ownership reserve. 31 March 2015 An additional share of 14,16% was acquired in Pro-Max Welding Consumables Proprietary Limited on 28 February The acquisition vendor of R2,5 million was disclosed under current borrowings. This resulted in a R2,2 million increase in the changes in ownership reserve. Additional shares of 24% and 18,1% were acquired for R6,2 million in DAWN Human Resource Solutions Proprietary Limited on 30 November 2014 and 31 March This resulted in a R4,7 million increase in the changes in ownership reserve. At 30 October 2014, an additional 40% share amounting to R6 million was acquired in Apex Valves which resulted in a change in ownership to the value of R1,8 million. The change in ownership was reversed as part of the disposal of the Watertech companies. A 51% share of the Watertech companies was disposed of to Grohe Luxemburg Four S.A. as at 31 October This resulted in the changes in ownership to be reversed as part of the transaction. The R0,5 million change in ownership in Africa Saffer Trading Limitada (Mozambique) was reversed upon the purchase of the additional 39% shares in Africa Saffer Trading group on 31 October An additional share of 20% was acquired in DMD Marketing SA Proprietary Limited on 31 March This resulted in a R0,7 million reversal in the changes in ownership reserve. GrOuP COMPanY Restated 31 March 31 March 31 March 31 March r 000 R 000 r 000 R borrowings non-current Interest-bearing borrowings Bank borrowings Instalment sale liabilities Finance lease liabilities Non-interest-bearing borrowings Related parties and non-controlling shareholders loans (note 41) Acquisition vendors Other borrowings Total non-current borrowings

83 for the 12 months ended 31 March GrOuP COMPanY Restated 31 March 31 March 31 March 31 March r 000 R 000 r 000 R borrowings continued Current Interest-bearing borrowings Bank overdraft and call loans Bank borrowings Instalment sale liabilities Finance lease liabilities Directors and family members loans (note 41) Trade finance Other borrowings Related parties and non-controlling shareholders loans (note 41) Non-interest-bearing borrowings Other borrowings Acquisition vendors * Related parties and non-controlling shareholders loans (note 41) Total current borrowings Total borrowings Other interest-bearing borrowings bear an interest rate varying between 2,82% and 9,25% (2015: varying between 2,7% and 9,25%). The security provided can be summarised as follows: Inventory General notarial bonds Accounts receivable Cession of book debts The security listed in the table covers the group s: Revolving credit facility Asset finance * For restatement detail see note

84 for the 12 months ended 31 March 22. borrowings continued 31 March A revolving credit facility of R200 million was granted with Absa Bank Limited on 15 October The current facility ends 7 October and has been re-negotiated to 7 October The new facility has similar characteristics but will have a quarterly step-down of R25 million per quarter in respect of the revolving credit facility (RCF) starting 7 October and ending 7 July Accounts receivable have been ceded and a general notarial bond has been registered over inventory. The details of the covenant measures are as follows: 31 March 31 March Covenant measures required Required 2015 Total debt/ebitda < 2.5:1 In breach n/a n/a Interest cover > 4.0:1 In breach n/a n/a Accounts receivable and inventory > 3.0:1 4.3 Accounts receivable CGIC covered debtors > 1.5:1 4.8 As indicated above DAWN has breached some of its covenants and accordingly approached Absa for a waiver of the relevant covenant measures. Absa consented to the non-compliance (breach) of the covenants and waived the event of default. The pricing has provisionally been indicated and reflects a deteriorated credit position as well as movements in the general yield curve. Security requirements remain unchanged. The carrying amount of the loan in default is R200 million (R200 million of a RCF) and Rnil general banking limit (R100 million of a general banking facility). 31 March 2015 The term debt and revolving credit facilities with Absa Bank Limited of R400,0 million and R200,0 million, respectively, were settled on 31 October

85 for the 12 months ended 31 March GrOuP COMPanY Restated * 31 March 31 March 31 March 31 March r 000 R 000 r 000 R borrowings continued The exposure of the group s borrowings to interest rate changes and the contractual repricing dates at the end of the reporting period is as follows: Six months or less Six to twelve months One to five years Over five years The maturity of non-current borrowings is as follows (excluding instalment sale and finance lease liabilities): Later than one year and no later than two years Later than two years and no later than five years Later than five years Instalment sale liabilities minimum payments: No later than one year Later than one year and no later than two years Later than two years and no later than five years Later than five years Future finance charges (2 127) (2 948) Present value of instalment sale liabilities The present value of instalment sale liabilities is as follows: No later than one year Later than one year and no later than two years Later than two years no later than five years Later than five years Gross finance lease liabilities minimum lease payments: No later than one year Later than one year and no later than two years Later than two years and no later than five years Future finance charges (10 651) (4 800) (9 392) (1 669) 83 Present value of finance lease liabilities * Refer to note 44 for details regarding restatements, reclassifications and consistency of presentation disclosure.

86 for the 12 months ended 31 March GrOuP COMPanY 31 March 31 March 31 March 31 March r 000 R 000 r 000 R borrowings continued The present value of finance lease liabilities is as follows: No later than one year Later than one year and no later than two years Later than two years no later than five years The effective annual interest rates at the end of the reporting period were as follows: % % % % Bank borrowings Working capital facilities 9,0 7,8 9,0 7,8 Long-term debt 9,0 6,9 9,0 6,9 Short-term debt 9,0 9,1 9,1 Loans from shareholders, directors and family members 8,5 7,3 9,0 Instalment sale liabilities 9,5 10,0 Finance lease liabilities 9,5 10,7 9,2 10,7 Trade finance 13,4 10,3 13,5 10,3 Related party loans 7,0 6,3 Carrying amounts fair values 31 March 31 March 31 March 31 March r 000 R 000 r 000 R 000 The carrying amounts and fair values of non-current borrowings of the group are as follows: Bank borrowings Instalment sale liabilities Finance lease liabilities The fair values of bank borrowings and related party loans are based on discounted cash flows using an appropriate market-related interest rate at the reporting date. 84 The carrying amounts of current borrowings approximate their fair values, as the impact of discounting is not significant. The fair values of finance lease and instalment sale obligations are estimated as the present value of future cash flows, discounted at the market-related interest rate at the reporting date.

87 for the 12 months ended 31 March GrOuP COMPanY Restated 31 March 31 March 31 March 31 March r 000 R 000 r 000 R borrowings continued The carrying amounts of the group s borrowings are denominated in the following currencies (all balances are disclosed as South african rands): South African Rand * Other currencies borrowing powers DAWN has unlimited borrowing powers permitted in terms of the company s memorandum of incorporation. borrowing facilities The group has the following contracted borrowing facilities: Floating rate Expiring within one year Expiring beyond one year Fixed rate Expiring within one year Expiring beyond one year Total interest-bearing borrowings (excluding acquisition vendors) * For restatement detail see note DerIvaTIve financial InSTruMenTS fair value estimation The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates to terminate the contracts at the statement of financial position date. Derivative financial instruments The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2). Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). 85

88 for the 12 months ended 31 March 23. DerIvaTIve financial InSTruMenTS continued GrOuP Restated 31 March 31 March 2015 Level r 000 R 000 assets non-current assets Put option Grohe DAWN Watertech # Current assets Forward foreign exchange contracts valued at fair value through profit/loss Total assets LIabILITIeS non-current liabilities Call option Grohe DAWN Watertech # Written put Swan Plastics Proprietary Limited * Total non-current liabilities Current liabilities Forward foreign exchange contracts valued at fair value through profit/loss Forward foreign exchange contracts designated as cash flow hedges Total current liabilities Total liabilities # For reclassification detail see note 44. * For restatement detail see note COMPanY 31 March 31 March 2015 Level r 000 R 000 assets non-current assets Put option Grohe DAWN Watertech Current assets Forward foreign exchange contracts valued at fair value through profit/loss Total assets LIabILITIeS non-current liabilities Call option Grohe DAWN Watertech Current liabilities Forward foreign exchange contracts valued at fair value through profit/loss Total liabilities The fair value of financial instruments traded in active markets is based on quoted market prices at the statement of financial position date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm s length basis. The quoted market price used for financial assets held by the group is the current bid price. These type of instruments are included in level 1. DAWN carries no level 1 financial instruments. 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. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

89 for the 12 months ended 31 March 23. DerIvaTIve financial InSTruMenTS continued Specific valuation techniques used to value financial instruments include: Quoted market prices or dealer quotes for similar instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves. The fair value of forward foreign exchange contracts is determined using forward exchange rates at the statement of financial position date, with the resulting value discounted back to present value. Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments. All of the resulting fair value estimates are included in level 2. forward exchange contracts The foreign exchange contracts in the above are shown at the year-end values for similar contracts maturing at the same date. Open forward exchange contracts (at contracted rates) can be analysed as follows: weighted average rand foreign forward amount amount exchange rate 31 March US Dollar buy ,5 US Dollar sell ,9 Euro buy ,0 31 March 2015 US Dollar buy ,7 US Dollar sell ,6 Euro buy ,7 Euro sell ,4 31 March The settlement dates on open forward exchanges contracts range between one and six months from 31 March. 31 March 2015 The settlement dates on open forward exchange contracts range between one and four months from 31 March hedge reserve At 31 March, the group held derivative financial instruments that were designated as cash flow hedges of future forecast transactions. These were hedging of: Future capital expenditure payments by forward foreign exchange contracts Future inventory payments by forward foreign exchange contracts The effective portion of the cumulative net change in the fair value of derivative financial instruments designated as a cash flow hedge is included in the hedge reserve. The periods in which the related cash flows are expected to occur are summarised below: Less than one year Total 31 March Contracts to hedge Future capital expenditure payments Future inventory payments Total net loss (net of tax) included within hedge reserve Tax on cash flow hedge Total loss included with hedge reserve

