Overview. KAP International Holdings Ltd December 2006 Results Presentation Increase RM RM %

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2 Overview Increase RM RM % Revenue 3,418 2, % EBITDA % Operating profit % Net profit before tax excluding pension fund surplus % Headline earnings excluding pension fund surplus % Tax Rate 20.6% 16.2%

3 Overview Cont Increase Note cents cents % HEPS excluding pension fund surplus % (1) EPS excluding pension fund surplus % (1) NAV per share % Dividend Operating margin 7.5% 7.6% P/E ratio (Share price 400 cents) Note (1) Increase in tax rate

4 Financial Structure RM RM Net interest bearing debt Interest bearing debt / equity % 20.8% 22.0% Interest cover 9.2x 11.7x Current ratio

5 Cash Flow RM RM Cash flows from operating activities Cash generated from operations before working capital changes Net working capital changes (78.4) (83.7) Net finance costs (28.2) (19.4) Taxation paid (6.7) (3.1) Cash flows from investing activities (121.2) (139.1) Purchase of property, plant and equipment (126.7) (165.2) Other investing activities Cash flow from financing activities (116.8) (81.8) Decrease in borrowings (70.2) (73.1) Distributions to shareholders (51.3) (8.7) Proceeds on share issue Net decrease in cash and equivalents (53.5) (110.4)

6 Industrial Division

7 Feltex Turnover up 7.1% (excluding Wayne Rubber 13.8%) Operating profit up 13.1% Major improvement in trim division Quality improvements Recycling initiative Acquisition of Caravelle Earn benefits of prior capital investment Feltex Fehrer (moulded foam seats) starting to show excellent performance Economies of scale with Toyota Excellent management team Difficult trading conditions for automotive leathers Lack of turnover for overhead recovery Unprofitable contract to supply Holden in Australia Other divisions showing positive growth Turnover percentage per division Fehrer 32% Trim 40% Leather 14% Foam Converting 9% Unifrax 5%

8 Feltex Strategic initiatives Increase in local vehicle build provides organic growth Short term decrease to June 2007 Changeover to new C series Mercedes Changeover to new Corolla Slowdown in VW due to boat going aground in UK Long term increase to 800,000 units Pursue acquisition strategy and new projects Swift action has been taken in the auto leather division Changes in senior personnel Highly qualified technical person recruited Unprofitable Australian business discontinued Extra business secured Landrover, Nissan, BMW Sourcing of hides from Bull Brand quality improved Management focus on continuous improvement programs Continuous search for key strategic partners

9 Industrial Footwear Turnover up 12.4% Operating profit down 25% from R32M to R24M Restructuring and impairment costs of R5M Mossop trading conditions were difficult high raw material cost resulted in margin squeeze Management response was immediate and decisive Consolidated two manufacturing sites under one roof Cut costs (retrenchment) Source better quality hides from Bull Brand Safety footwear Demand is strong (strong brands) Imported footwear selling well Gumboot division Huge backlog in production strong demand from mining and construction industries Industrial footwear division sold 2.86M pairs in 2006 (2.47M pairs in 2005) Strategic initiatives New safety boot and gumboot designs PVC gumboot machine on order to cope with demand for brands Target tender business with safety footwear Mossop turnaround with sourcing of cheaper hides and cost cutting

10 Hosaf Turnover was up 16.8% Tons sold 80,900 (2005 ; 73,400) 10.2% increase Fibre sales stayed the same ; PET sales up 7,500 tons Operating margin down from 6.2% to 5.7% Raw material prices high Overcapacity in world markets International margins are improving Hosaf is extremely competitive in PET Low depreciation and interest costs Excellent quality product (continuous process as opposed to local competitors batch process) Strategic initiatives Plan is to increase PET capacity significantly Fixed costs are a high percentage of total costs Margins will improve Turnover will increase Additional capacity expected to come on stream late 2008 Short term loss of production for trials (6 months to June 2007)

