contents annual report Corporate structure 1 Six-year review 3 Directorate and administration 5 Corporate governance 6 Directors approval 8

Transcription

1 annual report

2 annual report contents Corporate structure 1 Six-year review 3 Directorate and administration 5 Corporate governance 6 Directors approval 8 Company secretary s certificate 8 Independent auditor s report 9 Directors report 10 Balance sheets 12 Income statements 13 Statements of changes in equity 14 Cash flow statements 15 Notes to the annual financial statements 16 Share performance 28 Shareholders information 29 Notice of annual general meeting 30 Form of proxy (attached) Shareholders calendar 33

3 corporate structure Shareholding in Rex Trueform Clothing Company Limited ordinary shares (72.62%) N ordinary shares (51.94%) (Translates to an economic interest of 55.63% in Rex Trueform) Investment in retail, property holding and manufacturer of men s and ladies clothing Queenspark (Pty) Ltd. National retailer of men s and ladies clothing, shoes, costume jewellery and related fashion accessories, through Queenspark and J Crew stores African & Overseas Annual Report 1

4 2 African & Overseas Annual Report

5 six-year review Consolidated financial statements OPERATIONS () Revenue Profit/(loss) from operations (26 692) Profit/(loss) before taxation (22 089) Income tax expense (85) Profit/(loss) for the year (22 004) Profit/(loss) attributable to ordinary and N ordinary shareholders (22 172) CASH FLOW () Cash flow from operating activities Cash flows from investing activities (21 231) (12 564) (10 533) (16 842) (17 292) (15 630) Net increase/(decrease) in cash and cash equivalents (4 738) BALANCE SHEET () Net current assets Total tangible assets Ordinary shareholders interest Preference share capital Outside shareholders interest Deferred taxation asset PRODUCTIVITY, LEVERAGE AND LIQUIDITY Profit before taxation as a percentage of revenue 7.3% 9.9% 5.7% 4.3% (6.1%) 1.8% Return on total assets 13.7% 18.5% 11.2% 7.7% (12.1%) 3.3% Return on shareholders interest 20.9% 35.4% 16.7% 9.0% (27.0%) 2.1% Ratio of debt to equity Current ratio SHARE STATISTICS (Ordinary and N ordinary shares) Number of shares issued (000) Earnings/(loss) per share (cents) (111.3) 15.8 Headline earnings per share (cents) Proposed dividend per share (cents) Dividend cover based on headline earnings Net asset value per share (cents) Definitions 1 Return on total assets percentage of the profit before taxation to total assets. 2 Return on shareholders interest percentage of earnings attributable to ordinary and N ordinary shareholders interest. 3 Ratio of debt to equity net interest-bearing debt expressed as a percentage of ordinary shareholders interest plus outside shareholders interest. 4 Current ratio the ratio of current assets to current liabilities. 5 Earnings/headline earnings per share net income attributable to ordinary and N ordinary shareholders divided by the weighted average number of ordinary and N ordinary shares in issue during the year. 6 Dividend cover headline earnings per share divided by proposed dividend per share. 7 Net asset value per share ordinary and N ordinary shareholders interest divided by the number of ordinary and N ordinary shares in issue. African & Overseas Annual Report 3

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7 directorate Michael Laurence Krawitz (70) Dip in Law and Higher Dip in Tax Law Non-executive chairman Member of audit, remuneration and nomination committees. Non-executive chairman of Rex Trueform Clothing Company Limited and Queenspark (Pty) Limited. Appointed to the board Patricia Eve Shub (65) BA Chief executive officer Director of Rex Trueform Clothing Company Limited and Queenspark (Pty) Limited. Appointed to the board Catherine Elizabeth Anne Radowsky (42) BA Executive director Director and chief executive officer of Rex Trueform Clothing Company Limited and Queenspark (Pty) Limited. Appointed to the board James Charles O Brien (70) BSocSc, CHRP Executive director Director of human resources in Rex Trueform Clothing Company Limited and Queenspark (Pty) Limited. Member of the audit, remuneration and nomination committees. Appointed to the board Romain Victor Orlin (67) BA (Econ) Wits Independent non-executive director Member of audit, remuneration and nomination committees. Director of Rex Trueform Clothing Company Limited and Queenspark (Pty) Limited. Appointed to the board. Damian Steven Johnson (41) BCompt (Hons), CA (SA) Executive financial director Director of Rex Trueform Clothing Company Limited and Queenspark (Pty) Limited. Appointed to the board. Patrick Martin Naylor (63) BSc (Eng) Independent non-executive director Chairman of audit committee and member of remuneration and nomination committees. Director of Rex Trueform Clothing Company Limited and Queenspark (Pty) Limited. Appointed to the board. administration Registered office Rex Buildings, 263 Victoria Road Salt River, Cape Town, 7925 PO Box 1856, Cape Town, 8000 Tel: Fax: Company secretary AA Hodgkinson (72) CA (SA) PO Box 4216, Cape Town, 8000 Transfer secretaries Computershare Investor Services (Pty) Limited 70 Marshall Street Johannesburg, 2001 PO Box 61051, Marshalltown, 2107 Tel: Fax: Sponsor Java Capital (Pty) Limited 2 Arnold Road Rosebank, 2196 PO Box 2087, Parklands, 2121 Auditors KPMG Inc. MSC House, 1 Mediterranean Street Foreshore, Cape Town, 8001 Principal banker The Standard Bank of South Africa Limited Attorneys Michael Krawitz & Co 25 Bompas Road, Dunkeld West, 2196 African & Overseas Annual Report 5