90 for the 12 months ended 31 March 23. DerIvaTIve financial InSTruMenTS continued hedge accounting 88 as at 31 March Change in value of Change in Change in the hedging value if the the instrument hedge item value of nominal used for used for the hedging hedge amount Carrying calculating calculating instrument ineffectiveof hedging amount hedge hedge recognised in ness instrument of the ineffective- ineffective- other com- recognised and hedge hedging ness for ness for prehensive in profit item hedge instrument * income *** or loss ** r 000 rates r 000 r 000 r 000 r 000 r 000 Cash flow hedges Capital expenditure Zar/eur 730 (730) 646 (646) (84) (up to one year) 17,46 19,34 Inventory Zar/eur 99 (99) 71 (71) (28) (up to three months) 17,40 Inventory Zar/uSD 563 (563) 306 (306) (257) (up to five months) 16,84 17,37 * Hedging instruments are located with the derivative financial instruments caption on the statement of financial position. ** Hedge ineffectiveness is recognised in the other operating income (net foreign exchange loss/gain - note 5) caption in the income statement. *** Including deferred tax effect. Carrying amount of the hedged item equals the nominal value of the hedging instrument. Call and put option Grohe Dawn watertech The Watertech transaction included a call option in favour of Grohe to acquire an additional 24,1% indirect shareholding in the Watertech companies from DAWN after a ten-year period and, if such option is exercised by Grohe, or if Grohe s shareholding has otherwise increased to 75,1%, the option for DAWN to put its remaining 24,9% indirect interest in the Watertech companies to Grohe. Put option of R34,4 million and a call option of R25,4 million were recognised at their fair values. A 50%/50% probability was assumed and the consideration in future will be determined as an earnings multiple. The Monte Carlo valuation method was used and the assumptions are set out below. Inputs and assumptions 31 March 31 March Materiality 2015 Spot equity (100% holding) (R 000) Low Spot EBITDA (100% holding) (R 000) Low Spot value of P/EBITDA (%) Low 8,2 9,0 Spot DAWN shareholding (%) High 49,0 49,0 Spot Acqui Co shareholding (%) High 51,0 51,0 Control premium (%) Medium 15,0 15,0 Case 2 probability High unspecified unspecified Long-term mean: P/EBITDA High 9,0 9,0 Reversion factor (%) High 40,0 40,0 Equity volatility (%) Medium 35,0 35,0 Probability: Growth in EBITDA per annum (%) Implied 40,0 60,0 Probability: Decline in EBITDA per annum (%) Implied 40,0 60,0 Risk-free rate Low BESA Swap Curve BESA Swap Curve Dividend yield (%) Low 0,0 0,0 Debt in cash High Section 5.10 Section 5.10

91 for the 12 months ended 31 March 23. DerIvaTIve financial InSTruMenTS continued written put Swan Plastics A written put relating to Swan Plastics Proprietary Limited (Swan) had to be accounted for. In August 2013, a subsidiary of DAWN gave the remaining 49% shareholders in Swan the right to put their shares at a 5 price earnings ratio based on the average of the prior two years earnings. After six years there will be a deemed offer and a deemed acceptance of the remaining 49%. This written put was not disclosed to the board. At inception the valuation is accounted for in retained earnings as part of equity and the profit and loss impact is accounted for as a finance expense and an employment expense. The written put is disclosed in derivatives and an employment liability in trade and other payables non-current (note 30). Refer to restatement, reclassification and consistency of presentation (note 44). GrOuP COMPanY 24. DeferreD PrOfIT Restated 31 March 31 March 31 March 31 March r 000 R 000 r 000 R 000 The analysis of deferred profit is as follows: Balance at the beginning of the year * Deferred profit released (5 327) (3 862)* Acquisition through held-for-sale investment balance at the end of the period Deferred profit is reflected on the statement of financial position as follows: Deferred profit non-current portion * Deferred profit current portion * Deferred profit total * For restatement detail see note 44. The deferred profit consists of the sale and operating lease-back of the Germiston property during 2009 and the Pietermaritzburg property during The deferred profit is released to profit and loss on a straight-line basis over management s estimate of the remaining lease term. Germiston property The full lease period including all renewals is twenty years. It is the intention of the group to occupy the property for a period of fifteen years and the remaining balance will be amortised over a remaining period of seven years. Pietermaritzburg property The initial lease period is for ten years and the group has the option to renew the lease for a further five years. The intention of the group is to occupy the property for ten years after which the change in circumstances and requirements of the group will be reconsidered. As part of the Grohe DAWN Watertech transaction, the lease was ceded by Libra to Wholesale Housing Supplies Proprietary Limited. 89

92 for the 12 months ended 31 March DeferreD Tax net deferred tax asset Net deferred tax is calculated on all temporary differences under the liability method using a South African statutory rate of 28% (2015: 28%). GrOuP COMPanY Restated 31 March 31 March 31 March 31 March r 000 R 000 r 000 R 000 The following amounts are shown in the consolidated statement of financial position (aggregated based on subsidiary companies): The deferred tax assets and deferred tax liabilities are reflected on the statement of financial position as follows: Total deferred tax assets * Total deferred tax liabilities (22 185) (17 969) (2 548) (737) net deferred tax assets (2 548) (737) The gross movement on the deferred tax account is as follows: Balance at the beginning of the year * (737) Acquisition of subsidiary (330) Disposal of subsidiary Income statement charge temporary differences (6 179) * (1 811) (737) Charged directly to equity 4 12 Prior year adjustments (1 496) Deferred tax impact in associates and joint ventures (1 954) Foreign exchange movement on conversion (125) (155) Income statement charge change in tax rate (389) (24) balance at the end of the year (2 548) (737) * For restatement detail see note 44. The group did not recognise deferred tax assets of R76,7 million (2015: R40,2 million) in respect of cumulative losses amounting to R292,6 million (2015: R141,3 million) which can be carried forward against future taxable income. Movement in deferred tax assets and liabilities The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows: Deferred tax liabilities Intangible Capital assets and allowances other Total GrOuP r 000 r 000 r 000 at 1 July 2014 (24 025) (24 091) (48 116) (Debited)/credited to the income statement (5 666) Change in tax rate Exchange differences (75) (90) (165) Acquisition of businesses (479) (4 411) (4 890) at 1 april 2015 (30 142) (21 028) (51 170) (Debited)/credited to the income statement Change in tax rate (389) (389) Exchange differences (70) (70) Acquisition of businesses (330) (330) Derecognition of joint venture (1 954) (1 954) at 31 March (27 031) (24 892)

93 for the 12 months ended 31 March 25. DeferreD Tax continued Deferred tax assets Deferred profit and GrOuP operating assessed lease losses Provisions liabilities and other Total r 000 r 000 r 000 r 000 at 1 July 2014 (restated) * (Debited)/credited to the income statement Change in tax rate (127) (127) Exchange differences Acquisition of businesses Disposal of subsidiary Charged to equity at 1 april (Debited)/credited to the income statement (15 744) (181) (19 275) (35 200) Change in tax rate Exchange differences (55) (55) Acquisition of businesses Disposal of subsidiary Charged to equity 4 4 at 31 March * For restatement detail see note 44. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current assets against current tax liabilities and when the deferred taxes relate to the same fiscal authority. recognition of deferred tax assets The group discloses a deferred tax asset on the basis where: the utilisation of the deferred tax asset is dependent on future taxable profits in excess of the profits arising from the reversal of existing taxable temporary differences and that such deferred tax assets are expected to be utilised within a period not exceeding three years; and the entity has suffered a loss in either the current or preceding period in the tax jurisdiction to which the deferred tax asset relates. COMPanY Deferred tax is raised relating to a put option which is expected to materialise in future. Deferred tax has been raised at the South African capital gains tax rate. 91

94 for the 12 months ended 31 March GrOuP 31 March 31 March 2015 r 000 R retirement benefit ObLIGaTIOn Certain of the employees of DPI Plastics Proprietary Limited are entitled to medical aid benefits in terms of the DPI group of companies post-employment medical benefit plan. The plan is unfunded. The amounts recognised in the statement of financial position are determined as follows: Present value of unfunded obligations Movement for the year Balance at beginning of year Benefits paid (457) (244) Movement directly through equity (1 009) 43 changes in demographic assumptions (607) (38) changes in financial assumptions (402) 81 Net expense recognised in profit or loss balance at end of year The amounts recognised in the income statement were as follows: Current service cost Interest cost Total included in employee benefits expense and interest Increase Decrease r 000 r 000 The effects of a 1% movement in the assumed healthcare cost inflation rate were as follows: Effect on the defined benefit obligation The effects of a 1% movement in the assumed discount rate were as follows: Effect on the defined benefit obligation The latest actuarial valuation of the post-employment medical benefit plan was carried out on 31 March. The group performs a valuation at least every three years. The expected contributions for the 2017 financial year are R0,46 million. GrOuP 31 March 31 March 2015 % % The principal assumptions used in the valuation were as follows: Discount rates used 10,06 8,55 Healthcare cost inflation 8,50 8,50 Continuation of membership at retirement 100,00 100,00 Consumer price index inflation 7,47 6,06 Average retirement age 65 years 65 years Mortality Various assumptions regarding future mortality experience were made. These are based on PA (90) ultimate tables for interest of mortality after retirement and SA (light) ultimate tables for rates of mortality before retirement.

95 for the 12 months ended 31 March 27. retirement funds (defined contribution funds) The policy of the group is to provide retirement benefits to its employees. The group has been participating in various Provident Funds. The majority of contributions are made to South African funds namely: The Sanlam Provident Fund (from November 2011), The Metal Industries Provident Fund and The CIN Provident Fund. These funds are classified as defined contribution funds. The contributions paid by the group to fund obligations for the payment of retirement benefits are charged against the income statement as and when incurred. The group contributed R44,0 million to the various funds (2015: R30,1 million) for the year under review. Of these contributions, R42,1 million (2015: R28,6 million) was contributed to provident funds in South Africa and R1,9 million (2015: R1,5 million) was contributed to provident funds outside of South Africa. additional information relating to provident fund contributions made to provident funds in South africa All the funds are in a sound financial position at their latest financial year-end. A total of employees (2015: employees) are members of the above South African funds. Below are the relevant funds as well as their latest financial status: funding Funding number of Number of 2015 employees employees % % 2015 The Sanlam Provident Fund 100,0 100, The Metal Industries Provident Fund 100,0 100, The CIN Provident Fund 100,0 100, A total of 136 employees (2015: 166 employees) are members of foreign funds. 28. OPeraTInG LeaSe LIabILITIeS and COMMITMenTS GrOuP 31 March 31 March 2015 r 000 R 000 Capital commitments Capital expenditure contracted for at the reporting date but not yet incurred and recognised in the financial statements is as follows: Motor vehicles Intangible assets software Total capital commitments It is intended to finance capital expenditure from working capital generated within the group and available finance facilities. Operating lease commitments The group leases various premises, equipment and plant and machinery under non-cancellable operating lease agreements. The leases have varying terms and escalation clauses. The lease expenditure charged to the income statement during the year is disclosed in note 4. Leases have varying terms between current and December The leases with determinable escalations are charged to the income statement on a straight-line basis and liabilities are raised for the difference between the lease payment and the charge recognised in the income statement. The liabilities are classified based on the timing of the reversal which will occur between short-term and long-term. 93

