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View this report online at www.ir2013ububele.co.za UBUBELE INTEGRATED REPORT 2013 Scientific solutions for sustainable agriculture

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View this report online at www.ir2013ububele.co.za

U b U b e l e i n t e g r a t e d r e p o r t 2 0 1 3

Scientific solutions for sustainable

agriculture

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Scope and boundary of the report

Ububele recognises that integrated reporting is the future of corporate reporting. This report presents our performance and financial results for the year ended 30 June 2013.

We view the reporting requirements as dictated by the JSE Listings Requirements and the new Companies Act, 71 of 2008, as a means to improve our communication with our stakeholders in the short, medium and long term.

This report portrays our integrated journey to ensure that Ububele remains sustainable for the ongoing benefit of our stakeholders and the community in which we operate.

2 Financial highlights

3 Stated objective

4 Business overviewUbubele is a JSE AltX-listed South African holding company, with the objective of becoming the business partner of choice in Africa for lucrative investment opportunities in agriculture-related sectors.

20 Board of directors

21 Senior management team

23 Chairman’s report

29 Chief executive officers’ report

38 Financial director’s report

42 Sustainability reportUbubele embraces the principles of freedom of association, and drives best management practices actively.

51 Value added statement

52 Corporate governanceCorporate governance is a priority that requires more attention than merely establishing the steps to be taken to demonstrate compliance with legal, regulatory or listings requirements.

67 Financial statements

132 Notice of annual general meeting

IBC General information

integrated report 2013

View this report online at

www.ir2013ububele.co.za

U B U B E L E i n t E g r A t E d r E P O r t [1]

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financial highlights Þ

Revenue Þ 9.28%

Gross profit Þ 1.82%

Current assets Þ 0.75%

Share price Þ 16.67%

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statED OBJEctiVE Þ

O prOvide our customers with the highest standards of services and products,having due consideration for all stakeholders throughthe application of best practices and available technologies.

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BUsinEss OVERViEW Þ

company profile

o Ububele Holdings (Pty) Limited (Ububele) is primarily an agricultural scientific knowledge-based business. Ububele sells advanced scientific knowledge and products, such as pesticides, fungicides and herbicides, to farmers to protect and maximise their crops.

o Ububele develops and formulates some of these products. Ububele also acts as a distributor for multinational agricultural science companies from the USA and Europe.

investment case

AGriCULTUre

iS OUr wisest pursuit, because it will in the end contribute most to real wealth, good morals and happiness.

Thomas Jefferson in a letter to George Washington, 1787

WOrKiNG TO eLiMiNATe food insecurity across the globe ... will increase political stability in conflict and poverty-stricken regions, and put these countries on a path to future prosperity.

Thomas Vilsack – Tokyo, 2010

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areas of operation

UBUBeLe OperATeS priMAriLy iN SOUTherN AfriCA. The company has offices in Cape Town, pretoria, Kroonstad, Lichtenburg, Modimolle, pietermaritzburg, Umhlanga and Windhoek.

UBUBeLe SeLLS its products in South Africa, Namibia, Zambia, Angola, Botswana and Mozambique.

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OUr OBjeCTiveS and plans of action all feed into our primary goals, which include growing the business, increasing shareholder wealth and being socially responsible.to this end focus is continually placed on internal growth, expansion through acquisitions, sustainability, risk management, corporate finance, cost containment, succession planning and training.

BUsinEss OVERViEW [continued] Þ

GOALS

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OUr MiSSiON is to invest in new agricultural scientific businesses and to support and grow our existing business to create sustainable value for all our stakeholders.

OUr viSiON is to supply our customers with the necessary scientific knowledge and product mix to ensure long-term sustainability and a contribution to food security.

VISION

MISSION

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Rovic Agri, an agriculture investment company, and Mentele Investments, a black-owned investment consortium, hold the majority of shares in Ububele.

Ububele was founded in 2002. Initially, the board identified a number of sectors to invest in, i.e. airline catering, food production, agriculture, security and property.

The agriculture and food production businesses grew steadily and showed growth potential. However, the South African airline catering industry faced some challenges and for strategic reasons the Ububele board of directors decided to dispose of its investment in Ground Crew at the end of 2005. The sale allowed the board to release previous shareholders and settle some debt. By decreasing debt levels and increasing current assets the sale improved the company’s balance sheet.

Since the disposal of Ground Crew, Ububele has acquired more businesses in the food and agriculture sectors – Novon WTP, RT Chemicals, Linktrade and Just Fruit and Veg. Ububele was also able to re-establish itself in the airline catering business in Windhoek at Hosea Kutako International Airport.

At the beginning of 2007, the board had identified strategic acquisitions, but cash generated from operations was no longer enough to finance growth through acquisitions. Therefore, the board decided to secure external funding to ensure growth and sustainability. Among other things, sustainability required vertical integration of our chemical business by acquiring a chemical manufacturer. This was achieved by acquiring RT Chemicals which owned several chemical registrations and formulates some of its own products.

The acquisition of RT Chemicals made it possible for Ububele to list on the JSE’s AltX. However, the board decided to postpone the listing to 2009, giving the

BUsinEss OVERViEW [continued] Þ

Ububele is a JSE AltX-listed South African holding company, with the objective of becoming the business partner of choice in Africa for lucrative investment opportunities in agriculture-related sectors.

company time to bulk up its assets and list with a stronger balance sheet.

For Ububele to be more attractive to the equities market, it had to focus its investments. The most natural way to achieve this was to focus on the food-processing and agriculture-related business sectors. The group had expertise in these sectors and the sectors held growth opportunities worldwide. As food security is an international hot topic, it will receive more and more attention from government and agricultural business leaders. Therefore, it made sense for the board to focus its resources and energy on agriculture and food processing.

On 11 November 2009, Ububele listed on the AltX. By then the balance sheet was stronger and Ububele had proved to itself and its shareholders that it had the expertise to grow further into agriculture.

By the end of 2011, our food division made up less than 20% of our total business. Severe price pressure from retailers and double-digit increases in energy and transport costs, resulted in this division making losses during 2011 and 2012.

Therefore, we decided to disinvest from the food sector over the medium term and focus only on agriculture, which made up more than 80% of our business.

After the disposal of the majority of our food business, the board of directors realigned their strategy to focus only on the agriculture sector.

Strategic investment

§ Flamingo Food Services (Pty) Limited – 51% Flamingo Food Services is the only provider of

in-flight catering services to domestic, regional and international airlines, which entails, inter alia, the provision of meals, loading services, stock storage, chilling facilities and cleaning services for airlines operating in and out of Hosea Kutako International Airport in Windhoek, Namibia.

Who we

are

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Food securityUbubele contributes to food security by investing in and developing scientific knowledge-based products that have the potential to protect and enhance crops. these products include:§ Pesticides

§ Fungicides

§ Herbicides

§ Irrigation equipment

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BUsinEss OVERViEW [continued] Þ

Material issues table

the Ububele business model

produceTHe FArMerYIeLd

MuLTINATIoNAL SuppLIerS

eNVIro

Specialised working capital finance

production of world-class scientific products that will enhance our customers’ sustainability

Increase in footprint

Yield branding

Water management, climate control and irrigation

Growth into Africa

Flamingo Food Services in Namibia

The ability to finance our sales over the production period of our customers

To enhance the product yield obtained by our customers

To build a larger distribution network

Marketing within our customer base and building strong brand awareness

Integrating Turf-Ag into the existing network

To grow our sales with our existing product and new developed product mix

To use Namibia as a platform to grow our business into Africa

A network of knowledgeable agents that market our products

Building on the relationships with our customers, based on trust and scientific knowledge

LINk To STrATeGYMATerIAL ISSueS

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business offering

efficiency quality competitiveness

Enviro Crop Protection – 100% enViro crop protection has developed into a leading specialist business, manufacturing and distributing a core range of crop protection chemicals. currently the company owns 82 registrations, as well as numerous in various stages of registration. enviro crop protection distributes to most of the sadc countries.

efficiency quality competitiveness

Enviro Industries (Pty) Limited – 100% enViro industries owns the patents to the various weed control, herbicide and pesticide chemicals. the company was registered in 1999 and has established itself as a national market leader in the areas of weed and pest control through a network of dealers in south africa. the company owns brands in a wide spectrum of weed control products and outsources the formulation of the products to various formulation companies.

efficiency quality competitiveness

Enviro Weed Control Namibia (Pty) Limited – 63%Jointly owned by ububele holdings namibia and ububele chemical group. an extension of enviro industries (pty) limited operating in namibia.Flamingo In-Flight Catering (Pty) Limited (previously Ububele Alpine In-Flight) – 51% in the fast-paced environment of international gateways, Flamingo offers specialised airline catering and cleaning services from hosea Kutako international airport in windhoek, namibia. among the company's customers are south african airways, ba, ltu, taag and air namibia.Turf-Ag Products (Pty) Limited – 51%turF-ag imports and distributes agricultural and turf irrigation equipment. turf-ag operates throughout south africa and supplies products to the agriculture and turf market. the company holds the distribution rights to the well-known american irrigation brand, hunter.

Yield Alfa (Pty) Limited – 100%Yield alFa is a distributor of agricultural chemicals, i.e. pesticides, herbicides and fungicides, foliar feeds, wetters and seeds, directly to end users. Yield alfa is mainly active in northern cape and northern and eastern Free state. it distributes the multinational syngenta products in the northern cape and Free state.Yield Alfa Chemicals (Pty) Limited – 100% Yield alFa chemicals specialises in the supply and servicing of industrial chemicals such as herbicides, bush encroachment chemicals, fungicides and insecticides for the industrial market in south africa.Yield Avello (Pty) Limited – 100%Yield aVello is a wholesale distributor of agrichemicals in the agriculture sector. avello is a leading agrichem distributor in limpopo. avello has been operating for five years and has established excellent customer service through its products and associated services.Yield WTP (Pty) Limited – 100%Yield wtp, previously known as wes-transvaal plantbeskerming, was established in 1992. Yield wtp is a distributor of agricultural chemicals and focuses its activities mainly in north west, northern cape and northern and eastern Free state. it distributes the multinational syngenta products, and also generic products from suppliers like Villa crop protection and enviro crop protection. Foliar feeds, wetters and stickers supplied by hygrotech are also part of Yield wtp’s core products. Yield wtp aims to supply customers with crop solutions in an effort to maximise crops.

The

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aREas Of OpERatiOnUbubele operates primarily in southern Africa. § The company has offices in Cape Town, Pretoria,

Kroonstad, Lichtenburg, Modimolle, Umhlanga and Windhoek.

§ The company has agents in Barberton, Bergville, Bethlehem, Bloemfontein, Bothaville, Brits, Bultfontein, Christiana, Coligny, Delareyville, Dendron, Douglas, Lephalale, Eston, Ficksburg, Greyton, Harrismith, Jacobsdal, Jan Kempdorp, Klerksdorp, Koppies, Koster, Ladybrand, Leeudoringstad, Letsitele, Levubu, Lindley, Mahikeng, Malelane, Marble Hall, Mokopane, Mbombela, Ottosdal, Paarl, Pietermaritzburg, Polokwane, Port Shepstone, Potchefstroom, Sannieshof, Senekal, Skuinsdrift, Sweizer-Reneke, Thabazimbi, Tzaneen, Upington, Vaalwater, Ventersdorp, Viljoenskroon, Vryburg, Warden, Bela Bela, Warrenton, Welkom, Wesselsbron, Winterton, White River and Wolmaransstad.

§ Ububele sells its products in South Africa, Namibia, Mozambique, Angola, Zambia and Botswana.

performance highlights and key performance indicators

All indicators are comparative for continuous operations over the last three years.§ Average increase of 16.27% in gross revenue

year on year.§ Average increase of 16.67% in share price

year on year§ Average increase of 23.06% in current assets

year on year. § Average increase of 2.5% in total assets

year on year.

BUsinEss OVERViEW [continued] Þ

gross reVenue (r million)

2011Year

700

600

500

400

300

2002012 2013

share price (cents)

2011Year

60

55

50

45

40

35

302012 2013

current assets (r million)

2011Year

280

250

220

190

160

130

1002012 2013

total assets (r million)

2011Year

450

410

370

330

290

2502012 2013

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inVEstmEnt casEThe security of global food supply is one of the key challenges of the 21st century.

Population expansion and changing dietary patterns are increasing the demand for basic food crops.

On the supply side, agricultural land in production has barely increased since the mid-1960s, whereas the global population continues to rise. Climate change and depletion of natural resources are powerful secular trends that will restrict future food production. In the near term credit restrictions and the growth in biofuels are limiting the supply of basic food crops.

The combination of these powerful factors leads us to believe that the prices of basic agricultural commodities will keep rising.

“The observed increase in food prices is not a temporary phenomenon, but likely to persist in the medium term”, according to the World Bank.

Ububele, with its wide range of agricultural scientific knowledge and products, is well positioned to take advantage of this global growing demand for food.

gROUp Risks§ climate Climate and weather conditions are always a risk

factor in any agricultural business. However, Ububele sells 30% of its products into irrigated areas.

§ working capital investment In the agricultural industry, service providers must be

able to finance their customers for the period from planting to harvesting. Ububele has working capital finance structures in place to accommodate our customers in this respect. We also take out debtor insurance to minimise the risk of non-payment.

§ competition Competition will always be a risk. We manage this

risk by continuously enhancing our existing and new product ranges, and building on our customer relationships with our customers.

§ Foreign exchange Due to the volatility of the rand, the group is

exposed to foreign exchange fluctuations, which may have material financial implications.

gROUp OppORtUnitiEs§ technology We will continue investing in new scientific products

and technology to optimise the yield on our customers’ land.

§ Yield brand and product mix We will continue building on the successful launch

of our Yield brand.§ africa With 60% of the world’s arable land in Africa and

the world’s growing demand for food, Africa is the natural place to invest in agriculture.

§ water management and irrigation Water is one of the world’s scarce resources;

therefore, the management of water in the agricultural production process will become even more important in future.

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BUsinEss OVERViEW [continued] Þ

Definitions for industry-specific terms

HerbIcIDeS

Herbicides, also commonly known as weed killers, are pesticides used to kill unwanted plants. Selective herbicides kill specific targets, while leaving the desired crop relatively unharmed. Some of these act by interfering with the growth of the weed and are often synthetic plant hormones. Herbicides used to clear waste ground, industrial sites, railways and railway embankments are not selective and kill all plant material with which they come into contact. Smaller quantities are used in forestry, pasture systems, and management of areas set aside as wildlife habitat.

Some plants produce natural herbicides such as the genus juglans (walnuts) – such natural herbicide actions, and other related chemical interactions, are called allelopathy.

Herbicides are widely used in agriculture and landscape turf management. In the USA, they account for about 70% of all agricultural pesticide use.

PeStIcIDeS

Pesticides are substances or mixture of substances intended for preventing, destroying, repelling or mitigating any pests. Pesticides are specifically for crop protection. Crop protection products in general protect plants from damaging influences such as weeds, diseases or insects. A pesticide is generally a chemical or biological agent (such as a virus, bacterium, antimicrobial or disinfectant) that through its effect deters, incapacitates, kills or otherwise discourages pests.

FuNGIcIDeS

Fungicides are chemical compounds or biological organisms used to kill or inhibit fungi or fungal spores. Fungi can cause serious damage in agriculture, resulting in critical losses of yield, quality and profit. Fungicides are used both in agriculture and to fight fungal infections in animals. Chemicals used to control oomycetes, which are not inherently fungal, are also referred to as fungicides, because oomycetes and fungi use the same mechanisms to infect plants.

There are three types of fungicides – contact, translaminar or systemic: § Contact fungicides are not taken up into the plant

tissue and only protect the plant where the spray is deposited.

§ Translaminar fungicides redistribute the fungicide from the upper, sprayed leaf surface to the lower, unsprayed surface.

§ Systemic fungicides are taken up and redistributed through the xylem vessels to the upper parts of the plant. New leaf growth is protected for a short period.

Most retail fungicides are sold in a liquid form.

INSectIcIDeS

An insecticide is a pesticide used against insects. They include ovicides and larvicides used against the eggs and larvae of insects respectively. Insecticides are used in the agricultural and medical industries and the household. The use of insecticides is believed to be one of the major factors behind the increase in agricultural productivity in the 20th century. Nearly all insecticides have the potential to significantly alter ecosystems; many are toxic to humans; and others are concentrated in the food chain.

Insecticides are classified in several different ways:§ Systemic insecticides are incorporated by treated

plants. Insects ingest the insecticide while feeding on the plants.

§ Contact insecticides are toxic to insects brought into direct contact. Efficacy is often related to the quality of pesticide application, with small droplets (such as aerosols) often improve performance. Natural insecticides, such as nicotine, pyrethrum and neem extracts are made by plants as defences against insects.

§ Plant-incorporated protectants (PIPs) are insecticidal substances produced by plants after genetic modification. For instance, a gene that codes for a specific Baccilus thuringiensis biocidal protein is introduced into a crop plant’s genetic material.

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Then the plant manufactures the protein. Since the biocide is incorporated into the plant, additional applications – at least of the same compound – are not required.

§ Inorganic insecticides are manufactured with metals and include arsenates, copper compounds and fluorine compounds which are now seldom used, and sulphur which is more commonly used.

§ Organic insecticides are synthetic chemicals which comprise the largest numbers of pesticides available for use today.

buSH eNcrOAcHMeNt

Bush encroachment is the change in vegetation from open savannah, or mixed grass and woodland, to shrublands. Bush encroachment has been noted in eastern and southern Africa, South America, and Australia, and is considered to be a major threat to agricultural productivity where it occurs. It has been ascribed to changes in the vertical distribution of soil moisture and nutrients, which may encourage the growth of shrubs.

However, recent research, in areas of central southern Africa which have experienced bush encroachment, has not found evidence to support this hypothesis. More probable causes are: increased grazing levels; reduced use of burning to create grassland; changes in rainfall regimes; and the interactions between these factors.

FOLIAr FeeDING

Foliar feeding is a technique of feeding plants by applying liquid fertiliser directly to their leaves. It has been known that plants are able to absorb essential elements through their leaves. The absorption takes place through the stomata of the leaves and also through the epidermis. Movement of elements is usually faster through the stomata, but the total absorption may be as great through the epidermis. Plants are also able to absorb nutrients through their bark.

A popular version of the feeding is to use sea-based nutrient mixes, especially kelp, because they contain many of the 50 trace nutrients. The more trace needed,

the harder it is to balance the element within the soil. Trace elements are considered most fit for delivery by foliar feeding. Kelp also contains some hormones considered good for the cellular development of the plants’ leaves, flowers and fruit, again making foliar feeding useful to organic gardeners who avoid artificial hormone applications.

WetterS

Wetters are chemical agents capable of reducing the surface tension of a liquid in which it is dissolved.

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BUsinEss OVERViEW [continued] Þ

SurFAce IrrIGAtION

In surface irrigation systems, water moves over and across the land by simple gravity flow to wet it and to infiltrate into the soil. It is often called flood irrigation when the irrigation results in flooding or near flooding of the cultivated land. Historically, this has been the most common method of irrigating agricultural land.

LOcALISeD IrrIGAtION

Localised irrigation is a system where water is distributed under low pressure through a piped network, in a pre-determined pattern, and applied as a small discharge to each plant or adjacent to it.

DrIP IrrIGAtION

Drip irrigation, also known as trickle irrigation, functions as its name suggests. In this system water falls drop by drop just at the position of roots. Water is delivered at or near the root zone of plants, drop by drop. This method can be the most water-efficient method of irrigation, if managed properly, since evaporation and runoff are minimised.

In modern agriculture, drip irrigation is often combined with plastic mulch, further reducing evaporation, and is also the means of delivery of fertiliser.

SPrINkLer IrrIGAtION

In sprinkler or overhead irrigation, water is piped to one or more central locations within the field and distributed by overhead high-pressure sprinklers or guns.

ceNtre PIVOt IrrIGAtION

Centre pivot irrigation is a form of sprinkler irrigation consisting of several segments of pipe (usually galvanised steel or aluminium) joined together and supported by trusses, mounted on wheeled towers with sprinklers positioned along its length. The system moves in a circular pattern and is fed with water from the pivot point at the centre of the arc.

