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PAGE 1 | 2007 ANNUAL REPORT

Page

Chairman’s Statement 2

CEO’s Report 3

Statement on Corporate Governance 6

Directors’ Interest 7

Group Chart 8

Report of the Independent Auditors 9

Directors’ Responsibilities and Approval 10

Declaration by Company Secretary 10

Directors’ Report 11

Balance Sheet 12

Income Statement 13

Statement of Changes in Equity 14

Cash Flow Statement 15

Accounting Policies 16

Notes to the Annual Financial Statements 22

Shareholder information 29

Notice of annual general meeting 30

Corporate information inside back page

Form of proxy inserted

| 2007 ANNUAL REPORT

» CHAIRMAN’S STATEMENT

Imuniti went through unprecedented change during the year underreview when the company listed on the Alternate Exchange on 12 December 2006. Our entry into the South African market as alisted public entity provides us with a platform for enhancing valuecreation for our shareholders.

The major challenge facing Imuniti was the consolidation of the twonewly acquired companies, namely Nutritional Foods and ImpiloDrugs, into seamless business units under the Group. The re-engineering of the Group to become a fully integrated businesswill ensure the future success of the business. This process willcontinue into the next financial year. The Board has also reaffirmedthat Imuniti’s strategic focus would be its core competence ofmanufacturing.

Parallel to the consolidation process, Imuniti will also be embarkingon an acquisition programme to better enhance our product mix andmarket reach.

The Board is confident that Imuniti’s strategy will achieve thedesired results and has noted positive improvements in the last twomonths of the financial year.

During the year under review the Board has proactively taken stepsto ensure compliance with the King Code of Corporate Governance.We have a fully functional Board and will continue to attract andharness considerable talent at the Board and management levels ofImuniti.

I would like to thank the Imuniti team for their hard work anddedication. I would also like to thank the members of the Board fortheir commitment and support and look forward to working withthem into the future.

We are grateful for the continued support from our shareholders,customers and other stakeholders. We look forward to taking thecompany to new heights with you.

Collin MatjilaChairman

Imuniti Holdings Limited2 August 2007

Collin MatjilaChairman

The board is confident thatImuniti’s strategy will achieve the desired results

» CEO’S REPORT


Paul FoucheChief Executive Officer

Imuniti Holdings Limited was founded in 2004. In 2006, the companyacquired Impilo Marketing (Pty) Limited, BP Tully Family Holdings(Pty) Limited, Nutritional Foods (Pty) Limited and Imuniti HealthManagement Services (Pty) Limited and acquired the rights fromEdge to Edge to manufacture, sell, distribute, support, market andpromote the Imuniti Wellness Pack.

Imuniti is a manufacturer and marketer of pharmaceutical productsand complementary natural medicines as well as high-proteinfortified powdered nutritional food products and supplements.Through its ability to deliver an affordable range of nutritionalfortified and natural products, Imuniti aims to address themalnutrition, immune deficiencies and water contaminationproblems of South Africa and beyond.

Financial Overview

These are Imuniti’s maiden results since listing on the JSE Limited’sAlternate Exchange on 12 December 2006.

During the year Imuniti Holdings Limited changed its financial year-end from December to February.

Acquisitions

Nutritional Foods was acquired as a division from Sunspray (Pty)Limited. The effective date of the acquisition was 1 January 2006.The results were thus consolidated with effect from 1 January 2006,a fourteen-month period.

The Impilo Group of companies consists of:

• PB Tully Family Holdings (Pty) Limited – 100% held by ImunitiHoldings Limited;

• Impilo Drugs (1966) (Pty) Limited – 100% owned by PB TullyFamily Holdings (Pty) Limited; and

• Impilo Marketing (Pty) Limited – 100% held by Imuniti HoldingsLimited.

The effective date of this acquisition was 1 November 2006. Theconsolidated results thus reflect a four-month period.

Diluted EPS and HEPS are included due to a possible option thatmay be exercised by Hans Wessels and the Hans Wessels Trust for52 083 333 shares at 48c per share as published in the pre-listingstatement. The option is “shares for cash” and expires on 12 December 2007.

Imuniti is well poised to become one of the

leading manufacturersof high-protein fortified

nutritional foodproducts andsupplements


Income Statement

Although the sales target and operating profit were not met, Imunitimanaged to control costs and finance charges to keep the net profitat acceptable levels.

The results must be seen in the light of the fact that this is Imuniti’s“ramp-up” year. Imuniti took control of the two factories inDecember 2006.

No dividend has been declared.

Balance Sheet

Intangible assets consist primarily of the distribution, sales,marketing and manufacturing rights of the Imuniti Wellness Packacquired from Edge to Edge 1113 (Pty) Limited for R24 million. Theremainder consists primarily of the value that is placed on themedical dossiers owned by the Impilo Group.

Goodwill arose primarily out of the acquisition of the Impilo Group.

Share premium arose from the shares issued upon the conclusion ofthe private placement.

Cash Flow

Businesses acquired account for the R97 million raised from theissue of shares. This was utilised to acquire the subsidiaries andbusinesses of the Impilo Group, Nutritional Foods, and Researchand Development costs in Imuniti Heath Management Services (Pty)Limited and to provide working capital.

The consolidated financial statements for the year ended 28 February 2007 has been prepared in accordance with IFRS. Theconsolidated statements and this set of financial information havebeen audited by the company auditors, Siyabala Inc.

The Imuniti Group consists of:

• Imuniti Holdings Limited;• PB Tully Family Holdings (Pty) Limited – 100% held by Imuniti

Holdings Limited;• Impilo Drugs (1966) (Pty) Limited – 100% owned by PB Tully

Family Holdings (Pty) Limited;• Impilo Marketing (Pty) Limited – 100% held by Imuniti Holdings

Limited;• Nutritional Foods (Pty) Limited – 100% held by Imuniti Holdings

Limited; and• Imuniti Health Management Services (Pty) Limited – 100% held

by Imuniti Holdings Limited

The existing businesses are doing well. Imuniti will be establishingnew brands over the next three months.

Imuniti is continually looking for acquisitions that will add value to

the Group and that are in line with the company’s overall strategyand mission.

Strategy

As stated in the pre-listing statement:

“Imuniti is a manufacturer and marketer of pharmaceutical productsand complementary natural medicines as well as high-proteinfortified powdered food products and supplements.”

The most important aspect of the business at this stage is thatImuniti is a manufacturer. Imuniti’s strength and value lie in thefactories.

Imuniti outlines its strategic framework as follows:

• Factories – Manufacturing• Functional Head Office• Sales, Marketing and Distribution • Acquisitions

1. FACTORIES

1.1 Nutritional Foods

Nutritional Foods has one of the biggest and most efficientfactories in South Africa producing high-protein andfortified powdered food and food supplements. It has alarge customer base, sales and distribution network. It isprofitable and is a well run factory and business.