96 for the 12 months ended 31 March 28. OPeraTInG LeaSe LIabILITIeS and COMMITMenTS continued GrOuP Restated 31 March 31 March 2015 r 000 R 000 Operating lease liabilities Non-current Current The future aggregate minimum lease payments under non-cancellable operating leases are as follows: No later than one year Later than one year and not later than five years Later than five years COnTInGenCIeS The group has contingent liabilities in respect of bank and other guarantees and other matters arising in the ordinary course of business. It is not anticipated that any material liabilities will arise from the contingent liabilities. GrOuP COMPanY 31 March 31 March 31 March 31 March r 000 R 000 r 000 R 000 Bank guarantees issued Suretyships March The position as per the prior year has not changed. 31 March The Competition Commission of South Africa referred a complaint to the Competition Commission Tribunal regarding allegations of market allocation between DPI Plastics Proprietary Limited and Sangio Pipe Proprietary Limited. Based on legal advice, the matter will be defended and the group expects that the matter will be favourably concluded. 94

97 for the 12 months ended 31 March GrOuP COMPanY Restated 31 March 31 March 31 March 31 March r 000 R 000 r 000 R TraDe and OTher PaYabLeS Trade payables Accrued expenses and other payables * Leave accrual Discounts payable Onerous lease contracts Total trade and other payables Included in: Non-current assets Current assets * For restatement detail see note 44. Trade and other payables are unsecured and are payable within a period of twelve months additional disclosure relating to onerous lease contracts GrOuP 31 March 31 March 2015 r 000 R 000 Balance at the beginning of the year Provisions made during the year balance at the end of the year The onerous lease contracts provision relates to two premises, located in Pietermaritzburg and Centurion, which were raised against operating lease expenses. The Pietermaritzburg lease, which ends on 31 March 2020, is included in the Solutions segment. DAWN took over the lease as part of the Grohe transaction that occurred in the previous financial year. The lease on this property is non-cancellable and is currently being partly sub-let until 29 February Only the unavoidable costs have been provided for. The Centurion lease, which ends on 1 May 2018, is included in the infrastructure segment. The IPS business was moved from the Centurion premises into the Incledon premises during the current financial year due to the businesses merging. The property is currently vacant and the lease is non-cancellable. No sub-lease has been negotiated. The provision is expected to be utilised over the remaining lease periods and it has been discounted. 95

98 for the 12 months ended 31 March 30. TraDe and OTher PaYabLeS continued The carrying amounts of trade and other payables approximate their fair value. GrOuP COMPanY Restated 31 March 31 March 31 March 31 March r 000 R 000 r 000 R 000 The carrying amounts of the group s trade and other payables are denominated in the following currencies (all balances are disclosed in South african rand): South African Rand Other currencies The carrying amounts of the group s trade and other payables which are not financial instruments are denominated in South african rand and consist of: Accrued expenses and other payables * Leave accrual Discounts payable Onerous lease contracts Total trade and other payables * For restatement detail see note

99 for the 12 months ended 31 March CASH FLOW STATEMENTS 31. CaSh GeneraTeD from OPeraTIOnS (including discontinued operations for the period ended 31 October 2014) GrOuP COMPanY Restated 12 months 9 months 12 months 9 months 31 March 31 March 31 March 31 March r 000 R 000 r 000 R 000 Profit before taxation ( ) *# ( ) (12 242) Continuing operations ( ) *# ( ) (12 242) Discontinued operations Adjustments for: ( ) *# Depreciation Amortisation of government grants (39) (40) Amortisation Impairment of property, plant and equipment Impairment of intangible assets Impairment of loan receivables Net profit on disposal of property, plant and equipment (1 623) (1 220) Net share-based payment charge # Deferred profit (5 327) (3 995)* Finance income (3 460) (12 533) (50 694) (61 514) Finance expense * Share of losses/(profit) of associates (10 877) Share of profit of associate from disposal group (1 214) Other employee benefit charges (4 744) Operating lease liabilities * Foreign exchange losses on operating activities Fair value movement of derivative call and put option Grohe DAWN Watertech (5 000) (3 950) (5 000) (3 950) Contingencies released Write-off of acquisition vendor Pro-Max (8 359) Post-employment benefit obligation Net gain on derecognition of previously held interest Grohe DAWN Watertech ( ) Net (gain)/loss on derecognition of previously held interest Wilhelm Import Network (2 807) Net gain on derecognition of investment in Africa Saffer Trading (15 045) Net loss on derecognition of investment in Saffer Union (West Africa) Limited (SUWA) Impairment of investment in subsidiary Wholesale Housing Supplies Proprietary Limited Impairment of other assets Wilhelm Import Network Impairment of investments in associates and joint ventures Derivative movements (204) Changes in working capital: ( ) (2 273) Decrease/(increase) in inventories ( ) Decrease/(increase) in trade and other receivables (656) (5) (Decrease)/increase in trade and other payables ( ) ( ) (1 617) Cash generated from/(utilised in) operations ( ) (4 755) # For reclassification detail see note 44. * For restatement detail see note

100 for the 12 months ended 31 March GrOuP COMPanY 31 March 31 March 31 March 31 March r 000 R 000 r 000 R reconciliation Of InCOMe Tax PaID DurInG The Year Income tax liability/(asset) at beginning of year (4) continuing operations (5 116) (4) disposal group Current tax for the year recognised in profit or loss continuing operations Current tax for the year recognised in profit or loss disposal group Derecognition of subsidiary (24 811) Business combinations Disposal of subsidiary Interest and other movements (203) (116) Tax relief on equity settled instruments Income tax (liability)/asset at the end of the year continuing operations (1 428) (8 583) (3 248) Income tax paid during the year Income tax was transferred to equity due to the tax impact of the difference between cash and equity settled share schemes additions TO PrOPerTY, PLanT and equipment Land and buildings Plant and machinery Furniture and equipment Motor vehicles Additions to property, plant and equipment continuing operations (note 11) Additions to property, pant and equipment disposal group Total additions Non-cash additions financed by instalment sale and finance leases continuing operations (46 046) (46 576) Non-cash additions financed by instalment sale and finance leases disposal group (7 238) Government grants received (8 291) Total property, plant and equipment additions

101 for the 12 months ended 31 March GrOuP COMPanY 31 March 31 March 31 March 31 March r 000 R 000 r 000 R PrOCeeDS from DISPOSaL Of PrOPerTY, PLanT and equipment Net book amount of assets disposed of continuing operations disposal group Net profit on disposal of plant and equipment continuing operations disposal group 169 Total proceeds from sale of property, plant and equipment additions TO and DeveLOPMenT Of InTanGIbLe assets Software continuing operations additions continuing operations IT assets transferred (48 512) disposal group Government grants received (21 568) Total intangible additions

102 for the 12 months ended 31 March 36. business COMbInaTIOnS 31 March boutique baths Proprietary Limited A 76% share was acquired in Boutique Baths Proprietary Limited (Boutique Baths) for a consideration of R7 million. Boutique Baths specialises in the manufacturing and distribution of unique, luxury baths. The effective date of the transaction was 1 April Boutique Baths contributed operating profit of R0,7 million and revenue of R11,8 million since the acquisition date. The amount of net assets acquired amounted to R5,6 million and non-controlling interests of R1,9 million was recognised. Goodwill recognised on this acquisition amounts to R3,3 million. Intangible assets have been allocated in terms of IFRS 3(R). Non-controlling interest has been calculated based on the proportional share in net assets. The goodwill is not expected to be deducted for income tax purposes. The fair value of assets acquired, liabilities assumed, intangibles assets and the non-controlling interest at the acquisition date are set out below. boutique baths Proprietary Limited Consideration at acquisition date: r 000 Cash Total purchase consideration recognised amounts of identifiable fair assets acquired and liabilities value assumed: r 000 Property, plant and equipment Customer relationships Inventory Trade and other receivables 691 Cash and cash equivalents 3 assets Trade and other payables Deferred tax liabilities Provisions and accruals Liabilities (1 450) (330) (316) (2 096) Total identifiable net assets Less: Non-controlling interest (1 924) Goodwill Purchase consideration Cash flow from acquisitions Total purchase consideration Less: Cash and cash equivalents acquired (3) Total cash outflow from acquisitions 7 003

103 for the 12 months ended 31 March 36. business COMbInaTIOnS continued 31 March 2015 Pro-Max group (Pro-Max) A 60% share was acquired in Pro-Max (Pro-Max Welding Consumables Proprietary Limited and Weld-D Proprietary Limited) for a provisional cash consideration of R8,4 million. The cash consideration to be paid was dependent on Pro-Max meeting certain targets as set out in the sale of shares agreement between the group and Pro-Max. Pro-Max did not achieve the targets and the acquisition vendor of R8,4 million was reversed through profit and loss. Pro-Max specialises in the manufacturing and distribution of welding equipment and consumables. The effective date of the transaction was 1 July Pro-Max contributed operating profit of R3,6 million and revenue of R125,9 million since the acquisition date. The amount of net liabilities acquired amounted to R6,9 million and non-controlling interests of R0,9 million was recognised. The total fair value of identified intangible assets is R9,1 million. Goodwill recognised on this acquisition amounts to R9,6 million. The total goodwill amount, trademarks to the value of R4,5 million and customer relationships of R3,5 million were impaired as at 31 March A further 14,16% was acquired during February 2015 for a cash consideration of R2,5 million. This was accounted for as a transaction with non-controlling interest (note 21) and charged to the changes in ownership reserve. The R2,5 million is payable in full by 1 September hamilton s brushware Sa Proprietary Limited (hamilton s) On 1 December 2014 the group acquired a 69% share in Hamilton s Brushware SA Proprietary Limited for a cash consideration of R10 million. Hamilton s specialises in the manufacturing and retail distribution of brushware. Hamilton s contributed operating profit of R0,97 million and revenue of R18,4 million since the acquisition date. If the acquisition had occurred on 1 July 2014, group revenue would have been R28,1 million more, and operating profit for the period would have increased by R1,4 million. The amount of net assets acquired amounted to R0,9 million and non-controlling interests of R2,3 million was recognised. Total fair value of intangibles recognised are R6,6 million, comprising customer relationships and tradenames. The total goodwill attributed to this transaction amounts to R2,1 million. apex valves (South africa) Proprietary Limited (apex valves) An additional 39,53% shareholding was acquired in Apex Valves (South Africa) Proprietary Limited (Apex Valves) on 30 July 2014 in addition to the 60,47% previously owned. This resulted in the group obtaining 100% control over Apex Valves. A cash consideration of R6 million was paid on 31 October africa Saffer Trading Proprietary Limited (ast) The group acquired an additional 39% shareholding in AST as at 31 October 2014 for a cash consideration of R17,7 million. The 51% interest disclosed as an investment in joint venture was derecognised. Subsequently, AST was rerecognised as a subsidiary. The group realised a net gain of R15,0 million on this transaction, consisting of a R5,0 million loss on derecognition of the joint venture and a R20,0 million gain on rerecognition as a subsidiary. The total goodwill attributed to this transaction amounts to R29,5 million and was impaired. The AST group contributed an operating loss of R14,8 million and revenue of R61,6 million since the acquisition date. If the acquisition had occurred on 1 July 2014, group revenue would have been R62,4 million more, and operating profit for the period would have decreased by R1,0 million. IPS & Distribution Proprietary Limited (IPS) An additional 51% was purchased in IPS as at 1 January 2015 for a cash consideration of R51. The 49% disclosed as an investment in associate was derecognised. Subsequently, IPS was rerecognised as a 100% owned subsidiary. The total goodwill attributed to this transaction amounts to R2,3 million. IPS contributed an operating loss of R2,7 million and revenue of R30,8 million since the acquisition date. Saffer union (west africa) Limited (Suwa) The group acquired an additional 50% shareholding in SUWA as at 31 March 2015 for a cash consideration of R5,2 million. This resulted in the group obtaining 100% control over SUWA and recognised it as a subsidiary. SUWA is part of the AST group. If the acquisition occurred on 1 July 2014, group revenue would have been R5,5 million more and operating profit for the period would have decreased by R21,8 million. The amount of net assets acquired amounted to R1 million. No identifiable intangibles were recognised. Total goodwill attributed to this transaction amounts to R4,3 million and was subsequently impaired. 101