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à

25%à

11%2013

price per ton

R3 430(2012: R2 750)

2013

price per ton

R5 001(2012: R4 640)

2013

price per ton

R2 281(2012: R2 550)

Þ

8%

Sunf

low

er

Whe

at

Mai

zeBUsinEss OVERViEW [continued] Þ

our tradingenvironment

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environment

2013

price per ton

R5 045(2012: R4 640)

2013

price per ton

R23 311(2012: R13 172)

2013

price per ton

R2 912(2012: R2 353)

Þ

9%Þ

70%Þ

24%

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eans

Pean

uts

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toes

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BOaRD Of DiREctORs Þ

Colin Arthur (Colin) Hall – independent non-executive chairman (74)BA (Hons) (Law) (Unisa), BJuris (Pretoria) (Appointed 28 August 2013)Colin had a 50-year corporate journey after studying law. As a director of South African Breweries he was responsible for the group’s beer, wine and hotel interests. He sat on numerous boards of both listed and non-listedcompanies as a non-executive director, including McCarthy, Standard Merchant Bank, Grindrod, Southern Sun and Truworths. He played a key role in the creation of Wooltru Holdings, a merger of Truworths and Woolworths, the creation of Massmart, and was chairman and CEO of Wooltru when he retired to focus on leadership training.

Charles Henry (Charles) Rickens – chief executive officer (59)BSc (UCT) (Appointed 28 August 2013)Charles spent 12 years as managing director of HM Leers & Co. Then, after merging HM Leers with Rovic in 2000 to become RovicLeers, he was the managing director until 2012. He then took over as managing director of Safequip (Pty) Limited, part of Rovic Group (fire protection equipment). He is currently a non-executive director on the boards of RovicLeers (chairman), Rovic International, Spraynozzle, RI Holdings and an executive director on Safequip (managing director). Charles spent 10 years on the board of governors of the DSK (German School Cape Town).

Herbert William (Bertie) Cloete – chief executive officer (47)BComm (Stellenbosch), CMA (London), MBL (Unisa) (Appointed November 2009)Bertie was the financial manager for one of the biggest construction and civil engineering companies in South Africa until 1995. Thereafter, until 1999, he was the financial director of one of the biggest fruit juice processors.

During 2000, he started his own entrepreneurial company, Unibert, and in conjunction with other private equity partners and financiers, built a sizable asset base. Most of these investments are in property, food and leisure-related businesses.

Elana Kruger – financial director (32)BAcc (Stellenbosch), BCompt (Hons) (Unisa), CA(SA), CIS Professional Postgraduate Qualification: Company Secretarial and Governance Practice (Appointed June 2011)Elana qualified as a chartered accountant in 2006 after completing her articles at Nolands Inc. She then went on to work in London in the auditing field before returning to South Africa in 2008 to become group financial manager for Ububele.

Dr Mpumela Kayalethu (Kabs) Makaba – non-executive director (61)MBChB, Intermediate Diploma in Personnel Management and Training, Certificate in Small Business Management (Appointed May 2011)Kabs has served as non-executive director of Mediclinic Corporation Limited since 16 September 2008. He is chief executive officer of Faranani Health Solutions (since 2001) and director of Phodiso Holdings.

Stephan Abraham (Stephan) Roux – non-executive director (57)(Appointed July 2003)Stephan is an entrepreneur and commenced his business career in the 1970s, specialising in catering by managing and operating several restaurants before he entered the business of manufacturing ice cream after establishing a Dairy Maid agency. He established two ice cream manufacturing concerns, Cream Star and Avondale, in 1986 and 1990 respectively. He was instrumental in listing Milkworx on the JSE’s AltX. Stephan has interests in, among others, plastics and packaging operations as well as property developments.

Johannes Theodorus (Theo) Kleinhans – non-executive director(60) BMil (Commercial) (Stellenbosch), Diploma – Advanced Logistics Management (Pretoria) (Resigned 27 October 2012 and reappointed 28 August 2013)During the first part of his working life, Theo spent time in the South African Navy, specialising in logistics management. He reached the rank of Commander and left to start his business life with GKN Chep (Pty) Limited, operating in the materials handling services industry. He established an airline catering company in 1993, Aerofare (Pty) Limited, which was sold to an international operator in 1996. In 1999, Theo established another airline catering company which formed the anchor company in the formation of the group Ububele Holdings (Pty) Limited in 2002.

He held the position of CEO and executive chairman from 2002 to 2011. After stepping out of operations and after filling in as chairman and vice-chairman (while handing over the reins) took on the chairmanship of the newly introduced social and ethics committee as a non-executive director. Resigned from the Ububele board of directors in October 2012 to explore other opportunities.

John Denis (John) Newton – independent non-executive director (63)BCom LLB, BCom, LLB, (Hons) (Tax) (UCT), CA(SA)(Appointed 28 August 2013)1977 – 1989 Pim Goldby/Deloitte. Articled to Pim Whiteley and Close (later Pim Goldby, later Deloitte) in Cape Town. He was made a partner in 1984.

1989 – 2004 Wooltru Group. Joined Wooltru Finance in February 1989. Made managing director of Wooltru Finance in 1996 and appointed to the board of Wooltru Limited in 1998. Acted on many boards and audit committees within the Wooltru Group, including Massmart and CNA, and was chairman of Wooltru Insurance Brokers. Ultimately financial director of Wooltru Limited from 1998 until Wooltru’s unbundling in 2004.

2004 – 2013 French Wine Imports/Cuvées Classiques. Formed and operated a business dedicated solely to the importation, marketing and distribution of French champagne. Appointed one of the founder directors of the Champagne Importers Association of South Africa in 2012 and inducted as a Chevalier of the Ordre des Coteaux de Champagne in March 2013, in recognition of the services rendered to France in promoting champagne in South Africa.

2007 – 2013 actively involved in a private joint-venture company that conducts farming operations in the Western Cape and exports pomegranates, mainly to Europe.

[2 0 ] U B U B E L E i n t E g r A t E d r E P O r t

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sEniOR managEmEnt tEam Þ

charles henry (charles) Rickens (59)Joint chief executive officerBSc (UCt)

herbert William (Bertie) cloete (47)Joint chief executive officerBComm (Stellenbosch), CMA (London), MBL (Unisa)

Elana kruger (32)Financial directorBAcc (Stellenbosch), BCompt (Hons) (Unisa), CA(SA), CiS Professional Postgraduate Qualification: Company secretarial and governance Practice

June mamsie kelebohile (June) matlala (58)director: Social developmentBSEd Library and Education Media (USA), BBibl Hons (UCt), MA LibSc (USA, dipl Spec Ed) (Unisa)

theresa van heerden (48)group financial managerBComm Financial Accounting (Stellenbosch)

William Best (toet) swart (60)internal auditordiploma Accounting and Cost and Management (institute of Accounting and Commerce, Cape town)

idonette du toit (28)group marketing and communication managerB Value and Policy Studies (Stellenbosch)

Wimpie Oosthuizen (45)Financial manager: Ububele Agri Chemicalsnational diploma: internal Auditing (technikon SA)

Josias alexander (alex) de Wit (37)Sales manager: YieldOHS and Personal Selling certificates (Unisa)

Delmarie lourens (31)group human resource managerBComm Hons Human resource Management (Pretoria)

matthys Johannes (thys) coetzee (60)technical manager: Yield Chemical groupBSc (Hons) (UFS)

henda van der post (49)general manager: Flamingo Food Services

Waltie kleinhans (56)Business development manager: Mediva HoldingsOrganisation and Work Stud (Pretoria tech)

marius Boshoff (47)general manager: Enviro industriesMSc (Agric) Plant Pathology (University of Pretoria), Certified Six Sigma Black Belt (Wilmington VSA – duPont) in Quality management

connie Deetlefs (31)Financial manager: Yield CA(SA)

Michelle Julie Krastanov – non-executive director (46) CA(SA) (Resigned 27 August 2013)Michelle is a CA(SA), qualifying and spending seven years with Price Waterhouse, after joining in January 1987. In 1994, Michelle moved into Corporate Finance, running her own business until joining Arcay Moela Sponsors (Pty) Limited (“Arcay”) in October 2001 to start the sponsor business. Michelle now heads up the company within Arcay that is responsible for sponsor and designated advisor activities, assists with Acquisitions, Disposals and negotiations and other ancillary services. Michelle was previously a member of numerous audit committees in terms of the AltX Listings Requirements, and was until recently, a member of a main board audit committee. In addition, her experience includes attendance at numerous listed company board meetings, dealing with corporate governance issues and reporting, assistance with preparation of annual reports, JSE announcements, JSE ongoing compliance, TRP experience, etc. Michelle has been appointed as an independent non-executive director of Ububele and to chair the audit committee.

Trevor Bertram Hayter – non-executive director (50) BComm, CAIB, FIFM (Resigned 27 August 2013)Trevor served as chief executive officer of IQuad Group Limited until March 2010. He has notable skills and experience in financial services, banking, business development, entrepreneurship, acquisitions and mergers, as well as extensive experience in foreign exchange risk management (financial and market risk). He has been an entrepreneur for more than 20 years, having been party to starting many different businesses and holds business interests in agri processing for export, construction, financial and business services.

Matthys Petrus Mocke (Thys) – chief operating officer (45)BA LLB (Stellenbosch) (Removed 28 August 2013)During his working career, Thys practised as an attorney from 1994 to 1997, during which time he was a partner for two years. In 1998 he founded a fishing corporation and managed it as the chief executive officer for three years. In late 2000 Thys joined a South African registered merchant bank (Wipcapital Limited) as the manager of the Cape Town office. Thys also founded and/or operated businesses in Eritrea, Senegal, Mozambique, Angola, Namibia and Madagascar and consulted for a business in Kenya.

June Mamsie Kelebohile Matlala (June) – executive director (57)BS Ed (Library & Education Media) (USA), B Bibl (Hons) (UCT), MA Lib Sc (USA), Dipl Spec Ed (Unisa) (Removed 28 August 2013)June lectured at the College of Education before taking up the position of chief education specialist for policy development and monitoring at the Centre for Educational Technology and Distance Education. In 2001, she joined the City of Tshwane as general manager: special programmes in the office of the executive mayor. Over a period in her career, June served on several specialist working groups set up by various government departments. She is chairperson of the Capital Food Initiative, which is supported by IDASA, Pretoria News, City Improvement District and the City of Tshwane to eradicate poverty in Tshwane. She is also chairperson of the interim Gauteng PAET. She also sits on the board of the National Library of South Africa. In 2005, June was a winner in the Gauteng Women in Local Government Awards.

U B U B E L E i n t E g r A t E d r E P O r t [21]

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§Kabs Makaba Chairman

The AGriCULTUrAL SeASON WAS ChArACTeriSed

By A ShifT iN prOdUCT Mix

ANd SALeS

[2 2 ] U B U B E L E i n t E g r A t E d r E P O r t

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chaiRman’s REpORt Þ

Focused on delivering

sustained stakeholder value

In addition to providing historical information, the report provides a perspective on the future direction of the group, while promoting the investment case for our long-term sustainability.

thE agRicUltURE yEaRThe agricultural season was characterised by a big shift in product mix and sales, due to the monsoon rains arriving late in South Africa from Central Africa.

These rains normally start in October and end in March the following year. However, this season the monsoon rains only arrived in South Africa in December.

These rains led to severe storms during January in Gauteng, eastern parts of North West Province, eastern Free State, Mpumalanga and KwaZulu-Natal.

This rainfall shift meant that a big portion of sales moved from the October to January period, to the December to March period.

Welcome to Ububele’s integrated report. The purpose of this report is to serve as a roadmap for delivering on our strategy and provide stakeholders with information regarding our priorities, how we apply our resources within the environment in which we operate and how we respond to risks, challenges and opportunities in order to enhance value for all our stakeholders who have an interest in our long-term sustainable growth.

U B U B E L E i n t E g r A t E d r E P O r t [2 3 ]

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agRicUltURE in sOUth afRica Given the recent labour issues in agriculture in South Africa, government and Agriculture SA must address the following important issues to ensure a sustainable agriculture in South Africa:

labour

The recent labour unrest in the Western Cape has resulted in drastic wage increases, which raises concerns about the agriculture sector's ability to afford these wages and sustain production. The political and business environments are concerned with the requirements of making agriculture a vibrant sector as envisaged in the National Development Plan (NDP) that projects growth in terms of a million jobs in this sector by 2050.

Current scenario:§ Total number of employees in agriculture sector

(2012): 661 024§ Total remuneration in agriculture sector (2012):

R19.8 billion § Total average remuneration per employee in

agriculture sector: R29 954

Climate change

Climate change remains a material issue for our business. As as result we expect an increase in agricultural disasters such as more sporadic rainfall and in some cases higher rainfall, flooding and possible contraction of catchment areas for water provision. If we do not have a long-term strategy to address these issues we might be caught out.

chaiRman’s REpORt [continued] Þ

top 10 industries in agriculture: number oF emploYees – total 398 614 (60%)

Citrus

PearsBananasPineapplesApplesWinePotatoesTomatoesTable grapesSugar

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policy coherence

Government recently had a conference where they discussed the competing demands between agriculture and mining for water resources and the best top soil in South Africa. The fact of the matter is that legislation is developed in isolation, not taking cognisance of the long-term agricultural challenges that we have to face.

The conference with the mining sector and environ-mentalists was an effort to break through the silos and achieve some policy coherence. We have, for instance, problems with water – South Africa being a water-scarce country – this scarce resource needs to be used effectively. There are a number of issues that require a more focused approach by clusters of ministries and government departments, i.e. how we address the agricultural challenges to unlock potential.

The fact of the matter is the NDP sketches a very rosy picture of what agriculture can contribute but, if we do not have policy coherence, we could see the same effects we saw with the wage increase. In this case it was realised after the fact that the industry cannot sustain jobs at the current wage levels and that other support measures will be required instead of proactively addressing the problems.

Farmland

Farmland is the biggest asset of any farmer – because it represents their biggest investment. Ownership in a market economy, together with security of tenure, is absolutely critical for investor confidence and for entrepreneurs to be confident about what they are doing. The fact of the matter is that we have to address and

redress injustices of the past. What is troubling, though, is that the minister of land reform and rural development projected that the reopening of restitution plans will take another 10 years. This projection will place investment possibilities on ice for many years because of the insecurity that goes with such policy decisions.

infrastructure development

What we are delighted about, is that the president initiated a massive infrastructure development programme for underdeveloped agricultural areas, especially in the former homelands. What we envisage is that we analyse value chains to determine which infrastructure development can improve South African competitiveness and profitability in the agricultural sector. This may include road infrastructure, telecommunications and electricity supply, and storage facilities. The availability of sector-specific infrastructure may vary, but in many instances rural areas lack the most basic infrastructure.

African governments realise the need to improve the level of food security.

Strategy and implementation

Our newly designed strategy of being a leading scientific knowledge-based agricultural company in providing products and services to our customers is well accepted by our stakeholders. We have proceeded with many initiatives during the past year to ensure that we move closer to this vision.

U B U B E L E i n t E g r A t E d r E P O r t [2 5 ]

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chaiRman’s REpORt [continued] Þ

Core businesses

Our core agricultural businesses experienced good growth of 9%, with sales growth from R540 million to R591 million.

However, margins came under pressure due to the devaluation of the rand, the lack of rain during the end of the season and the change in the product mix.

The new kitchen facilities of Flamingo Food Services were also completed and this company continues to be profitable.

OppORtUnitiEsWater management

Water, energy and food are all interconnected and are all affected by climate change. Water is essential for sustaining life and there are no substitutes for it. Water security is at the heart of the relationship between energy generation, economic growth, development and food security. It plays a crucial role in an economy, serving as an input to production and the basis for sustaining life. However, the price of water does not reflect the underlying value that we derive from this very important resource.

With this in mind, Ububele acquired a 51% majority stake in well-known South African water management and irrigation company, Turf-Ag.

OUr COre AGriCULTUrAL

BUSiNeSSeS experieNCed GOOd GrOWTh Of 9%, WiTh SALeS GrOWTh

frOM r540 MiLLiON TO r591 MiLLiON.

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the rest of africa

With more than 60% of the world’s arable land in Africa, we continue to explore viable business opportunities into Africa. Our vision is to be an active enabler in unlocking the agricultural potential in Africa. We currently operate through partnerships generating new sales in Mozambique, Angola, Namibia and Botswana.

fUtURE pROspEctsWe believe that we decided on the right strategy to dispose of the majority of our food business.

All our future efforts will be to grow our agricultural businesses and focus specifically on scientific agricultural knowledge and products that we sell to our customers, to ensure a sustainable future for all our stakeholders.

Emphasis will be on new product development, new product mixes, water management and growth into Africa with existing and new product ranges.

appREciatiOnI express the board’s thanks to our loyal customers, shareholders and other stakeholders for their continued support.

I extend my sincere thanks to my colleagues on the board for their support and especially to the executives and general employees for their tireless commitment to the group.

K makaba Chairman

I have always been fascinated by the Ziziphus Mucronata an indigenous tree, found in the warmer parts of our country, and revered particularly by the Zulu and Shangaan people who call it the Mpafa or Shikaya and for whom it has profound symbolism and significance. In English it is the Buffalo Thorn, while in Afrikaans it is well described by its name; the Blinkblaar-wag-’n-bietjie boom, for if you get hooked on its sharp curved thorns, it takes time to free yourself.

One of its many unique characteristics, is that its twigs and branches are not straight – they twist and turn as life for all of us has its phases, its ups and downs.

But at each turning point, there are two thorns; a small hooked thorn that points backwards and a longer straight thorn that points forward. The hooked thorn holds us back just long enough to learn from the past – but not stay trapped in it!

The long straight thorn points out a new direction.

I believe that Ububele is at one of those decisive point in its life. The board, strengthened by new appointments, and assisted by those experienced directors who have stayed, is carefully but quickly taking stock of what we are, what we have and what lessons we have learnt.

It is a good position to define a new direction, properly engage and inform its shareholders, and important stakeholders and pursue that future with openness and vigour.

Dr Makaba has handed the reigns and the thoughtful leadership responsibility that goes with it, to me – with dignity and charm. I am grateful to him, and those who have agreed to continue as directors, as they constitute an important part of the new team.

c hall Chairman

U B U B E L E i n t E g r A t E d r E P O r t [27 ]

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§bertie Cloete Chief executive officer §Charles rickens Chief executive officer

The ONLy SOLUTiON fOr The WOrLd TO prOdUCe MOre

fOOd frOM The SAMe AMOUNT Of LANd LieS iN

SCieNTifiC fArMiNG

[2 8 ] U B U B E L E i n t E g r A t E d r E P O r t

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chiEf ExEcUtiVE OfficERs’ REpORt Þ

thE macRO EnViROnmEnt

The UN estimates that by 2050 the world will need to produce 70% more food with the world population growing by more than 2 billion to over 9 billion people. This approximates to a required annual

growth rate of 1.5% in grain production.

The remainder will come from an approximate increase in farmland of 120 million hectares.

The increase in farmland is expected to be contributed predominantly by sub-Saharan Africa and Latin America. These estimates for increased yields are supported by the figure on the following page, illustrating the decrease in hectares of arable land per capita.

According to industry research, more than 86% of maize and 80% of soya are grown from genetically modified (GM) seeds in the US. This trend is spreading into Asia and Europe and used in maize planting in South Africa. With the drive for increased yields from GM seed and crop protection chemicals, companies invest heavily in research and development.

The operating

environment

“We’re going to speed up the development and delivery of innovation in agriculture that will unleash huge leaps in food production.”

Barack Obama – Washington, 2012

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The global seed market has grown by nearly 90% from 2000 reaching approximately $29 billion in 2010, while the crop protection industry has grown from approximately $5 billion to $40 billion and is expected to grow to $50 billion by 2020.

Agricultural commodity markets have experienced significant volatility due to supply and demand forces. Aside from weather influences, stronger ties between agricultural commodities and energy market volatility have been observed. This comes as oil price volatility spills over into input such as fuel and fertiliser and also affects the demand for feedstock from the biofuels industry. This means that world economic growth and volatility not only affects agricultural markets through the demand for food, but also through energy demand and its effect on the following input costs:

Fuel

The current global food system is highly fuel and transport-dependent. Fuel will almost certainly become less affordable in the short to medium term, making the current, highly fuel-dependent agricultural production system less secure and food less affordable. It is therefore necessary to promote food self-sufficiency and reduce fuel-related input on all levels of the food system.

The connection between food and oil is systemic. In recent years the price of both food and oil has risen and fallen more or less in tandem, as seen in figure 2. In modern agriculture oil products are used to fuel machinery on farms, in transporting items to the farm, and in transporting produce to the ultimate consumer. Oil is often also used in the production of agricultural chemicals. Therefore, oil price increases put pressure on all these aspects of commercial food systems.

The concern is that high and volatile prices of crude oil may cause food prices to continue increasing (Bloomberg, 2011).

chiEf ExEcUtiVE OfficERs’ REpORt [continued] Þ

Figure 2: comparison oF Food and oil prices

Sources: Food and Agriculture Organization (FAO) of the United Nations and US Energy Information Administration – 26 September 2012.