1.2 Impilo

The Impilo Group has SA Medicines Control Council (MCC)accreditation and is thus an approved manufacturing facilityof pharmaceuticals within the ambit of Good ManufacturingPractice, an MCC manufacturing accreditation forpharmaceutical manufacturers.

The company has a well established brand and hasnumerous dossiers with product registrations with theMedicines Control Council.

Imuniti will focus on the complementary natural medicinemarket and not necessarily on the pharmaceutical market.Imuniti do believe that the Group has an edge in the marketplace in that the company manufactures complementarymedicines in a GMP approved facility.

These are Imuniti’s assets, and therefore the company’smain strategy is to:

“Ensure that both factories are operating at maximumprofitability through controlling costs, correct staff mix andproper capital.”

» CEO’S REPORT

» CEO’S REPORT


2. FUNCTIONAL HEAD OFFICE

Imuniti is continually reviewing and structuring its head office tobe functional. Imuniti is mindful of the fact that it needs to be a“value-added” facility and will ensure that this is the case.Imuniti believes that its head office performs a support functionin that Imuniti has empowered the operating divisions to beself-sufficient and autonomous.

Imuniti’s head office focuses on:

• Financial support and reporting;• Corporate governance;• Group HR policies;• Group IT function; and• Risk management

3. SALES, MARKETING AND DISTRIBUTION

Imuniti’s strategy is to acquire and create self-sustainablebusiness units that will deal with marketing, sales anddistribution. The business development intent of Imuniti is adirect outflow of Imuniti’s strategic focus which is to berecognised as a manufacturer of complementary naturalmedicines and high-protein fortified powdered nutritional foodproducts and supplements.

We do not want to burden the organisation with highinfrastructure cost in this regard. This model is in the process ofbeing developed to satisfy the company’s requirements.

4. ACQUISITIONS

One of the reasons that Imuniti listed on the AltX market was toplace the company in a position to raise capital for strategicacquisitions. Imuniti is pursuing this avenue. Initially thecompany will limit its acquisition to fit within the model ofacquiring and establishing marketing, sales and distributionbusiness units. The company will consider the acquisitions ofmanufacturing concerns once the existing two facilities areoperating at capacity.

5. GENERAL

Imuniti is well poised to become one of the leadingmanufacturers of high-protein fortified nutritional food productsand supplements as well as pharmaceutical products andcomplementary natural medicines in South Africa.

The company is operating in one of the major areas of need inthe world, i.e. to provide affordable food, food supplementationand natural medicines.

Imuniti is committed to its company strategy and will remainfocused thereon.

The company is committed to its stakeholders and will continueto endeavour to create wealth for the companies shareholders.

Paul FoucheChief Executive OfficerImuniti Holdings Limited

2 August 2007

Registered Office Transfer SecretariesSuite E101 Hampdon Court Link Market Services (Pty) Limited7 Hampden Road 11 Diagonal StreetDurban 4000 Johannesburg 2000

Designated AdvisorsExchange Sponsors (Pty) Limited First Floor, Building 3Commerce SquareSandton 2196


» STATEMENT ON CORPORATE GOVERNANCE

The Imuniti Group endorses the Code of Corporate Practice andconduct as contained in South Africa’s King II Report and affirms itscommitment to implement all material aspects of the principlesincorporated in this report.

Imuniti and its subsidiaries are intent on implementing the higheststandards of corporate governance. The Group is committed to goodcorporate citizenship and organisational integrity in the running ofits affairs.

This commitment provides stakeholders with the comfort that theGroup’s affairs will be managed in an ethical and disciplinedmanner. Imuniti’s philosophy is founded on principles oftransparency, accountability and responsibility.

Board of Directors

The Board of Directors maintain full and effective control over theaffairs of the company. In terms of the governance philosophy of thecompany there is a separation of responsibility for running theBoard and the executive responsibility for running the business.

Management is held accountable through reviews of theirperformance against their targets. The roles of the Chairman andChief Executive Officer are separated with responsibilities dividedamong them.

Executive Committee

The Chief Executive Officer is assisted by the Executive Committee.The Executive Committee facilitates the effective management ofall operational activities, acts as a medium of communication andcoordination between the various business units, ensures thatregular financial reports are presented to the Board, that there areadequate internal controls and that there is an effective riskmanagement process throughout the Group. The latter is in theprocess of being finalised.

The Executive Committee meets at least twice per month.

The composition of the Executive Committee at year-end was asfollows:

PA Fouche Chief Executive OfficerJJ Barnard Operations OfficerHAK Slabbert Chief Financial OfficerHJ Wessels Company Secretary and Legal AdvisorNGPO Tambo Public Relations and Marketing

Audit Committee

The Audit Committee assists the Board in discharging itsresponsibilities of safeguarding the Group’s assets, maintaining

Back from left to right: HAK Slabbert, NB Gxowa, JJ Barnard, HJ WesselsFront from left to right: PA Fouche, MC Matjila, NGPO Tambo


» STATEMENT ON CORPORATE GOVERNANCE

» DIRECTORS’ INTEREST

Shares heldBeneficial Non-beneficial

Direct Indirect Direct Indirect Total Percentage

MC Matjila 130 000 000 130 000 000 17.27PA Fouche 6 375 000 6 375 000 0.85JJ Barnard –HAK Slabbert –NGPO Tambo 25 000 000 25 000 000 3.32HJ Wessels 145 791 667 145 791 667 19.36NB Gxowa 50 000 000 50 000 000 6.64MA Rwayitare –AF Tambo –GW Slabbert –

– 177 166 667 – 180 000 000 357 166 667 47.44

adequate accounting records and effective records and systems ofinternal control, overseeing the financial reporting process andmonitoring compliance with Group policies and legal requirements.It also evaluates the effectiveness of external audit processes.

The Audit Committee, which consists of two non-executivedirectors, will be meeting twice a year. The external auditors andthe designated advisor will attend these meetings and will haveunrestricted access to the Audit Committee and its Chairman.

Personnel and Remuneration Committee

The Committee consists of two non-executive members and oneexecutive member.

This Committee will be meeting twice per annum.

Directors’ emoluments are disclosed in the Annual Report.

Relationship with the Shareholders and Stakeholders

There were no communications to the shareholders due to the shorttrading period – December 2006 to February 2007. The companyenvisage maintaining communication with shareholders throughquarterly newsletters, SENS announcements and regularinformation on the official Imuniti website – www.imuniti.co.za.

Internal Controls

Detailed design, implementation and operation of adequate internalcontrols are currently taking place. The internal financial andoperational controls are designed to provide reasonable integrity

and reliability of the annual financial statements, to adequatelysafeguard assets against material losses, to ensure properauthorisation and recording of transactions, and to minimiseoperating risks.