8 corporate governance Endorsement of King II The board endorses and subscribes to the principles of integrity and accountability advocated by the Code of Corporate Practices and Conduct set out in the second King Report on Corporate Governance for South Africa ( King II ) and to the Listings Requirements of the JSE Limited. In so doing the directors recognise the need to conduct the enterprise with integrity and transparency and also in accordance with International Financial Reporting Standards. The directors acknowledge the need for enhanced corporate governance practices and therefore welcome the King III proposals, the enactment of the Corporate Laws Amendment Act and the proposed New Companies Act. The directors accordingly remain committed to the principles of effective corporate governance and application of the highest ethical standards in the conduct of the business. The board is of the opinion that in all material aspects the group complies with the provisions of King II and proposes to ensure that the King III proposals are adopted. Board of directors The company has a unitary board structure consisting of four executive directors and three non-executive directors, two of whom are independent, details of whom appear elsewhere in this report. The board was restructured during the past year with the appointment of PM Naylor and RV Orlin as independent nonexecutive directors and DS Johnson as financial director. The current composition of the board does not fully comply with recommendations of King II in that there is not a majority of non-executive directors. The board has adopted a charter which regulates the manner in which the business of the board is to be conducted in accordance with the principles of good corporate governance. This charter defines the roles of the chairman, the chief executive officer and the board members, the composition of the board, governance procedures, the role of the board and the board committees, the board s responsibility for management and control, board evaluation and performance, the role of the company secretary and the board s relationship with shareholders. The appointment of directors is approved by the board assisted by the nomination committee in compliance with the board appointment policy. These appointments are formal and transparent. There is a clear division of responsibilities at board level to ensure a balance of power and authority such that no individual has unfettered powers of decision-making. In accordance with the company s Articles of Association, all directors are subject to retirement by rotation and re-election by shareholders at least once every three years. New directors hold office until the next annual general meeting at which they retire and become available for re-election. No executive director has a long-term service contract with the group. The board is responsible for setting the direction of the group through the establishment of strategic objectives and policies and takes overall accountability for the group by taking responsibility for its management. It retains full and effective control over the group and decisions on material matters are reviewed by the board. The board normally meets at least quarterly or when circumstances necessitate to consider results and performance, to monitor issues of strategic direction and to consider any other issues having a material effect on the group. The board recognises its responsibility to report and communicate matters of material significance to all stakeholders. Chairman The chairman, Michael Krawitz, leads the board and is responsible for its efficient operation and for representing the board to shareholders. The chairman is a non-executive director and is elected by the board. The roles of chairman and chief executive officer are separated with a clear division of duties. Chief executive officer The chief executive officer, Patricia Eve Shub, has responsibility to ensure that the day-to-day business affairs of the group are properly managed. Non-executive directors The non-executive directors are chosen for their business acumen and skills and bring to bear an independent judgement on key issues. They take responsibility for ensuring that the chairman encourages proper deliberation of all matters requiring the board s attention. Company secretary The board has appointed a company secretary whose responsibilities include assisting the chairman in co-ordinating and administering the operation of the board, providing guidance on the discharge of director responsibilities, the implementation of governance procedures and ensuring that the group complies with all statutory requirements. All directors have unlimited access to the advice and services of the company secretary. Board committees The board has established audit, remuneration and nomination committees to assist the board in performing its duties. The audit committee appointed by the board also assumes responsibility for the audit committee functions of the company s subsidiaries. Details of these committees roles, duties and terms of reference are as per those set out in the Annual Report of Rex Trueform Clothing Company Limited ( Rex Trueform ), the principal operating subsidiary of the group, which is attached hereto. 6 African & Overseas Annual Report

9 Composition of board committees Audit PM Naylor (Appointed 11/02/2006) ML Krawitz (Appointed 01/07/2006) RV Orlin (Appointed 19/05/) Remuneration and Nomination PM Naylor (Appointed 01/07/2006) ML Krawitz (Appointed 04/06/2004) RV Orlin (Appointed 19/05/) The group audit committee is chaired by Patrick Naylor, an independent non-executive director, and comprises a majority of independent non-executive directors. This committee was reconstituted on 19 May with the appointment of RV Orlin in the place of JC O Brien. The audit committee meets at least twice a year specifically prior to the publication of the group s interim and final results. These meetings are attended by the external auditors and where appropriate by the internal auditor and senior executives of the group. The primary role of the committee is to assist the board in discharging its responsibilities with regard to safeguarding the company s assets, maintaining adequate accounting records and developing and maintaining an effective system of internal control. It also acts as a liaison between the external auditors and the board and is responsible for reporting to the board on each interim and final group result. The committee nominates a registered auditor for appointment as external auditor to the company, determines the fees to be paid and the terms of engagement and ensures that the appointment complies with all relevant legislation. The committee also determines the nature and extent of any nonaudit services rendered by the external auditor and it approves any proposed contract in this regard. The audit committee is satisfied as to the independence of the external auditors. Both external and internal auditors have unfettered access to the chairman of the audit committee and all its members throughout the year. The audit committee has satisfied itself of the appropriateness of the expertise and experience of the financial director. The committee operates in accordance with written terms of reference which include: assisting the board in their responsibilities of ensuring that the system of internal controls, accounting practices, management information systems, financial reporting systems and auditing processes are functioning effectively; facilitating effective communication between the board of directors, management and the external auditors; reviewing the credibility, objectivity and reliability of published financial reports and ensuring that the financial statements comply with International Financial Reporting Standards thereby providing an objective, independent forum for the resolution of significant accounting and reporting-related matters; promoting overall effectiveness of corporate governance; evaluating the independence and effectiveness of the external auditors; evaluating the performance of the internal audit; and monitoring the ethical conduct of the company, its executives and senior officials. During the year under review audit committee meetings were attended as follows: 03/03/ 01/09/ PM Naylor 3 3 ML Krawitz 3 3 JC O Brien 3 n/a RV Orlin 3 The remuneration committee which is responsible for reviewing and approving the remuneration of directors and senior executives of the group comprises PM Naylor and RV Orlin, both independent non-executive directors, and ML Krawitz, a non-executive director. This committee was reconstituted on 19 May with the appointment of RV Orlin in the place of JC O Brien. The members of the remuneration committee also constitute the nomination committee which identifies and evaluates potential candidates for appointment to the board. The deliberations of this committee are regulated by a board appointment policy document which sets guidelines on the qualities required of directors. Interests in contracts During the year under review, none of the directors had a significant interest in any contract or arrangement entered into by any company in the group. Accountability and accounting The chief executive officer is responsible and accountable to the board for all group operations. Divisional and group management accounts are prepared monthly, comparing actual results against approved budgets. The group s monthly management accounts are distributed to all board members for the monitoring of the group s performance. Other matters of corporate governance relevant to the group including risk management, the corporate code of ethics, whistle-blowing, dealing in group company shares and sustainability are dealt with in the statements on Corporate Governance and Sustainability in the annual report of this company s principal operating subsidiary, Rex Trueform Clothing Company Limited, which is attached hereto. African & Overseas Annual Report 7

10 directors approval The directors are responsible for the preparation and fair presentation of the group annual financial statements and annual financial statements of African & Overseas Enterprises Limited, comprising the balance sheets at 30 June, and the income statements, the statements of changes in equity and cash flow statements for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes, and the directors report, in accordance with International Financial Reporting Standards, the AC 500 standards and in the manner required by the Companies Act of South Africa. The directors responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of these financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The directors have made an assessment of the group s and company s ability to continue as a going concern and there is no reason to believe the businesses will not be going concerns in the year ahead. The auditor is responsible for reporting on whether the group annual financial statements and annual financial statements are fairly presented in accordance with the applicable financial reporting framework. Approval of group annual financial statements and annual financial statements The group annual financial statements and annual financial statements of African & Overseas Enterprises Limited, as identified in the first paragraph, were approved by the board of directors on 15 September and signed on its behalf by The directors responsibility also includes maintaining adequate accounting records and an effective system of risk management. ML Krawitz Chairman PE Shub Chief executive officer company secretary s certificate I certify that African & Overseas Enterprises Limited has lodged with the Registrar of Companies all returns as required by a public company in terms of section 268G(d) of the Companies Act, 1973, as amended, and that all such returns are true, correct and up to date. Per: AA Hodgkinson Secretary 15 September 8 African & Overseas Annual Report