104 for the 12 months ended 31 March 36. business COMbInaTIOnS continued The fair value of assets acquired, liabilities assumed, intangibles assets and the non-controlling interest at the acquisition date are set out below. africa Saffer hamilton s Saffer union IPS & brushware Sa Trading (west Distribution Pro-Max Proprietary Proprietary africa) Proprietary group Limited Limited Limited Limited Total Consideration at acquisition date: r 000 r 000 r 000 r 000 r 000 r 000 Cash Fair value of previously held interest Loan amount acquired as part of acquisition (4 521) (4 521) Contingent consideration (acquisition vendor) Total purchase consideration recognised amounts of identifiable fair fair fair fair fair fair assets acquired and liabilities value value value value value value assumed: r 000 r 000 r 000 r 000 r 000 r 000 Property, plant and equipment Trademarks Customer relationships Investments in joint ventures equity accounted Deferred taxation Inventory Trade and other receivables Cash and cash equivalents assets Borrowings (3 780) (14 337) (35 630) (20 711) (74 458) Trade and other payables (50 730) (15 428) (58 786) (1 924) (32 179) ( ) Current tax liabilities (3 442) (591) (2 981) (7 014) Deferred tax liabilities (2 552) (1 859) (494) (4 905) Bank overdraft (22 514) (4 058) (26 572) Provisions and accruals (1 081) (912) (17 833) (1 500) (1 139) (22 465) Liabilities (84 099) (33 127) ( ) (3 424) (54 029) ( ) Total identifiable net assets (383) (2 250) Less: Non-controlling interest (867) (2 351) (727) Goodwill Purchase consideration Cash flow from acquisitions Total purchase consideration Less: Cash and cash equivalents acquired (4 845) (446) (447) (5 986) Less: Loan amount acquired as part of acquisition Less: Fair value of previously held interest (20 080) (20 080) Less: Contingent consideration (8 359) (8 359) Total cash outflow/(inflow) from acquisitions (5 986)

105 for the 12 months ended 31 March 37. net (LOSS)/GaIn On DereCOGnITIOn Of SubSIDIarIeS (LOSS Of COnTrOL) 31 March The group realised a net loss of R4,6 million with the derecognition of Wilhelm Import Network Proprietary Limited (WiiN) and Saffer Union (West Africa) Limited (SUWA). Wilhelm Import Network was classified as held-for-sale in the prior year. WiiN was disposed of in September 2015 and accordingly losses incurred during were derecognised, resulting in a gain on derecognition. SUWA was disposed of in January and derecognised, resulting in a loss on derecognition. 31 March 2015 The group realised a net gain of R637,4 million (2014: R14,8 million) with the derecognition of the Grohe DAWN Watertech group, Wilhelm Import Network Proprietary Limited and Africa Saffer Trading Proprietary Limited. GrOuP 12 months 9 months 31 March 31 March 2015 r 000 R 000 Loan repayment Proceeds from transaction Proceeds on derecognition of investment in Grohe DAWN Watertech Consideration for new investment in Grohe DAWN Watertech and Distribution and Warehousing Network Africa Proprietary Limited (formerly Africa Saffer Trading Proprietary Limited) Carrying amount of net asset value (4 592) ( ) (Loss)/gain on derecognition of subsidiaries (4 592) Net loss on derecognition of investment in Saffer Union (West Africa) Limited (SUWA) (7 399) Net gain/(loss) on derecognition of investment in Wilhelm Import Network Proprietary Limited (7 091) Net gain on derecognition of investment in Distribution and Warehousing Network Africa Proprietary Limited (formerly Africa Saffer Trading Proprietary Limited) Net gain of derecognition of investment in Grohe DAWN Watertech financial assets by CaTeGOrY The accounting policies for financial instruments have been applied to the line items below: assets at Loans fair value and through recei- profit or vables loss Total r 000 r 000 r 000 GrOuP 31 March Trade and other receivables Cash and cash equivalents Derivative financial instruments Total GrOuP 31 March 2015 (Restated) Trade and other receivables Cash and cash equivalents Derivative financial instruments Total Excluding pre-payments. 2 Derivative financial instruments (note 23). 103

106 for the 12 months ended 31 March 39. financial LIabILITIeS by CaTeGOrY The accounting policies for financial instruments have been applied to the line items below: Liabilities at Other fair value financial through liabilities profit and at amorloss tised cost Total r 000 r 000 r 000 GrOuP 31 March Borrowings Trade and other payables Bank overdrafts and call loans Derivate financial instruments Total GrOuP 31 March 2015 (Restated) Borrowings Trade and other payables * * Bank overdrafts and call loans Derivative financial instrument Total Excluding leave pay. 2 Derivative financial instruments (refer note 23) * For restatement detail see note risk ManaGeMenT financial risk management The group s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk as well as price risk), credit risk and liquidity risk. 104 In 2014 the group adopted a centralised treasury structure which acts as an internal banker for the group with the objective of providing value-add on both a strategic and operational level. This was made possible with the outsourcing of all its treasury activities and obtaining professional treasury expertise on a full time basis. Dawn has implemented: i) liquidity risk management with short-term and long-term cash flow forecasting; ii) implementation of foreign payments factory; iii) centralisation of all financial assets and liabilities, financial risk exposures, recording and report within the group; iv) cash sweeping and pooling; v) centralisation and consolidation of all treasury-related activities, processes, systems and information; vi) consolidated monthly strategic and operational reporting; vii) intercompany loan restructuring; and viii) on boarding of new subsidiaries.

107 for the 12 months ended 31 March 40. risk ManaGeMenT continued The focus for the next period includes: i) working capital management; ii) iii) iv) incorporation of all foreign subsidiaries into the centralised treasury and restructuring of loans to foreign subsidiaries; host-to-host connection with the transactional banker for all foreign and treasury related payments; closure of bank accounts with the former transactional bankers; v) review of financial risk management policies and the implementation of an integrated risk management framework within the group; and vi) implementation of a formalised, regular and dynamic risk management process with the objective of optimising the portfolios. The group s objective with financial risk management is to protect the underlying business operations against those financial risks which may influence its income negatively. Accordingly, the group does not assume speculative positions and hedge the exposures and risks expeditiously, where possible. foreign exchange risk The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. Exposures consist primarily of exposures with respect to the US Dollar and Euro as well as exposure to foreign exchange due to operations in African countries including Angola, Botswana, Democratic Republic of the Congo, Mauritius, Mozambique, Tanzania and Zambia. To manage the group s foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, entities in the group use forward foreign exchange contracts, where available. Foreign exchange risk arises when future commercial transactions and recognised assets or liabilities are denominated in a currency that is not the entity s functional currency. Forward foreign exchange contracts are entered into to manage exposure to fluctuations in foreign currency exchange rates on specific transactions. In general, the group s policy is to enter into forward foreign exchange contracts to cover net foreign currency exposure. Forward foreign exchange contracts are used to hedge the foreign exchange risk in cash flows for unrecognised firm commitments relating to purchases of property, plant and equipment or inventory, with lead times of one month or greater, denominated in a foreign currency. Purchases of property, plant and equipment dominated in a foreign currency may be hedged out to one year using forward foreign exchange contracts. For the year ended 31 March, derivative financial instruments included derivatives used to hedge foreign currency, including hedging of future capital expenditure and inventory payments, totalling R1,4 million (net liability) (2015: nil). The group has certain investments in foreign operations which results in exposure to foreign currency translation risk. It is the group s policy to source borrowing facilities in the respective countries which are in the name of the respective legal entities, where possible. 105

108 for the 12 months ended 31 March 40. risk ManaGeMenT continued The group s significant exposure to foreign currency risk was as follows: Trade Trade foreign Cash and foreign and and overdrafts cash exchange other other and bank equiva- contracts functional currency receivables payables borrowings lents net sell/buy Total rand exposed to: r 000 r 000 r 000 r 000 r 000 r March Zambian Kwacha (2 225) (1 112) Botswana Pula (2 578) (7 452) 16 (2) (2 566) Mozambican Metical (954) (3 811) Angolan Kwanza 853 (777) (3) Congolese Franc 686 (1 923) (477) 17 (1 697) US Dollar 683 (16 455) (4 852) (7 438) (26 087) Mauritian Rupees 94 (60) (1 067) 4 (1 029) British Pound (4) (4) Euro (2 218) (971) (3 189) Total (27 190) (18 774) (8 415) (10 069) 31 March 2015 Zambian Kwacha (914) (1 536) Mozambican Metical (501) (6 615) Botswana Pula (2 473) (4 274) US Dollar (12 323) (4 017) (50) (9 539) Angolan Kwanza (473) Mauritian Rupees 147 (799) (2 680) 68 (3 264) Nigerian Naira 14 (1 799) 447 (1 338) Congolese Franc (1 128) (341) (1 469) Euro (2 101) 94 (2 007) Total (22 511) (19 463) GrOuP COMPanY 31 March 31 March 31 March 31 March r 000 R 000 r 000 R 000 The group s significant exposure to foreign currency risk was as follows: Sensitivity analysis A 10% weakening of the Rand against the above currencies as at 31 March (2015: 31 March) would have increased/(decreased) equity and post-tax profit by: 106 Zambian Kwacha Mozambican Metical Angolan Kwanza Botswana Pula (185) 364 Mauritian Rupees (74) (235) Congolese Franc (122) (106) Euro (230) (145) US Dollar (1 878) (687) Nigerian Naira (96) Total (725) 1 021