Risk Management

The Group recognises that managing risk represents an integral partof generating sustainable shareholder value.

The ability to effectively manage risks is essential in order to meetthe Group’s objectives in terms of financial performance,increased market share, human resource development and socialinvestment.

Code of Ethics

The Group’s ethics policy requires all employees to act with theutmost good faith and integrity and compliance to the applicablelegislation.

Details of Meetings

Due to the fact that the company was only listed on 12 December2006 no official Board meetings were held since listing to end ofFebruary 2007.

Various ad hoc committee meetings were convened prior toNovember 2006 to organise and prepare for listing purposes.


» GROUP CHART

IMPILO DRUGS IMPILO MARKETINGIMUNITI HEALTH

MANAGEMENT SERVICESNUTRITIONAL FOODS

IMUNITI HOLDINGS LIMITED

Chairman, Collin Matjila with Chief Executive Officer, Paul Fouche

» REPORT OF THE INDEPENDENT AUDITORS


TO THE MEMBERS OF IMUNITI HOLDINGS LIMITED

Report on the Financial Statements

We have audited the annual financial statements of ImunitiHoldings Limited and Group, which comprise the directors’ report,the balance sheet as at 28 February 2007, the income statement,the statement of changes in equity and cash flow statement for the14-month period then ended, a summary of significant accountingpolicies and other explanatory notes, as set out on pages 9 to 28.

Directors’ Responsibility for the Financial Statements

The company’s directors are responsible for the preparation and fairpresentation of these financial statements in accordance withInternational Financial Reporting Standards (IFRS), and in themanner required by the Companies Act of South Africa. Thisresponsibility includes: designing, implementing and maintaininginternal control relevant to the preparation and fair presentation offinancial statements that are free from material misstatement,whether due to fraud or error; selecting and applying appropriateaccounting policies; and making accounting estimates that arereasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financialstatements based on our audit. We conducted our audit inaccordance with International Standards on Auditing. Thosestandards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidenceabout the amounts and disclosures in the financial statements. Theprocedures selected depend on the auditor’s judgement, includingthe assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internalcontrol relevant to the entity’s preparation and fair presentation ofthe financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the entity’s internalcontrol.

An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates madeby the directors, as well as evaluating the overall presentation ofthe financial statements.

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

Opinion

In our opinion, the annual financial statements present fairly, in allmaterial respects, the financial position of the company and Groupas of 28 February 2007 and of its financial performance and its cashflows for the 14-month period then ended in accordance withInternational Financial Reporting Standards, and in the mannerrequired by the Companies Act of South Africa.

Siyabala IncorporatedJA Etchells DirectorChartered Accountants (SA)Registered Auditors

Durban2 August 2007

» DIRECTORS’ RESPONSIBILITIES AND APPROVAL


The directors are required by the Companies Act of South Africa tomaintain adequate accounting records and are responsible for thecontent and integrity of the annual financial statements and relatedfinancial information included in this report. It is their responsibilityto ensure that the annual financial statements fairly present thestate of affairs of the company as at the 14 months ended 28 February 2007 and the results of its operations and cash flowsfor the period then ended, in conformity with International FinancialReporting Standards. The external auditors are engaged to expressan independent opinion on the annual financial statements.

The annual financial statements are prepared in accordance withInternational Financial Reporting Standards and are based uponappropriate accounting policies consistently applied and supportedby reasonable and prudent judgments and estimates.

The directors acknowledge that they are ultimately responsible forthe system of internal financial control established by the companyand place considerable importance on maintaining a strong controlenvironment. To enable the directors to meet these responsibilities,the board sets standards for internal control aimed at reducing therisk of error or loss in a cost effective manner. The standards includethe proper delegation of responsibilities within a clearly definedframework, effective accounting procedures and adequatesegregation of duties to ensure an acceptable level of risk. Thesecontrols are monitored throughout the company and all employeesare required to maintain the highest ethical standards in ensuringthe company’s business is conducted in a manner that in allreasonable circumstances is above reproach. The focus of riskmanagement in the company is on identifying, assessing, managingand monitoring all known forms of risk across the company. While

operating risk cannot be fully eliminated, the company endeavoursto minimise it by ensuring that appropriate infrastructure, controls,systems and ethical behaviour are applied and managed withinpredetermined procedures and constraints.

The directors are of the opinion, based on the information andexplanations given by management, that the system of internalcontrol provides reasonable assurance that the financial recordsmay be relied on for the preparation of the annual financialstatements. However, any system of internal financial control canprovide only reasonable, and not absolute, assurance againstmaterial misstatement or loss.

The directors have reviewed the company’s cash flow forecast forthe 12 months to 29 February 2008 and, in the light of this reviewand the current financial position, they are satisfied that thecompany has or has access to adequate resources to continue inoperational existence for the foreseeable future.

The annual financial statements set out on pages 9 to 28, whichhave been prepared on the going concern basis, were approved bythe board on 20 July 2007 and were signed on its behalf by:

JJ Barnard Paul FoucheDirector CEO

Durban2 August 2007

The Company Secretary certifies that the company has lodged withthe Registrar of Companies all such returns as are required of apublic company, in terms of the Companies Act, No. 61 of 1973, andthat all such returns are true, correct, and up to date

Hans WesselsCompany Secretary2 August 2007

» DECLARATION BY COMPANY SECRETARY

» DIRECTORS' REPORT


The directors submit their report for the 14 months ended 28 February 2007.

1. REVIEW OF ACTIVITIES

Main business and operations

The company is engaged in those activities of a holding company and operates principally in South Africa.

The operating results and state of affairs of the company are fully set out in the attached annual financial statements and do not in ouropinion require any further comment.

Net profit of the company was R513 777 (2005: loss R1 613 679), after taxation of R449 256 (2005: Rnil).

2. POST BALANCE SHEET EVENTS

The directors are not aware of any matter or circumstance arising since the end of the financial period.

3. AUTHORISED AND ISSUED SHARE CAPITAL

There were no changes in the authorised share capital of the company during the 14 months under review. 252 946 200 Ordinary shareswere issued at a share premium of R97 790 601 during the 14 months under review.

4. DIVIDENDS

No dividends were declared or paid to shareholders during the 14 months.

5. DIRECTORS

The directors of the company during the 14 months and to the date of this report are as follows:

Name Nationality Change in appointment

JJ Barnard South African Appointed 30 March 2006PHA Fouche South AfricanNB Gxowa* South African Appointed 30 March 2006MC Matjila* South African Appointed 30 March 2006MA Rwayitare* South African Appointed 30 March 2006HAK Slabbert South African Appointed 30 March 2006GW Slabbert* South African Appointed 30 March 2006NGPO Tambo South African Appointed 30 March 2006HJ Wessels South AfricanJC Ellis South African Resigned 30 March 2006JD Louw South African Resigned 30 March 2006AFM Tambo* South African Deceased

* Non-executive

6. SECRETARY

The secretary of the company is PHA Fouche.