11 independent auditor s report To the members of African & Overseas Enterprises Limited We have audited the group annual financial statements and the annual financial statements of African & Overseas Enterprises Limited, which comprise the balance sheets at 30 June and the income statements, the statements of changes in equity and cash flow statements for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes, and the directors report as set out on pages 10 to 27. Directors responsibility for the financial statements The company s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, these financial statements present fairly, in all material respects, the consolidated and separate financial position of African & Overseas Enterprises Limited at 30 June, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa. KPMG Inc. Registered Auditor Per: Henry du Plessis Chartered Accountant (SA) Registered Auditor Director 15 September MSC House 1 Mediterranean Street Foreshore Cape Town 8001 African & Overseas Annual Report 9

12 directors report Corporate governance The directors subscribe to the values of good governance as set out in the King Report II on Corporate Governance for South Africa. Specific disclosure requirements are dealt with on pages 6 and 7 of the annual report. Review of activities The business of the company is that of a financial and holding company. The company holds 72.62% of the ordinary shares and 51.94% of the N ordinary shares of Rex Trueform Clothing Company Limited ( Rex Trueform ). The subsidiary, Rex Trueform, continued its normal activities of manufacturing clothing and also the retailing of clothing and fashion accessories through its wholly-owned subsidiary, Queenspark (Pty) Limited during the year. Financial results The financial results of the company and the group for the year are set out in the financial statements accompanying this report. The financial statements have been prepared on the historical cost basis and in accordance with the accounting policies which were applied in the prior year. Share capital The share capital of the company, both authorised and issued is set out in note 5 to the financial statements. Dividends Full details of the dividends paid during the year are as follows: Dividends on ordinary and N ordinary shares: No. 56 on ordinary shares No. 14 on N ordinary shares Dividends on 6% cumulative participating preference shares: No. 143 for half-year to 31 December No. 144 additional dividend No. 145 for half-year to 30 June Your directors have recommended a distribution of 25.0 cents per share (: 25.0 cents) on the ordinary and N ordinary shares. Shareholders will be asked to approve this recommendation of the board at the annual general meeting of the company on 11 November. Subsidiaries The required information relating to subsidiaries is set out in note 2 to the financial statements. Investments Full details of the company s investments is set out in note 5 to the financial statements of Rex Trueform Clothing Company Limited. Directorate The names of the directors of the company are reflected on page 5 of this annual report. ML Krawitz was reappointed chairman of the company on 4 September. PM Naylor and RV Orlin were appointed as independent non-executive directors on 2 March and 19 March respectively. DS Johnson was appointed as financial director on 21 May. CEA Radowsky, JC O Brien, PM Naylor, RV Orlin and DS Johnson retire at the annual general meeting in accordance with the Articles of Association but being eligible offer themselves for re-election. The emoluments of the executive and non-executive directors are set out in note 12 to the financial statements. Directors interest in shares The interest of directors in the shares of the company at 30 June, all of which are beneficially held, as recorded in the register thereof kept by the company was: Ordinary and N ordinary shares 30 June 30 June Held directly: PE Shub CEA Radowsky Held indirectly: * The Stewart and Pat Shub Family Trust * The beneficiaries of the Stewart and Pat Shub Family Trust include PE Shub and CEA Radowsky. The company has not been advised of any changes in holdings between 30 June and the date of approval of the financial statements by the board of directors. 10 African & Overseas Annual Report

13 Employee share incentive scheme The Rex Trueform Share Trust was created in 1997 and was issued with N ordinary shares in Rex Trueform to facilitate an employee share incentive scheme. Subsequent capitalisation share awards totalling N ordinary shares were received and placed in reserve in the Trust. The purpose of this scheme is to afford eligible full-time employees, including directors holding full-time salaried employment or office in the group the opportunity of acquiring an interest in the share capital of Rex Trueform. Since inception of the Trust, payment and delivery has been effected in respect of of the N ordinary shares which were acquired by the Trust. As at the beginning of the financial period under review options in respect of N ordinary shares held by the Trust had been granted to employees of the group and exercised on a deferred delivery basis and the Trust held no shares in reserve for future utilisation. At 30 June options have, in total, been exercised in respect of N ordinary shares, of which have been exercised by directors of group companies. Full details of options granted and exercised are reflected in note 21.2 to the financial statements of Rex Trueform. Special resolution A special resolution was passed on 12 November which authorised the company and/or its subsidiaries by way of a general authority to acquire its own issued shares on such terms, conditions and such amounts determined from time to time by the directors of the company. At the annual general meeting to be held on 11 November, shareholders will be asked to renew the above general authority to acquire issued shares. Subsidiary company special resolution At its annual general meeting held on 12 November, the subsidiary company, Rex Trueform Clothing Company Limited passed a similar special resolution to that of the company detailed above. Secretary The position of secretary was held by AA Hodgkinson during the period covered by this report. The secretary s business and postal addresses are shown on page 5. Post-balance sheet events No events, material to the understanding of this report, have occurred between the financial year-end and the date of this report. African & Overseas Annual Report 11

14 balance sheets at 30 June Note GROUP COMPANY ASSETS Non-current assets Property, plant and equipment Investment property Intangibles Investment in subsidiary companies Other investments Deferred tax Current assets Inventories Trade and other receivables Accounts receivable from subsidiary companies 13 Income tax receivable Cash and cash equivalents TOTAL ASSETS EQUITY AND LIABILITIES Equity Ordinary share capital Preference share capital Share premium Share-based payment reserve Other reserves Accumulated profits Equity attributable to equity holders Minority interest Total equity Non-current liabilities Post-retirement liability Operating lease liability Current liabilities Accounts payable to subsidiary companies 2 26 Provision Trade and other payables Forward exchange contracts Income tax payable TOTAL EQUITY AND LIABILITIES African & Overseas Annual Report