World population (billions)Arable land per capita in hectares

Sources: World Bank 2013

World population vs arable land

[3 0 ] U B U B E L E i n t E g r A t E d r E P O r t

Figure 1: estimates For increased Yields

2020 F200019801960

10

8

6

4.3

3

3

2.2

1.8

4.4

6

7.5

4

2

0

280 140

120

100

80

60

40

20

0

240

FAO

Food

pric

e in

dex

Bren

t oil

price

in S

S$

200

160

120

Food

Oil

80

40

0

Jan-

02

Jul-0

4

Jul-0

9

Jan-

07

Jan-

12

May

-05

May

-10

nov-

07

nov-

02

Sep-

03

Sep-

08

Mar

-06

Mar

-11

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Water

As mentioned before, the agriculture sector, and life in general, depends greatly on water. The human body, for example, contains more than 70% water.

Irrigated agriculture accounts for 62% of the current water demand in South Africa. Increased variability in water supplies will have a significant impact on agriculture and ultimately on domestic food security.

The agricultural sector has been characterised by bullish commodity prices as droughts-related concerns affected US maize production and estimates. Reports by the US Department of Agriculture (USDA) have created downward pressure on international maize prices, because the US is expected to plant 39.4 million hectares of maize. These levels represent the highest since 1936, and will flood the international food market as the demand for maize from the biofuels industry remains low. Therefore, market expectations indicate maize surpluses rather than shortages. The South African prices will experience a respite from the downward pressure, due to decreased local harvest estimates.

oiN Order TO SATiSfy TheSe deMANdS, iT iS eSTiMATed ThAT Over 80% Of prOdUCTiON GrOWTh deMANdS WiLL Need TO Be AChieved ThrOUGh hiGher yieLd. o

U B U B E L E i n t E g r A t E d r E P O r t [31]

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chiEf ExEcUtiVE OfficERs’ REpORt [continued] Þ

OUR tRaDing EnViROnmEntMaize

South Africa reduced its forecasted maize output slightly for 2013 to 11.562 million metric tons from a previously estimated 11.75 million metric tons, due to prolonged dry conditions in the main grain-growing areas.

The government’s crop estimates committee (CEC) reported that the 2013 maize crop will consist of an estimated 6.155 million metric tons of white maize and 5.407 million metric tons of yellow maize.

The estimate was in line with market expectations of 11.5 million metric tons, according to a Reuters poll.

south african maize was trading at r2 281 per tons at end June 2013 compared to r2 550 per tons in 2012 (an 11% decrease).

Wheat

South Africa’s 2012/2013 season (October 2012 to September 2013) wheat crop is estimated at 1.9 million tons on 511 200 hectares. Although it was the smallest planting area in the past 40 years, an exceptional rainfall season in the Western Cape contributed to record yields and a 1.9 million tons wheat crop, marginally less than the 2.0 million tons produced in 2011/2012.

The CEC indicated South African farmers intend to plant 516 600 hectares (2012: 511 200 hectares) of wheat this year.

south african wheat was trading at r3 430 per tons compared to r2 750 per tons in 2012 (a 25% increase).

Sunflower

Most of the sunflower production in South Africa takes place in the North West and Free State provinces. Sunflower plantings increased by 11% to 505 000 hectares. Due to dry weather conditions during the normal planting season for corn, many farmers had to switch to sunflower production. With the prevailing dry conditions in some areas, estimates for the 2012/2013 sunflower seed crop is 510 000 tons, marginally less than the 530 000 tons produced in 2011/2012.

currently sunflower seeds traded at r5 001 per tons at end June 2013 (2012: r4 640), an 8% increase.

Soybeans

Soybeans are produced mainly in the Free State and Mpumalanga provinces. After taking drought conditions into consideration, the commercial oilseed crop is estimated at 1.44 million tons for 2012/2013, 16% more than the 1.24 million tons produced in 2011/2012.

Crushing capacity increased in the previous period, which resulted in farmers planting a record 515 000 hectares of soybeans in 2012/2013, 9% more than in the previous season.

The impact of mining in Mpumalanga is expected to influence the expansion of soybean production. By 2021, the total area under soybeans will amount to more than 40% of the total area under production. The projected increase, together with higher yields, will result in a local soybean crop of more than 2 million tons within a decade.

soybean price: r5 045 per tons at end June 2013 (2012: r4 640 per ton), a 9% increase.

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peanuts

The groundnut crop is expected to be on the same level as the previous season, i.e. 55 000 tons. Peanut exports for 2011/2012 (according to SAGIS) reached about 16 000 tons. Exports are expected to decrease to 14 000 tons in 2012/2013, but will recover in 2013/2014 to 20 000 tons, due to an increase in local production.

peanut price: r23 311 per tons at end June 2013 (2012: r13 172 per ton), a 70% increase.

o We Are iN The prOCeSS Of iNSTALLiNG MOre ThAN 100 WeATher STATiONS ACrOSS SOUTh AfriCA. TheSe STATiONS WiLL eNSUre ThAT fArMerS hAve direCT ACCeSS TO vALUABLe CLiMATe iNfOrMATiON, iNCreASiNG effiCieNCy ANd fArM yieLdS.

sandveld

ceressouthern cape

northern cape

north west

eastern cape

southwestern Free statewestern Free state

eastern Free stateKzn

mpumalanga

gauteng

northeastern Free state

limpopo

loskop valley

southwestern cape

potatoes

South Africa ranks 28th in the world in terms of total potato production (tons per country) and contributes about 0.3% to the global potato production. In terms of the African continent, our area under production is only 3.5% of the total area, but South Africa contributes 11% of the total potato production.

Potatoes amount to about 45% of the gross value of vegetables in South Africa, and 3% of the total value of all agricultural products. There are a total of about 650 active commercial and 1 000 emerging potato growers in the country.

potato price: r2 912 per tons at end June 2013 (2012: r2 353 per ton), a 24% increase.

potato producing areas in south aFrica potato industrY – hectares and crop

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chiEf ExEcUtiVE OfficERs’ REpORt [continued] Þ

oThiS fOrCeS UBUBeLe TO fOCUS ON The MANUfACTUriNG Of GeNeriCS ANd SpeCiALiSed SMALLer vOLUMe AGriCheMiCAL prOdUCTS AS WeLL AS diSTriBUTiON.

fOr The CUrreNT

fiNANCiAL yeAr, UBUBeLe hAS reGiSTered Six NeW prOdUCTS WiTh The depArTMeNT Of AGriCULTUre. A TOTAL Of 10 NeW prOdUCTS WiLL Be COMpLeTed By The eNd Of deCeMBer 2013. o

Vegetables

Many vegetable farmers are currently unhappy about the low prices they receive for a wide range of vegetable products. Taking increased input costs into account, many producers are questioning whether rising costs will affect the general public’s ability to buy food.

Generally, prices fluctuate according to supply and demand. Too much product lowers prices; scarcity raises prices. At the same time, general economic conditions have an impact on disposable income available to purchase food. These affect luxury items first, but staples will also “suffer” in due course.

A major contributing factor is consumer spending. Consumers with large bonds spend less on food, electricity and fuel and will experience a lower effective inflation than those whose main expenses are food, electricity and fuel or transport.

Municipal price hikes will also hamper the latter group’s buying power. And so, for these people, inflation will be much higher than the general figures issued by the government and will mean they have even less money to spend on food, which, of course, includes vegetables. But regardless of the reasons, low vegetable prices are not only good for vegetable farmers, they are essential for them.

Vegetables prices increased by an average of 9.1% compared to last year.

Fruit

Fruit prices increased by an average of 4.6% compared to last year.

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deciduous fruit

Apricots and nectarines are forecast to decline by 10% and 7% respectively. Peaches and plums are forecast to grow by 6% and 4% respectively compared to the previous season.

Citrus

South Africa is an important player in global citrus exports. The Limpopo Province is the biggest producer of citrus, accounting for 31% of total production. Mpumalanga and the Eastern Cape provinces each account for 21%, followed by the Western Cape with 16% and KwaZulu-Natal with 7%.

The Western Cape and parts of the Eastern Cape are better suited for soft citrus and lemons, as these fruits prefer cooler regions. The other provinces have a warm climate and are ideal for orange and grapefruit production.

Wine

The 2013 harvest season exceeded industry expectations and will be the biggest wine grape crop ever produced, although it had a slow start.

Although the crop was harvested later than usual and over a shorter period, the cold, wet winter constituted ideal weather conditions during the flowering and berry set stages, and moderate weather conditions during this harvest season throughout the various viticultural areas contributed to the size and quality of this year’s harvest. It was also a particularly healthy year with effective disease and pest control by producers where needed.

Bigger harvests are expected in all nine wine districts, with the exception of Robertson, and record crops are on the cards for Olifants River, Breedekloof and Worcester. After two dry and consequently smaller vintages, Malmesbury produced a considerably bigger crop, and in the Orange River district vineyards are starting to recover from the flood damage in 2011.

The total crop is 4.6% higher than the record crop in 2008 – and high-quality wines are anticipated for the 2013 vintage.

The 2013 wine grape crop is expected to reach 1 491 432 tons according to the latest estimate (30 April) of the SA Wine Industry Information and Systems (SAWIS). This exceeds the 2012 crop by 5.4% and is 4.6% bigger than the previous record crop in 2008.

The 2013 wine harvest – including juice and concentrate for non-alcoholic purposes, wine for brandy and distilling wine – is expected to amount to 1.152 million litres, calculated at an average recovery of 773 litres per tons of grapes.

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OPERATIONAL REVIEWThe season

As mentioned in the chairman’s report, the regular summer monsoon rains arrived late this year, which caused severe flooding in parts of the country. A direct impact on our operations was that our sale season started in December rather than October.

The direct impact on our farmers was that most of the primary production areas had good rains in December and early January but unfortunately the lack of follow-up rain in the later parts of January 2013 over the Free State and North West resulted in crop damages. The hot and dry conditions experienced in early February caused sizeable yield losses for farmers, which resulted in less spending.

We achieved various operational milestones the past 12 months, which include, among others:§ The successful registration of 10 new agricultural

chemical products with a further three product registrations in progress.

§ The acquisition of one product registration from a third party.

§ Obtaining two new distribution rights from Sumitomo in Japan.

§ Obtaining the usage rights for 25 new registrations from the Chinese company, Rainbow Chemicals.

§ The increase of the total percentage market share of own agricultural chemical business to 16%.

§ The progress made in Botswana on in-flight catering.

§ The successful selling of Unique Dairy Products.§ The new installation of more than 30 weather

stations over South Africa.

CONSIDERING THE FOOD SECURITY

CHALLENGES WE FACE, MOST FARMERS RELY ON INNOVATION IN ALL THE

FIELDS OF AGRICULTURAL SCIENCES TO OFFER

SOLUTIONS

AVERAGE RAND PER TON

0

1000

2000

3000

4000

5000

6000

'13'12'11

6 000

5 000

4 000

3 000

2 000

1 000

0

2011 2012 2013

WheatSoybean

Sunflower

White maize

Potato

ChIEf ExECuTIVE OffICERS’ REPORT [continued] Þ

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challEngEs § Probably the biggest challenge this year is the

management of debtors and stock. The late rains and the absence of follow-up rain during January and February, not only caused less spending by farmers, but also losses for farmers. Normally most of our debtors are paid to date by the end of June. However, this year it will be two months later. Our comprehensive insurance will cover the biggest portion of our debtors book.

§ The devaluation of rand vs dollar had a negative impact on margins.

OppORtUnitiEsConsidering the food security challenges we face, most farmers rely on innovation in all the fields of agricultural sciences to offer solutions in the ever-demanding productivity cycle.

fUtURE pROspEctsAfter the past year’s consolidation of our food division, Ububele’s focus on the immediate future will be to invest even more in the agricultural sector. We foresee normalised earnings from our operations and we will enhance and expand the current scientific service and agricultural products we sell. Scientific farming is the only answer we foresee to the looming food security crisis. Our customers will yield more from their land through the use of our product mix and our continuous investment into research and development.

The world is looking to Africa, with all its arable land, as a solution for the world food crisis. We, at Ububele, are very excited to be part of the solution.

in cOnclUsiOnWe would like to thank:§ the board of directors for their guidance and for

advice and especially those that attend our management meetings;

§ our fellow executive directors: for all your hard work and dedication; and

§ the whole senior management team for all their hard work and long hours.

bertie cloete Chief executive officer

charles rickens Chief executive officer

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§elana Kruger Financial director

AN AreA Of fOCUS iS TO

iNCreASe The SUppLy Of prOdUCTS TO frUiT ANd veGeTABLe CrOp

prOdUCerS

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financial DiREctOR’s REpORt Þ

Focused on delivering

sustainable shareholder

returns over the long termOVERViEW

Tough economic conditions, exacerbated by severe drought in the Free State and North West, continued putting pressure on operations during the year. The devaluation of the rand against the US dollar, challenging

cash flow as a result of pressure on farmers, and increasing operating costs led to weaker than expected results.

The Ububele board was restructured in August 2013, which allowed the group to implement a different strategy. The process of reducing the group’s investment in the food industry was started in 2012 and was finalised in 2013 with the sale of Unique Dairy Products in November 2012 and the impairment of the last intangible asset in this division. The board decided to sell our strategic investment in Namibia, which would enable a renewed focus on our agricultural business.

Despite the difficulties of the past season, our agricultural business remains a sustainable investment and we are positive about the road ahead.

REVEnUEThe past year was characterised by major price fluctuations caused by macro-economic factors like the debt crisis in the Europe, the decline in economic growth in China, and tension in the Middle East, which inevitably leads to increased crude oil prices.

The drought in the USA led to higher commodity prices. The price of maize, soybeans and wheat was higher than a year ago by 20%, 18% and 13% respectively.

However, the rand weakened by 22% against the dollar, not only due to the stronger dollar and euro, but also because of strikes in the labour sector. The weaker rand supported higher local commodity prices, but unfortunately also led to higher input cost.

Although these commodity prices were high, macro-economic conditions and the late-season dry spell in February and March led to farmers’ inability to take advantage of these price increases and resulted in a 3.5% smaller maize crop for the year.

The dry spells in the North West Province and Free State in the later parts of January and February had a negative impact on our results. The unusually hot

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financial DiREctOR’s REpORt [continued] Þ

and dry conditions caused yield losses for farmers and resulted in less spending. Therefore, revenue for the period only increased by a moderate 9% year on year.

This moderate increase in sales led to a minimal 2% increase in gross profit, mainly due to the substantial increase in our raw material import cost, caused by the weakened rand.

pROfitaBilityOther income includes the profit on sale of Unique Dairy Products’ shares of R1 232 488.

The weakening rand exaggerated the R23 million increase in operating costs, which includes a foreign exchange loss of R4.5 million and a provision for doubtful debt of R8.3 million.

Petrol, oil and transport costs increased by R1.2 million as a result of the 31% increase in the rand crude oil price for the year.

Finance charges increased by 21% due to the term loan for the Enviro Crop Protection acquisition and higher interest rates on loans payable, while investment revenue increased by 38% due to later payment by farmers – another effect of the adverse weather conditions.

statEmEnt Of financial pOsitiOnThe 34% decrease in property, plant and equipment is mainly due to the sale of Unique Dairy Products on 30 November 2012.

The 48% increase in intangible assets was due to research and development costs of R3.3 million and Sage X3 software and development costs of R2.3 million capitalised during the year.

Non-current loans payable include a building loan from Bank Windhoek of R6.8 million to finance the new kitchen facilities at Hosea Kutako International Airport.

liqUiDity anD cashCash inflow from operations increased substantially to R26 million for the year, mainly due to the decrease in losses made from discontinued operations and better terms with creditors.

No additional long-term loans were taken out during the year and cash at year-end decreased by R4.7 million from 2012.

ExcEptiOnal itEmsLegal expenditure amounted to R3 million for the year, the majority of which due to the collection of outstanding litigation amounts on contractual matters and corporate action towards the end of the financial year, which should be one-off events.

As mentioned above we have a doubtful debt provision of R8.3 million at year-end, as a result of the drought in our biggest operating areas – North West and the Free State.

The board reviewed its decision to invest in Turf-Ag after year-end, and is currently looking at options to revert the group’s interest to the previous shareholders or disposing of its shares.

A summons was received from the Bloemfontein High Court on 27 September 2013 in the amount of R85 million, relating to crop damages suffered by a customer. Our insurance company has instructed their attorneys to file a notice of defence on our behalf. Recent tests on the product in question may result in a positive outcome for the company in this case.

financial Risk managEmEntThe group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk.

There have been changes in the group and company’s risk management procedures during the year under review. In the prior financial periods, the group’s overall risk management programme focuses on the unpredictability of financial markets and sought to minimise potential adverse effects on the group’s financial performance. The group used derivative financial instruments to hedge certain risk exposures. Risk management was carried out by a central treasury department (group treasury) under policies approved by the board. Group treasury identified, evaluated and hedged financial risks in close co-operation with the group’s operating units. The board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. For operational reasons, foreign exchange risk remains

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uncovered from shipment date to payment date and payment is effected at spot rates. In future, the group will assess the operations on a day-to-day basis to minimise the currency risk exposure.

Some trade debtors in the Agri division are insured by Coface and our receivables book is monitored by senior management, as follows:§ Sales representatives visit farmers weekly to monitor

their farming practices and to ensure that farmers follow the prescribed spraying programmes.

§ Sales representatives report their findings to the financial controller of the relevant entity in his operating area.

§ A detailed report of the receivables book within the group is presented monthly to the Ububele EXCO, where the operational director regularly evaluates the accounts of those customers with larger exposures to ensure that trends do not develop that could lead to high risks.

§ A detailed report on the receivables book of Ububele is also presented to the full board of directors every three months, including a separate report highlighting customers that might default or have defaulted.

§ Before accepting any new credit customer, the group assesses the potential customer’s credit quality and defines credit limits for each customer. Limits are reviewed periodically in accordance with the requirements of the National Credit Act, 34 of 2005, and upon request by a customer.

Subsidiaries in the agricultural division make use of independent agents to sell their inventory and these agents are also primarily responsible for collecting outstanding debts. At 30 June 2013, an amount of R21 587 687 (2012: R23 079 514) was retained from distributions payable to agents relating to outstanding debtors.

In certain instances, if there is a slight doubt in the repayment ability of a customer, the debt is secured by:§ notarial bonds over movable property;§ cession on the crops;§ requesting customers to pay a deposit of 50% of

goods; or§ lease contracts on certain portions of a customer’s

farm. (The ownership of the crop on the land is thus passed on to the Ububele Group.)

inflatiOn, intEREst RatEs, cURREncy anD cREDit ExtEnsiOnThe headline CPR (for all urban areas) annual inflation rate in June 2013 was 5.5%. If the rand continues to depreciate, it could push up the cost of food and fuel, which will fan inflation.

The Reserve Bank’s repo rate stayed constant at 5% throughout the year.

The rand depreciated by 22% against the US dollar, from R8.17 on 2 July 2012 to R9.97 on 28 June 2013.

According to the South African Reserve Bank, credit extension in the private sector grew by 8.91% year on year in June 2013.

capEx plannEDOur agri division is expected to spend about R5 million during the 2014 financial year on research and development of new patents and registrations.

fUtURE pROspEctsThe focus in the 2014 financial year is on extracting more value from our existing assets and on finalising our restructuring and cost saving exercise that will add further value. We will continue growing our agricultural business and focus specifically on scientific agricultural knowledge and products that we sell to our customers. We will expand on our current product range through new product developments, selling our product into new areas and into new crop varieties. This is to ensure a sustainable future for all our stakeholders.

elana Kruger Financial director

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Committed to delivering shareholder value

sUstainaBility REpORt Þ

Sustainability strategy and approach

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Sustainability is not only a business imperative, but also a moral obligation we have towards our multiple stakeholders and the environment. As a business we are fully committed to this sustainability journey. Our approach to stakeholder relations is informed by our business values and effective behaviour in carrying out our daily business.

We remain committed to making a difference through our concerted efforts towards sustainable development.

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sUstainaBility REpORt [continued] Þ

o UBUBeLe eMBrACeS The priNCipLeS Of freedOM Of ASSOCiATiON, ANd driveS BeST MANAGeMeNT prACTiCeS ACTiveLy. o

Internally, we are streamlining and aligning the environmental, quality and safety standards, relevant legislation, governance protocols and the development of metrics that will guide our business processes in our sustainability journey.

We are committed to putting back what we take from the earth, and more. We strive to provide what society needs for nourishment and sustenance, while preserving environmental resources for future generations.

We remain committed to making a difference through our concerted efforts towards sustainable development.

EmplOyEEsemployee relations

The employee and employee relationship is governed by the country’s labour legislation. Our human resource policies and procedures are reviewed on a regular basis to ensure compliance with labour legislations and best practice. These policies and procedures include grievance and disciplinary policies and procedures, which exist purely to ensure fairness when dealing with grievance and disciplinary matters.