Business address: Postal address:5th Floor PO Box 201966197 North Ridge Road Durban NorthDurban 40164001

7. AUDITORSSiyabala Incorporated will continue in office in accordance with section 270(2) of the Companies Act.

» BALANCE SHEET


Group Company28 February 31 December 28 February 31 December

Figures in Rand Notes 2007 2005 2007 2005

AssetsNon-current assetsProperty, plant and equipment 2 13 646 108 – – –Goodwill 3 25 207 298 – – –Intangible assets 4 47 445 169 – 24 000 000 –Investments in subsidiaries 5 – – 44 853 441 –Deferred tax 6 503 034 – 449 256 –

86 801 609 – 69 302 697 –

Current assetsInventories 7 10 700 526 – – –Loans to group companies 8 – – 27 389 930 –Loans receivable 9 1 078 121 – 969 745 –Current tax receivable 54 694 – – –Trade and other receivables 13 158 805 820 467 147 469 820 467Cash and cash equivalents 10 1 160 978 619 490 78 040 619 490

26 153 124 1 439 957 28 585 184 1 439 957

Total assets 112 954 733 1 439 957 97 887 881 1 439 957

Equity and liabilitiesEquityShare capital 11 97 865 896 50 000 97 865 896 50 000Revaluation reserve 249 740 – – –Retained earnings 831 694 (1 613 679) (1 099 902) (1 613 679)

98 947 330 (1 563 679) 96 765 994 (1 563 679)

LiabilitiesNon-current liabilitiesShareholders’ loans 12 – 2 872 075 – 2 872 075Instalment sale agreements 13 1 348 198 – – –

1 348 198 2 872 075 – 2 872 075

Current liabilitiesCurrent tax payable 801 590 – – –Instalment sale agreements 13 422 615 – – –Trade and other payables 10 263 985 103 933 1 121 887 103 933Provisions 14 218 940 – – –Bank overdraft 10 952 075 27 628 – 27 628

12 659 205 131 561 1 121 887 131 561

Total liabilities 14 007 403 3 003 636 1 121 887 3 003 636

Total equity and liabilities 112 954 733 1 439 957 97 887 881 1 439 957

» INCOME STATEMENT


Group Company14 Months 12 Months 14 Months 12 Months

ended ended ended ended28 February 31 December 28 February 31 December


Revenue 63 314 940 – – –Cost of sales (31 893 240) – – –

Gross profit 31 421 700 – – –Other income 1 121 986 – 1 146 669 –Operating expenses (29 717 317) (1 633 177) (1 110 218) (1 633 177)

Operating profit (loss) 15 2 826 369 (1 633 177) 36 451 (1 633 177)Interest received 39 764 19 560 30 691 19 560Finance costs (120 665) (62) (2 621) (62)

Profit (loss) before taxation 2 745 468 (1 613 679) 64 521 (1 613 679)Taxation 18 (300 096) – 449 256 –

Profit (loss) for the period 2 445 372 (1 613 679) 513 777 (1 613 679)

Earnings per share (cents) 22 0.42 (0.32) – –Headline earnings per share (cents) 22 0.42 (0.32) – –Diluted earnings per share (cents) 23 0.41 (0.32) – –

» STATEMENT OF CHANGES IN EQUITY


Share Share Total Revaluation Retained Total Figures in Rand capital premium share capital reserve earnings equity

GroupBalance at 31 December 2004 50 000 – 50 000 – – 50 000Changes in equityLoss for the year – – – – (1 613 679) (1 613 679)

Total changes – – – – (1 613 679) (1 613 679)

Balance at 31 December 2005 50 000 – 50 000 – (1 613 679) (1 563 679)Changes in equityProfit for the year 2 445 372 2 445 372Issue of shares 25 295 97 790 601 97 815 896 97 815 896Revaluation of land and buildings – 249 740 249 740

Total changes 25 295 97 790 601 97 815 896 249 740 2 445 372 100 511 008

Balance at 28 February 2007 75 295 97 790 601 97 865 896 249 740 831 693 98 947 329

CompanyBalance at 31 December 2004 50 000 – 50 000 – – 50 000Changes in equityLoss for the year – (1 613 679) (1 613 679)

Total changes – – – – (1 613 679) (1 613 679)

Balance at 31 December 2005 50 000 – 50 000 – (1 613 679) (1 563 679)Changes in equityProfit for the year 513 777 513 777Issue of shares 25 295 97 790 601 97 815 896 97 815 896

Total changes 25 295 97 790 601 97 815 896 – 513 777 98 329 673

Balance at 28 February 2007 75 295 97 790 601 97 865 896 – (1 099 902) 96 765 994

» CASH FLOW STATEMENT


Group Company14 Months 12 Months 14 Months 12 Months

ended ended ended ended28 February 31 December 28 February 31 December


Cash flows from operating activitiesCash generated from (used in) operations 19 (2 537 057) (2 349 711) 1 727 402 (2 349 711)Interest income 39 764 19 560 30 691 19 560Finance costs (120 665) (62) (2 621) (62)Tax paid 21 (110 000) – – –

Net cash from operating activities (2 727 958) (2 330 213) 1 755 472 (2 330 213)

Cash flows from investing activitiesPurchase of property, plant and equipment 2 (1 479 543) – – –Proceeds on disposal of property, plant and equipment 2 361 414 – – –Increase in intangible assets 4 (28 077 643) – (24 000 000) –Acquisition of businesses 20 (62 019 639) – – –Loans advanced to group companies – – (27 389 930) –Increase in loans receivable (1 078 121) – (969 745) –Increase in investments in subsidiaries – – (44 853 440) –

Net cash from investing activities (92 293 532) – (97 213 115) –

Cash flows from financing activitiesProceeds on share issue 11 25 295 50 000 25 295 50 000Increase in share premium 11 97 790 601 – 97 790 601 –Loans raised/(repaid) (2 872 075) 2 872 075 (2 872 075) 2 872 075Long-term borrowings (305 290) – – –

Net cash from financing activities 94 638 531 2 922 075 94 943 821 2 922 075

Total cash movement for the period (382 959) 591 862 (513 822) 591 862Cash at the beginning of the period 591 862 – 591 862 –

Total cash at end of the period 10 208 903 591 862 78 040 591 862

» ACCOUNTING POLICIES


1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTSThe Group financial statements are prepared on the historical cost basis except for the revaluation of certain financial instruments whichare carried at either fair value or amortised cost as appropriate and incorporate the following principal accounting policies which havebeen consistently applied in all material respects unless otherwise specifically stated.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

The preparation of financial statements in conformity with IFRS required management to make judgements, estimates and assumptionsthat effect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associatedassumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, theresults of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent fromother sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in theperiod in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if therevision affects both current and future periods.