109 for the 12 months ended 31 March 40. risk ManaGeMenT continued This analysis assumes that all other variables, in particular interest rates, remain constant. A 10 percent strengthening of the Rand against the above currencies as at 31 March would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all variables remain constant. The concentration of risk in respect of foreign currencies is considered low. The lack of liquidity experienced in the African countries had a negative effect on the availability of currency for repatriation and repayment of foreign obligations as well as the availability of hedging instruments in the affected foreign countries. Alternative hedging mechanisms were deployed to assist in the foreign exchange management. Cash flow and fair value interest rate risk The group s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the group to cash flow interest rate risk. Borrowings incurred at fixed rates expose the group to fair value interest rate risk. The group s borrowings are denominated mainly in Rand and at variable interest rates. The effective interest rates on bank overdrafts are disclosed in note 22. Interest rates on other borrowings are disclosed in note 22. Inter-company financial assistance is provided or similar terms and conditions and in specific the interest rates, to ensure (as provided in the market place) no interest rate mismatch is created. The table below analyses the group s sensitivity to interest rate movements with respect to variable rates. The group does not have significant exposure to fixed rate instruments. GrOuP Restated 31 March 31 March 2015 r 000 R 000 at 31 March Total borrowings Less: Fixed rate borrowings (18 245) (16 796) Less: Non-interest-bearing borrowings (9 028) (17 002)* Less: Cash and cash equivalents (80 006) ( ) net variable rate debt net variable rate exposure Interest rate change (2%) negative impact on earnings (after tax) * For restatement detail see note 44. For further details on borrowing exposures and related maturity dates refer to note 22. Price risk The group is not exposed to equity securities price risk as the group does not have investments classified on the consolidated statement of financial position either as available-for-sale or at fair value through profit and loss. Credit risk management i) Credit risk within the group towards financial institutions and service providers arises from cash and cash equivalents, derivative instruments and deposits. The credit risk policy for financial institutions and service providers has the objective to minimise losses that could result from counterparty failure. All such counterparties are assessed on an annual basis to ensure credit worthiness and the evaluations will be based on the financial strength of the counterparty as published by a recognised rating agency. Credit limits are set for individual counterparty legal entities and not on a counterparty group basis. Transactions may be conducted with both local and international counter parties. No investment will be made with any counterparty with a short-term national rating of lower than: P-1 (Moody s), A-1 (S&P), F1+ (Fitch). The exposure to financial institutions and service providers are monitored on an ongoing basis and reported formally on a monthly basis to the executive committee. 107

110 for the 12 months ended 31 March 40. risk ManaGeMenT continued ii) iii) Credit risk also arises within the group from outstanding receivables. The granting of credit is controlled by a formal application process. If there is no independent rating, then risk control and the company executive committee assess 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 terms of the approved delegation of authority approved by the board. Ongoing credit evaluations are performed on the financial position of customers, taking into account its financial position, past experience and other factors. Trade and other receivables are covered by credit insurance according to group policy. When no insurance is available, a mandate is approved within the delegation of authority framework. Potential concentration of credit risk consists mainly within trade receivables. Trade receivables are presented net of the provision for doubtful debt. Credit risk also arises within the group towards subsidiaries, joint ventures, related parties and associates. The intercompany loans are being restructured to support the DAWN treasury position as the internal banker for the group. Accordingly, the loans will vary from being short-term to five-year term debt with market-related interest rates, terms and conditions. Loans to associates and related parties are provided at market-related interest rates based on the credit assessment of the entity and where required additional security such as general notarial bonds, cessions and personal suretyship by shareholders are obtained. Liquidity and solvency tests are assessed as part of the loan approval process and minimum financial covenant criteria are required as part of on-going reporting and assessment. Short-term exposures have notional credit limits imposed which is monitored on an ongoing basis. The exposure to subsidiaries, joint ventures, associates and related parties are monitored on an ongoing basis and reported formally on a monthly basis to the executive committee. Credit quality of trade receivables can be analysed as follows: GrOuP 31 March 31 March 2015 r 000 R 000 Group Group Group Group Total Group 1 new customers (less than six months). Group 2 existing customers (more than six months) with no defaults (no bad debt write-offs/hand-overs) in the past. Group 3 existing customers (more than six months) with some defaults in the past. Group 4 customers with defaults, no trading and handed over. This category of trade receivables relates mainly to contractors and subcontractors exposed to statal and parastatal bodies. Appropriate security policies are in place to limit risks in this category. The following cash balances were held with major banks of high quality located in South Africa (note 17) Management does not expect any losses from non-performance by these counterparties. 108

111 for the 12 months ended 31 March 40. risk ManaGeMenT continued national Credit ratings of banks where balances are held are: Short-term national rating Standard & Poor Barclays Africa Group a-2 Absa Bank Limited a-1 FirstRand Limited a-1 FirstRand Bank Limited a-2 31 March 31 March 2015 Moody s Absa Bank Limited P-1 P-2 FirstRand Bank Limited P-1 P-2 The Standard Bank of South Africa Limited P-1 P-2 Fitch Barclays Africa Group f1+ Absa Bank Limited f1+ F1+ Standard Bank Group Limited f1+ The Standard Bank of South Africa Limited f1+ F1+ First National Bank (a division of FirstRand Bank Limited) F1+ Liquidity risk management Prudent liquidity management implies maintaining sufficient cash and availability of funding through an adequate amount of committed credit facilities and funding sources. The group manages liquidity risk through the compilation and monitoring of cash flow forecasts, as well as ensuring that adequate borrowing facilities are maintained. Borrowing powers are disclosed under note 22. Repayments of term borrowings are structured to match the expected cash flows from the operations to which they relate, where possible. The group utilises the credit facilities of various financial institutions and has been able to operate within these facilities. There is currently a concentration of liquidity risk as a result of the restructured debt position and transactional banking with the same financial institution. This is being monitored and will be amended as soon as the group is in a position to do so. The group established facilities for specialised asset-based finance with financial institutions to reduce concentration risk. The funding of growth in the group for working capital requirements will continue to use credit facilities from financial institutions as well as other feasible corporate market funding mechanisms for working capital. The funding of growth in the group of capital nature will utilise suitable funding sources available in the corporate market and from financial institutions. 109

112 for the 12 months ended 31 March 40. risk ManaGeMenT continued The table below analyses the group s financial liabilities that will be expected to be settled on a net basis into relevant maturity groupings based on the remaining period at reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. at 31 March Gross Less between Carrying contractual than two and Over amount cash flows one year five years five years r 000 r 000 r 000 r 000 r 000 Overdraft Borrowings (excluding overdraft) Trade and other payables ~ Derivative financial instruments Total At 31 March 2015 (R estated) Overdraft Borrowings (excluding overdraft) Trade and other payables ~ Derivative financial instruments Total ~ Excludes post-employment medical aid, deferred profit and the accrual for leave. An analysis of derivative financial instruments which will be settled on a gross basis follows in note 23. fair value estimation The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates to settle the contracts at the statement of financial position date. The nominal 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. Capital risk management The group s objectives when managing capital are to safeguard the group s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The capital structure of the group consists of debt, which includes the borrowings (excluding derivative financial liabilities) disclosed in note 22, and equity as disclosed in the statement of financial position. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The group monitors capital structure on the basis of the gearing ratio and balanced with monitoring debt levels against cash generation of the group. 110

113 for the 12 months ended 31 March GrOuP Restated * 31 March 31 March 2015 r 000 R risk ManaGeMenT continued It is DAWN s intention to maintain the gearing ratio below 2,5 times projected EBITDA. The gearing ratio at 31 March (2015: 31 March) was as follows: Total borrowings Less: Cash and cash equivalents (80 006) ( ) Less: Loans receivable (41 300) ( ) Net debt Total equity Net debt/equity ratio (%) 29,5 8,4 * Refer to note 44 for details regarding restatements, reclassifications and consistency of presentation disclosure. 41. related ParTIeS The group entered into transactions and has balances with related parties as listed below. These include associates, joint ventures and directors. Transactions that are eliminated on consolidation are not included. Transactions with related parties are effected on a commercial basis and related party debts are repayable on a commercial basis. A listing of the group s principal subsidiaries, joint ventures and associates is set out on pages 127 and 128 of the annual financial statements. For transactions with directors refer to note 42 (directors and prescribed officers emoluments). The following transactions were carried out with related parties: GrOuP 12 months 9 months 31 March 31 March 2015 r 000 R 000 a) Sales of goods and services Joint ventures DPI group Distribution and Warehousing Network Africa Proprietary Limited group Associates Incledon Proprietary Limited 99 Heunis Steel Proprietary Limited Grohe DAWN Watertech group Total sales of goods and services b) Purchases of goods Associates Heunis Steel Proprietary Limited Grohe DAWN Watertech group Total purchases of goods

114 for the 12 months ended 31 March GrOuP 12 months 9 months 31 March 31 March 2015 r 000 R related ParTIeS continued c) Commission paid Braveheart Financial Services Proprietary Limited (group s insurance broker) Total commission paid d) Commission received Distribution and Warehousing Network Africa Proprietary Limited received from Grohe DAWN Watertech group Namibia Plastic Converters Proprietary Limited received from Grohe DAWN Watertech group Wholesale Housing Supplies Proprietary Limited commission received from Distribution and Warehousing Network Africa Proprietary Limited Total commission received e) Interest received Joint ventures Distribution and Warehousing Network Africa Proprietary Limited group Associates IPS & Distribution Proprietary Limited Grohe DAWN Watertech group Other Interest received from directors via DAWN Share Trust JAI Ferreira (note 42) RD Roos (note 42) Total interest received (refer note 6) f) Interest paid Associates Grohe DAWN Watertech group Other Interest paid to shareholders Total interest paid g) Management fees received Joint ventures Distribution and Warehousing Network Africa Proprietary Limited group Associates Grohe DAWN Watertech group Total management fees (refer note 5)