11 Consumer Division

12 Bull Brand Turnover was up 21.3% Cattle volumes slightly up; lamb volumes lower Increase in sales in the cannery Higher meat selling prices in September November 06 Operating profit up 21.1% Good operating margins until late November Drop in margins and volumes in December Consumer resistance to high prices Farmers sold market ready cattle in December Improvement in farming statistics (last 4 years) Standing days in feedlots 7.5% improvement Mortality 50% improvement Morbidity 52% improvement Extra costs High price of cattle acquired Increase in feed cost per head R20.8M

13 Bull Brand Cost structure in fresh meat division as a % of total cost As at 2006 Cost of cattle purchase Approximately 55-60% Cost of feed Approximately 20% Farming performance is excellent Standing days, mortalities, morbidities well controlled Unlikely to get further improvements Abattoir is a world class facility One of only two EU accredited in SA Management structures have already been cut New computer system may result in some savings and improved control

14 Bull Brand Strategic initiatives Backgrounding of cattle (preconditioning) Allows Bull Brand to buy younger lighter cattle (pay per kg) Already purchased two farms Aim to significantly increase preconditioning over next 2 years Acquisition of Brenner Mills Explore synergies and purchase feed Investigate further increases in the herd Return must justify working capital implications Timing must be correct Value added products where margins are better Increase in cannery sales Master butcher outlets Spar Tender and Tasty range Biltong production plant has been installed Develop new products (can meals / burgers) Significant improvement in the quality of leather produced

15 Weekly:

16 Weaner vs Beef Prices Rc/kg Weaners Beef

17 Jordan Turnover was up 20.2% Excellent performance of main brands Number of pairs 000 s Bronx 601 (33% improvement) Jordan 309 (29% improvement) Olympic 420 (1% improvement) Asics 122 (32% improvement) Total pairs sold increased by 14.4% Operating profit (excluding property sale) showed significant improvement Function of increased volumes in pairs Forward cover taken in early part of the year Strategic initiatives Improve information systems Build on strong brands Grow ladies division Grow children's division

18 Glodina Turnover increase by 13.3% Strong increase from Woolworths, Makro & Game Increase mainly volume related Operating profit increased by 16.7% Better production efficiencies Benefits of capex program over last few years Brand is strong Staff morale is excellent Strategic initiatives Improve customer service levels Expand factory outlets Target hospitality market (current market share 20%) Grow with retailers as they open more stores

19 Group Synergies Brenner Supply feed Distribution outlets Bull Brand Hides to FAL Hides to Mossop Feltex interior cockpit parts Leather for seats Moulded foam Trim and acoustic products Loose lay carpets Heat shields Mossop Leather Industrial footwear Jordan Shoes Polyester for carpeting Share infrastructure to import shoes from China Hosaf Glodina

20 Corporate Action Caravelle carpets Purchase price R15M Manufacturer of loose lay mats Contributed R2.7M PBIT for the six months to December Aggressive export initiatives are being pursued Intend to grow local market share Joint venture with Futuris Investment of R13M in cash and existing plant Manufacture tufted carpeting Production will commence in May 2007 Supply Mercedes on the local market Supply Caravelle with raw material allowing them to claim MIDP on exports Pursue duty free access to American markets (long term) Brenner Mills Purchase price R18M for 60% of the business Subject to Competition Board approval Synergies in distribution channels with Bull Brand Supply feed to Bull Brand Once competition approval have been obtained we will work with management to cut costs

21 BEE Status Adequate representation in terms of non-executive directors at board level and at the audit committee and remuneration committee No black executive directors (currently two executive directors) Ownership criteria Motseng 6.1% investment Top management and senior management employment equity needs attention Skills development scorecard is good Preferential procurement, enterprise development and socio economic development are all receiving attention Our action plan Driven by transformation committee Each division has a team to drive the process The issue is on the agenda of each divisional board meeting List of fast track candidates identified Top management get reports on all appointments / terminations We recognise it will be a difficult process but we take the issue seriously

22 Prospects Organic growth potential of all businesses but particularly Feltex and Hosaf Number of internal projects will provide good returns Exciting synergies between Brenner and Bull Brand Futuris, Feltex, JV and Caravelle exports will provide good returns Potential property development in Wellington Still pursuing acquisitions Well thought out long term strategic plans in place for each division

23 Thank You