15 income statements for the year ended 30 June Note GROUP COMPANY Revenue Turnover Cost of sales ( ) ( ) Gross profit Employment costs (71 663) (65 250) (214) (170) Occupancy costs (53 325) (40 901) Depreciation and amortisation (12 248) (14 349) Other operating costs (54 489) (53 029) (847) (703) Rental income Franchise income/royalties Operating profit/(loss) (1 061) (873) Dividends received Interest received Interest paid (446) (540) (81) (64) Profit on disposal of associate 671 Share of losses from associated company (59) Profit before tax Income tax expense 14 (11 422) (7 025) (8) (59) Profit for the year Profit attributable to: Ordinary and N ordinary shareholders Preference shareholders Profit attributable to equity holders of the parent Minority interests Profit for the year Basic earnings per ordinary share (cents) Headline earnings per ordinary share (cents) Dividends declared per ordinary share (cents) Dividend cover based on headline earnings Dividends per preference share (cents) African & Overseas Annual Report 13

16 statements of changes in equity for the year ended 30 June Ordinary share capital Preference share capital Share premium Other reserve Sharebased payments reserve Foreign currency translation reserve Accumulated profits Minority interest Total GROUP Balance as at 30 June Profit for the year Preference dividends (87) (17) (104) Ordinary dividends (1 594) (2 257) (3 851) Share-based payment Loss on treasury shares issued (8) (7) (15) Fair value adjustment for available-for-sale financial assets (183) (151) (334) Foreign currency translation Balance as at 30 June Profit for the year Preference dividends (138) (17) (155) Ordinary dividends (2 847) (3 160) (6 007) Share-based payment Transfer reserves (2 405) Balance as at 30 June COMPANY Balance as at 30 June Profit for the year Preference dividends (87) (87) Ordinary dividends (1 594) (1 594) Balance as at 30 June Profit for the year Preference dividends (138) (138) Ordinary dividends (2 847) (2 847) Balance as at 30 June African & Overseas Annual Report

17 cash flow statements for the year ended 30 June Note GROUP COMPANY Cash flows from operating activities Operating profit before working capital changes (1 061) (873) Working capital changes 16.2 (2 720) (16 269) (56) (56) Cash generated by operating activities (1 117) (929) Interest received Interest paid (446) (540) (81) (64) Dividends paid 16.3 (6 162) (3 951) (2 985) (1 681) Dividends received Normal taxation paid 16.4 (8 994) (7 130) (12) 8 Secondary tax on companies paid 16.4 (722) (516) Net cash inflow/(outflow) from operating activities (204) 193 Cash flows from investing activities Additions to property, plant and equipment (22 090) (15 520) Proceeds on disposal of property, plant and equipment Proceeds on disposal of investment in associate Net cash outflow from investing activities (21 231) (12 564) Cash flows from financing activities Proceeds on delivery of shares by share trust (15) Net cash outflow from financing activities (15) Net increase/(decrease) in cash and cash equivalents (204) 193 Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year African & Overseas Annual Report 15

18 notes to the annual financial statements 1 Except as presented below, the accounting policies and notes to the annual financial statements and consolidated annual financial statements for African & Overseas Enterprises Limited are identical to those disclosed for Rex Trueform Clothing Company Limited on pages of its annual report. Issued Shareholding Shares at cost Indebtedness capital R % 2 SUBSIDIARY COMPANIES Rex Trueform Clothing Company Limited Ordinary shares % N ordinary shares % % cumulative preference shares % 1 1 current account (payable)/receivable* (26) (26) 13 * This current account is unsecured, interest free and no fixed date for repayment has been determined. The interest of the company in the profits after taxation of its subsidiaries for the year is as follows: Aggregate profits Further indirect subsidiaries are set out in note 5 to the Rex Trueform Clothing Company financial statements. GROUP COMPANY 3 TRADE AND OTHER RECEIVABLES Trade receivables Duty credit certificates Prepayments Other receivables At end of the year The carrying amount of financial assets represents the maximum credit exposure. 4 CASH AND CASH EQUIVALENTS Bank balances Call deposits At end of the year African & Overseas Annual Report

19 GROUP COMPANY 5 SHARE CAPITAL Authorised share capital Ordinary shares ordinary shares of 50c each N ordinary shares of 0.25c each Total authorised ordinary share capital Preference shares % cumulative participating preference shares of R2 each Total authorised share capital Issued share capital Ordinary shares ordinary shares of 50c each N ordinary shares of 0.25c each Total issued ordinary share capital Preference shares % cumulative participating preference shares of R2 each Total issued share capital The unissued shares are under the control of the directors until the annual general meeting. 6 OTHER RESERVES Reserve arising on acquisition of subsidiaries 584 Revaluation of share investment Capital redemption reserve fund (45) Surplus arising on disposal of land At end of the year African & Overseas Annual Report 17

20 notes to the annual financial statements 7 POST-RETIREMENT LIABILITY Employees participate in defined contribution retirement funds which are subject to the Pension Funds Act, 1956 as amended. These funds exist for the purpose of providing retirement benefits for employees and are funded by member contributions and employer contributions which are charged to the income statement as they are incurred. The group provides medical aid and pension gratuities in respect of certain retired employees. No current employees will receive a gratuity after retirement. The latest valuation of the obligation was performed as at 30 June at which time there were 29 members receiving benefits. The obligation is unfunded. GROUP COMPANY Reconciliation of balance sheet amount At beginning of the year Income statement amount 282 (1 997) Benefits paid (437) (411) (83) (72) At end of the year Amount included in income statement Interest cost Curtailment of obligation (2 206) Actuarial (gain)/loss (152) (331) 14 (9) 282 (1 997) The following assumptions have been used in the valuation of the obligation: Discount rate 9.0% 11.0% 9.0% 11.0% Medical aid contribution inflation 8.0% 10.0% 8.0% 10.0% Salary and related benefit inflation 7.0% 9.0% 7.0% 9.0% GROUP Historical information Present value obligation COMPANY Historical information Present value obligation GROUP COMPANY 8 TRADE AND OTHER PAYABLES Trade payables Accrued operating lease liability Other payables and accruals At end of the year African & Overseas Annual Report