115 for the 12 months ended 31 March GrOuP 12 months 9 months 31 March 31 March 2015 r 000 R related ParTIeS continued h) Dividends received Joint Ventures DPI group 567 Total dividends received (refer note 14) 567 i) Discounts received Associates Grohe DAWN Watertech group Fibrex S.A.R.L. 75 Total discounts received Year-end balances arising from sales/purchases of goods/services j) Trade and other receivables Joint Ventures Distribution and Warehousing Network Africa Proprietary Limited group DPI group Associates Heunis Steel Proprietary Limited Fibrex S.A.R.L Grohe DAWN Watertech group College of Production Technology Proprietary Limited Total trade and other receivables

116 for the 12 months ended 31 March GrOuP 12 months 9 months 31 March 31 March 2015 r 000 R related ParTIeS continued k) Loans to other related parties and non-controlling shareholders Joint ventures Distribution and Warehousing Network Africa Proprietary Limited group DPI group Associates Grohe DAWN Watertech group DPI Rooftiles Proprietary Limited Other Loans to directors via DAWN Share Trust unrestricted share scheme funding: * JAI Ferreira (note 42) RD Roos (note 42) Braveheart Financial Services Proprietary Limited (insurance broker) Total loans to other related parties and non-controlling shareholders * The terms of the trust deed of the DAWN Share Trust (the Trust), as amended by DAWN shareholders on 6 December 2006, stipulate that employees may obtain funding from the Trust to procure unrestricted shares. The terms of these loans are at arm s length and repayable within seven years or when employment terminates. l) Trade and other payables Associates Fibrex S.A.R.L. 45 Grohe DAWN Watertech group Heunis Steel Proprietary Limited Total trade and other payables m) Loans from other related parties, associate and non-controlling shareholders Distribution and Warehousing Network Africa Proprietary Limited group non-controlling shareholders Swan Plastics Proprietary Limited non-controlling shareholders 72 Total loans from other related parties and non-controlling shareholders

117 for the 12 months ended 31 March GrOuP 12 months 9 months 31 March 31 March 2015 r 000 R related ParTIeS continued n) Loans from related parties Loans from directors and key management of the group (and their families): Balance at the beginning of the period Loans received from directors during the period Loan repayments to directors (14 745) (6 191) Interest paid Total loans from related parties Loans from directors and family members are unsecured and have no specific terms of repayment, bearing interest at 8,50% (2015: 7,25%). The loans are payable on demand. As a result, the loans are recorded at their nominal value (note 22). COMPanY 12 months 9 months 31 March 31 March 2015 r 000 R 000 o) Interest received Subsidiaries Associates Total interest received p) Interest paid Subsidiaries Associates Total interest paid r) Loans receivable Loans receivable classified as investments by Distribution and Warehousing Network Limited from Wholesale Housing Supplies Proprietary Limited Loans receivable classified as trade and other receivables by Distribution and Warehousing Network Limited Subsidiaries Associates Total loans receivable

118 for the 12 months ended 31 March COMPanY 12 months 9 months 31 March 31 March 2015 r 000 R related ParTIeS continued s) Loans payable Loans payable classified as borrowings by Distribution and Warehousing Network Limited Subsidiaries Total loans payable t) Directors and prescribed officers emoluments Non executive directors Executive directors Prescribed officers (note 42) u) Directors and prescribed officers shareholding (refer to the Directors report page 12) v) Share Incentive Schemes (equity settled) (note 20) w) Interest in subsidiaries, associates and joint ventures (pages 127 and 128) x) analysis of shareholders (page 129) 116

119 for the 12 months ended 31 March 42. DIreCTOrS and PreSCrIbeD OffICerS emoluments Directors emoluments for the period ended 31 March are outlined as follows: Committees Social, remunera- ethics board audit tion and and member and nomi- Transforfees advisory risk nation mation Total r 000 r 000 r 000 r 000 r 000 r 000 non-executive directors 12 months ended 31 March M Akoojee ¹ LM Alberts DJ Fouché ² RL Hiemstra ³ S Mayet ⁴ DM Mncube VJ Mokoena G Nakos ⁵ March months ended 31 March 2015 M Akoojee OS Arbee ⁶ LM Alberts RL Hiemstra DM Mncube ⁷ VJ Mokoena March ¹ Resigned 11 November ² Appointed 1 November ³ Retired 31 October Appointed 29 May Appointed 12 November Resigned 13 February Appointed 1 May

120 for the 12 months ended 31 March 42. DIreCTOrS and PreSCrIbeD OffICerS emoluments continued executive directors Share options vested retire- cumulament tive gains and Specific realised medical fee 2 over a aid contri- Sub- repay- Other three- Salary bonus bution total ment Total services Total year r 000 r 000 r 000 r 000 r 000 r 000 r 000 r 000 period 12 months ended 31 March JA Beukes JAI Ferreira (2 000) GD Kotzee RD Roos DA Tod (5 000) March (7 000) Prescribed officers CJ Bishop DK Ferguson GR Johnston March executive directors 9 months ended 31 March 2015 JA Beukes JAI Ferreira GD Kotzee RD Roos DA Tod March Prescribed officers CJ Bishop DK Ferguson GR Johnston March Resigned with effect from 29 February. 2 Specific bonuses paid in respect of the executive s contribution to facilitate the Grohe DAWN Watertech transaction, was paid back during the year Bishop Corporate Finance Proprietary Limited (Mr CJ Bishop is a related party) received a fee amounting to R10,1 million for the advisory role played in the Grohe DAWN Watertech transaction. This fee was paid from the proceeds of a share incentive tranche of 1,2 million LTIPs awarded to Mr Bishop and approved by the Remuneration Committee in June 2013.The fee was disclosed to shareholders in the circular for the Grohe DAWN Watertech transaction. Shareholders approved the transaction at the general meeting on 15 September 2014.

121 for the 12 months ended 31 March 42. DIreCTOrS and PreSCrIbeD OffICerS emoluments continued Executive directors and prescribed officers participate in share incentive schemes, designed to recognise the contributions of senior staff to the growth of the company s equity. Within limits imposed by shareholders, rights are allocated to directors and senior staff. The equity-linked compensation benefits for executive directors and prescribed officers are set out below. Refer to note 20 share-based payment reserve. number number Opening of share of share Closing Grant Grant number options options number Type date date of awarded exercised of of share strike valuation share during during share Grant vesting incentive price price options the year the year options date date note scheme^ cents cents executive directors 12 months ended 31 March Ja beukes Jun Jun 2014 SAR Apr Jun LTIP Dec Dec LTIP Dec Dec DBP JaI ferreira Jun Jun 2014 SAR Apr Jun LTIP Dec Dec 1 LTIP Dec Dec LTIP Dec Dec DBP rd roos Jun Jun 2014 SAR Apr Jun LTIP Dec Dec LTIP Dec Dec DBP Da Tod # Jun Jun 2014 SAR Apr Jun LTIP Dec Dec LTIP Dec Dec DBP ^ LTIP: Long-Term Incentive Plans, SAR: Share Appreciation Rights; DBP: Deferred Bonus Plan. 1. As a result of poor earnings, management and the remuneration committee have decided that these tranches will not vest. # Retired 31 May. 119

122 for the 12 months ended 31 March 42. DIreCTOrS and PreSCrIbeD OffICerS emoluments continued number number Opening of share of share Closing Grant Grant number options options number Type date date of awarded exercised of of share strike valuation share during during share Grant vesting incentive price price options the year the year options date date note scheme^ cents cents Prescribed officers DK ferguson Apr Jun LTIP Dec Dec 1 LTIP Dec Dec LTIP Dec Dec DBP Gr Johnston Apr Jun LTIP Dec Dec 1 LTIP Dec Dec LTIP Dec Dec DBP Dec Mar 2018 LTIP ^ LTIP: Long-Term Incentive Plans, SAR: Share Appreciation Rights; DBP: Deferred Bonus Plan. 1. As a result of poor earnings, management and the remuneration committee have decided that these tranches will not vest. A prescribed officer, in terms of the Companies Act no 71 of 2008, as amended, means the holder of an office, within a company. DAWN has identified its prescribed officers as the members of the executive committee and cluster heads. Prescribed officers are designated to be key management personnel in terms of IAS 24. All executive directors are eligible for an annual performance-related bonus payment linked to appropriate group and business sector targets. The structure of the individual annual bonus plans and awards are decided by the group remuneration committee revolving credit facility. Directors and prescribed officers emoluments are paid by various subsidiaries within the group. 43. events after The reporting PerIOD Changes to the board of directors Chief executive officer As announced on SENS on 26 April, Derek Tod has taken a decision to retire as chief executive officer, effective 31 May. He has agreed with the board that he will participate in an organised hand-over to the board and interim chief executive officer, as and when required. Stephen Connelly, who was appointed to the board as independent non-executive director on 1 April, has accepted the role of interim chief executive officer of DAWN, effective 1 June. He will fulfil this role until the board has selected a permanent successor to Derek Tod. He will also assist the DAWN executive committee in the turnaround strategy, which commenced recently. 120 The board will immediately commence with the process of identifying and appointing a permanent successor and will in this process consider both internal and external candidates. Chief financial officer The chief financial officer, Dries Ferreira, resigned from DAWN on 14 July, but agreed to remain in employment until 31 October to ensure a smooth transition. Hanré Bester ((CA (SA), MCom (Tax)), the group financial manager who joined DAWN during 2010, has been appointed as acting financial director until a permanent placement can be made. Risk and compliance officer The risk and compliance officer and executive director, Jan Beukes, resigned from DAWN on 14 July, but agreed to remain in employment until 31 October to ensure a smooth transition. A suitable replacement will be recruited in due course.