Accounting policies are not applied when the effect of applying them is immaterial, i.e. if individually or collectively they would notinfluence the economic decisions of the users of the financial statements.

1.1 Basis of consolidationSubsidiaries are entities controlled by the company. Control exists when the company has the power, directly or indirectly, togovern the financial and operating policies of an entity so as to obtain benefits from its activities.

The Group financial statements include the results, cash flows and financial position of the company and of its subsidiarycompanies. The results and cash flows of subsidiaries are included from the date that control commences until the date thatcontrol ceases. In the case of the company, investments in subsidiaries are carried at cost less impairment losses. Intergrouptransactions and balances are eliminated on consolidation.

1.2 Significant judgementsIn preparing the annual financial statements, management is required to make estimates and assumptions that affect the amountsrepresented in the annual financial statements and related disclosures. Use of available information and the application ofjudgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may bematerial to the annual financial statements.

1.3 Property, plant and equipmentThe cost of an item of property, plant and equipment is recognised as an asset when:

• it is probable that future economic benefits associated with the item will flow to the company; and• the cost of the item can be measured reliably.

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

The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also includedin the cost of property, plant and equipment.

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.

Item Average useful lifeLand IndefiniteBuildings 30 yearsPlant and machinery 1 – 15 yearsFurniture and fixtures 1 – 4 yearsMotor vehicles 1 – 5 yearsOffice equipment 1 – 3 yearsComputer equipment 1 – 3 yearsComputer software 1 – 3 yearsLeasehold improvements 6 – 7 yearsLaboratory equipment 1 – 8 years


The residual value and the useful life of each asset are reviewed at each financial period end.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shallbe depreciated separately.

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

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

1.4 Post balance sheet eventsRecognised amounts in the financial statements are adjusted to reflect events arising after the balance sheet date that provideevidence of conditions that existed at the balance sheet date. Events after the balance sheet that are indicative of conditions thatarose after the balance sheet date are dealt with by way of a note.

1.5 GoodwillGoodwill is initially measured at cost, being the excess of the business combination over the company's interest of the net fairvalue of the identifiable assets, liabilities and contingent liabilities.

Subsequently goodwill is carried at cost less any accumulated impairment.

The excess of the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over thecost of the business combination is immediately recognised in profit or loss.

Internally generated goodwill is not recognised as an asset.

1.6 Intangible assetsAn intangible asset is recognised when:

• it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and• the cost of the asset can be measured reliably.

Intangible assets are initially recognised at cost.

Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.

An intangible asset arising from development (or from the development phase of an internal project) is recognised when:

• it is technically feasible to complete the asset so that it will be available for use or sale;• there is an intention to complete and use or sell it;• there is an ability to use or sell it;• it will generate probable future economic benefits;• there are available technical, financial and other resources to complete the development and to use or sell the asset; and• the expenditure attributable to the asset during its development can be measured reliably.

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

1.7 Investments in subsidiariesInvestments in subsidiaries are carried at cost less any accumulated impairment.

The cost of an investment in a subsidiary is the aggregate of:

• the fair value, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by thecompany; plus

• any costs directly attributable to the purchase of the subsidiary.

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



1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS (continued)1.8 Financial instruments

Initial recognitionFinancial assets and liabilities are recognised initially at fair value. In the case of financial assets or liabilities not classified as atfair value through profit and loss, transaction costs that are directly attributable to the acquisition or issue of the financialinstrument are added to the fair value.

An asset that is subsequently measured at cost or amortised cost is recognised initially at its fair value on the trade date.

Subsequent measurementAfter initial recognition financial assets are measured as follows:

• loans and receivables and held-to-maturity investments are measured at amortised cost using the effective interest method;• investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be

reliably measured, are measured at cost; and• other financial assets, including derivatives, at fair values, without any deduction for transaction costs which may incur on sale

or other disposal.

After initial recognition financial liabilities are measured as follows:

• financial liabilities at fair value through profit or loss, including derivatives that are liabilities, are measured at fair value; and• other financial liabilities are measured at amortised cost using the effective interest method.

Gains and lossesA gain or loss arising from a change in a financial asset or financial liability is recognised as follows:

• a gain or loss on a financial asset or financial liability classified as at fair value through profit or loss is recognised in profit orloss;

• a gain or loss on an available-for-sale financial asset is recognised directly in equity, through the statement of changes inequity, until the financial asset is derecognised, at which time the cumulative gain or loss previously recognised in equity isrecognised in profit or loss; and

• financial assets and financial liabilities carried at amortised cost: a gain or loss is recognised in profit or loss when thefinancial asset or financial liability is derecognised or impaired, and through the amortisation process.

1.9 TaxCurrent tax assets and liabilitiesCurrent tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect ofcurrent and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

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

Deferred tax assets and liabilitiesA deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arisesfrom the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accountingprofit nor taxable profit (tax loss).

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit willbe available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when itarises from the initial recognition of an asset or liability in a transaction at the time of the transaction and affects neitheraccounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for the carry forward of unused tax losses and unused STC credits to the extent that it isprobable that future taxable profit will be available against which the unused tax losses and unused STC credits can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realisedor the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheetdate.


Tax expensesCurrent and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to theextent that the tax arises from:

• a transaction or event which is recognised, in the same or a different period, directly in equity; or• a business combination.

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

1.10 InventoriesInventories are measured at the lower of cost and net realisable value.

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

The cost of inventories is assigned using the weighted average cost formula. The same cost formula is used for all inventorieshaving a similar nature and use to the entity.

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

1.11 Impairment of assetsThe company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any suchindication exists, the company estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the company also:

• tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually bycomparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period andat the same time every period; and

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

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is notpossible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash generating unit to whichthe asset belongs is determined.

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

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

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

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

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

• first, to reduce the carrying amount of any goodwill allocated to the cash generating unit; and• then, to the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods forassets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts ofthose assets are estimated.



1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS (continued)1.11 Impairment of assets (continued)

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceedthe carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

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

1.12 Employee benefitsShort-term employee benefitsThe cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacationleave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the serviceis rendered and are not discounted.

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

The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or constructiveobligation to make such payments as a result of past performance.

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

1.13 Provisions and contingenciesProvisions are recognised when:

• the company has a present obligation as a result of a past event;• it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and• a reliable estimate can be made of the obligation.

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

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, thereimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entitysettles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shallnot exceed the amount of the provision.

Provisions are not recognised for future operating losses.

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

A constructive obligation to restructure arises only when an entity:

• has a detailed formal plan for the restructuring, identifying at least:– the business or part of a business concerned;– the principal locations affected;– the location, function, and approximate number of employees who will be compensated for terminating their services;– the expenditures that will be undertaken;– when the plan will be implemented; and

• has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan orannouncing its main features to those affected by it.