There are performance management systems throughout the group that are designed to establish a culture in which individuals and groups take responsibility for continuous improvement of business processes, their own skills and behaviour.

Ububele embraces the principles of freedom of association, and drives best management practices actively.

remuneration

our approach

Ububele’s approach to remuneration is determined by its desire to establish a performance culture. As such, our remuneration policy is to reward employees according to the dictates of the market and their contribution to achieving the group’s objectives.

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the remuneration and nomination committee

The remuneration and nomination committee is a board committee of Ububele Holdings Limited. The committee-specific duties and responsibilities are in addition to board-specific duties. The deliberations of the committee do not reduce the individual and collective responsibility of board members regarding their fiduciary duties and responsibilities. They must continue applying due judgement in accordance with their statutory obligations. These terms of reference are subject to the provisions of the Companies Act, 71 of 2008, the company’s memorandum of incorporation and any other applicable law or regulatory provisions.

Composition of the remuneration and nomination committee

The committee comprises at least three non-executive directors, the majority of whom are independent non-executive directors.

Members of this committee and its chairman are nominated by the board. The members of the committee as a whole must have sufficient qualifications and experience to fulfil their duties.

Role of the remuneration and nomination committee

The committee has an independent role, operating as an overseer and makes recommendations to the board for consideration and final approval.

The committee does not assume management functions, which remain with the executive directors, officers and other members of senior management.

The role of the committee is to assist the board in ensuring that:§ the company remunerates directors and executives

fairly and responsibly; § the disclosure of director and executive

remuneration is accurate, complete and transparent;§ the board has the appropriate composition for it to

execute its duties effectively;

§ directors are appointed through a formal process;§ induction and ongoing training and development of

directors take place; and§ formal succession plans for the board, chief

executive officer and senior management appointments are in place.

Responsibilities

The committee must perform all the functions necessary to fulfil its role as stated above, including the following:§ Oversee the setting and administering of

remuneration at all company levels.§ Oversee the establishment of a remuneration policy

that will promote the achievement of strategic objectives and encourage individual performance.

§ Ensure that the remuneration policy is put to a non-binding advisory vote at the general meeting of shareholders once every year.

§ Review the implementation outcomes of the remuneration policy, to establish whether the set objectives are being achieved.

§ Ensure that the mix of fixed and variable remuneration, in cash, shares and other elements, meets the company’s needs and strategic objectives.

§ Satisfy itself as to the accuracy of recorded performance measures that govern the vesting of incentives.

§ Ensure that all benefits, including retirement benefits and other financial arrangements, are justified and correctly valued.

§ Consider the results of the chief executive officer and other executive directors’ performance evaluation, both as directors and as executives in determining remuneration.

§ Select an appropriate comparative group when comparing remuneration levels.

§ Regularly review incentive schemes to ensure continued contribution to shareholder value and that these are administered in terms of the rules of the JSE.

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sUstainaBility REpORt [continued] Þ

§ Consider the appropriateness of vesting share-based schemes early at the end of employment.

§ Advise on the remuneration of non-executive directors.

§ Oversee the preparation of the remuneration report, to be included in the integrated report, for whether it: o is accurate, complete and transparent;o provides a clear explanation of how the

remuneration policy has been implemented; ando provides sufficient forward-looking information

for the shareholders to approve a special resolution in terms of section 66(9) of the Companies Act, 71 of 2008.

§ Ensure the establishment of a formal process for the appointment of directors, including:o identification of suitable members of the board;o performing reference and background checks of

candidates prior to nomination; ando formalising the appointment of directors

through an agreement between the company and the director.

§ Oversee the development of a formal induction programme for new directors.

§ Ensure that inexperienced directors are developed through a mentorship programme.

§ Oversee the development and implementation of continuing professional development programmes for directors.

§ Ensure that directors are briefed regularly on changes in risks, laws and the environment in which the company operates.

§ Consider the performance of directors and take steps to remove directors who do not make an appropriate contribution.

§ Finding and recommending a replacement for the chief executive officer when it becomes necessary.

§ Ensure that formal succession plans are developed and implemented for the board, chief executive officer and senior management appointments.

§ Considering the skills, experience and expertise of any new person for nomination as a director to the board in combination with existing experience and expertise of the board.

Authority

The committee acts in terms of the delegated authority of the board as recorded in these terms of reference. It has the power to investigate any activity within the scope of its terms of reference.

The committee, in the fulfilment of its duties, may call upon the chairmen of the other board committees, any of the executive directors, officers or company secretary to provide it with information, subject to following a board-approved process.

The committee has reasonable access to the company’s records, facilities and any other resources necessary to discharge its duties and responsibilities.

The committee may form, and delegate authority to, subcommittees and may delegate authority to one or more designated members of the committee.

The committee has the right to obtain independent outside professional advice to assist with the execution of its duties, at the company’s cost, subject to following a board-approved process.

The committee makes recommendations to the board that it deems appropriate in any area within the ambit of its terms of reference where action or improvement is required.

Meeting procedures

Frequency

The committee must hold sufficient scheduled meetings to discharge all its duties as set out in these terms of reference but subject to a minimum of one meeting per year.

Meetings in addition to those scheduled may be held at the request of the chief executive officer, head of human resources or other members of senior management or at the instance of the board.

The chairman of the committee may meet with the chief executive officer, head of human resources and/or the company secretary prior to a committee meeting to discuss important issues and agree on the agenda.

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employee wellness

Ububele implemented life cover and funeral benefits for all its employees and agents during the year. One of our priorities is improving our employees’ life expectancy. We appreciate their time and want to emphasise our appreciation by providing them with a better quality of life and fewer concerns.

occupational health and safety

Health and safety at work is a fundamental requirement at Ububele and is not simply viewed as a legal requirement.

non-discrimination

Ububele is an equal opportunity employer committed to the principles and objectives of the Employment Equity Act, 55 of 1998.

ethics and fraud

the social and ethics committee

The role of the committee shall be to monitor the company’s activities, having regard for any relevant legislation, other legal requirements or prevailing codes of best practice, regarding matters relating to:§ social and economic development, including the

company’s standing in terms of the goals and purposes of:o the 10 principles set out in the United Nations

Global Compact Principles;o the OECD recommendations regarding

corruption;o the Employment Equity Act, 55 of 1998; ando the Broad-based Black Economic Empower-

ment Act, 53 of 2003;§ good corporate citizenship, including the company’s:

o promotion of equality, prevention of unfair discrimination, and reduction of corruption;

o contribution to development of the communities in which its activities are predominately conducted or within which its products or services are predominantly marketed; and

o record of sponsorship, donations and charitable giving;

o UBUBeLe’S ApprOACh TO reMUNerATiON iS deTerMiNed By iTS deSire TO eSTABLiSh A perfOrMANCe CULTUre.

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sUstainaBility REpORt [continued] Þ

§ the environment, health and public safety, including the impact of the company’s activities and of its products or services;

§ consumer relationships, including the company’s advertising, public relations and compliance with consumer protection laws; and

§ labour and employment, including:o the company’s standing in terms of the

International Labour Organisation Protocol on decent work and working conditions; and

o the company’s employment relationships, and its contribution toward the educational development of its employees.

HiV/aids

Societal health risks, including HIV/Aids, receive special attention as they have the potential to negatively impact productivity and costs associated with hiring and training new employees. We have intensified our awareness programmes for employees and our HIV/Aids policy and programmes have been developed to support affected employees.

EnViROnmEntal managEmEntour relationship with the environment

Ububele is committed to a programme of improvement that will take in all its spheres of activity to conduct itself in a manner that it is safe, healthy and environmentally friendly. We continue providing a quality product and service in a safe and healthy workplace, while minimising its impact on the environment. Ububele endeavours to comply with all relevant environmental legislation and strive to apply best practices in all its activities. Ububele commits itself to improving its environmental performance continuously and evaluating its targets and objectives regularly.

These targets and objectives are, among others:§ Considering impacts on the environment during the

decision-making processes.

§ Promoting environmental awareness among our employees and encouraging them to work in an environmentally friendly manner.

§ Training and educating employees in relevant environmentally matters.

§ Reducing waste through reuse and recycling programmes.

§ Promoting efficient use of resources throughout business activities.

§ Maintaining appropriate spill and emergency response programmes.

Waste management

General waste separation and recycling are undertaken at many of our installations.

We started a programme this year that recycles all the plastic containers used in our agricultural chemical division. This entails collecting all these containers at a central collecting point and recycling them into an intermediate raw material. This raw material is then reintroduced into the polypropylene market.

Water management

As mentioned previously, our operations rely chiefly on water. Our recent investment in Turf-Ag, in conjunction with the weather stations we are in the process of installing, should help mitigate the climate-related risk to our operations, and establish the Ububele brand in the irrigation sector.

We are very excited about these new investments and the value they will create for the group.

the endangered Wildlife trust

As part of our environmental responsibility, Ububele supports the Endangered Wildlife Trust in the conservation of the Secretary Bird. This bird is just one of many species that plays an important role in the day-to-day ecological activities on our customers’ land.

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The Secretary Bird Sagittarius serpentarius is an iconic species of the African plains that was recently reclassified on the 2011 IUCN Red List of Threatened Species: Birds from ‘Least concern’ to ‘Vulnerable’. Data collected through the 2nd Southern African Bird Atlas Project concluded that the species is suffering a decline in southern Africa. It is listed as ‘near threatened’ in the Red Data Book of Birds of South Africa, Lesotho and Swaziland. This status is likely to be reclassified as ‘Vulnerable’ on the review of the South African list in 2012.

The Secretary Bird faces a range of threats of which habitat loss and fragmentation due to anthropogenic factors is probably the most prominent. Other threats include collisions with power lines, fences and other structures, poisoning and the illegal trade in live birds.

The Birds of Prey Programme of the Endangered Wildlife Trust (EWT-BoPP) has been working on the monitoring, research and conservation of raptors for almost 40 years. We can confidently state that many species in the region would have faced a more severe threat of extinction were it not for the dedication and hard work of the EWT-BoPP and its partners, associates and volunteers.

The Secretary Bird was identified as a priority species by the EWT-BoPP and the purpose of this proposal is to acquire funding to conduct substantive work towards their conservation in South Africa.

The project aims to: § Compare the relative density and survival of

populations inside and outside conservation areas§ Assess seasonality in breeding patterns, breeding

success and recruitment§ Post-fledging dispersal – through GPS-tracking

monitor the post-fledging period, spatial and temporal use of its environment within the key biomes, inter- and intra-specific competition, dispersal and survival

§ Food selection – spatial and temporal patterns of resource use in heterogeneous landscapes

oWe Are COMMiTTed TO pUTTiNG BACK WhAT We TAKe frOM The eArTh, ANd MOre. We STrive TO prOvide WhAT SOCieTy NeedS fOr NOUriShMeNT ANd SUSTeNANCe, WhiLe preServiNG eNvirONMeNTAL reSOUrCeS fOr fUTUre GeNerATiONS. o

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sUstainaBility REpORt [continued] Þ

UBUBeLe BeLieveS ThAT The BiGGeST pOrTiON Of OUr SpONSOrShipS ANd AdverTiSiNG

CAMpAiGNS ShOULd Be SpeNT WiThiN

The COMMUNiTieS WiThiN WhiCh We

OperATe.

Findings from this work will better inform our approach and strategy with regard to the conservation of this species within its distribution range in South Africa.

Ububele is specifically involved in the southern Kalahari biome (Tswalu Kalahari Reserve).

Tswalu Kalahari Reserve (TKR) in north-central South Africa falls within the Kalahari biome and is an important protected area of over 100 000 hectares that provides a home for a range of raptor species, including several breeding pairs of Secretary Birds. The project here will be conducted as a post-graduate research project (MSc) in partnership with the Witwatersrand University School of Animal, Plant and Environmental Sciences (APES).

intERactiOn With cOmmUnitiEsSport

Ububele believes that the biggest portion of our sponsorships and advertising campaigns should be spent within the communities within which we operate.

The 2013 rugby tournaments held at Kroonstad and Jacobsdal were received well.

A new website was built under the www.yieldrugby.co.za domain.

Bismarck du Plessis will be the brand ambassador and help promote the tournaments.

Yield is the sole sponsor for the Griekwas referees.

It is important for us to market in the area in which we operate. The Griekwas referees are involved in the schools in these areas.

the Ububele recipe book

We decided this year to sponsor a recipe book that combines various recipes from our farming community, hereby showing further commitment and support to our customers’ well-being.

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ValUE aDDED statEmEnt Þ

2013

Government 3%Employees 7%Financiers 3%Investment 2%Purchases 86%Value added 0%

Employees 7% Financiers 3%

2012

Government 3%

Investment 1%Purchases 84%Value added 2%

Employees 7% Financiers 2%

2011

Government 3%

Investment 1%Purchases 82%Value added 5%

U B U B E L E i n t E g r A t E d r E P O r t [51]U B U B E L E i n t E g r A t E d r E P O r t [51]

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Committed to delivering shareholder value

cORpORatE gOVERnancE Þ

Acknowledging corporate governance

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intRODUctiOn

The directors of Ububele Holdings Limited (Ububele) acknowledge the importance of sound corporate governance and are committed to implementing the principles of the King Code on Governance Principles for South Africa (King III) insofar as is applicable and relevant to the company. Good corporate governance is key to the integrity of the Ububele group and central to the health and stability of its subsidiaries.

U B U B E L E i n t E g r A t E d r E P O r t [5 3 ]

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o UBUBeLe eMBrACeS The priNCipLeS Of freedOM Of ASSOCiATiON, ANd driveS BeST MANAGeMeNT prACTiCeS ACTiveLy. o

Since the last integrated report the following appointments were made to the board:§ CA Hall, Non-executive chairman§ CH Rickens, Joint chief executive officer§ JD Newton, Non-executive director§ JT Kleinhans, Non-executive director

All governance structures are reviewed and adapted regularly to ensure compliance with corporate developments and to adhere to best corporate practice.

The board considers corporate governance as a priority that requires more attention than merely establishing the steps to be taken to demonstrate compliance with legal, regulatory or listings requirements. The board and its committees will give issues of governance ongoing consideration during the year ahead. Sound governance remains one of the top priorities of executive management.

The board is satisfied that the company has applied adequate corporate practices of transparency, integrity, and accountability for the year under review.

cOmpliancE With REgUlatORy pROVisiOnsThe company is listed on the Alternative Exchange (AltX) of the JSE Limited (JSE). Accordingly, the company is subject to the ongoing disclosure, corporate governance and other requirements imposed by the JSE Listings Requirements, the Companies Act, 71 of 2008 (Companies Act), and King III.

Ububele welcomes and endorses the recommendations of King III which came into effect in March 2010. The board continuously considers the implications and effect of the King III best practice recommendations.

As demonstrated by this integrated report, Ububele has embraced the “apply or explain” principle of King III and complied with the Companies Act and JSE Listings Requirements (aside from where otherwise indicated).

cORpORatE gOVERnancE [continued] Þ

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The principles that have not been applied are listed and explained below:

No. King III principle and recommended practice Explanation

3.2.3 The chairman of the board should not be the chairman or member of the audit committee.

The new chairman is not the chairman of the audit committee.

The chairman of the board is a member of the audit and risk committee. The board considered the size of the company and the requirements of the Companies Act on the constitution of the audit committee. It was resolved that the non-executive chairman of the board also serves as a member of the audit and risk committee.

In terms of paragraph 21.5 of the JSE Listings Requirements, companies listed on the AltX are exempt from compliance with regard to the audit committee composition.

2.18 The board should comprise a balance of power, with majority of non-executive directors of whom the majority should be independent.

The board consist of eight directors of whom five are non-executive and two of the non-executives are independent.

The composition is continually reviewed.

There is a policy in place for a clear balance of power and authority at board level to ensure that no one director has unfettered powers of decision-making, regardless of the board's composition.

5.1 The board should be responsible for information technology governance.

The board has recognised this to be a key responsibility and will delegate the responsibility in due course.

A detailed analysis of the company's adherence to King III is available at www.ububele.co.za

U B U B E L E i n t E g r A t E d r E P O r t [5 5 ]

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cORpORatE gOVERnancE [continued] Þ

BOaRD Of DiREctORsAll directors are individuals of integrity and have the relevant knowledge, skills and experience to bring judgement to bear on the business of the company.

The directors are entitled to seek independent professional advice at Ububele’s expense concerning the company’s affairs and have access to any information they may require in discharging their duties as directors.

main ROlE anD REspOnsiBilitiEs Of DiREctORs In line with the board charter the following were determined as main functions and responsibilities of the board:§ Retaining full and effective control over the

company§ Determining the strategic objectives of the company

and group companies§ Monitoring implementation by group companies,

board committees and executive management of the board’s strategies, decisions, values and policies

§ Determining the company’s values, and ethical business practice

§ Bringing independent, informed and effective judgement to bear on material decisions of the company and group companies

§ Ensuring that the company and group companies are governed effectively in accordance with corporate governance best practice, including risk management and internal control systems

inDUctiOn Of nEWly appOintED DiREctORsNewly appointed directors are inducted in the company’s business, board matters and their fiduciary duties and other governance responsibilities as directors, under the guidance of the company secretary, in accordance with their specific needs.

BOaRD chaRtERThe board charter, which regulates how business is to be conducted by the board in accordance with the principles of good corporate governance, is in place. This charter is being reviewed to represent the memorandum of incorporation which will replace the existing articles of association in the near future.

OngOing tRainingDirectors are supplied with the information necessary to discharge their responsibilities individually and as a board, and in certain instances, as board committee members. Ububele is committed to providing continuing professional development and training opportunities to its directors and officers.

ROtatiOn Of DiREctORsThe rotation of directors is governed in terms of articles 13.2, 13.16 and 15 of the memorandum of incorporation of the company. One third of the directors shall retire from office at the annual general meeting. The retiring directors at each annual general meeting shall be, firstly, those who were appointed during the financial year, secondly any director who was removed from the board by a majority directors’ vote during the financial year and thirdly those who have been in office longest since their last election or appointment. A retiring director shall act as a director throughout the meeting at which he retires and if eligible make himself available for re-election.

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cOmpOsitiOn Of thE BOaRD Of DiREctORsIn terms of the memorandum of incorporation the number of directors on the board shall be a minimum of four directors.

The board is currently constituted as follows: § Colin Arthur Hall – Non-executive chairman§ Herbert William Cloete – Chief executive officer§ Charles Henry Rickens – Chief executive director§ Elana Kruger – Group financial director§ Dr Mpumela Kayalethu Makaba – Non-executive

director§ Stephan Abraham Roux – Non-executive director§ Johannes Theodorus Kleinhans – Non-executive

director§ John Denis Newton – Non-executive director

thE chaiRmanThe chairman has the following roles and responsibilities:§ Sets the ethical tone for the board and the company.§ Provides overall leadership to the board without

limiting the principle of collective responsibility for board decisions, while at the same time being aware of the individual duties of board members.

§ Identifies and participates in selecting board members, and oversees a formal succession plan for the board, chief executive officer and certain senior management appointments such as the financial director.

§ Formulates (with the chief executive officer and company secretary) the yearly work plan for the board against agreed objectives, and playing an active part in setting the agenda for board meetings.

§ Presides over board meetings, ensuring that meetings are productive, encouraging collegiality among board members without inhibiting candid debate and creative tension among board members.

§ Manages conflicts of interest (in terms of all internal and external requirements, for example the requirements of the Companies Act).

§ Acts as the link between the board and management and particularly between the board and the chief executive officer.

§ Is collegial with board members and management while at the same time maintaining an arm’s length relationship.

§ Ensures that directors play a full and constructive role in the affairs of the company and taking a lead role in the process for removing non-performing or unsuitable directors from the board.

§ Ensures that complete, timely, relevant, accurate, honest and accessible information is placed before the board to enable directors to reach an informed decision.

§ Monitors how the board works together and how individual directors perform and interact at meetings. The chairman meets with individual directors once a year to evaluate their performance. The chairman knows board members’ strengths and weaknesses.

§ Mentors directors to develop their skill and enhance confidence (especially those new to the role) and encouraging them to speak up and make an active contribution at meetings. The mentoring role is encouraged to maximise the potential of the board.

§ Ensures that all directors are made aware of their responsibilities appropriately through a tailored induction programme, and ensures that a formal programme of continuing professional development is adopted at board level.

§ Ensures that good relationships are maintained with the company’s major shareholders and its strategic stakeholders, and presides over shareholders’ meetings.