123 for the 12 months ended 31 March 43. events after The reporting PerIOD continued borrowings covenants DAWN has breached some of its covenants and accordingly approached Absa for a waiver of the relevant covenant measures. On 28 June Absa consented to the non-compliance (breach) of covenants and waived the event of default. DAWN s current facility ends on 7 October and has been re-negotiated to 7 October The new facility has similar characteristics, but will have a quarterly step-down of R25 million per quarter in respect of the revolving credit facility (RCF) starting 7 October and ending 7 July The pricing has provisionally been indicated and reflects a deteriorated credit position as well as movements in the general yield curve. Disposal Braveheart Financial Services Proprietary Limited a DAWN investment of 30% was sold to the majority shareholder on 30 May for an amount of R1 million. 44. restatement, reclassification and COnSISTenCY Of PreSenTaTIOn restatements (notes 1 TO 3) 1. restatement 1 Operating lease liability (note 28) and deferred profit (note 24) An operating lease liability is required for leases with escalation clauses. An addendum to the existing lease agreement on the Germiston Distribution Centre in 2009 was not disclosed to the board. As a result, the lease operating liability (note 28) and related deferred tax had to be restated based on a minimum 15-year lease period at an escalation of 8% per annum, ending in December To improve disclosure, the operating lease liability has been disclosed as a separate item on the face of the statement of financial position and a description of the liability is included in note 28. Deferred profit relating to the initial sale of the Germiston Distribution Centre had to be restated based on a 15-year amortising profile instead of 10 years as previously reported. This is in line with the operating lease liability. Deferred profit (note 24) and the relating deferred tax (note 25) were restated. The financial impact in the affected periods are as follows: 31 March 30 June r 000 r 000 Statement of changes in equity (3 976) (78 452) 2. restatement 2 written put (note 23) A written put relating to Swan Plastics Proprietary Limited (Swan) had to be accounted for. In August 2013, a subsidiary of DAWN gave the remaining 49% shareholders in Swan the right to put their shares at a 5 price earnings ratio, based on the average of the prior two years earnings. After six years there will be a deemed offer and a deemed acceptance of the remaining 49%. This written put was not disclosed to the board. At inception the valuation is accounted for in retained earnings as part of equity and the profit and loss impact is accounted for as a finance expense and an employment expense. The written put is disclosed in derivatives (note 23) and an employment liability in trade and other payables non-current. The financial impact in the affected periods are as follows: 31 March 30 June r 000 r 000 Statement of changes in equity (2 143) (31 236) 121

124 for the 12 months ended 31 March 44. restatement, reclassification and COnSISTenCY Of PreSenTaTIOn continued 3. restatement 3 acquisition vendor disclosure in share-based payment reserve (note 20) An obligation was raised as a share-based payment obligation in equity to acquire the remaining non-controlling interest shareholding of 18,1% in DAWN Human Resource Solutions Proprietary Limited. The above treatment transferring the liability to equity was incorrect as per paragraph 4 of IFRS 2. DAWN has updated the statement of changes in equity (SOCIE) and share-based payment obligation. This incorrect treatment was highlighted by the JSE proactive monitoring process. The financial impact in the affected periods are as follows: 31 March 30 June r 000 r 000 Statement of changes in equity (3 780) reclassifications (notes 4 TO 8) 4. Grohe put (note 23) During 2015 the Grohe put valuation (note 23) was calculated based on a Black Scholes valuation model. A more appropriate valuation model namely, Monte Carlo valuation method, was used. During the prior year a net put asset was disclosed. To enhance disclosure, the put was disclosed as an asset and the call as a liability in the current year. The valuation was re-performed for the comparative period and a call option disclosed under assets and a put option disclosed under liabilities was recognised. The net amount remained unchanged with no profit and loss impact. 5. Consulting fees and share-based payment disclosure (SOCIe, note 4, 8) Consulting fees should have been disclosed as a share-based payment expense under IFRS 2 for Collin Bishop in respect of services rendered for the Grohe DAWN Watertech transaction. This incorrect treatment was highlighted by the JSE proactive monitoring process. 6. acquisition and delivery of treasury shares (SOCIe) Historically DAWN disclosed the movement in treasury shares between acquisition and delivery of shares and in the SOCIE they were set-off against each other. IAS 1.15 however, requires fair presentation through faithful representation of the effects of transactions, other events and conditions that occurred during a financial period. IAS 1.106(d) specifically requires the SOCIE to reflect a reconciliation separately disclosing the changes between the equity position at the beginning and end of the year. The restatement separates the disclosure in the SOCIE. This incorrect treatment was highlighted by the JSE proactive monitoring process. 7. Treasury shares purchased (cash flow) Treasury shares were historically incorrectly included in investing activities and have been reclassified to financing activities. This incorrect treatment was highlighted by the JSE proactive monitoring process. 8. acquisition of non-controlling interests (cash flow) Acquisition of non-controlling interest was historically incorrectly included in investing activities and has been reclassified to financing activities. This incorrect treatment was highlighted by the JSE proactive monitoring process. 122

125 for the 12 months ended 31 March 44. restatement, reclassification and COnSISTenCY Of PreSenTaTIOn continued COnSISTenCY Of PreSenTaTIOn (note 9) 9. Tax impact in equity (SOCIe) The tax impact in equity relating to treasury shares and share-based payment have been identified separately and aligned with the applicable category instead of a separate line item where it was offset. Capital Gains Tax (CGT) relating to the disposal of treasury shares is accounted for in equity on the basis that at a group level shares are disclosed at cost and delivered at cost. There is therefore no resultant CGT charge at group level. DAWN has disclosed the CGT difference against the share-based payment vesting of options line in SOCIE. The tax impact relating to the difference in tax treatment between group (equity-settled) and company (cash-settled) is accounted for in equity. DAWN has disclosed the equity/cash-settled difference against the share-based payment charge for the period line in SOCIE. This incorrect treatment was highlighted by the JSE proactive monitoring process. OTher MaTTerS The transactions described above in 1 and 2 were initiated and executed at the time by certain executive directors and senior management, respectively. Both transactions were executed without the knowledge and approval of the board. A reportable irregularity has therefore been reported by the external auditors to the Independent Regulatory Board of Auditors with respect to these transactions. The external auditors have also confirmed to the Independent Regulatory Board of Auditors that these irregularities are not continuing. After considering the circumstances of these transactions, as a matter of good governance, the board has instituted the following corrective actions: engaged with external legal counsel to clarify DAWN s legal position with respect to these matters and its relationship with the individuals in question, including DAWN s right of recourse against any relevant individuals; engaged with parties involved in the above matters to ensure the board acts in the best interests of DAWN; accounted for and restated the comparative results in the annual financial statements for these transactions; and the internal audit department launched detailed investigations into these transactions. The board is confident that it has taken and continues to take all the necessary steps to execute its responsibilities in terms of the Companies Act of South Africa and the principles of good governance as contemplated by the King Code on Corporate Governance. IMPaCT On InCOMe STaTeMenT restated reported 31 March 31 March Difference note r 000 r 000 r 000 Operating expenses 1, 2 ( ) ( ) (5 387) Administration and selling expenses 1 ( ) ( ) (5 173) Other operating expenses 2 (46 288) (46 074) (214) Other operating income (349) Operating profit/(loss) before impairments and de-recognition of previously held interest 1, 2 (80 065) (74 329) (5 736) Operating profit/(loss) 1, (5 736) Finance expense 2 (52 194) (50 266) (1 928) Profit/(loss) after net finance costs 1, (7 664) Profit/(loss) before taxation 1, (7 664) Income tax (expense)/income 1, Profit/(loss) from continuing operations 1, (6 118) Profit/(loss) for the period 1, (6 118) Profit attributable to: Owners of the parent 1, (6 118) 123 Profit/(loss) for the period (6 118)

126 for the 12 months ended 31 March 44. restatement, reclassification and COnSISTenCY Of PreSenTaTIOn continued COnSOLIDaTeD and SeParaTe STaTeMenT Of COMPrehenSIve InCOMe restated reported 31 March 31 March Difference note r 000 r 000 r 000 Profit for the year 1, (6 118) Total comprehensive income 1, (6 118) Total comprehensive income attributable to: Owners of the parent 1, (6 118) 1, (6 118) Total comprehensive income attributable to equity shareholders arising from: Continuing operations 1, (6 118) 1, (6 118) IMPaCT On STaTeMenT Of financial POSITIOn restated reported 31 March 31 March Difference note r 000 r 000 r 000 non-current assets Derivative financial instruments Deferred tax assets , Total assets 1, Opening retained earnings , ( ) Opening retained earnings , ( ) Share-based payment reserve (3 780) Share capital and reserves ( ) Total equity ( ) non-current liabilities Derivative financial instruments 2, Deferred profit Operating lease liability Trade and other payables Current liabilities Trade and other payables (15 430) Operating lease liability Borrowings Deferred profit (466) (10 362) Total liabilities Total equity and liabilities

127 for the 12 months ended 31 March 44. restatement, reclassification and COnSISTenCY Of PreSenTaTIOn continued IMPaCT On STaTeMenT Of ChanGeS In equity restated Share- equity based attribu- non- Treasury payment retained table to controlling shares reserve earnings company interest Total note r 000 r 000 r 000 r 000 r 000 r 000 balance at 30 June , Total comprehensive income for the year 1, Profit for the year 1, Continuing operations 1, Total contributions by and distributions to owners of the company recognised directly in equity Share-based payment charge for the period 3, Share-based payment vesting of options 6, 7, (14 717) (8 958) (8 958) (8 958) Treasury shares acquired 5 (7 984) (7 984) (7 984) balance at 31 March reported balance at 30 June Total comprehensive income for the year Profit for the year Continuing operations Total contributions by and distributions to owners of the company recognised directly in equity Share-based payment charge for the period Share-based payment vesting of options (6 733) Tax impact in equity (5 359) (5 359) (5 359) Treasury shares acquired balance at 31 March

128 for the 12 months ended 31 March 44. restatement, reclassification and COnSISTenCY Of PreSenTaTIOn continued IMPaCT On STaTeMenT Of ChanGeS In equity (continued) Difference Share- equity based attribu- non- Treasury payment retained table to controlling note shares reserve earnings company interest Total balance at 30 June , 3 ( ) ( ) ( ) Total comprehensive income for the year 2, 3 (6 118) (6 118) (6 118) Profit for the year 2, 3 (6 118) (6 118) (6 118) Continuing operations 2, 3 (6 118) (6 118) (6 118) Total contributions by and distributions to owners of the company recognised directly in equity (3 780) (3 780) (3 780) Share-based payment charge for the period 5, Share-based payment vesting of options 5, (7 984) (8 958) (8 958) (8 958) Treasury shares acquired 1, 7 (7 984) (7 984) (7 984) Tax impact in equity balance at 31 March 2015 (3 780) ( ) ( ) ( ) IMPaCT On STaTeMenT Of CaSh flows restated reported 31 March 31 March Difference note r 000 r 000 r 000 Cash flows from investing activities Treasury shares acquired 7 (7 984) Acquisition of non-controlling interests 8 (12 168) net cash generated by investing activities Cash flows from financing activities Treasury shares acquired 7 (7 984) (7 984) Acquisition of non-controlling interests 8 (12 168) (12 168) net cash utilised in financing activities ( ) ( ) (20 152) 126