After their initial recognition contingent liabilities recognised in business combinations that are recognised separately aresubsequently measured at the higher of:

• the amount that would be recognised as a provision; and• the amount initially recognised less cumulative amortisation.

Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 26.

1.14 RevenueRevenue from the sale of goods is recognised when all the following conditions have been satisfied:

• the company has transferred to the buyer the significant risks and rewards of ownership of the goods;• the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective

control over the goods sold;• the amount of revenue can be measured reliably;• it is probable that the economic benefits associated with the transaction will flow to the company; and• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

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

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

1.15 TurnoverTurnover comprises sales to customers and service rendered to customers. Turnover is stated at the invoice amount and isexclusive of value-added taxation.

1.16 Cash and cash equivalentsCash and cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and aresubject to insignificant risk in change in value. Cash and cash equivalents are measured at fair value.

» NOTES TO THE ANNUAL FINANCIAL STATEMENTS


2. PROPERTY, PLANT AND EQUIPMENT2007 2005

Cost/ Accumulated Carrying Cost/ Accumulated Carrying Figures in Rand Valuation depreciation value Valuation depreciation value

Land and buildings 3 483 890 350 400 3 133 490 – – –Plant and machinery 13 904 886 5 287 112 8 617 774 – – –Furniture and fixtures 149 323 34 477 114 846 – – –Motor vehicles 2 008 063 722 645 1 285 418 – – –Office equipment 275 800 106 564 169 236 – – –Computer equipment 236 597 44 954 191 643 – – –Computer software 49 746 13 348 36 398 – – –Leasehold improvements 40 000 667 39 333 – – –Laboratory equipment 114 100 56 130 57 970 – – –

Total 20 262 405 6 616 297 13 646 108 – – –

Reconciliation of property, plant and equipment – 2007Additions

throughOpening businessbalance Additions combinations Disposals Revaluations Depreciation Total

Land and buildings – 70 260 2 952 122 – 249 740 (138 632) 3 133 490Plant and machinery – 594 241 10 435 573 (45 054) – (2 366 986) 8 617 774Furniture and fixtures – 98 823 50 500 – – (34 477) 114 846Motor vehicles – 378 076 1 803 763 (316 049) – (580 372) 1 285 418Office equipment – 11 800 264 000 – – (106 564) 169 236Computer equipment – 236 597 – – – (44 954) 191 643Computer software – 49 746 – – – (13 348) 36 398Leasehold improvements – 40 000 – – – (667) 39 333Laboratory equipment – – 114 100 – – (56 130) 57 970

– 1 479 543 15 620 058 (361 103) 249 740 (3 342 130) 13 646 108

Land and buildings comprise Portion 10 of Erf 1911 Extension 1, North-West Province measuring 1.3866 hectares with commercialbuildings thereon.

Valuation done by HC de Waal, a member of the South African Institute of Valuers.

3. GOODWILL2007 2005

Cost/ Accumulated Carrying Cost/ Accumulated CarryingFigures in Rand Valuation amortisation value Valuation amortisation value

GroupGoodwill 25 207 298 – 25 207 298 – – –


4. INTANGIBLE ASSETS2007 2005

Cost/ Accumulated Carrying Cost/ Accumulated Carrying Figures in Rand Valuation amortisation value Valuation amortisation value

GroupDistribution rights 24 000 000 – 24 000 000 – – –Brand names 11 694 216 – 11 694 216 – – –Customer contracts 7 673 310 – 7 673 310 – – –Development costs 4 077 643 – 4 077 643 – – –

Total 47 445 169 – 47 445 169 – – –

CompanyDistribution rights 24 000 000 – 24 000 000 – – –

5. INVESTMENTS IN SUBSIDIARIESCarrying Carrying amount amount

Figures in Rand 2007 2005

Shares held at cost less provisions and amounts written off 44 853 441 –

44 853 441 –

Subsidiary Country of incorporationNutritional Foods (Pty) Limited South AfricaPB Tully Family Holdings (Pty) Limited (incorporating Impilo Drugs 1966 (Pty) Limited) South AfricaImpilo Marketing (Pty) Limited South AfricaImuniti Health Management Services (Pty) Limited South AfricaImuniti Wellness Centres (Pty) Limited South Africa

All subsidiaries are wholly owned unless specifically stated otherwise. All holdings are in the ordinary share capital of the undertakingconcerned. For details of loans to/(from) subsidiaries refer to note 8.

The aggregate profit before tax attributable to shareholders of the company is R2 680 947.

Group CompanyFigures in Rand 2007 2005 2007 2005

6. DEFERRED TAXDeferred tax asset (liability)Accelerated capital allowances for tax purposes 53 778 – – –Tax losses available for set-off against future taxable income 449 256 – 449 256 –

503 034 – 449 256 –

Reconciliation of deferred tax asset (liability)Temporary differences 503 034 – 449 256 –

7. INVENTORIESRaw materials 4 515 361 – – –Work in progress 176 157 – – –Finished goods 3 513 892 – – –Merchandise 2 495 116 – – –

10 700 526 – – –




8. LOANS TO/FROM GROUP COMPANIESSubsidiariesImpilo Drugs (1966) (Pty) Limited – – 1 787 116 –Nutritional Foods (Pty) Limited – – 18 835 662 –Imunity Health Management Services (Pty) Limited – – 6 767 152 –

– – 27 389 930 –

The loans are unsecured, bear interest at variable rates and haveno fixed terms of repayment.

9. LOANS RECEIVABLELoans and receivablesLoans receivable 1 078 121 – 969 745 –

The loans are unsecured, bear interest at variable rates and haveno fixed terms of repayment.Current assetsLoans and receivables 1 078 121 – 969 745 –

10. CASH AND CASH EQUIVALENTSCash and cash equivalents consist of:Bank balances 1 160 978 619 490 78 040 619 490Bank overdraft (952 075) (27 628) – (27 628)

208 903 591 862 78 040 591 862

Current assets 1 160 978 619 490 78 040 619 490Current liabilities (952 075) (27 628) – (27 628)

208 903 591 862 78 040 591 862

Trade debtors of R829 761 in Impilo Marketing (Pty) Limited, werepledged as security for overdraft facilities of R300 000. As at 28 February 2007 the overdraft amounted to R237 344.

11. SHARE CAPITALAuthorised1 000 000 000 Ordinary shares of R0.0001 each 100 000 100 000 100 000 100 000100 000 000 Redeemable preference shares of R0.0001 each 10 000 10 000 10 000 10 000

110 000 110 000 110 000 110 000

IssuedOrdinary 75 295 50 000 75 295 50 000Share premium 101 799 294 – 101 799 294 –Share issue costs written off against share premium (4 008 693) – (4 008 693) –

97 865 896 50 000 97 865 896 50 000

Unissued ordinary shares are under the control of the directors interms of a resolution of members passed at the last annualgeneral meeting. This authority remains in force until the nextannual general meeting.