§ Builds and maintains stakeholders’ trust and confidence in the company.

o The BOArd CONSiderS COrpOrATe GOverNANCe AS A priOriTy ThAT reqUireS MOre ATTeNTiON ThAN MereLy eSTABLiShiNG The STepS TO Be TAKeN TO deMONSTrATe COMpLiANCe WiTh LeGAL, reGULATOry Or LiSTiNGS reqUireMeNTS.

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cORpORatE gOVERnancE [continued] Þ

§ Upholds rigorous standards of preparation for meetings by; for example, meeting with the chief executive officer before meetings and studying the meeting information packs distributed.

§ Ensures that decisions by the board are executed.

The chairman of the board is a member of the audit and risk committee, and the remuneration committee.

chiEf ExEcUtiVE OfficERThe board appointed the chief executive officer and is finalising a framework for the delegation of authority. The role and functions of the chief executive officer are formalised. His performance is subject to annual evaluation. The board provides the chief executive officer with guidance regarding senior management appointments.

ExEcUtiVE DiREctORsThe service contracts for all executive directors are in the process of being finalised. The executive directors are involved in the day-to-day business of the company.

Remuneration policies and practices for executive directors have been developed and adopted by the company.

nOn-ExEcUtiVE DiREctORsNon-executive directors are elected based on their business skills and acumen appropriate to the strategic direction of the company. Considerations of gender and racial diversity, as well as diversity in business, geographic and academic backgrounds, are taken into account when appointments to the board are considered.

The board confirms that the non-executive directors of the company do not form part of the executive management team and are not employees of the company. They are differentiated from executive directors in that they are not involved in the day-to-day business of the company. The non-executive directors:§ constructively challenge and contribute to the

development of the strategy;§ scrutinise the performance of management in

meetings;§ satisfy themselves that financial information is

accurate and that financial controls and systems of risk management are robust and defensible; and

§ provide their independent views on resources, appointments and standards of conducts.

inDEpEnDEnt nOn-ExEcUtiVE DiREctORsThe independent non-executive directors are independent in terms of the King III definition and the JSE Listings Requirements. No independent non-executive directors have served for a period of nine years. The board will measure their independence in line with the policy on measuring independence.

We confirm that the independent non-executive directors:§ do not represent any shareholder who has the ability

to control or materially influence management or the board;

§ were not employed by the company or the group in any executive capacity in the preceding three financial years;

§ are not immediate family members of an individual who is, or has been employed by the company or the group in an executive capacity the past three financial years;

§ are not professional advisors to the company or the group, other than in the capacity as a director;

§ are not suppliers or material suppliers to the company or group, or to customers of the group;

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§ have no material contractual relationship with the company or group; and

§ do not entertain business or other relationships which could be seen to materially interfere with the individual’s capacity to act in an independent manner.

BOaRD mEEtingsA minimum of four board meetings are scheduled per financial year. Additional board meetings are convened on an ad hoc basis if and when required.

In addition to the board meetings, the board convenes annual strategy meetings with executive management to determine strategic direction and to consider plans proposed by management for the achievement thereof. Progress against the strategic plan is monitored by the board on a quarterly basis.

DiREctOR anD BOaRD pERfORmancE EValUatiOnsDuring the year the board and individual directors’ performance was assessed in terms of a prescribed method and procedure. The board recognises the importance of board evaluation and development, not only as it constitutes good governance but it is a valuable process in improving board performance.

BOaRD sUBcOmmittEEsThe following committees were established to assist the board in discharging its responsibilities. § Audit and risk committee§ Remuneration committee§ Social and ethics committee

o ALL GOverNANCe STrUCTUreS Are revieWed ANd AdApTed reGULArLy TO eNSUre COMpLiANCe WiTh COrpOrATe deveLOpMeNTS ANd TO Adhere TO BeST COrpOrATe prACTiCe. o

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cORpORatE gOVERnancE [continued] Þ

thE nOminatiOn cOmmittEEThe board considered the size of the company and the requirements of the Companies Act on the constitution of a nomination committee and decided to postpone the formation of such committee.

These committees have an important role in enhancing high standards of governance and achieving increased effectiveness within the group. Every committee has terms of reference. All board committees comprise members of the board. All committee members are allowed to obtain such external or other independent professional advice as they consider necessary to carry out their duties.

Appointments to the board of directors are done in a formal and transparent manner and is a matter for the board of directors as a whole.

board meetings and attendance

Board27 Sep

201222 Nov

201218 Mar

201315 May

201330 May

201318 Jun

2013JT Kleinhans P R R R R RHW Cloete P P P P P PSA Roux P P P P P PJMK Matlala P P P P P PMP Mocke P P P P P PTB Hayter P P P P P PMK Makaba P P P P P PE Kruger P P P P P PMJ Krastanov P P P P P PLN Altini NA NA P P P RCompany Secretary P P P P P P

Present – PResigned – RNot applicable – NA

aUDit anD Risk cOmmittEEMembers:§ JD Newton (Chairman) – since 5 September 2013§ CA Hall – since 5 September 2013§ Dr MK Makaba § MJ Krastanov – Chairperson until 27 August 2013§ TB Hayter – member until 27 August 2013

The chairperson of the audit and risk committee has pleasure in submitting the following to shareholders:

The audit and risk committee is an important element of the board’s system of monitoring and control. All members are independent non-executive directors. All committee members are financially literate.

The committee acts in terms of approved terms of reference. The terms of reference are in line with the

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recommendations of King III and a copy thereof can be obtained from the chairman.

The audit and risk committee primarily assists the board in overseeing:§ the Ububele financial statements (including

consolidated group financial statements, interim reports and other financial reports and circulars);

§ the qualification and independence of the external auditors for Ububele and all group companies;

§ the scope and fees of the external audit function for Ububele and all group companies;

§ the effectiveness of the Ububele group’s internal controls and internal audit function;

§ the preapproval of all permissible non-audit services provided by the external auditor;

§ the committee’s functions include reviewing and assessing the integrity of the company’s risk management processes; and

§ the competency and appropriate qualification of the financial director.

intERnal aUDit anD cOntROlThe internal audit function is an integral part of the corporate governance regime. The internal auditor forms part of the corporate governance process so that the board will have absolute assurance regarding:§ The effectiveness and efficiency of operations§ The safeguarding of the company’s assets and

information§ Compliance with applicable laws, rules and

regulations§ Supporting business sustainability under normal and

adverse operating conditions§ The reliability of reporting§ Behaving responsibly towards all stakeholders

EValUatiOn Of annUal financial statEmEntsThe audit and risk committee confirmed that they have reviewed and discussed the annual financial statements with the independent external auditors and financial director. Based on the information provided to the audit and risk committee by management and while

considering the report by the independent auditors, the committee was satisfied that the group complies, in all material respects, with the requirement of the Companies Act, the Corporate Laws Amendment Act, 24 of 2006, and International Financial Reporting Standards (IFRS).

After agreeing that the going concern premise was appropriate the audit and risk committee recommended the adoption of the annual financial statements by the board at a meeting held on 25 September 2013. These financial statements will be open for discussion at the forthcoming annual general meeting.

financial DiREctORAs required by JSE Listings Requirement 3.84(h), the audit and risk committee has satisfied itself that the financial director, Mrs Elana Kruger has appropriate expertise and experience to fill her position as financial director.

ExtERnal aUDitORsThe external auditor has unrestricted access to the audit and risk committee. Their independence is in no way impaired.

The audit and risk committee evaluated the independence of Nolands Incorporated as the external auditors further as required in terms of section 90 of the Companies Act and is satisfied that they have maintained their independence during the year.

The committee nominated Nolands Incorporated for reappointment as the external auditor for the 2014 financial year, with Allan Mundell as the designated auditor, to be approved by shareholders at the annual general meeting.

annUal aUDit fEEsThe approved normal annual audit fee for the financial period under review amounted to R1 110 000 and was authorised by the committee. This fee does not include the audit fees of Mediva Group Holdings (Pty) Limited,

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cORpORatE gOVERnancE [continued] Þ

Flamingo In-Flight Services (Pty) Limited and Enviro Weed Control Namibia.

nOn-aUDit fEEsThe committee set the principles for recommending the use of the external auditors for non-audit services. There were no non-audit fees approved during the year.

All non-audit services remain subject to negotiation by management and the auditors. In the event that any non-audit services exceed the preapproved amounts, it will be reviewed and reapproved by the audit committee.

aUDit anD Risk cOmmittEE mEEtingsThe executive directors and external auditors attend audit and risk committee meetings by invitation.

The committee is required to meet at least twice a year. During the year, the committee met three times.

Committee meetings and attendance

Member18 Sep

201226 Sep

201212 Mar

201318 Mar

201328 May

2013

MJ Krastanov P P P P PTB Hayter P P P P PMK Makaba P P P P PHW Cloete P P P P PE Kruger P P P P PMP Mocke P P P P PCompany secretary P P P P PAuditor P P P P ADesignated advisor P P P P P

Present – PApology – A

o SOUNd GOverNANCe reMAiNS ONe Of The TOp priOriTieS Of exeCUTive MANAGeMeNT. o

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REmUnERatiOn cOmmittEEMembers:§ Dr K Makaba (Chairman) – since 20 September 2013§ C Hall – since 20 September 2013§ J Newton – since 20 September 2013

The terms of reference of the remuneration committee are available at the offices of the chairman.

The chairman of the remuneration committee has pleasure in presenting the following to shareholders:

The chief executive officer and financial director attends the meetings of the committee at the request of the committee, but is requested to leave the meeting before any decisions are made.

The functions of the remuneration committee are to:§ assist the board in exercising its function of ensuring

that affordable, fair and effective remuneration practices are implemented throughout the group;

§ determine the remuneration of group management members;

§ make recommendations to the board regarding directors’ fees and the remuneration and service conditions of executive directors, including the chief executive officer; and

§ provide a channel of communication between the board and management on remuneration matters.

The remuneration committee is mandated but not limited to:§ reviewing the group’s remuneration policies and

practices and making recommendations to the board on any proposed changes;

§ ensuring that the levels of remuneration are sufficient to attract, retain and motivate executives of the competence required for high-level management and key personnel positions;

§ playing a pivotal role in the succession planning, particularly in respect of the chief executive officer and executive management;

§ determining and approving any criteria for measuring the performance of executive directors in discharging their functions and responsibilities;

§ reviewing and approving the terms and conditions of executive directors’ employment contracts; and

§ reviewing and approving any disclosures in the integrated report or elsewhere on remuneration policies or directors’ remuneration.

Directors’ emoluments and other relevant remuneration information are disclosed on page 123 of the annual financial statements.

The committee reviews the group human resources policies and procedures as well as the group remuneration policy continuously.

Committee meetings and attendance

Member 6 Sep 2012 1 Mar 2013

TB Hayter P PMJ Krastanov P PDr MK Makaba P PHW Cloete P PE Kruger P PMP Mocke P PPresent – P

thE sOcial anD Ethics cOmmittEE (sEc) Members:§ T Kleinhans (Chairman) – since 20 September 2013

The terms of reference of the SEC are available at the offices of the chairman. The SEC is required to meet at least once per year.

The chairman of the SEC has pleasure in presenting the following to shareholders:

The chief executive officer, other executive directors, and prescribed officers attend committee meetings by invitation but are requested to leave the meeting before any decisions are made.

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The mandate of the SEC according to the regulations that accompany the Companies Act is threefold: § The committee has to monitor whether the company

complies with relevant social, ethical and legal requirements and best practice codes.

§ The committee has to bring any relevant matters within the scope of its mandate to the attention of the board.

§ The committee has to report matters that fall within the scope of its mandate to shareholders.

The following areas of social responsibility and relevant standards are explicitly listed in section 43(5) of the Companies Act: § Social and economic development (relevant

standards: United Nations Global Compact; OECD recommendations on corruption; Employment Equity Act, 55 of 1998; Broad-based Black Economic Empowerment Act, 53 of 2003)

§ Good corporate citizenship (including promotion of equality, prevention of unfair discrimination, eradication of corruption; contribution to community development; sponsorship, donations and charitable giving; environment, health and public safety)

§ Impact of the company’s activities, products or services on communities

§ Consumer relationships (including advertising; public relations; compliance with consumer protection laws)

§ Labour and employment (including employment relationships; contributions towards the educational development of employees – relevant standards: International Labour Organisation Protocol on decent work and working conditions)

The committee is also pleased to report that much is being achieved on the social front. On 22 April 2012, the Financial Mail rated Ububele as the second most socio-economically responsible company in South Africa. There was no Financial Mail ranking in 2013.

cORpORatE gOVERnancE [continued] Þ

Committee meetings and attendance

Member 18 Sep 2012 28 May 2013J Matlala P PM Krastanov P PB Cloete P PT Kleinhans P NAL Altini NA P

Present – PNot applicable – NA

cOmpany sEcREtaRyFusion Corporate Secretarial Services (Pty) Limited, represented by Melinda van den Berg is the company secretary, duly appointed in accordance with the Companies Act.

The company secretary has a direct channel of communication with the chairman while maintaining an arms’ length relationship with the board and the directors.

She is responsible to the board for ensuring the proper administration of board proceedings, including the preparation and circulation of board papers, ensuring that feedback is provided to the board and board committees and preparing and circulating minutes of board and board committee meetings. She provides practical support and guidance to the directors on their responsibilities within the prevailing regulatory and statutory environment and the manner in which such responsibilities (including not dealing in the company’s shares during restricted periods) should be discharged.

The board of directors has reviewed, through discussion and assessment, the qualifications, experience and competence of the company secretary and has noted that the company secretary performed all formalities and substantive duties timeously and in an appropriate manner.

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DEaling in thE cOmpany’s sEcURitiEs The company’s directors, executives and senior employees are prohibited from dealing in Ububele securities during certain prescribed restricted and closed periods. The company secretary regularly disseminates written notices to inform them of the insider trading legislation and advise them of closed periods. All dealings in the company’s securities are disclosed in terms of the applicable JSE Listings Requirements.

inVEstOR RElatiOns anD shaREhOlDER cOmmUnicatiOnCommunication with Ububele’s stakeholders is vital. Apart from communication through SENS and the media, the group has embarked on roadshows and analyst presentations.

REstRictiVE fUnDing aRRangEmEntsThe company is party to a restrictive funding arrangement with the Land and Agricultural Development Bank of South Africa in the amount of R180 million. The company may not, without the prior written consent of the Land and Agricultural Development Bank, which consent shall not be unreasonably withheld:1. Mortgage, pledge, hypothecate or otherwise

encumber of any of its immovable or movable assets bonded to Land Bank in favour of any other person or organisation.

2. Sell, alienate, dispose of or transfer or in any way give up possession of any of its movable or immovable assets other than in the ordinary course of business.

3. Furnish security of any nature to any other financial institution or organisation on behalf of itself or any subsidiary, associated company or other entity or person other than in the ordinary course of business.

4. Restructure its operations in a manner that will result in any of its assets or business operations being transferred either to a subsidiary or associated company or companies or otherwise.

5. Implement any material changes to its structure or its operations.

6. Make any material investment in or advance money to any subsidiary or associated company that results or may result in an outflow of capital from the company. The decision of the Land Bank as to what constitutes a material investment shall be final and binding on the company.

7. Issue any secured or unsecured debentures.8. Incur any indebtedness, financial liabilities or loans

of any nature with any financial institution or other lender. The Land Bank shall be entitled to receive any information it requests in writing from the company from time to time.

9. Undertake or take steps in respect of any share buy-backs, cancellation or reduction of its issued and/or authorised share capital or record the transfer of any shares held in the issued share capital of the company by any shareholder to another person or organisation.

10. Make amendments to its memorandum of incorporation.

analysis Of shaREhOlDERsPlease refer to the analysis of shareholders on page 74.

DEsignatED aDVisORsPSG Capital is the group’s designated advisor.

tRansfER sEcREtaRiEsComputershare Investor Services (Pty) Limited is the appointed transfer secretary to the group. All shareholders can address shareholding-related queries to PO Box 61051, Marshalltown, 2107, South Africa.

o The BOArd iS SATiSfied ThAT The COMpANy hAS AppLied AdeqUATe COrpOrATe prACTiCeS Of TrANSpAreNCy, iNTeGriTy, ANd ACCOUNTABiLiTy fOr The yeAr UNder revieW.

U B U B E L E i n t E g r A t E d r E P O r t [ 6 5 ]

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U B U B E L E i n t e g r a t e d r e P O r t [ 67 ]

68 Directors’ responsibilities and approval

69 Report of the independent auditor

70 Certificate of the company secretary

71 Report of the audit committee

72 Report of the directors

76 Report of the social and ethics committee

77 Statements of financial position

78 Statements of profit or loss and other comprehensive income

79 Statements of changes in equity

80 Statements of cash flows

81 Accounting policies

92 Notes to the annual financial statements

integrated report 2013

View this report online at

www.ir2013ububele.co.za

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[ 6 8 ] U B U B E L E i n t e g r a t e d r e P O r t

Directors’ responsibilities anD approval Þ

The directors are required in terms of the Companies Act, 71 of 2008 (Companies Act) to maintain adequate accounting records and are responsible for the content and integrity of the audited annual financial statements and related financial information included in this report. It is their responsibility to ensure that the audited annual financial statements fairly present the state of affairs of the group as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with International Financial Reporting Standards, the JSE Listings Requirements and the Companies Act. The external auditors are engaged to express an independent opinion on the annual financial statements.

The annual financial statements are prepared in accordance with International Financial Reporting Standards, the JSE Listings Requirements and the Companies Act and are based upon appropriate accounting policies that have been consistently applied and are supported by reasonable and prudent judgements and estimates.

The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the group and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost-effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the group and all employees are required to maintain the highest ethical standards in ensuring the group’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the group is on identifying, assessing, managing and monitoring all known forms of risk across the group. While operating risk cannot be fully eliminated, the group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the audited annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The external auditors are responsible for independently auditing and reporting on the group’s audited annual financial statements. The audited annual financial statements have been examined by the group’s external auditors and their report is presented on page 69.

The audited annual financial statements set out on pages 72 to 131, which have been prepared on the going concern basis, were approved by the board of directors and were signed on its behalf by:

HW Cloete E Kruger

Cape Town29 October 2013

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U B U B E L E i n t e g r a t e d r e P O r t [ 6 9 ]

report of the inDepenDent auDitor Þ

report on the annual financial statementsTo the shareholders of Ububele Holdings LimitedWe have audited the consolidated and separate annual financial statements of Ububele Holdings Limited which comprise the consolidated and separate statements of financial position as at 30 June 2013, the consolidated and separate statements of profit or loss and other comprehensive income, consolidated and separate statements of changes in equity and the consolidated and separate statements of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory notes as set out on pages 77 to 131.

Directors’ responsibility for the financial statementsThe company’s directors are responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with International Financial Reporting Standards and in the manner required by the Companies Act, 71 of 2008, of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

auDitors’ responsibilityOur responsibility is to express an opinion on these annual 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 annual 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 misstatements of the financial statements, whether due to fraud or error. In making those risks 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 the director, 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.

opinionIn our opinion, the consolidated and separate annual financial statements present fairly, in all material respects, the consolidated and separate financial position of Ububele Holdings Limited as at 30 June 2013, 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 Companies Act, 71 of 2008, of South Africa.

other reports requireD by the companies actAs part of our audit of the consolidated and separate financial statements for the year ended 30 June 2013, we have read the directors’ report, the report of the audit committee and certificate of the company secretary for the purpose of identifying whether there are material inconsistencies between these reports and the audited consolidated and separate financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited consolidated and separate financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

Nolands Inc. Noland House,Registered Auditors River Park,Practice number 900583E River Lane

Per: Allan Mundell CA(SA) Mowbray

5 November 2013Cape Town

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[70 ] U B U B E L E i n t e g r a t e d r e P O r t

certificate of the company secretary Þ

In terms of section 88(2)(e) of the Companies Act, 71 of 2008, we certify that, to the best of our knowledge and belief, Ububele Holdings Limited has lodged with the Commissioner all such returns and notices as are required by the Companies Act, 71 of 2008, and that all such returns and notices are true, correct and up to date.

Fusion Corporate Secretarial Services (Pty) LimitedCompany SecretaryPer Melinda van den Berg

Cape Town29 October 2013

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U B U B E L E i n t e g r a t e d r e P O r t [71]

The report of the audit committee is presented as required by section 61(8)(a)(iii) of the Companies Act, 71 of 2008 (“the Companies Act”).

The audit committee consisted of the following non-executive directors during the year under review:§ MJ Krastanov (Chair)§ TB Hayter§ MK Makaba

With effect from 5 September 2013, the audit committee consisted of the following non-executive directors:§ JD Newton (Chair)§ CA Hall§ MK Makaba

All the above directors are independent other than MK Makaba.