21 9 FINANCIAL INSTRUMENTS 9.1 Fair values The carrying amounts of financial assets and liabilities, which also approximates their fair values, are as follows: GROUP COMPANY 30 June 30 June 30 June 30 June Available-for-sale financial assets Other receivables Cash and cash equivalents Trade and other payables (32 578) (33 652) (185) (295) Forward exchange contracts (5 642) (13) Total Fair values of forward exchange contracts are determined by comparing the contracted forward rate to the present value of the current forward rate of an equivalent contract with the same maturity date. 9.2 Credit risk The risk arising on accounts receivable is managed through a stringent group policy on the granting of credit limits, continual review and monitoring of these limits and insurance of certain accounts receivable through an independent party. Credit risk is minimised through an initial new client acceptance procedure whereby potential customers are individually assessed before an appropriate credit limit is allocated to the new client. The group makes use of credit vetting agencies who maintain current credit data on most companies in South Africa. The manufacturing segment trade receivables represents 56% of the group trade receivables and is insured for 80% of any loss incurred. Listings of overdue customer balances are reviewed monthly and reviewed against their credit terms/limits. Any customer exceeding their credit terms/limits must settle their overdue balances before any further credit is extended. Appropriate action is taken to recover long overdue debts. An impairment provision is raised if there is objective evidence that the outstanding debt may not be collectible. The credit risk on cash and cash equivalents is managed through dealing with well-established financial institutions with high credit standings. African & Overseas Annual Report 19

22 notes to the annual financial statements GROUP COMPANY 9 FINANCIAL INSTRUMENTS continued 9.2 Credit risk continued Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: Other investments Trade receivables Other receivables Accounts receivable from subsidiary companies 13 Cash and cash equivalents Total The maximum exposure to credit risk for trade receivables at the reporting date by type of customer was: Wholesale customers Total The group s most significant customer accounts for 54% of the total trade receivables. Gross Impairment provision Group Gross Impairment provision Gross Impairment provision Company Gross Impairment provision Impairment losses The ageing of trade receivables at the reporting date was: Current days days days 103 (137) 235 (137) Total (137) (137) GROUP COMPANY The movement in the impairment provision in respect of trade receivables during the year was as follows: Balance at beginning of year Provision released (69) Balance at end of year African & Overseas Annual Report

23 GROUP COMPANY 9 FINANCIAL INSTRUMENTS continued 9.3 Liquidity risk Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group s approach to managing liquidity risk is to ensure that sufficient liquidity is available to meet its liabilities when due. The risk is managed through cash flow forecasts and the optimisation of daily cash management. The expected cash flow related to the other payables and accruals will occur as follows: Carrying amount Contractual cash flows (16 652) (15 576) (185) (295) Less than 1 year (16 652) (15 576) (185) (295) The expected cash flows related to forward exchange contracts will occur as follows: Carrying amount Contractual cash flows (32 231) (15 167) Less than 1 year (32 231) (15 167) 9.4 Interest rate risk The financial assets that are sensitive to interest rate risk are cash and cash equivalents. The risk is managed by maintaining an appropriate mix of fixed and daily call placements with reputable financial institutions. The interest rates applicable to these financial instruments are keenly negotiated and generally vary in response to the prime overdraft rate. Current effective interest rate is 7.4% (: 11.4%). Floating rate financial assets include cash at bank and cash equivalents. The group has no fixed rate financial assets or liabilities. 9.5 Currency risk The group incurs currency risk as a result of transactions which are denominated in a currency other than the group entity s functional currency. The settlement of these transactions takes place within a normal business cycle. The group has clearly defined policies for the management of foreign currency risks. No uncovered foreign exchange commitments exist at balance sheet date. This risk is covered by entering into forward foreign exchange contracts. These contracts are matched with anticipated future cash outflows in foreign currencies. The group does not use forward foreign exchange contracts for speculative purposes. No hedge accounting is applied. The currencies in which the group primarily deals are US dollars. Trade payables consisted of: Local suppliers Foreign suppliers USD Total African & Overseas Annual Report 21

24 notes to the annual financial statements 9 FINANCIAL INSTRUMENTS continued 9.5 Currency risk continued The principal or contract amounts of foreign exchange contracts outstanding at balance sheet date relating to specific items appearing on the balance sheet were: Currency Foreign amount 000 Average forward cover rate Rand amount 000 Imports US dollar R Currency Foreign amount 000 Average forward cover rate Rand amount 000 Imports US dollar R The following significant exchange rates applied during the year: Average rate 30 June spot rate US dollar R9.05 R7.31 R7.88 R7.96 Sensitivity analysis A 10% strenghtening/weakening in the rand against the US dollar at 30 June would have increased/decreased equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for. Profit or Loss 30 June US dollar June US dollar African & Overseas Annual Report

25 GROUP COMPANY 10 REVENUE Turnover Rental income Interest received Dividends received Royalties Total OPERATING PROFIT/(LOSS) IS STATED AFTER THE FOLLOWING: Income Net surplus on disposal of plant and equipment plant vehicles Net foreign exchange (losses)/gains (5 986) realised (344) unrealised (5 642) (13) Expenses Auditors remuneration audit fee other services Amortisation Depreciation property plant vehicles equipment and shopfittings Directors emoluments non-executive for services as directors non-executive for consultancy services executive paid for managerial services executive retirement fund contributions executive incentives Leasing charges operating leases properties plant, vehicles and equipment Managerial, technical, administrative and secretarial fees Employee costs manufacturing Employee costs other Share-based payment Retirement funding costs Post-retirement liability (148) (2 537) (9) curtailment of obligation (2 206) actuarial gain (148) (331) (9) African & Overseas Annual Report 23

26 notes to the annual financial statements 12 DIRECTORS EMOLUMENTS Directors fees Basic salary Bonuses and performancerelated payments Value of other benefits Retirement fund contributions Fees for other services Total Total Executive DS Johnson* JC O Brien PE Shub CEA Radowsky Non-executive directors PM Naylor** RV Orlin*** ML Krawitz Total Summary Paid by company Paid by subsidiary company Total * Appointed 21 May ** Appointed 2 March *** Appointed 19 March 24 African & Overseas Annual Report

27 GROUP COMPANY 13 DIVIDENDS RECEIVED Dividends from subsidiaries Dividends from investments Total INCOME TAX EXPENSE South African taxation normal current prior year deferred (1 788) current (2 079) change in tax rate 287 prior year (132) 4 Total normal tax Secondary tax on companies Total Reconciliation of South African normal tax rate % % % % Statutory tax rate Dividend income (38.9) (41.3) Expenses disallowed Tax exempt income (1.3) Secondary tax on companies Prior year adjustments 0.4 Capital gains tax (0.6) Change in tax rate Tax losses previously not recognised (13.3) Effective tax rate EARNINGS/HEADLINE EARNINGS PER SHARE Basic earnings per share is derived by dividing profit for the year attributable to ordinary and N ordinary shareholders of the parent by the weighted average number of ordinary shares. Basic and headline earnings per ordinary share Profit attributable to equity holders Adjusted for: Profit on disposal of plant and equipment (192) (72) Profit on disposal of associate (368) Headline earnings Number of shares Weighted average number of ordinary and N ordinary shares in issue Basic earnings per ordinary share (cents) Headline earnings per ordinary share (cents) African & Overseas Annual Report 25