12. SHAREHOLDERS’ LOANSHeld at amortised costThe Ellis Family Trust – 1 453 876 – 1 453 876BBE Trust – 1 418 199 – 1 418 199

– 2 872 075 – 2 872 075

The loans are unsecured, interest free and have no fixed terms ofrepayment.Non-current liabilitiesAt amortised cost – 2 872 075 – 2 872 075

13. INSTALMENT SALE AGREEMENTSNon-current liabilities 1 348 198 – – –Current liabilities 422 615 – – –

1 770 813 – – –

The instalment sale agreements are repayable in monthlyinstalments of R53 288, bearing interest at between 11% and15% per annum. The liabilities are secured over property, plantand equipment with a book value of R1 829 643.

14. PROVISIONSReconciliation of provisions – 2007

Opening balance Additions Total

Provision for leave pay – 218 940 218 940


15. OPERATING PROFITOperating profit for the year is stated after accounting for thefollowing:Operating lease chargesPremises• Contractual amounts 531 739 85 500 34 656 85 500Equipment• Contractual amounts 210 541 – – –

742 280 85 500 34 656 85 500

Profit on disposal of property, plant and equipment 311 – – –Depreciation 3 342 130 – – –Employee costs 16 306 899 193 965 638 875 193 965

16. AUDITOR’S REMUNERATIONFees 180 112 – 58 710 –Other services 5 670 – – –

185 782 – 58 710 –



17. DIRECTORS’ EMOLUMENTSExecutive2007 Emoluments Allowances Bonus Total

PHA Fouche 490 000 70 000 40 000 600 000JJ Barnard 635 000 70 000 37 500 742 500HAK Slabbert 455 000 70 000 37 500 562 500NGPO Tambo 175 000 – 17 500 192 500HJ Wessels 175 000 – 17 500 192 500

1 930 000 210 000 150 000 2 290 000

Non-executive2007 Emoluments Total

MC Matjila 25 000 25 000GW Slabbert 12 500 12 500

37 500 37 500


18. TAXATIONMajor components of the tax expense (income)CurrentLocal income tax – current period 802 873 – – –DeferredOriginating and reversing temporary differences (502 777) – (449 256) –

300 096 – (449 256) –

19. CASH GENERATED FROM (USED IN) OPERATIONSProfit (loss) before taxation 2 745 468 (1 613 679) 64 521 (1 613 679)Adjustments for:Depreciation and amortisation 3 342 130 – – –Loss on sale of assets 311 – – –Interest received (39 764) (19 560) (30 691) (19 560)Finance costs 120 665 62 2 621 62Movements in provisions 218 940 – – –Changes in working capital:Inventories (4 420 794) – – –Trade and other receivables (10 721 529) (820 467) 672 997 (820 467)Trade and other payables 6 217 516 103 933 1 017 954 103 933

(2 537 057) (2 349 711) 1 727 402 (2 349 711)



20. ACQUISITION OF BUSINESSESFair value of assets acquiredProperty, plant and equipment 15 003 833 – – –Intangible assets 19 367 526 – – –Goodwill 25 207 298 – – –Inventories 6 279 732 – – –Trade and other receivables 2 490 116 – – –Trade and other payables (3 924 727) – – –Tax assets/liabilities (54 024) – – –Borrowings (1 585 523) – – –Cash (613 082) – – –

62 171 149 – – –

Net cash outflow on acquisitionCash consideration paid (62 171 149) – – –Cash acquired and deposits paid 151 510 – – –

(62 019 639) – – –

During the year the company acquired 100% of the share capitalof Nutritional Foods (Pty) Limited, PB Tully Family Holdings (Pty)Limited (incorporating Impilo Drugs (1966) (Pty) Limited), ImpiloMarketing (Pty) Limited and Imuniti Health Management Services(Pty) Limited.

21. TAX (PAID) REFUNDEDCurrent tax for the period recognised in income statement (802 873) – – –Tax acquired (54 023) – – –Balance at end of the period 746 896 – – –

(110 000) – – –

22. EARNINGS PER SHAREReconciliation of earnings and headline earningsWeighted average shares in issue (shares) 587 203 000 500 000 000 – –Attributable earnings 2 445 372 (1 613 679) – –

Earnings and headline earnings per share (cents) 0.42 (0.32) – –

23. DILUTED EARNINGS PER SHAREReconciliation of diluted earnings and headline earningsWeighted average shares in issue (shares) 587 203 000 500 000 000 – –Shares on option (shares) 5 461 626 – – –Diluted weighted average shares in issue (shares) 592 664 626 500 000 000 – –

Attributable earnings 2 445 372 (1 613 679) – –

Diluted earnings per share (cents) 0.41 (0.32) – –



24. RELATED PARTIESImuniti Holdings Limited is a holding company incorporated in South Africa. The company transacts with various subsidiaries. Alltransactions between related parties are conducted at arm’s length. Details of transactions with related parties are not considerednecessary for an understanding of these financial statements. For details with loans with related parties refer to note 8.

25. FINANCIAL INSTRUMENTSRisk management activitiesIn the normal course of its operations, the company is exposed to interest rate, liquidity and credit risk. In order to manage these risks,the company has developed a comprehensive risk management process to facilitate control and monitoring of these risks. Generalcorporate hedging unrelated to any specific project is not undertaken. The company also does not issue or acquire derivative instrumentsfor trading purposes.

Interest rate and liquidity riskFluctuations in interest rates impact on the value of short-term investments and financing activities giving rise to interest rate risk. In theordinary course of business, the company receives cash proceeds from its operations and is required to fund working capital and capitalexpenditure requirements. The cash is managed to ensure that surplus funds are invested to maximise returns whilst ensuring that capitalis safeguarded for the maximum extent possible by investing only with top financial institutions. Contractual arrangements for committedborrowing facilities are maintained with several banking counterparties to meet the company’s normal and contingency funding.

Credit riskThe company’s financial instruments do not represent a concentration of credit risk as the company deals with a number of major clients.Accounts receivable are regularly monitored and assessed and where necessary an adequate level of provision is maintained.

Fair valuesThe fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in an arm’s lengthtransaction between willing parties. The carrying amounts of on balance sheet financial instruments approximate their fair value.