In accordance with the JSE Listings Requirements, a representative of the designated advisor attends all audit committee meetings.

statement of auDit committee responsibilities for the year enDeD 30 June 2013The role of the audit committee is to assist the board by performing an objective and independent review of the functioning of the organisation’s finance and accounting control mechanisms. It exercises its functions through close liaison and communication with corporate management and the internal and external auditors. The committee met on three occasions during the 2013 financial year. The committee is guided by its terms of reference, dealing with membership, structure and levels of authority and has the following responsibilities:

§ Ensuring compliance with applicable legislation and the requirements of regulatory authorities§ Nominating for appointment a registered auditor who, in the opinion of the audit committee, is independent of the company§ Matters relating to financial accounting, accounting policies, reporting and disclosure§ Internal audit policy including determination of fees and terms of engagement§ Activities, scope, adequacy, and effectiveness of the internal audit function and audit plans

Review/approval of external audit plans, findings, reports, fees and determination and approval of any non-audit services that the auditor may provide to the company

§ Review/consideration of expertise and experience of the financial director and the financial team§ Compliance with the Code of Corporate Practices and Conduct§ Compliance with the company’s code of ethics

The audit committee addressed its responsibilities properly in terms of the charter during the 2013 financial year. One of these responsibilities was the assessment of the independence of the auditor. The committee is satisfied that the auditor was independent of the company. It has further satisfied itself that the audit firm and designated auditor are accredited to appear on the JSE List of Accredited Auditors. The audit committee has an established non-audit services policy as well as an approval process for non-audit services, where utilised. During the year under review no non-audit services were utilised.

Based on the results of the system of internal financial controls conducted by the internal audit function during the 2013 financial year and considering information and explanations given by management together with discussion held with the external auditors on the results of their audit, the committee is of the opinion that Ububele’s system of internal financial controls is effective and forms a basis for the preparation of reliable financial statements. Certain matters were identified during the year under review through the internal audit function, which matters were substantially resolved before the commencement of the external audit.

The committee also oversees cooperation between the internal and external auditors and serves as a link between the board of directors and these functions. The committee is satisfied that it has complied with its legal, regulatory and other responsibilities.

The committee is also satisfied as to the expertise and experience of the financial director and the finance team. Management has reviewed the financial statements with the audit committee, and the audit committee has reviewed them without management or external auditors being present. The quality of the accounting policies are discussed with the external auditors.

The audit committee considers the financial statements of Ububele Holdings Limited to be a fair presentation of its financial position as at 30 June 2013 and of the results of the operations, changes in equity and cash flows for the period ended then, in accordance with International Financial Reporting Standards and the Companies Act.

JD NewtonChairman

29 October 2013

report of the auDit committee Þfor the year ended 30 June 2013

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[72 ] U B U B E L E i n t e g r a t e d r e P O r t

report of the Directors Þ

The directors submit their report for the year ended 30 June 2013.

1. review of activitiesMain business and operationsThe company is an investment and management company. The group operates principally in South Africa and Namibia.

Certain trading subsidiaries are engaged in airline catering, and the distribution of chemicals and related substances.

The board has reviewed its strategy and decided to reduce its investment in the manufacturing and distribution of food products in South Africa and focus on developing Ububele’s agriculture business. In the agriculture business, an area of focus is to increase the distribution of chemicals and related substances to fruit and vegetable crop producers in order to achieve an optimal product mix. The company is well positioned to achieve this. On both the organic and the acquisitive side, Ububele will continue to expand and diversify the agriculture business in both South Africa and the rest of the continent.

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

Special resolutionsAt the annual general meeting of shareholders held on 29 November 2012, three special resolutions were approved by the requisite majority of votes, namely: general authority to acquire (repurchase) shares; remuneration of non-executive directors; and financial assistance in terms of section 44 and 45 of the Companies Act.

Special resolutions were approved in all subsidiaries of the group for financial assistance in terms of sections 44 and 45 of the Companies Act.

Full details of the special resolutions passed will be made available to shareholders on request.

2. GoinG concernThe audited annual financial statements have been prepared on the going concern basis. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

3. events after the reportinG perioDFull details of events after the reporting period are disclosed as per note 40.

4. authoriseD anD issueD share capitalThere were no changes in the authorised share capital of the group during the year under review.

During the year under review, the group repurchased 35 000 shares at 50 cents each. The repurchased shares are held as treasury securities by a subsidiary of Ububele.

5. non-current assetsThere were no major changes to the non-current assets of the group during the year under review, other than those mentioned below and reflected in the attached annual financial statements.

On 30 November 2012, the group disposed of its interest and claims in Unique Dairy Products (Pty) Limited.

6. DiviDenDs paiDThe dividends already declared and paid to shareholders during the year are as reflected in the attached annual financial statements.

7. DirectorsThe directors of the company during the year and to the date of this report are as follows:

HW CloeteCA Hall Appointed 28 August 2013TB Hayter Resigned 27 August 2013JT Kleinhans Resigned 27 October 2012, Appointed 28 August 2013MJ Krastanov Resigned 27 August 2013E KrugerMK Makaba

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U B U B E L E i n t e g r a t e d r e P O r t [73 ]

JMK Matlala Removed 28 August 2013MP Mocke Removed 28 August 2013JD Newton Appointed 28 August 2013CH Rickens Appointed 28 August 2013SA Roux

8. secretaryThe secretary of the company is Fusion Corporate Secretarial Services (Pty) Limited of:

Business address Fusion Corporate Secretarial Services 43 Sovereign Road Route 21 Corporate Park Nellmapius Drive Irene, Pretoria

Postal address PO Box 68528 Highveld 0169

9. investment in subsiDiaries Country of incorporation if not South Africa Net income (loss) after taxDirect subsidiariesUbubele Agri (Pty) Limited (1 384 270)Ububele Foods (Pty) Limited 5 140 231Mediva Group Holdings (Pty) Limited Namibia 6 298 874IAMU Holding Company Limited Ireland –Ububele Holdings Mozambique Limited Mozambique –Ububele Equity (Pty) Limited (20 015)

Indirect subsidiariesEnviro Weed Control Namibia (Pty) Limited Namibia (203 551)Flamingo In-Flight (Pty) Limited Namibia 3 948 155Ububele Investments (Namibia) (Pty) Limited Namibia – Ububele Properties (Pty) Limited Namibia – Yield Chemical Group (Pty) Limited (14 601 111)Yield Alfa (Pty) Limited 354 991Yield Alfa Chemicals (Pty) Limited 20 336Enviro Industries (Pty) Limited (898 297)Yield WTP (Pty) Limited (4 233 047)RT Chemicals (Pty) Limited 654 316 Enviro Crop Protection (Pty) Limited (516 345)Yield Avello (Pty) Limited 7 897 744Avello Logistics (Pty) Limited 220 975Uberfoods (Pty) Limited (224 201) Fine Cut Fruit and Veg (Pty) Limited (13 581 695) Unique Dairy Products (Pty) Limited 802 970 Linktrade (Pty) Limited 460 005AG Foods (Pty) Limited – So Gourmet (Pty) Limited – Uni-Way Logistics (Pty) Limited 1 372 339Avondale Dairy Shop Silverton (Pty) Limited – Avondale Dairy Shop Nelspruit (Pty) Limited – Avondale Dairy Shop Roodepoort (Pty) Limited – Avondale Dairy Shop Polokwane (Pty) Limited –

Details of the company’s investment in subsidiaries are set out in note 6.

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[74 ] U B U B E L E i n t e g r a t e d r e P O r t

report of the Directors (continued) Þ

10. auDitorsNolands Inc. will continue in office in accordance with Section 90 of the Companies Act, 71 of 2008.

11. analysis of shareholDers

Shareholder spreadNumber of

shareholders %Number of

shares %1 – 1 000 shares 436 41.09 145 181 0.08

1 001 – 10 000 shares 315 29.69 1 268 837 0.71

10 001 – 100 000 shares 217 20.45 7 759 024 4.35

100 001 – 1 000 000 shares 76 7.16 28 627 012 16.04

1 000 001 shares and over 17 1.60 140 617 770 78.81

1 061 100.00 178 417 824 100.00

Distribution of shareholdersNumber of

shareholders %Number of

shares %Banks and brokers 12 1.13 1 984 222 1.11

Close corporations 19 1.79 362 102 0.20

Endowment funds 1 0.09 690 0.00

Individuals 944 88.97 35 858 086 20.10

Nominees and trusts 53 5.00 31 657 670 17.74

Other corporations 9 0.85 20 118 0.01

Private companies 21 1.98 104 528 356 58.59

Public companies 1 0.09 3 971 580 2.23

Treasury stock 1 0.09 35 000 0.02

1 061 100.00 178 417 824 100.00

Public/non-public shareholdersNumber of

shareholders %Number of

shares %Non-public shareholders

Director holdings in the company* 4 0.38 14 412 966 8.08

Strategic shareholder 3 0.28 87 577 239 48.86

Public shareholders 1 054 99.34 76 427 619 43.06

1 061 100.00 178 417 824 100.00

* Some directors have an indirect interest in Ububele via Mentele Investments which have been disclosed in their personal capacity for disclosure/compliance purposes but not added to the total director holdings as Mentele Investments has not been adjusted. This is to avoid double counting.

Beneficial shareholders holding 3% or moreNumber of

shares %Mentele Investments (Pty) Limited 41 261 220 23.13

K2012197774 (South Africa) (Pty) Limited 46 316 019 25.96

Miramare Investments (Pty) Limited 14 692 441 8.23

Kleinhans Family Trust 9 916 829 5.56

Dirk Willem Ryk Trust 6 666 667 3.74

118 853 176 66.62

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U B U B E L E i n t e g r a t e d r e P O r t [75 ]

2013 2012

Breakdown of non-public shareholdersTotal number

of shares %Total number

of shares %

DirectorsHW CloeteUnibert Investments (Pty) Limited – – 12 455 135 6.98

Doekvoet Beleggings – – 367 333 0.21

JT KleinhansKleinhans Family Trust 9 916 829 5.56 9 916 829 5.56

SA RouxRoux, SA – – 7 225 066 4.05

JMK MatlalaMentele Investments (Pty) Limited (21.40%) (50%) SuperStrike

Investments 31 (Pty) Limited 4 414 951 2.47 4 414 951 2.47

MP MockeThe Intsikelelo Family Trust 4 448 037 2.49 4 448 037 2.49

Mentele Investments (Pty) Limited (19.07% ) The Intsikelelo Family Trust 7 868 515 4.41 7 868 515 4.41

MJ KrastanovKrastanov, MJ 25 000 0.01 25 000 0.01

E KrugerKruger, E 23 100 0.01 23 100 0.01

MK Makaba – – – –

Mentele Investments (Pty) Limited (6.86%) 2 830 520 1.59 2 830 520 1.59

14 412 966 8.08 34 460 500 27.78

From 30 June 2013 up to the date of this report, the Kleinhans Family Trust disposed of 2 000 000 (two million) of its shares.

Strategic Holdings (more than 10%)Number of

shares %K2012197774 (South Africa) (Pty) Limited 46 316 019 25.96Mentele Investments (Pty) Limited 41 261 220 23.13

87 577 239 49.09

12. reGistereD aDDressEast Wing Acorn HouseOld Oak Office ParkCnr of Old Oak & Durban RoadsBellville 7530

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[76 ] U B U B E L E i n t e g r a t e d r e P O r t

report of the social anD ethics committee Þ

For the period July to October 2012 the committee comprised:

JT Kleinhans – ChairmanM Krastanov – MemberJ Matlala – Member

The primary focus during this period was to note and develop various mandatory and voluntary standards against which the performance of the company regarding its social responsibility and ethical behaviour could be measured.

Theo Kleinhans resigned from the board at the end of October 2012. The functioning of the social and ethics committee was then left to J Matlala (Chairperson) and M Krastanov (Member).

Theo Kleinhans was re-appointed to the board in August 2013 and will continue to manage and direct the social and ethics committee. Interviews are being conducted for the positions of new members as M Krastanov and J Matlala no longer serve on the committee.

The priority of the new committee will be to pick up its monitoring function received via its mandate. In summary:

§ the committee will monitor whether the company complies with relevant social, ethical and legal requirements and best practice codes; § the committee will bring to the attention of the board any relevant matters within the scope of its mandate; and § the committee will report to shareholders on matters that fall within the scope of its mandate.

Furthermore, in the light of the board having appointed a new group CEO and a new chairman to the audit and risk committee, it will rest upon the chairman of the social and ethics committee to establish strong relationships with the latter. The social and ethics committee is heavily dependent on the aforementioned appointees for several assurances regarding company performance in the areas of:

§ Social and economic development (relevant standards: United Nations Global Compact; OECD recommendations on corruption; Employment Equity Act; Broad-based Black Economic Empowerment Act).

§ Good corporate citizenship (including promotion of equality, prevention of unfair discrimination, eradication of corruption; contribution to community development; sponsorship, donations and charitable giving; environment, health and public safety).

§ Impact of the company’s activities, products or services on communities. § Consumer relationships (including advertising; public relations; compliance with consumer protection laws). § Labour and employment (including employment relationships; contributions towards the educational development of employees. § Relevant standards: International Labour Organisation Protocol on decent work and working conditions).

The social and ethics committee accepts its key function as acting as the social conscience of the business and ensuring that the company behaves like a responsible corporate citizen.

JT KleinhansChairman of the social and ethics committee

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U B U B E L E i n t e g r a t e d r e P O r t [7 7 ]

statements of financial position Þas at 30 June 2013

Group Company

Note(s)2013

R

2012Restated

R

2011Restated

R2013

R2012

RASSETS Non-current assets Property, plant and equipment 3 22 546 615 34 508 140 27 542 244 134 005 209 630 Goodwill 4 66 006 912 73 424 364 98 577 678 – – Intangible assets 5 21 766 733 15 331 261 27 762 093 481 647 49 266 Investment in subsidiaries 6 – – – 101 901 786 174 181 849 Deferred taxation 7 20 355 785 23 242 621 17 666 609 4 607 850 4 567 135 Available-for-sale financial assets at

fair value 8 5 179 892 4 565 856 3 854 738 – – Loans to group companies 9 – – – 151 334 715 162 287 727 135 855 937 151 072 242 175 403 362 258 460 003 341 295 607 Current assets Trade and other receivables 10 160 747 738 154 717 349 129 827 257 19 417 090 15 944 932 Deposits 40 2 833 010 – – – – Inventories 11 86 865 903 89 718 021 72 963 357 – – Loans receivable 12 2 228 441 2 250 772 – – – Loans to group companies 9 – – – 42 772 909 49 566 826 Cash and cash equivalents 13 14 242 706 17 869 530 13 464 017 2 165 108 186 129 Taxation 1 070 572 662 144 1 473 440 – – 267 988 370 265 217 816 217 728 071 64 355 107 65 697 887 Non-current assets held for sale and

assets of disposal groups 14 515 000 1 294 645 1 385 766 – – Total assets 404 359 307 417 584 703 394 517 199 322 815 110 406 993 494

EQUITY AND LIABILITIES EQUITY Equity attributable to equity holders

of parent Share capital and premium 15 100 981 928 100 999 428 99 749 428 229 342 369 229 342 369 Other reserves 16 2 894 553 2 395 148 1 917 537 – – Retained earnings (95 537 150) (62 708 599) 29 098 973 (126 003 202) (45 125 681) 8 339 331 40 685 977 130 765 938 103 339 167 184 216 688Non-controlling interest 6 691 900 10 421 395 13 075 372 – – 15 031 232 51 107 372 143 841 310 103 339 167 184 216 688 LIABILITIES Non-current liabilities Loans payable 17 216 783 748 219 393 719 91 373 641 208 365 394 217 496 035 Amounts due on instalment sale

agreements 18 2 775 805 4 764 571 5 724 003 – – Deferred taxation 7 3 465 632 4 355 426 3 199 054 – – 223 025 185 228 513 716 100 296 698 208 365 394 217 496 035 Current liabilities Trade and other payables 19 149 221 204 118 429 972 118 237 856 6 110 593 5 236 172 Loans from shareholders – – 9 664 108 – – Loans payable 17 12 880 135 13 321 297 5 617 593 4 999 955 – Taxation 924 845 2 906 867 1 461 273 – – Amounts due on instalment sale

agreements 18 2 156 969 3 260 801 3 853 601 – – Derivative financial instruments – – 45 846 – – Bank overdraft and acceptances 13 1 119 737 44 678 11 498 914 – 44 599 166 302 890 137 963 615 150 379 191 11 110 548 5 280 771 Total liabilities 389 328 075 366 477 331 250 675 889 219 475 942 222 776 806 Total equity and liabilities 404 359 307 417 584 703 394 517 199 322 815 110 406 993 494

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[78 ] U B U B E L E i n t e g r a t e d r e P O r t

statements of profit or loss anD other comprehensive income Þfor the year ended 30 June 2013

Group Company

Note(s) 2013

R

Restated2012

R2013

R2012

R

Continuing operations Revenue 20 636 518 348 582 406 218 12 263 158 16 608 737

Cost of sales (524 313 785) (472 315 742) – –

Gross profit 112 204 563 110 090 476 12 263 158 16 608 737

Other income 5 009 780 4 065 616 1 780 292 9 913

Operating expenses (117 661 974) (94 716 519) (14 878 311) (14 493 976)

Operating (loss)/profit 21 (447 629) 19 439 573 (834 861) 2 124 674

Investment revenue 22 12 168 214 8 824 080 18 978 579 15 254 274

Impairment of goodwill 4 (7 417 452) – – –

Impairment of investment subsidiary 6 – – (72 280 163)Loss on loan written off – – (7 500 000) (25 650 001)

Loss on non-current assets held for sale or disposal groups – (67 775) – –

Finance costs 23 (22 887 129) (18 841 187) (19 281 793) (13 702 191)

(Loss)/profit before taxation (18 583 996) 9 354 691 (80 918 238) (21 973 244)

Taxation 24 (6 449 117) (4 258 971) 40 717 393 280

(Loss)/profit from continuing operations (25 033 113) 5 095 720 (80 877 521) (21 579 964)

Discontinued operations

Profit/(loss) from discontinued operations 1 533 542 (47 181 112) – –

Loss for the year (23 499 571) (42 085 392) (80 877 521) (21 579 964)

Other comprehensive income: Other comprehensive income to be reclassified to profit or loss in subsequent periodsNet change in fair value of available-for-sale financial assets 499 405 477 611 – –

Total comprehensive loss (23 000 166) (41 607 781) (80 877 521) (21 579 964)

Total comprehensive loss attributable to: Owners of the parent: Loss for the year from continuing operations (26 899 471) (614 861) – –

Profit/(loss) for the year from discontinued operations 1 308 139 (47 171 744) – –

Loss for the year attributable to owners of the parent (25 591 332) (47 786 605) (80 877 521) (21 579 964)

Non-controlling interest: Profit for the year from continuing operations 2 365 763 6 188 192 – –

Profit/(loss) for the year from discontinued operations 225 403 (9 368) – –

Profit for the year attributable to non-controlling interest 2 591 166 6 178 824 (80 877 521) (21 579 964)

Earnings per share (cents) Basic from continuing operations 25 (15.36) (0.61)

Diluted basic from continuing operations (15.36) (0.61)

Basic from discontinued operations 0.73 (26.52)

Diluted basic from discontinued operations 0.73 (26.52)

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statements of chanGes in equity Þfor the year ended 30 June 2013

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[ 8 0 ] U B U B E L E i n t e g r a t e d r e P O r t

statements of cash flows Þfor the year ended 30 June 2013

Group Company

Note(s) 2013

R2012

R2013

R2012

R

CASH FLOWS FROM OPERATING ACTIvITIESCash (used in)/generated from operations 26 41 637 136 (17 216 698) (3 279 332) (4 357 738)

Interest income 11 861 750 8 564 560 18 978 579 15 254 274

Dividends received 306 466 259 520 – –

Finance costs (22 887 129) (19 249 328) (19 281 793) (13 702 191)

Taxation paid 27 (4 846 750) (5 572 304) – (354 336)

Net cash inflow/(outflow) from operating activities 26 071 473 (33 214 250) (3 582 546) (3 159 991)

CASH FLOWS FROM INvESTING ACTIvITIESAdditions to property, plant and equipment 3 (10 718 976) (21 296 235) (25 310) (62 070)

Proceeds on disposal of property, plant and equipment 3 4 145 286 5 649 826 – 14 980 139

Additions to intangible assets 5 (8 502 792) (3 239 080) (484 810) (17 605)

Acquisition of interest in subsidiaries 28 (3 500 000) (40 000 000) (800) –

(Repayment)/advancement of loans to group companies – – 10 246 929 (135 630 206)

Acquisition of available-for-sale financial assets – (711 118) – –

(Receipt)/advancement of loans 22 331 (2 250 772) – –

Net cash outflows from investing activities (18 554 151) (61 847 379) 9 736 009 (120 729 742)

CASH FLOWS FROM FINANCING ACTIvITIESProceeds on share issue 15 – 1 250 000 – 1 250 000

Repurchase of shares (17 500) – – –

Proceeds from loans payable – 125 053 524 – 125 872 596

Repayment of loans payable (5 912 936) – (4 129 885) –

Repayment of shareholders’ loans – (1 453 757) – –

Interest-bearing borrowings repaid (230 795) (1 552 232) – (1 562 077)

Interest-bearing borrowings raised – – – –

Dividends paid 29 (6 057 974) (12 376 157) – (3 543 356)

Net cash (outflow)/inflow from financing activities (12 219 205) 110 921 378 (4 129 885) 122 017 163

Net increase/(decrease) in cash and cash equivalents for the year (4 701 883) 15 859 749 2 023 578 (1 872 570)

Cash and cash equivalents at the beginning of the year 17 824 852 1 965 103 141 530 2 014 100

Cash and cash equivalents at the end of the year 13 13 122 969 17 824 852 2 165 108 141 530

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U B U B E L E i n t e g r a t e d r e P O r t [ 81]

accountinG policies Þfor the year ended 30 June 2013

1. presentation of auDiteD annual financial statementsThe audited annual financial statements have been prepared in accordance with International Financial Reporting Standards, the JSE Listings Requirements and the Companies Act, 71 of 2008.