28 notes to the annual financial statements GROUP COMPANY 16 NOTES TO THE CASH FLOW STATEMENTS 16.1 Cash generated by operations Profit before taxation Adjusted for: Depreciation Amortisation Dividends from subsidiary company (3 963) (2 831) Interest received (10 215) (7 926) (28) (28) Interest paid Profit on disposal of property, plant and equipment (480) (180) Profit on disposal of investment in associate (671) Loss from associated company 59 Dividends from investments (23) (22) Accrued operating lease liability Share options expensed Unrealised foreign exchange losses Net inflow/(outflow) (1 061) (873) 16.2 Working capital changes Increase in inventories (4 388) (18 497) Decrease/(increase) in trade and other receivables (2 731) 3 Movement in forward exchange contracts (13) (317) (Decrease)/increase in trade and other payables (1 302) (110) 4 Decrease/(increase) in amounts receivable from subsidiary company 13 (13) Increase/(decrease) in amount owed to subsidiary company 26 (30) Decrease/(increase) in post-retirement liability (155) (2 408) 12 (17) Net outflow (2 720) (16 269) (56) (56) 16.3 Dividends paid Dividend on ordinary and N ordinary shares (6 007) (3 847) (2 847) (1 594) Dividend on 6% cumulative preference shares paid 31 December (130) (79) (122) (71) Dividend on 6% cumulative preference shares paid 30 June (25) (25) (16) (16) Net outflow (6 162) (3 951) (2 985) (1 681) 16.4 Taxation paid Amounts unpaid at beginning of the year (3 234) (1 600) Amounts overpaid at beginning of the year Amounts charged to income statement (6 605) (9 347) (8) (59) Amounts unpaid at end of the year Amounts overpaid at end of the year (14) (10) (14) (10) Net (outflow)/inflow (9 716) (7 646) (12) 8 Comprising: Normal tax paid (8 994) (7 130) (12) 8 Secondary taxation on companies paid (722) (516) Net (outflow)/inflow (9 716) (7 646) (12) 8 26 African & Overseas Annual Report

29 17 SEGMENTAL ANALYSIS Primary segmentation based on activity Manufacturing Retail Property Group services* Total Segment turnover External sales Intersegment sales (2 369) (2 369) Segment income Operating (loss)/profit (2 095) (4 371) Segment assets Non-current assets Current assets Intersegment assets 992 (992) Segment liabilities Non-current liabilities Current liabilities Segment information Capital expenditure Depreciation and amortisation Segment turnover External sales Intersegment sales (8 172) (8 172) Segment income Operating profit/(loss) (1 578) Segment assets Non-current assets Current assets Intersegment assets 444 (444) Segment liabilities Non-current liabilities Current liabilities Segment information Capital expenditure Depreciation and amortisation * Group services include corporate costs. African & Overseas Annual Report 27

30 share performance for the year ended 30 June Ordinary shares Market price per share at year-end (cents) high (cents) low (cents) Shares traded value () volume (000 s) Shares in issue (000 s) Percentage traded (%) Closing price/earnings (ratio) Closing dividend yield* (%) N ordinary shares Market price per share at year-end (cents) high (cents) low (cents) Shares traded value () volume (000 s) Shares in issue (000 s) Percentage traded (%) Closing price/earnings (ratio) Closing dividend yield* (%) Market capitalisation Ordinary shares (R million) N ordinary shares (R million) Total (R million) Net asset value Ordinary shares (cents) N ordinary shares (cents) Ratio closing price/net asset value Ordinary shares N ordinary shares Based on headline earnings. * = Recommended. Other years based on the years to which they relate. 28 African & Overseas Annual Report

31 shareholders information analysis of shareholders as at 30 June Ordinary N Ordinary Preference Number of shareholders % of shareholders Number of shareholders % of shareholders Number of shareholders % of shareholders Public Insurance companies, nominees and trusts Individuals Companies and close corporations Mutual funds and pension funds Non-public Stewart and Pat Shub Family Trust Brimstone Investment Corporation Limited H Roberts Gingko Investments No. 2 (Pty) Limited PRS Shotter Directors Total Number of shares % of share capital Number of shares % of share capital Number of shares % of share capital Public Insurance companies, nominees and trusts Individuals Companies and close corporations Mutual funds and pension funds Non-public Stewart and Pat Shub Family Trust Brimstone Investment Corporation Limited H Roberts Gingko Investments No. 2 (Pty) Limited PRS Shotter Directors Total Number of shares % of share capital Number of shares % of share capital Number of shares % of share capital Shareholders holding in excess of 5% of share capital at 30 June Stewart and Pat Shub Family Trust Brimstone Investment Corporation Limited H Roberts PRS Shotter Gingko Investments No. 2 (Pty) Limited Ceejay Trust DK Dreyer Total African & Overseas Annual Report 29

32 notice of annual general meeting African & Overseas Enterprises Limited (Incorporated in the Republic of South Africa) (Registration number 1947/027461/06) Share codes: AOO AON ISIN: ZAE ZAE ( AOE or the company ) Notice is hereby given that the sixty-second annual general meeting of shareholders of AOE will be held in the boardroom, Rex Buildings, 263 Victoria Road, Salt River, Cape Town, on Wednesday, 11 November immediately after the annual general meeting of Rex Trueform Clothing Company Limited which is to be held at 10:00 (which meeting AOE shareholders are invited to attend) for the purpose of considering, and if deemed fit, passing with or without modification, the following resolutions: Ordinary resolution number 1 Approval of financial statements To consider and adopt the annual financial statements of the company and its subsidiaries, for the year ended 30 June, together with the reports of the directors and auditors contained therein. Ordinary resolution number 2 Approval of dividend To approve the declaration of a dividend of 25.0 cents per share for the year on the ordinary and N ordinary shares. Ordinary resolution number 3 Re-election of directors To re-elect as directors of the company, CEA Radowsky, JC O Brien, PM Naylor, RV Orlin and DS Johnson, who retire by rotation in terms of the company s Articles of Association but who are eligible and offer themselves for re-election. Abbreviated curricula vitae in respect of the directors offering themselves for re-election are annexed to this notice. Ordinary resolution number 4 Appointment of auditors To reappoint KPMG Inc. as the auditors of the company for the ensuing year. Ordinary resolution number 5 Directors fees To approve the directors fees paid to the directors of the company for the year ended 30 June, as set out in note 12 to the financial statements. Special resolution number 1 RESOLVED THAT, the company and/or any subsidiary of the company be and is hereby authorised by way of a general approval contemplated in sections 85(2) and 85(3) of the Companies Act 1973 (Act 61 of 1973) as amended ( the Act ) to acquire issued ordinary and/or N ordinary shares of the company ( the securities ) upon such terms and conditions and in such amounts as the directors of the company may from time to time determine, but subject to the Articles of Association of the company, the provisions of the Act and the Listings Requirements of the JSE Limited, where applicable, and provided that: a) the repurchase of securities will be effected through the main order book operated by the JSE trading system and done without any prior understanding or arrangement between the company and the counterparty; b) this general authority shall only be valid until the company s next annual general meeting, provided that it shall not extend beyond fifteen months from the date of passing of this special resolution; c) in determining the price at which the securities are acquired by the company in terms of this general authority, the maximum premium at which such securities may be acquired will be 10% (ten per cent) of the weighted average of the market price at which such securities are traded on the JSE, as determined over the 5 (five) trading days immediately preceding the date of the repurchase of such securities by the company; d) the acquisitions of securities in the aggregate in any one financial year does not exceed 20% (twenty per cent) of the company s combined issued share capital in the securities from the date of the grant of this general authority; e) the directors, after considering the effect of the maximum repurchase, are of the opinion that: (i) the company and the group will be in a position to repay their debt in the ordinary course of business for a period of twelve months from the company first acquiring securities under this general approval and subject to (f) below; (ii) the consolidated assets of the company, being fairly valued in accordance with International Financial Reporting Standards, will be in excess of the consolidated liabilities of the company at the time of the company first acquiring securities under this general approval and subject to (f) below; (iii) the ordinary capital and reserves of the company and the group will be adequate for a period of twelve months from the company first acquiring securities under this general approval and subject to (f) below; (iv) the available working capital will be adequate to continue the operations of the company and the group for a period of twelve months from the company first acquiring 30 African & Overseas Annual Report