26. CONTINGENCIESThe Group’s bankers hold letters of guarantee for the amount of R57 600 for trade services.


» SHAREHOLDER INFORMATION

SHAREHOLDER SPREADNumber of Percentage of Number Percentage of

shareholders shareholders of shares issued capital

Public 199 93.43 255 741 348 33.97Non-public 14 6.57 497 204 852 66.03

Total 213 1 752 946 200 1

MAJOR SHAREHOLDERS HOLDING 5% OR MORE OF THE SHARE CAPITAL

Number of Percentage of Number Percentage ofshareholders shareholders of shares issued capital

Kopano Logistics 130 000 000 17.27Hans Jacob Wessels 101 291 667 13.45BBE Family Trust 84 465 000 11.22Ellis Family Trust 78 333 334 10.40Malibongwe Women’s Development 50 000 000 6.64Hans Wessels Trust 44 500 000 5.91Edge to Edge 1113 (Pty) Limited 39 581 633 5.26

528 171 634 70.15

RANGE OF SHAREHOLDERS

Number of Percentage of Number Percentage ofshareholders shareholders of shares issued capital

1 – 9 999 45 21.13 178 377 0.0210 000 – 99 999 60 28.17 2 277 209 0.30100 000 – 999 999 78 36.62 26 210 506 3.481 000 000 shares and over 30 14.08 724 280 108 96.19

213 100.00 752 946 200 100.00

DESIGNATED ADVISORExchange SponsorsFirst Floor, Building 3Commerce Square39 Rivonia RoadSandton 2196


» NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the annual general meeting of shareholders of Imuniti Holdings Limited will be held at the Gallagher Estate,Richards Drive, Midrand on Wednesday, 29 August 2007 at 16:00 for the following purposes:

1. To consider the annual financial statements of the company for the year ended 28 February 2007;

2. To transact such other business as may be transacted at the annual general meeting of the company including the re-appointment of theauditors; and

3. To consider and, if deemed fit, to pass, with or without modification, the following ordinary resolutions set out below, in the mannerrequired by the South African Companies Act, 1973, as amended:

ORDINARY RESOLUTIONSOrdinary resolution number 1: Issue of shares for cash“Resolved that the directors be authorised pursuant inter alia to the company’s articles of association, until this authority lapses at the nextannual general meeting of the company, unless it is then renewed at the next annual general meeting of the company provided that it shallnot extend beyond 15 months, to allot and issue any ordinary shares for cash subject to the Rules and Requirements of the JSE Limited (JSE)on the following bases:

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

2. the shares which are the subject of the issue for cash must be of a class already in issue, or where this is not the case, must be limitedto such shares or rights that are convertible into a class already in issue;

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

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

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

In terms of the Listings Requirements of the JSE a 75% (seventy-five percent) majority of the votes cast by shareholders present or representedby proxy at the general meeting must be cast in favour of ordinary resolution number 1 for it to be approved.”

Ordinary resolution number 2: Unissued ordinary shares“Resolved that the authorised and unissued ordinary share capital of the company be and is hereby placed under the control of the directorsof the company which directors are, subject to the Rules and Regulations of the JSE Limited (JSE) and the provisions of section 221 and 222of the Companies Act, 1973 as amended, authorised to allot and issue any of such shares at such time or times, to such person or persons,company or companies and upon such terms and conditions as they may determine, such authority to remain in force until the next annualgeneral meeting of the company.”

» NOTICE OF ANNUAL GENERAL MEETING


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

Ordinary resolution number 4: Re-appointment of auditors“Resolved that Siyabala Inc. be re-appointed as auditors of the company.”

VOTING AND PROXIESA shareholder of the company entitled to attend and vote at the annual general meeting is entitled to appoint one or more proxies (who neednot be a shareholder of the company) to attend, vote and speak in his/her stead.

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, everyshareholder of the company present in person or represented by proxy shall have one vote for every share held in the company by suchshareholder.

A form of proxy is attached for the convenience of any shareholder holding Imuniti Holdings Limited shares who cannot attend the annualgeneral meeting. Forms of proxy may also be obtained on request from the company’s registered office. The completed forms of proxy mustbe deposited at or posted to the office of the transfer secretaries of the company, to be received no later than 48 hours prior to the meeting.Any member who completes and lodges a form of proxy will nevertheless be entitled to attend and vote in person at the general meeting,should the member subsequently decide to do so.

Shareholders who have already dematerialised their shares through their Central Securities Depository Participant (CSDP) or broker rather thanthrough own-name registration and who wish to attend the annual general meeting must instruct their CSDP or broker to issue them with thenecessary authority to attend.

Dematerialised shareholders, who have elected own-name registration in the sub-register through a CSDP and who are unable to attend butwish to vote at the annual general meeting, should complete and lodge the attached form of proxy with the transfer secretaries of thecompany.

Dematerialised shareholders, who have elected own-name registration in the sub-register through a CSDP and who are unable to attend butwish to vote at the annual general meeting, should timeously provide their CSDP or broker with their voting instructions in terms of the custodyagreement entered into between the shareholder and his CSDP or broker.

By order of the board

Hans WesselsCompany Secretary

2 August 2007

Registered address Transfer SecretariesSuite E101 Hampden Court Link Market Services (Pty) Limited7 Hampden Road 11 Diagonal StreetDurban 4000 Johannesburg 2000

» NOTES


Designed by

Printed by I

» FORM OF PROXY

(For use by certified shareholders and own-name dematerialised shareholders)

IMUNITI HOLDINGS LIMITED(Incorporated in the Republic of South Africa)(Registration number 2004/002282/06)(JSE Code: IMU & ISIN: ZAE000089199)

(“Imuniti” or “the company”)

Form of proxy for the annual general meeting of the company to be held at Gallagher Estate, Richards Drive, Midrand on Wednesday, 29 August 2007 at 16:00 (“the annual general meeting”).

For use by certificated shareholders, nominee companies of Central Securities Depository Participants (“CSDP”), brokers’ nominee companiesand shareholders who have dematerialised their shares and who have elected own-name registration, who wish to vote on the ordinary andspecial resolutions per the Notice of the Annual General Meeting to which this form is attached.

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

I/We (name in block letters)

Of (address)

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

1. or failing him/her

2. or failing him/her

3. The chairperson of the annual general meeting

as my/our proxy to act for me/us and on my/our behalf at the annual general meeting of the company, or any adjournment thereof, which willbe held for the purpose of considering and, if deemed fit, of passing, with or without modification, the ordinary resolutions as detailed in theNotice of Annual General Meeting, and to vote for and/or against the resolutions and/or abstain from voting in respect of the ordinary sharesregistered in my/our name/s, in accordance with the following instructions (refer notes):

To pass ordinary resolutions:

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

In favour Against Abstain

1. To issue for cash the authorised but unissued shares

2. To place the unissued shares under the control of the directors

3. To authorise the signature of documentation

4. To re-appoint Siyabala Inc. as auditors of the company

Signed at on 2007

Signature

Assisted by (if applicable)

» NOTES TO THE FORM OF PROXY

1.

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