129 INTEREST IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES for the 12 months ended 31 March Percentage interest Activities 12 months 9 months Issued ended ended share Class 31 March 31 March capital of 2015 (Rands) share Country 1. Subsidiaries in which Distribution and warehousing network Limited has a direct interest DAWN Consolidated Holdings Proprietary Limited H Ord RSA Wholesale Housing Supplies Proprietary Limited B Ord RSA 2. Subsidiaries in which Distribution and warehousing network Limited has an indirect interest Subsidiaries Distribution and Warehousing Network Africa Proprietary Limited H Ord RSA Shares held by Distribution and Warehousing Network Africa Proprietary Limited in: Africa Swiss Trading Limitada B Ord Angola Distribution and Warehousing Network Africa Trading Congo S.A.R.L. B Ord Congo DAWN Africa Mozambique, LDA B Ord Mozambique DAWN Africa Proprietary (Zambia) Limited B Ord Zambia Africa Saffer Trading (Mauritius) Limited B Ord Mauritius Boutique Baths Proprietary Limited B Ord RSA DAWN Human Resource Solutions Proprietary Limited A Ord RSA DMD Marketing SA Proprietary Limited A Ord RSA DPI Holdings Proprietary Limited H Ord A RSA DPI International Limited H Ord Mauritius DPI Plastics Proprietary Limited C Ord RSA Franmore Investments Proprietary Limited A Ord Namibia Hamilton s Brushware Proprietary Limited B Ord RSA Incledon DPI Proprietary Limited B Ord RSA Incledon DPI Proprietary Limited A Ord Botswana Incledon KZN Proprietary Limited B 51 Ord RSA Incledon Zambia Limited B Ord Zambia Incledon Proprietary Limited B Ord RSA Namibia Plastic Converters Proprietary Limited C Ord Namibia Pipex Plastics Botswana Proprietary Limited C Ord Botswana Pro-Max Welding Consumables Proprietary Limited B Ord RSA Saffer Union (West Africa) Limited B Ord Nigeria Sangio Pipe Proprietary Limited C Ord RSA Swan Plastics Proprietary Limited C Ord RSA Ubuntu Plastics Proprietary Limited C Ord RSA Wilhelm Import Network Proprietary Limited B Ord RSA 3. Subsidiaries, associates and joint ventures which are dormant and in the process of deregistration Almar Aluminium Proprietary Limited D Ord RSA Almar Extrusions Proprietary Limited D Ord A RSA Almar Marketing Proprietary Limited D Ord RSA Avrutec Proprietary Limited D Ord RSA Bathing Paradise Proprietary Limited D Ord RSA City Non-Ferrous Metals Proprietary Limited D Ord RSA City Wires Proprietary Limited D Ord RSA Caslead Properties Proprietary Limited D Ord RSA Cobra Brands Proprietary Limited D Ord A RSA Courier Internet Exchange Proprietary Limited D Ord RSA DAWN 101 Investments Proprietary Limited (Formerly Springset Proprietary Limited) D Ord RSA DAWN Cargo Proprietary Limited D Ord RSA DAWN Consolidated Properties Proprietary Limited D Ord RSA DAWN Kitchen Fittings Proprietary Limited B Ord RSA DAWN Logistics Proprietary Limited D Ord RSA DAWN Management Services Proprietary Limited D Ord RSA Delivery Deluxe Proprietary Limited D Ord RSA DPI Kwanzi Proprietary Limited D Ord RSA 127

130 INTEREST IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES for the 12 months ended 31 March Percentage interest Activities 12 months 9 months Issued ended ended share Class 31 March 31 March capital of 2015 (Rands) share Country 3. Subsidiaries, associates and joint ventures which are dormant and in the process of deregistration continued Electroline Proprietary Limited B Ord RSA Geyser Technology Proprietary Limited D Ord RSA Incledon Proprietary Limited D Ord RSA Inex Trading Proprietary Limited D Ord RSA Insyst Cape Town Proprietary Limited D Ord RSA Insyst Durban Proprietary Limited D Ord RSA Insyst Johannesburg Proprietary Limited D Ord RSA La-Co Africa Marketing Proprietary Limited D Ord RSA Monocraft Proprietary Limited D Ord RSA Romson Properties Proprietary Limited D Ord RSA Royal Express Services Proprietary Limited D Ord RSA Saffer Angola S.A.R.L.* D Ord Angola Saffer International Proprietary Limited D Ord RSA Skillco Proprietary Limited D Ord RSA Springset (Natal) Proprietary Limited D Ord RSA Springset Alloys Proprietary Limited D Ord RSA Stability Hardware Wholesale Proprietary Limited D Ord RSA Stylus Industries Proprietary Limited D Ord RSA Vaal Mac Holdings Proprietary Limited D Ord RSA Veloset Proprietary Limited D Ord RSA Wholesale Housing Supplies East London Proprietary Limited D Ord RSA 4. Joint ventures Shares held by Distribution and Warehousing Network Africa Proprietary Limited in: DAWN Africa Tanzania Limited B Ord Tanzania ASTIZ (Private) Limited B Ord Zimbabwe Aqualia DPI Proprietary Limited C Ord Mauritius DPI Simba Limited C Ord Tanzania Aqua Science Proprietary Limited C Ord Mauritius associates Grohe DAWN Watertech Proprietary Limited H Ord RSA Shares held by Grohe DAWN Watertech Proprietary Limited in: Apex Valves South Africa Proprietary Limited C Ord RSA Cobra Watertech Proprietary Limited C Ord RSA Exipro Manufacturing (Swaziland) Proprietary Limited C Ord Swaziland Grohe South Africa Proprietary Limited B Ord RSA ISCA Proprietary Limited C Ord RSA Libra Bathrooms Proprietary Limited C Ord RSA Vaal Sanitaryware Proprietary Limited C Ord RSA Braveheart Financial Services Proprietary Limited A Ord RSA College of Production Technology Proprietary Limited A Ord RSA DPI Rooftiles Proprietary Limited B Ord RSA Heunis Steel Proprietary Limited B Ord RSA Shares held by Plastic Investments International Limited H Ord Mauritius Fibrex Fabrica deart.de.f.b. Sinteticas, S.A.R.L. C Ord Angola activities A Other; B Wholesale trading; C Manufacturing; D Dormant; H Investment holding company Percentage interest reflects voting power. * The DAWN Group has effective control of the board of directors of Saffer Angola S.A.R.L. by means of an additional deciding vote.

131 ANALYSIS OF SHAREHOLDING Listed below is an analysis of holdings extracted from the register of ordinary shareholders at 31 March. number of % number of % Portfolio size shareholders of total shares held of total , , shares , , shares , , shares 109 7, , shares and over 31 2, ,48 Total , ,00 DISTrIbuTIOn Of SharehOLDerS Banks/brokers 23 1, ,66 Close corporations 24 1, ,20 Empowerment 2 0, ,25 Endowment funds 22 1, ,59 Individuals , ,36 Insurance companies 9 0, ,63 Investment companies 3 0, ,28 Medical schemes 7 0, ,24 Mutual funds 63 4, ,21 Other corporations 11 0, ,42 Private companies 29 1, ,13 Public companies 2 0, ,38 Retirement funds 82 5, ,41 Share trust 1 0, ,65 Trusts 83 5, ,59 Total , ,00 PubLIC/nOn-PubLIC SharehOLDerS non-public shareholders 11 0, ,55 Directors and associates 7 0, ,60 Prescribed officers 1 0, ,42 Empowerment 2 0, ,25 Treasury shares 1 0, ,27 Public shareholders , ,45 Total , ,00 In accordance with section 56(7)(b) of the Companies act and paragraph 8.63 of the JSe Listings requirements holdings greater than 5% of issued shares have to be disclosed. Dawn has elected to disclose holdings greater than 3%. beneficial SharehOLDerS with a holding GreaTer Than 3% Of ISSueD ShareS number of % shares held of total Ukhamba Holdings (Pty) Ltd ,25 Coronation Fund Managers ,68 Boles Family Trust ,47 DA Tod ,62 Investec ,02 Total ,04 129

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133 CORPORATE INFORMATION DISTrIbuTIOn and warehousing network LIMITeD Incorporated in the Republic of South Africa Registration Number: 1984/008265/06 Listed on the JSE Limited JSE share code: DAW ISIN: ZAE COMPanY SeCreTarY ithemba Governance and Statutory Solutions (Pty) Ltd Monument Office Park Block 5, Suite Steenbok Ave Monument Park Pretoria PO Box Monument Park, 0105 registered OffICe Cnr Barlow Road and Caveleros Drive Jupiter Ext 3 Germiston, 1401 PostNet Suite number 100 Private Bag X1037 Germiston, 1400 Tel: Fax: Website: DIreCTOrS Diederik fouché Cnr Barlow Road and Caveleros Drive Jupiter Ext 3 Germiston, 1401 Stephen Connelly (appointed with effect from 1 April ) Cnr Barlow Road and Caveleros Drive Jupiter Ext 3 Germiston, 1401 Lou alberts Cnr Barlow Road and Caveleros Drive Jupiter Ext 3 Germiston, 1401 hanré bester (appointed with effect from 14 July ) Cnr Barlow Road and Caveleros Drive Jupiter Ext 3 Germiston, 1401 Saleh Mayet 44 Main Street Marshalltown, 2107 Dinga Mncube Cnr Barlow Road and Caveleros Drive Jupiter Ext 3 Germiston, 1401 veli Mokoena 32 Electron Road Isando, 1609 George nakos 79 Boeing Road East Bedfordview, 2007 Johannesburg rené roos Cnr Barlow Road and Caveleros Drive Jupiter Ext 3 Germiston, 1401 InTerneT Website: info@dawnltd.co.za auditors PricewaterhouseCoopers Inc. 2 Eglin Road Sunninghill, 2157 Johannesburg TranSfer SeCreTarIeS Computershare Investor Services (Pty) Ltd 70 Marshall Street Marshalltown, 2001 PO Box Marshalltown, 2107 Tel: Fax: SPOnSOr Deloitte & Touche Sponsor Services (Pty) Ltd Building 8, Deloitte Place The Woodlands 20 Woodlands Drive Woodmead, 2196 Private Bag X6 Gallo Manor, 2052 Tel: Fax:

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135 GRAPHICULTURE

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