33 securities under this general approval and subject to (f) below; f) prior to entering the market to proceed with the repurchase, the company s sponsor will have complied with its responsibilities contained in Schedule 25 of the JSE Listings Requirements; g) the company will comply with any specific JSE Listings Requirements concerning the shareholder spread; h) the company or its subsidiaries will not repurchase securities during a prohibited period as defined in paragraph 3.67 of the JSE Listings Requirements; unless there is a repurchase programme in place and the dates and quantities of securities to be repurchased during the prohibited period are fixed and full details thereof have been disclosed in an announcement over SENS prior to commencement of the prohibited period; i) when the company has cumulatively repurchased 3% (three per cent) of the initial number of the relevant class of securities, and for each 3% (three per cent) in aggregate of the initial number of that class acquired thereafter, an announcement will be made; and j) the company only appoints one agent to effect any repurchase(s) on its behalf. Disclosures required in terms of section of the JSE Listings Requirements a) The JSE Listings Requirements require the following disclosures, some of which are disclosed in the annual report of which this notice forms part as set out below: Directors and management page 5 Major shareholders of the company page 29 Directors interests in the company shares page 10 Share capital of the company page 17 b) There have been no material changes in the affairs or financial position of the company and its subsidiaries since the date of signature of the audit report and the date of this notice. c) The directors of the company collectively and individually accept full responsibility for the accuracy of the information pertaining to special resolution number 1 and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this resolution contains all such information. d) In terms of section of the Listings Requirements of the JSE, the directors of the company are not aware of any legal or arbitration proceedings, including proceedings that are pending or threatened, that may have or have had in the recent past, being at least the previous twelve months, a material effect on the group s financial position. Reason for and effect of special resolution number 1 The reason and effect for special resolution number 1 is to authorise the company and/or its subsidiaries by way of a general authority to acquire its own issued shares on such terms, conditions and such amounts determined from time to time by the directors of the company, subject to the limitations set out above. The directors of the company have no specific intention to effect the provisions of special resolution number 1 but will, however, continually review the company s position, having regard to prevailing circumstances and market conditions, in considering whether to effect the provisions of special resolution number 1. Voting and proxies All shareholders are encouraged to attend, speak and vote at the annual general meeting. A shareholder of the company entitled to attend, speak and vote at the meeting is entitled to appoint a proxy or proxies to attend, speak and on a poll to vote in his/her stead. The proxy need not be a shareholder of the company. On a show of hands, every shareholder of the company present in person or represented by proxy shall have one vote only. On a poll, every shareholder of the company present in person or represented by proxy shall have 200 votes for every ordinary share and one vote for every N ordinary share held in the company by such shareholder. A form of proxy is attached for the convenience of certificated and own name dematerialised shareholders holding shares in the company who cannot attend the annual general meeting but who wish to be represented thereat. Forms of proxy may also be obtained on request from the company s registered office. The completed forms of proxy must be deposited at, posted or faxed to the transfer secretaries at the address below, to be received by no later than 48 hours before the meeting, excluding Saturdays, Sundays and public holidays. Any member who completes and lodges a form of proxy will nevertheless be entitled to attend and vote in person at the annual general meeting should the member subsequently decide to do so. Shareholders who have dematerialised their shares through a Central Securities Depository Participant ( CSDP ) or broker, other than own name registered dematerialised shareholders, who wish to attend the annual general meeting, must request their CSDP or broker to issue them with a letter of representation. African & Overseas Annual Report 31

34 notice of annual general meeting Should shareholders who have dematerialised their shares wish to vote by proxy, they must provide their CSDP or broker with their voting instructions in terms of the custody agreement entered into between the dematerialised shareholders and their CSDP or broker. Dematerialised shareholders who have elected own name registration and who are unable to attend but wish to vote at the annual general meeting, should complete and return the attached form of proxy and lodge it with the transfer secretaries of the company. By order of the board AA Hodgkinson Secretary 15 September Registered office Rex Buildings, 263 Victoria Road Salt River, Cape Town, 7925 PO Box 4216, Cape Town, 8000 Fax No.: Transfer secretaries Computershare Investor Services (Pty) Limited Ground Floor, 70 Marshall Street Johannesburg, 2001 PO Box 61051, Marshalltown, 2107 Fax No.: Annexure Abridged curricula vitae of directors standing for re-election. CEA Radowsky (42) BA Catherine Radowsky joined the group in January She was appointed as executive director of the company in August She is the chief executive officer of Rex Trueform Clothing Company Limited and has an in-depth knowledge of all aspects of the company s operations and particularly the group s retail business. Catherine also serves on the boards of the principal operating subsidiaries, Rex Trueform Clothing Company Limited and Queenspark (Pty) Limited. JC O Brien (70) BSocSc, CHRP James O Brien joined the group in an executive capacity in March He was appointed as an executive director of the company in June He is a highly skilled and knowledgeable human resource practitioner and services the group in this capacity. James also serves on the boards of Rex Trueform Clothing Company Limited and Queenspark (Pty) Limited. PM Naylor (63) BSc (Eng) Patrick Naylor was appointed as an independent non-executive director of the company in March. He has been in practice as a consulting civil engineer for many years and has served as a director on the board of various companies and as trustee of certain institutions. Patrick also serves on the boards of Rex Trueform Clothing Company Limited and Queenspark (Pty) Limited. RV Orlin (67) BA (Econ) Wits Romain Orlin was appointed as an independent non-executive director of the company in March. He is an experienced company director and has been involved in the retail clothing industry in an executive capacity for many years. Romain is a member of the audit, remuneration and nomination committees of the group. He is also an independent non-executive director of Rex Trueform Clothing Company Limited and Queenspark (Pty) Limited. DS Johnson (41) BCompt (Hons), CA (SA) Damian Johnson joined the group in an executive capacity in January He was appointed as financial director of the company in May, the board being fully satisfied that he possesses the required expertise and experience necessary to carry out this function. Damian has extensive experience in financial management and has served as chief financial officer of the group for five years prior to his appointment as financial director. He also serves on the boards of the group s holding company, African & Overseas Enterprises Limited, and the operating subsidiary, Queenspark (Pty) Limited, as financial director of these companies. 32 African & Overseas Annual Report