The accounting policies set out below have, except for the instances listed below, been consistently applied to all periods presented in these consolidated financial statements, except where the group has adopted the IFRS and IFRIC interpretations and amendments listed below that became effective during the period. These interpretations and amendments had no material impact on the reported results. Where applicable, additional disclosures for the current and comparative periods were provided. IFRS and IFRIC interpretations that were not applicable to the group were not adopted.

§ The statement of profit or loss and other comprehensive income, as at 30 June 2012, has been restated for the reclassification of commission paid between cost of sales and operating expenses. This resulted in an increase in cost of sales of R54 399 130, with a corresponding decrease in operating expenses.

This reclassification was done in order to provide increased disclosure and because the directors felt that it gave a better reflection of the classification of expenses. There has been no impact on profit, statement of financial position, statement of changes in equity, statement of cash flows, earnings per share or diluted earnings per share.

§ The statement of financial position as at 30 June 2012 and 30 June 2011 has been restated for the reclassification of distributions retained from agents from loans payable to trade and other payables. This resulted in an increase in trade and other payables of R23 079 514 (30 June 2012) and R25 795 199 (30 June 2011), with a corresponding decrease in loans payable.

This reclassification was done in order to provide increased disclosure and because the directors felt that it gave a better reflection of the classification of amounts payable. There has been no impact on profit, statement of profit or loss and other comprehensive income, statement of changes in equity, earnings per share or diluted earnings per share.

§ Included in discontinued operations in the statement of profit or loss and other comprehensive income for 2012, are the profits and losses from Unique Dairy Products, which was stated in continuing operations in the prior year.

Basis of measurementThe separate and consolidated financial statements have been prepared on the historical cost basis except for the following:§ Derivative financial instruments are measured at fair value; and§ Available-for-sale financial assets are measured at fair value.

1.1 Consolidation

Basis of consolidationThe consolidated annual financial statements comprise the financial statements of the company and the subsidiaries controlled by the company. Subsidiaries are defined as those companies in which the group, either directly or indirectly, has more than one half of the voting rights, has the right to appoint more than half of the board of directors or otherwise has the power to control the financial and operating activities of the company.

The results of subsidiaries are consolidated from acquisition date and cease to be consolidated on the date control ceases. Where there is a disposal or loss of control of a subsidiary, the consolidated financial statements include the results for part of the reporting period during which the group had control. Any difference arising on disposal between the carrying amount of the subsidiary and the net proceeds is recognised in the statement of profit or loss and other comprehensive income in profit or loss.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation and, where necessary, accounting policies for subsidiaries are changed to ensure consistency with the policies adopted by the group.

Non-controlling interests (excluding goodwill) of consolidated subsidiaries are identified separately from the group’s equity. Non-controlling interests consist of those interests at the date of the original business combination and the non-controlling interests’ share of the changes in equity since the date of the combination.

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[ 8 2 ] U B U B E L E i n t e g r a t e d r e P O r t

accountinG policies (continued) Þfor the year ended 30 June 2013

Business combinationsAcquisitions of subsidiaries and businesses are accounted for using the purchase method, which involves the identification of an acquirer, measuring the cost of the business combination and allocating, at acquisition date, the cost of the business combination to the assets acquired and liabilities and contingent liabilities incurred or assumed. The cost of the business combination is measured as the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed and equity instruments issued by the acquirer in exchange for control of the acquiree. Acquisition-related costs directly attributable to the business combination are recognised as an expense in the period to which the costs are incurred and the services rendered, except to the extent that such costs relate to the issuance of debt or equity securities.

The acquiree’s identifiable assets, liabilities and contingent liabilities, that meet the conditions for recognition under IFRS 3, Business Combinations, are recognised at their fair values at the acquisition date, except for non-current assets, or disposal groups, that are acquired exclusively with a view to subsequent disposal within one year, which are recognised and measured at fair value less costs to sell in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

Goodwill arising on acquisition is recognised as an asset and is initially measured at the cost of the business combination over the group’s interest in the net fair value of the acquiree’s recognised identifiable assets, liabilities and contingent liabilities.

If, after reassessment, the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed exceed the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

1.2 Significant judgements and sources of estimation uncertaintyIn preparing the audited annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the audited annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the audited annual financial statements. Significant judgements include:

Trade receivablesThe group assesses its trade receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in profit or loss, the group makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

The impairment for trade receivables is calculated on a portfolio basis, based on historical loss ratios, adjusted for national and industry-specific economic conditions and other indicators present at the reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period.

The group has raised an impairment provision for trade receivables in all ageing status levels based on estimated irrecoverable amounts from the sale of merchandise, determined by reference to past default experience.

Before accepting any new credit customer, the group assesses the potential customer’s credit quality and defines credit limits for each customer. Limits are reviewed periodically in accordance with the requirements of the National Credit Act and upon request by a customer.

Available-for-sale financial assetsThe group follows the guidance of IAS 39 to determine when an available-for-sale financial asset is impaired. This determination requires significant judgement. In making this judgement, the group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of and near term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

TaxationThe group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.

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U B U B E L E i n t e g r a t e d r e P O r t [ 8 3 ]

Property, plant and equipmentThe group assesses the useful lives of, depreciation rates and residual values of these assets at each reporting date. These estimates take cognisance of current market and trading conditions for the group’s specific assets.

1.3 Underlying conceptsChanges in accounting policies are accounted for in accordance with the transitional provisions in the applicable standard. Where no such provision exists, these changes are applied retrospectively, unless it is impracticable to do so, in which case they are applied prospectively.

Changes in accounting estimates are recognised in profit or loss.

Prior period errors are retrospectively restated unless it is impracticable to do so, in which case they are applied prospectively.

Accounting policies are not applied when the effect of applying them is immaterial.

1.4 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.

Property, plant and equipment is initially measured at cost and are subsequently carried at cost less accumulated depreciation and impairment.

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

Property, plant and equipment are depreciated on the straight-line basis over their expected useful lives to their estimated residual value.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Average useful lifePlant and equipment 3 – 10 yearsFurniture and fixtures 6 yearsMotor vehicles 2 – 5 yearsOffice equipment 6 yearsComputer equipment 2 – 3 yearsLeasehold improvements Period of lease

The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting period. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

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

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[ 8 4 ] U B U B E L E i n t e g r a t e d r e P O r t

accountinG policies [continued] Þfor the year ended 30 June 2013

1.5 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 and are subsequently carried at cost less any accumulated amortisation and impairment losses.

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.

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight-line basis over their useful life.

The amortisation period and the amortisation method for intangible assets are reviewed every year.

Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result, the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.

Amortisation is provided to write down the intangible assets, on a straight-line basis, to their residual values as follows:

Item Useful lifePatents, trademarks and recipes indefiniteComputer software 2 yearsProduct development costs 5 yearsRestraint of trade 3 – 6 yearsCustomer contract indefinite

1.6 GoodwillGoodwill arises on the acquisition of subsidiaries.

Goodwill represents the excess of the cost of the acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. To the extent that the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree exceeds the cost of the acquisition, such excess is recognised immediately in profit or loss as a bargain purchase.

1.6.1 Acquisition of non-controlling interestsAcquisitions of non-controlling interests are accounted for as transactions with equity holders in their capacity as owners and therefore no goodwill is recognised as a result of such transactions.

1.6.2 Subsequent measurementGoodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity accounted investee.

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U B U B E L E i n t e g r a t e d r e P O r t [ 85 ]

1.7 Investment in subsidiaries

Company audited annual financial statementsIn the company’s separate audited annual financial statements, investment 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 the company; 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 the adjustment is probable and can be measured reliably.

1.8 Financial instruments

ClassificationThe group classifies financial assets and financial liabilities into the following categories:§ Derivatives§ Loans and receivables§ Available-for-sale financial assets§ Financial liabilities at fair value through profit or loss§ Financial liabilities measured at amortised cost

Classification depends on the purpose for which the financial instruments were obtained/incurred and takes place at initial recognition. Classification is reassessed on an annual basis, except for derivatives and financial assets designated as at fair value through profit or loss, which shall not be classified out of the fair value through profit or loss category.

Initial recognition and measurementFinancial instruments are recognised initially when the group becomes a party to the contractual provisions of the instruments.

The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial instruments are measured initially at fair value, except for equity investments for which a fair value is not determinable, which are measured at cost and are classified as available-for-sale financial assets.

For financial instruments which are not at fair value through profit or loss, transaction costs are included in the initial measurement of the instrument.

Transaction costs on financial instruments at fair value through profit or loss are recognised in profit or loss.

Subsequent measurementDividend income is recognised in profit or loss as part of other income when the group’s right to receive payment is established.

Loans and receivables are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses.

Available-for-sale financial assets are subsequently measured at fair value. This excludes equity investments for which a fair value is not determinable, which are measured at cost less accumulated impairment losses.

Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in equity until the asset is disposed of or determined to be impaired. Interest on available-for-sale financial assets calculated using the effective interest method is recognised in profit or loss as part of other income. Dividends received on available-for-sale equity instruments are recognised in profit or loss as part of other income when the group’s right to receive payment is established.

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[ 8 6 ] U B U B E L E i n t e g r a t e d r e P O r t

accountinG policies [continued] Þfor the year ended 30 June 2013

Changes in fair value of available-for-sale financial assets denominated in a foreign currency are analysed between translation differences resulting from changes in amortised cost and other changes in the carrying amount. Translation differences on monetary items are recognised in profit or loss, while translation differences on non-monetary items are recognised in other comprehensive income and accumulated in equity.

Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest method.

Interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation process.

DerecognitionFinancial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership.

Fair value determinationThe fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, net asset value and option pricing models making maximum use of market inputs and relying as little as possible on entity specific inputs.

Loans to/(from) group companiesThese include loans to and from holding companies, fellow subsidiaries and subsidiaries, and are recognised initially at fair value plus direct transaction costs.

Loans to group companies are classified as loans and receivables.

Loans from group companies are classified as financial liabilities measured at amortised cost.

Trade and other receivablesTrade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 90 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss.

Trade and other receivables are classified as loans and receivables.

Trade and other payablesTrade payables, which are primarily settled on 30-day terms and are occasionally extended to 90-day terms, are carried at fair value of the consideration to be paid in the future for goods and services rendered. These are subsequently measured at amortised cost, using the effective interest rate method.

Other payables are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method.

Cash and cash equivalentsCash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Cash and cash equivalents are initially recognised at fair value and are subsequently measured at amortised cost.

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U B U B E L E i n t e g r a t e d r e P O r t [ 8 7 ]

Bank overdraft and borrowingsBank overdrafts and borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the group’s accounting policy for borrowing costs.

DerivativesThe group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.

Available-for-sale financial assetsThese financial assets are non-derivatives that are either designated in this category or not classified elsewhere.

Investments are recognised and derecognised on a trade date basis where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned.

These investments are measured initially and subsequently at fair value. Gains and losses arising from changes in fair value are recognised directly in other comprehensive income until the security is disposed of or is determined to be impaired. Once disposed of, the gains and losses will be recycled through profit or loss.

1.9 Taxation

Current 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 of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

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

Deferred tax assets and liabilitiesA deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from:§ the initial recognition of goodwill; or§ the initial recognition of an asset or liability in a transaction which:

o is not a business combination; ando at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax liability is recognised for all taxable temporary differences associated with investments in subsidiaries, branches and associates, and interests in joint ventures, except to the extent that both of the following conditions are satisfied:§ the parent, investor or venturer is able to control the timing of the reversal of the temporary difference; and§ it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that:§ is not a business combination; and§ at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for all deductible temporary differences arising from investments in subsidiaries, branches and associates, and interests in joint ventures, to the extent that it is probable that:§ the temporary difference will reverse in the foreseeable future; and§ taxable profit will be available against which the temporary difference can be utilised.

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accountinG policies [continued] Þfor the year ended 30 June 2013

A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses 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 realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Taxation expensesCurrent and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:§ a transaction or event which is recognised, in the same or a different period, in other comprehensive income, or§ a business combination.

Current tax and deferred taxes are charged or credited in other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, in other comprehensive income.

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

1.10 LeasesA lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Finance leases – lesseeFinance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease.

The lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate on the remaining balance of the liability.

Operating leases – lesseeOperating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset. This liability is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.11 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 and the estimated costs necessary to make the sale.

The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

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

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1.12 Impairment of assets

Financial assetsAt each reporting date the group assesses whether there is objective evidence that financial assets not carried at fair value through profit or loss are impaired. A financial asset is considered to be impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the group on terms that the group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy and the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

The group considers evidence of impairment for receivables at both a specific asset and collective level. All individually significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics. In assessing collective impairment, the group uses historical trends of the probability of default, timing of recoveries ant the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate.

Losses are recognised in profit or loss and reflected in an allowance account against receivables. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

An impairment loss in respect of an available-for-sale financial asset is calculated with reference to its current fair value. Impairment losses on available-for-sale investment securities are recognised by transferring the cumulative loss that has been recognised in other comprehensive income, and presented in the fair value reserve in equity, to profit or loss. The cumulative loss that is removed from other comprehensive income and recognised in profit or loss is the difference between the acquisition cost and the current fair value, less any impairment loss previously recognised in profit or loss. If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised in profit or loss, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive income.

Non-financial assetsThe carrying amount of the group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each reporting date.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in profit or loss. Impairment losses in respect of cash generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less cost to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

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accountinG policies [continued] Þfor the year ended 30 June 2013

1.13 Share capital and equityAn equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Ordinary shares are classified as equity.

Shares in the company, held by its subsidiaries or the company itself, are classified in the group’s shareholders’ interest as treasury shares. These shares are treated as a deduction from the issued and weighted average number of shares. The cost price of the shares is presented as a deduction from total equity. Distributions received on treasury shares are eliminated on consolidation.

1.14 Employee benefits

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

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

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

1.15 RevenueRevenue from the sale of goods is recognised when all the following conditions have been satisfied:§ the group has transferred to the buyer the significant risks and rewards of ownership of the goods;§ the group 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 group; and§ the costs incurred or to be incurred in respect of the transaction can be measured reliably.

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:§ the amount of revenue can be measured reliably;§ it is probable that the economic benefits associated with the transaction will flow to the group;§ the stage of completion of the transaction at the end of the reporting period can be measured reliably; and§ the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable.

Service revenue is recognised by reference to the stage of completion of the transaction at the end of the reporting period. Stage of completion is determined by surveys of work performed.

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and 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.

Royalties are recognised on the accrual basis in accordance with the substance of the relevant agreements.

Dividends are recognised, in profit or loss, when the company’s right to receive payment has been established.

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1.16 Cost of salesWhen inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. Commission paid to agents is also included in cost of sales in the period in which it occurs. The amount of any writ-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

1.17 Borrowing costsAll other borrowing costs are recognised as an expense in the period in which they are incurred.

1.18 Translation of foreign currencies

Foreign currency transactions

Functional and presentation currencyThe company’s annual financial statements are presented in South African rand, which is the company’s functional and presentation currency.

Transactions and balancesTransactions in foreign currencies are initially recorded in the functional currency at the rate ruling at the date of the transaction. At the reporting date, monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at exchange rates ruling at that date. Exchange differences arising on the settlement of transactions at rates different from those at the date of the transaction and unrealised foreign exchange differences on unsettled foreign currency monetary assets and liabilities, are recognised in profit or loss for the period.

1.19 Segment reportingAn operating segment is a component of the group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the group’s other components. All operating segments’ operating results are reviewed regularly by the group’s CEO to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the company’s headquarters), head office expenses, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible assets other than goodwill.

1.20 Earnings per shareThe group presents basic and diluted earnings per share (EPS) information for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees. Headline earnings per share is calculated in accordance with Circular 3/2012 issued by the South African Institute of Chartered Accountants.

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notes to the annual financial statements Þfor the year ended 30 June 2013

2. new stanDarDs anD interpretations2.1 Standards and interpretations effective and adopted in the current year

In the current year, the group has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations:

IAS 1 Presentation of Financial StatementsThe amendment now requires items of other comprehensive income to be presented as:§ Those which will be reclassified to profit or loss§ Those which will not be reclassified to profit or loss

The related tax disclosures are also required to follow the presentation allocation.

In addition, the amendment changed the name of the statement of comprehensive income to the statement of profit or loss and other comprehensive income.

The effective date of the amendment is for years beginning on or after 1 July 2012.

The group has adopted the amendment for the first time in the 2013 audited annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s audited annual financial statements.

IAS 12 Income Taxes: Amendment: Deferred Tax: Recovery of Underlying AssetsThe amendment now provides that for investment property measured at fair value, the recovery of the carrying amount is assumed to be through sale, with the result that deferred tax arising on the valuation is measured using the prevailing tax rate for capital gains.

The effective date of the amendment is for years beginning on or after 1 January 2012.

The group has adopted the amendment for the first time in the 2013 audited annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s audited annual financial statements.

2.2 Standards and interpretations not yet effectiveThe group has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the group’s accounting periods beginning on or after 1 July 2013 or later periods:

IFRS 1 – Annual Improvements for 2009 – 2011 cycle The amendment allows an entity to be a first-time adopter of IFRS more than once, if its previous financial statements did not contain an explicit unreserved statement of compliance with IFRS. In addition, borrowing costs capitalised in accordance with previous GAAP before the date of transition to IFRS may be applied unadjusted at the transition date.

The effective date of the amendment is for years beginning on or after 1 January 2013.

The company expects to adopt the amendment for the first time in the 2014 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

IFRS 7 Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities

Amendment requires additional disclosure for financial assets and liabilities which are offset and for financial instruments subject to master netting arrangements.

The effective date of the amendment is for years beginning on or after 1 January 2013.

The company expects to adopt the amendment for the first time in the 2014 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

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IFRS 9 Financial InstrumentsThis new standard is the first phase of a three-phase project to replace IAS 39 Financial Instruments: Recognition and Measurement. To date, the standard includes chapters for classification, measurement and derecognition of financial assets and liabilities. The following are main changes from IAS 39:§ Financial assets will be categorised as those subsequently measured at fair value or at amortised cost. § Financial assets at amortised cost are those financial assets where the business model for managing the assets is to hold the assets to

collect contractual cash flows (where the contractual cash flows represent payments of principal and interest only). All available-for-sale financial assets at fair value are to be subsequently measured at fair value.

§ Under certain circumstances, financial assets may be designated as at fair value.§ For hybrid contracts, where the host contract is an asset within the scope of IFRS 9, then the whole instrument is classified in accordance

with IFRS 9, without separation of the embedded derivative. In other circumstances, the provisions of IAS 39 still apply.§ Voluntary reclassification of financial assets is prohibited. Financial assets shall be reclassified if the entity changes its business model

for the management of financial assets. In such circumstances, reclassification takes place prospectively from the beginning of the first reporting period after the date of change of the business model.

§ Financial liabilities shall not be reclassified.§ Investments in equity instruments may be measured at fair value through other comprehensive income. When such an election is made,

it may not subsequently be revoked, and gains or losses accumulated in equity are not recycled to profit or loss on derecognition of the investment. The election may be made per individual investment.

§ IFRS 9 does not allow for investments in equity instruments to be measured at cost.§ The classification categories for financial liabilities remains unchanged. However, where a financial liability is designated as at fair value

through profit or loss, the change in fair value attributable to changes in the liabilities credit risk shall be presented in other comprehensive income. This excludes situations where such presentation will create or enlarge an accounting mismatch, in which case, the full fair value adjustment shall be recognised in profit or loss.