35 form of proxy AFRICAN & OVERSEAS ENTERPRISES LIMITED (Incorporated in the Republic of South Africa) (Registration number 1947/027461/06) Share codes: AOO and AON ISIN: ZAE and ZAE ( AOE or the company ) For use only by ordinary and N ordinary certificated shareholders or dematerialised shareholders with own name registration, at the sixty-second annual general meeting of the company to be held in the boardroom, Rex Buildings, 263 Victoria Road, Salt River, Cape Town, on Wednesday, 11 November commencing immediately after the annual general meeting of Rex Trueform Clothing Company Limited which is to be held at 10:00. I/We (full name/s in block letters) of (address) being a shareholder/shareholders of AOE and holding ordinary shares in the company, and/or N ordinary shares in the company, do hereby appoint 1. of or failing him/her 2. of or failing him/her 3. the chairman of the annual general meeting, as my/our proxy to act for me/us and on my/our behalf at the annual general meeting which will be held for the purpose of considering and, if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at any adjournment thereof and to vote for and/or against the resolutions and/or abstain from voting in respect of the AOE ordinary shares and N ordinary shares registered in my/our name(s), in accordance with the following instructions: Ordinary Resolutions 1. Approval of financial statements 2. Approval of dividend 3. Re-election of the following directors: 3.1 CEA Radowsky 3.2 JC O Brien 3.3 PM Naylor 3.4 RV Orlin 3.5 DS Johnson 4. Appointment of auditors 5. Approval of directors fees Special Resolution 1. General authority to repurchase shares Ordinary shares* N ordinary shares* For Against Abstain For Against Abstain * Please indicate with an X, or the number of shares applicable, in the appropriate spaces above how you wish your votes to be cast. Unless otherwise instructed, my/our proxy may vote as he/she sees fit. Signed at (place) on (date) Shareholder s signature Please read the notes on the reverse side hereof African & Overseas Annual Report

36 notes to the form of proxy 1. This form of proxy must only be used by certificated ordinary and N ordinary shareholders or dematerialised ordinary and N ordinary shareholders who hold dematerialised ordinary and N ordinary shares with own name registration. 2. Dematerialised shareholders holding ordinary and N ordinary shares other than with own name registration. must inform their CSDP or broker of their intention to attend the annual general meeting and request their CSDP or broker to issue them with the necessary letter of representation to attend the annual general meeting in person and vote or provide their CSDP or broker with their voting instructions should they not wish to attend the annual general meeting in person, but who wish to be represented thereat. These shareholders must not use this form of proxy. 3. Each shareholder is entitled to appoint one or more proxies (who need not be a shareholder(s) of the company) to attend, speak and, on a poll, vote in place of that shareholder at the annual general meeting. 4. A shareholder may insert the name of a proxy or the names of two alternative proxies of the shareholder s choice in the space provided, with or without deleting the chairman of the annual general meeting. The person whose name stands first on the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of those whose names follow. 5. A shareholder s voting instructions to the proxy must be indicated by the insertion of an X or, alternatively, the number of shares such shareholder wishes to vote, in the appropriate spaces provided overleaf. Failure to comply with the above will be deemed to authorise the chairman of the annual general meeting, if the chairman is the authorised proxy, to vote in favour of the resolutions at the annual general meeting, or any other proxy to vote or to abstain from voting at the annual general meeting as he/she deems fit, in respect of all the shareholders votes exercisable thereat. 6. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy, unless previously recorded by the company s transfer office or waived by the chairman of the annual general meeting. 7. The chairman of the annual general meeting may reject or accept any form of proxy which is completed and/or received other than in accordance with these instructions, provided that he is satisfied as to the manner in which a shareholder wishes to vote. 8. Any alterations or corrections to this form of proxy must be initialled by the signatory(ies). 9. The completion and lodging of this form of proxy will not preclude the relevant shareholder from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such shareholder wish to do so. 10. A minor must be assisted by his/her parent/guardian unless the relevant documents establishing his/her legal capacity are produced or have been registered by the company. 11. Where there are joint holders of any shares: any one holder may sign this form of proxy; the vote(s) of the senior shareholders (for that purpose seniority will be determined by the order in which the names of shareholders appear in the company s register of shareholders) who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint shareholder(s). Forms of proxy must be lodged with the transfer secretaries at the address given below not later than 48 hours before the meeting, excluding Saturdays, Sundays and public holidays. Registered office: Transfer secretaries: Rex Buildings, 263 Victoria Road Computershare Investor Services (Pty) Limited Salt River, Cape Town, 7925 Ground Floor, 70 Marshall Street, Johannesburg, 2001 PO Box 1856, Cape Town, 8000 PO Box 61051, Marshalltown, 2107 Fax No.: Fax No.: African & Overseas Annual Report

37 shareholders calendar Financial year-end 30 June Preliminary announcement 3 September Annual report 15 September Annual general meeting 11 November Interim report (December ) March 2010 Dividends Ordinary and N ordinary shares Shareholders approval Wednesday, 11 November Last day to trade Friday, 27 November Trade ex-dividend Monday, 30 November Record date Friday, 4 December Payment date Monday, 7 December 6% cumulative preference shares Declared half-year to December November half-year to June 2010 May 2010 Payable half-year to December end-december half-year to June 2010 end-june 2010 African & Overseas Annual Report 33