The effective date of the standard is for years beginning on or after 1 January 2015.

The group expects to adopt the standard for the first time in the 2016 audited annual financial statements.

It is unlikely that the standard will have a material impact on the company’s audited annual financial statements.

IFRS 10 Consolidated Financial StatementsStandard replaces the consolidation sections of IAS 27 Consolidated and Separate Financial Statements and SIC 12 Consolidation – Special Purpose Entities. The standard sets out a new definition of control, which exists only when an entity is exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to effect those returns through power over the investee.

The effective date of the standard is for years beginning on or after 1 January 2013.

The group expects to adopt the standard for the first time in the 2014 audited annual financial statements.

It is unlikely that the standard will have a material impact on the company’s audited annual financial statements.

IFRS 11 Joint ArrangementsThe standard replaces IAS 31 Interests in Joint Ventures and SIC 13 Jointly Controlled Entities – Non-monetary Contributions by Venturers. The standard defines a joint arrangement as existing only when decisions about relevant activities require the unanimous consent of the parties sharing joint control in terms of a contractual arrangement. The standard identifies two types of joint arrangements as:§ Joint operations which exist when the entities sharing joint control have direct rights to the assets and obligations for the liabilities of the joint

arrangements. In such cases the joint operators recognise their share of the assets and liabilities and profits and losses of the joint arrangements in their financial statements.

§ Joint operations which exist when the entities sharing joint control have direct rights to the assets and obligations for the liabilities of the joint arrangements. In such cases the joint operators recognise their share of the assets and liabilities and profits and losses of the joint arrangements in their financial statements.

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The effective date of the standard is for years beginning on or after 1 January 2013.

The group expects to adopt the standard for the first time in the 2014 audited annual financial statements.

It is unlikely that the standard will have a material impact on the company’s audited annual financial statements.

IFRS 12 Disclosure of Interests in Other EntitiesThe standard sets out disclosure requirements for investments in subsidiaries, associates, joint ventures and unconsolidated structured entities. The disclosures are aimed to provide information about the significance and exposure to risks of such interests. The most significant impact is the disclosure requirement for unconsolidated structured entities or off-balance sheet vehicles.

The effective date of the standard is for years beginning on or after 1 January 2013.

The group expects to adopt the standard for the first time in the 2014 audited annual financial statements.

It is unlikely that the standard will have a material impact on the company’s audited annual financial statements.

Consolidated Financial Statements, Joint Arrangements and Disclosures of Interests in Other Entities: Transition GuidanceTransitional guidance for the application of IFRS 10, IFRS 11 and IFRS 12. The amendment limits the requirement to provide adjusted comparative information to only the preceding comparative period.

The effective date of the amendment is for years beginning on or after 1 January 2013.

The company expects to adopt the amendment for the first time in the 2014 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

IFRS 13 Fair Value MeasurementNew standard setting out guidance on the measurement and disclosure of items measured at fair value or required to be disclosed at fair value in terms of other IFRSs.

The effective date of the standard is for years beginning on or after 1 January 2013.

The group expects to adopt the standard for the first time in the 2014 audited annual financial statements.

It is unlikely that the standard will have a material impact on the company’s audited annual financial statements.

IAS 1 – Annual Improvements for 2009 – 2011 cycle Clarification is provided on the requirements for comparative information. Specifically, if a retrospective restatement is made, a retrospective change in accounting policy or a reclassification, the statement of financial position at the beginning of the previous period is only required if the impact on the beginning of the previous period is material. Related notes are not required, other than disclosure of specified information.

The effective date of the amendment is for years beginning on or after 1 January 2013.

The company expects to adopt the amendment for the first time in the 2014 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

IAS 16 – Annual Improvements for 2009 – 2011 cycle Spare parts, standby equipment and servicing equipment should only be classified as property, plant and equipment if they meet the definition.

The effective date of the amendment is for years beginning on or after 1 January 2013.

The company expects to adopt the amendment for the first time in the 2014 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

notes to the annual financial statements [continued] Þfor the year ended 30 June 2013

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IAS 19 Employee Benefits Revised§ Requires recognition of changes in the net defined benefit liability (asset) including immediate recognition of defined benefit cost,

disaggregation of defined benefit cost into components, recognition of remeasurements in other comprehensive income, plan amendments, curtailments and settlements

§ Introduces enhanced disclosures about defined benefit plans § Modifies accounting for termination benefits, including distinguishing benefits provided in exchange for service and benefits provided in

exchange for the termination of employment, and affects the recognition and measurement of termination benefits § Clarification of miscellaneous issues, including the classification of employee benefits, current estimates of mortality rates, tax and

administration costs and risk sharing and conditional indexation features

The effective date of the amendment is for years beginning on or after 1 January 2013.

The group expects to adopt the amendment for the first time in the 2014 audited annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s audited annual financial statements.

IAS 27 Separate Financial StatementsConsequential amendment as a result of IFRS 10. The amended standard now only deals with separate financial statements.

The effective date of the amendment is for years beginning on or after 1 January 2013.

The group expects to adopt the amendment for the first time in the 2014 audited annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s audited annual financial statements.

IAS 28 Investments in AssociatesConsequential amendments resulting from the issue of IFRS 10, 11 and 12.

The effective date of the amendment is for years beginning on or after 1 January 2013.

The group expects to adopt the amendment for the first time in the 2014 audited annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s audited annual financial statements.

IAS 32 Financial Instruments: Presentation – Offsetting Financial Assets and Financial LiabilitiesClarification of certain aspects concerning the requirements for offsetting financial assets and financial liabilities.

The effective date of the amendment is for years beginning on or after 1 January 2014.

The company expects to adopt the amendment for the first time in the 2015 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

IAS 32 – Annual Improvements for 2009 – 2011 cycleTax effects of distributions made to holders of equity instruments. Income tax relating to distributions made to holders of equity instruments and tax effects of transaction costs of equity transactions must be accounted for in accordance with IAS 12 Income Taxes.

The effective date of the amendment is for years beginning on or after 1 January 2013.

The company expects to adopt the amendment for the first time in the 2014 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

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IAS 34 – Annual Improvements for 2009 – 2011 cycleClarification on reporting of segment assets and segment liabilities in interim financial reports. Such reporting is only required when it is regularly reported to the chief operating decision-maker, and when there has been a material change from the previous annual financial statements.

The effective date of the amendment is for years beginning on or after 1 January 2013.

The company expects to adopt the amendment for the first time in the 2014 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

IAS 36 Impairment of assetsAmendment to clarify the required disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less cost of disposal.

The effective date of the amendment is for years beginning on or after 1 January 2014.

The company expects to adopt the amendment for the first time in the 2015 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

IFRIC 20 Stripping Costs in the Production Phase of a Surface MineClarifies the requirement for accounting for stripping costs in surface mining. Specifically, it provides requirements on when to recognise costs as assets, when they provide improved access to ore. The depreciation requirements are also clarified.

The effective date of the amendment is for years beginning on or after 1 January 2013.

The company expects to adopt the amendment for the first time in the 2014 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

IFRIC 21 LeviesProvides guidance on when to recognise a liability for a levy imposed by a government, both for levies that are accounted for in accordance with IAS 37: Provisions Contingent Liabilities and Contingent Assets and those where the timing and amount of the levy is certain.

The effective date of the amendment is for years beginning on or after 1 January 2014.

The company expects to adopt the amendment for the first time in the 2015 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

2.3 Standards and interpretations effective and adopted in the prior yearIn the prior year, the group has adopted the following standards and interpretations that are effective for the prior and current financial year and that are relevant to its operations:

IAS 24 Related Party Disclosures (Revised)The revisions to IAS 24 include a clarification of the definition of a related party as well as providing a partial exemption for related party disclosures between government related entities.

In terms of the definition, the revision clarifies that joint ventures or associates of the same third party are related parties of each other. To this end, an associate includes its subsidiaries and a joint venture includes its subsidiaries.

The partial exemption applies to related party transactions and outstanding balances with a government which controls, jointly controls or significantly influences the reporting entity as well as to transactions or outstanding balances with another entity which is controlled, jointly controlled or significantly influenced by the same government. In such circumstances, the entity is exempt from the disclosure requirements of paragraph 18 of IAS 24 and is required only to disclose:§ The name of the government and nature of the relationship§ Information about the nature and amount of each individually significant transaction and a quantitative or qualitative indication of the extent

of collectively significant transactions. Such information is required in sufficient detail to allow users to understand the effect.

The effective date of the amendment is for years beginning on or after 1 January 2011.

notes to the annual financial statements [continued] Þfor the year ended 30 June 2013

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The group adopted the amendment for the first time in the 2012 audited annual financial statements.

The impact of the amendment is not material.

2010 Annual Improvements Project: Amendments to IFRS 1 First-time Adoption of International Financial Reporting StandardsThe amendment provides that if an entity changes its accounting policy or its use of IFRS 1 exemptions in the first IFRS audited annual financial statements, it shall explain the changes between its first IFRS interim financial report and its first IFRS audited annual financial statements and shall update the reconciliations accordingly. Such explanations are also required in each interim report where changes are made.

Additional exemptions are provided for first-time adopters who have established a deemed cost under previous GAAP for assets and liabilities by measuring them at fair value at a particular date because of an event such as a privatisation. If such measurement date is in the first reporting period covered by the first IFRS audited annual financial statements, then the event-driven fair value measurements may be applied. The adjustment shall be recognised directly in retained earnings.

Entities who hold assets in operations subject to rate regulation may apply the previous GAAP carrying amount for such items on first-time adoption of IFRS. However, the entity shall test for impairment when the exemption is applied.

The effective date of the amendment is for years beginning on or after 1 January 2011.

The group adopted the amendment for the first time in the 2012 audited annual financial statements.

The impact of the amendment is not material.

2010 Annual Improvements Project: Amendments to IFRS 7 Financial Instruments: DisclosuresAdditional clarification is provided on the requirements for risk disclosures.

The effective date of the amendment is for years beginning on or after 1 January 2011.

The group adopted the amendment for the first time in the 2012 audited annual financial statements.

The impact of the amendment is not material.

2010 Annual Improvements Project: Amendments to IAS 1 Presentation of Financial StatementsThe amendment now requires that an entity must present, either in the statement of changes in equity or in the notes, an analysis of other comprehensive income by item.

The effective date of the amendment is for years beginning on or after 1 January 2011.

The group adopted the amendment for the first time in the 2012 audited annual financial statements.

The impact of the amendment is not material.

2010 Annual Improvements Project: Amendments to IAS 34 Interim Financial ReportingThe amendment provides additional examples of events and transactions which would be considered significant and therefore required to be disclosed in the interim financial report. In addition, the amendment removes references to only reporting certain items when they are material. Therefore, the list of items to be presented in addition to significant transactions and events is required irrespective of whether they are material.

The effective date of the amendment is for years beginning on or after 1 January 2011.

The group adopted the amendment for the first time in the 2012 audited annual financial statements.

The impact of the amendment is not material.

IFRS 7 Amendments to IFRS 7 (AC 144) Disclosures – Transfers of Financial AssetsAmended the required disclosures to help users of financial statements evaluate the risk exposures relating to transfers of financial assets and the effect of those risks on an entity’s financial position.

The effective date of the amendment is for years beginning on or after 1 July 2011.

The group adopted the amendment for the first time in the 2012 audited annual financial statements.

The impact of the amendment is not material.

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Reconciliation of property, plant and equipment – Group – 2013Opening balance

RAdditions

RDisposals

RTransfer

RDepreciation

RTotal

RComputer equipment 2 174 102 2 659 260 (3 112 873) – (946 670) 773 819 Furniture and fixtures 446 038 376 741 (75 383) – (155 692) 591 704 Leasehold improvements 7 852 755 2 821 772 (124 964) 587 244 (787 439) 10 349 368 Motor vehicles 10 255 770 1 490 239 (2 062 463) 774 000 (3 414 645) 7 042 901 Office equipment 737 012 2 146 591 (299 577) 39 085 (488 300) 2 134 811 Plant and equipment 13 042 463 1 224 373 (10 683 924) (626 329) (1 302 570) 1 654 013 34 508 140 10 718 976 (16 359 184) 774 000 (7 095 317) 22 546 615

Vehicles to the value of R774 000 were transferred from available-for-sale to property, plant and equipment after the decision was taken to rent out the vehicles rather than sell them.

3. property, plant anD equipment 2013 2012

CostR

Accumulated depreciation

and impairment

R

Carrying amount

RCost

R

Accumulated depreciation

and impairment

R

Carrying amount

R

GroupComputer equipment 2 311 882 (1 538 064) 773 819 3 828 958 (1 654 856) 2 174 102

Furniture and fixtures 1 134 085 (542 382) 591 704 1 056 006 (609 968) 446 038

Leasehold improvements 11 134 918 (785 550) 10 349 368 7 990 176 (137 421) 7 852 755

Motor vehicles 14 702 674 (7 659 774) 7 042 901 15 582 208 (5 326 438) 10 255 770

Office equipment 3 090 704 (955 893) 2 134 811 1 886 035 (1 149 023) 737 012

Plant and equipment 2 388 159 (734 146) 1 654 013 27 739 734 (14 697 271) 13 042 463

Total 34 762 423 (12 215 808) 22 546 615 58 083 117 (23 574 977) 34 508 140

CompanyComputer equipment 68 382 (41 756) 26 626 43 072 (14 113) 28 959

Furniture and fixtures 165 842 (58 463) 107 379 165 842 (30 817) 135 025

Leasehold improvements – – – 80 911 (35 265) 45 646

Total 234 224 (100 219) 134 005 289 825 (80 195) 209 630

notes to the annual financial statements [continued] Þfor the year ended 30 June 2013

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3. property, plant anD equipment (continueD)Reconciliation of property, plant and equipment – Group – 2012

Opening balance

RAdditions

RDisposals

R

Classified as held-for-sale

RDepreciation

R

Impairment loss

RTotal

R

Computer equipment 710 771 2 163 047 (125 218) – (574 498) – 2 174 102

Furniture and fixtures 621 167 87 813 (112 248) – (150 694) – 446 038

Leasehold improvements 72 614 7 814 738 – – (34 597) – 7 852 755

Motor vehicles 10 433 535 5 186 054 (1 315 077) (774 000) (3 188 226) (86 516) 10 255 770

Office equipment 643 562 196 168 (199) – (102 519) – 737 012

Plant and equipment 14 582 609 2 809 281 (1 282 015) – (3 067 412) – 13 042 463

Refrigeration equipment 477 986 – (347 571) – (130 415) – –

27 542 244 18 257 101 (3 182 328) (774 000) (7 248 361) (86 516) 34 508 140

Reconciliation of property, plant and equipment – Company – 2013Opening balance

RAdditions

RDisposals

RDepreciation

RTotal

RComputer equipment 28 959 25 310 – (27 643) 26 626 Furniture and fixtures 135 025 – – (27 646) 107 379 Leasehold improvements 45 646 – (45 646) – – 209 630 25 310 (45 646) (55 289) 134 005

Reconciliation of property, plant and equipment – Company – 2012Opening balance

RAdditions

RDisposals

RDepreciation

RTotal

R

Computer equipment 177 960 28 939 (165 396) (12 544) 28 959

Furniture and fixtures 234 795 33 131 (105 975) (26 926) 135 025

Leasehold improvements 72 614 – – (26 968) 45 646

Motor vehicles 2 259 107 – (2 259 107) – –

Office equipment 335 903 – (335 903) – –

Plant and equipment 12 113 758 – (12 113 758) – –

15 194 137 62 070 (14 980 139) (66 438) 209 630

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notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

3. property, plant anD equipment (continueD) Group Company

2013R

2012R

2013R

2012R

Pledged as securityCarrying value of assets pledged as security (see note 18):

Motor vehicles 3 638 788 4 598 919 – –

Office equipment – 195 775 – –

Plant and equipment – 498 709 – –

4. GooDwill 2013 2012

CostR

Accumulated impairment

R

Carrying amount

RCost

R

Accumulated impairment

R

Carrying amount

R

GroupGoodwill 89 279 180 (23 272 268) 66 006 912 98 577 678 (25 153 314) 73 424 364

Reconciliation of goodwill – Group

Opening balance

R

Impairment loss

RTotal

R2013Goodwill 73 424 364 (7 417 452) 66 006 912

2012Goodwill 98 577 678 (25 153 314) 73 424 364

Chemicals division

Foods division Total

Reconciliation of goodwillBalance at 30 June 2011 66 006 912 32 570 766 98 577 678

Impairment loss – (25 153 314) (25 153 314)

Balance at 30 June 2012 66 006 912 7 417 452 73 424 364

Impairment loss – (7 417 452) (7 417 452)

Balance at 30 June 2013 66 006 912 – 66 006 912

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4. GooDwill (continueD)Chemical

divisionR

Fooddivision

RTotal

RImpairment test for goodwillGoodwill is allocated to the group’s cash-generating units (CGUs) identified according to the business segment.

The carrying amounts of goodwill with indefinite useful lives are as follows:

Reconciliation of goodwill – Company2013Goodwill 66 006 912 – 66 006 912

2012Goodwill 66 006 912 7 417 452 73 424 364

The recoverable amount of a cash-generating unit (CGU) is determined based on value in use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the growth rates estimated by management. The growth rate does not exceed the long-term average growth rate for the business in which the CGU operates.

Management determined budgeted gross margin based on past performance and its expectations of market development. The weighted average growth rates used are consistent with forecasts included in industry reports. The discounted cash rates used are pre-tax (16.47% (2012: 16.47%)) and reflect specific risks relating to the relevant segment. In consequence of the above, the directors are of the opinion that no impairment be recognised for the year under review other than discussed below.

Management believes that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the carrying amount to materially exceed its recoverable amount.

Given the decision taken in 2012 to primarily disinvest from the food sector, the board of directors decided to impair the remaining Just Fresh brand of R7 417 452. This brand currently holds minimal usage at our airline catering company in Namibia.

During the 2012 financial year, the group decided to discontinue its fruit and vegetable operations in Cape Town, Fine Cut Fruit and Veg (Pty) Limited. The recipes and goodwill relating to the transaction were therefore impaired. The impairment loss pertaining to goodwill relating to this transaction amounted to R15 854 816 and was included in loss for the year from discontinued operations. This impairment is included in the total of R25 153 314 for the 2012 financial year.

During the year under review, the company disposed of its shares and claims in Unique Dairy Products and Uni-Way Logistics. Final sale of shares agreement was signed with the seller on 25 September 2012, and initial indications during the 2012 financial year were that goodwill may have needed to be impaired. The goodwill was assessed for impairment in terms of IAS 36, which requires that an impairment loss should be recognised based on the higher of value in use of the asset and its fair value less costs to sell. As a result of the assessment in terms of IAS 36, the goodwill was impaired by R9 298 498 in 2012. The impairment was disclosed on the statements of comprehensive income as impairment of goodwill. This impairment is included in the total of R25 153 314 for the 2012 financial year.

Refer to note 14 for additional information relating to the discontinued operations.

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5. intanGible assets 2013 2012

CostR

Accumulated amortisation

and impairment

R

Carrying amount

RCost

R

Accumulated amortisation

and impairment

R

Carrying amount

R

GroupComputer software 5 394 694 (612 087) 4 782 607 940 062 (436 269) 503 793

Customer contract – – – 10 314 929 (10 314 929) –

Patents, trademarks and recipes – – – 8 086 978 (8 086 978) –

Product development costs 24 339 661 (7 355 535) 16 984 126 21 593 650 (6 766 182) 14 827 468

Restraint of trade 1 353 630 (1 353 630) – 3 195 409 (3 195 409) –

Total 31 087 985 (9 321 252) 21 766 733 44 131 028 (28 799 767) 15 331 261

CompanyComputer software 558 615 (76 968) 481 647 383 020 (333 754) 49 266

Reconciliation of intangible assets – Group – 2013Opening balance

RAdditions

RDisposals

RAmortisation

RTotal

RComputer software 503 793 5 169 537 (334 327) (556 396) 4 782 610 Product development costs 14 827 468 3 333 255 – (1 176 598) 16 984 126 15 331 261 8 502 792 (334 327) (1 732 993) 21 766 733

Reconciliation of intangible assets – Group – 2012Opening balance

RAdditions

RDisposals

RAmortisation

R

Impairment loss

RTotal

R

Computer software 148 811 478 553 (4 758) (118 813) – 503 793

Customer contract 5 948 994 – – – (5 948 994) –

Patents, trademarks and recipes 8 083 354 – – – (8 083 354) –

Product development costs 12 511 445 2 760 527 – (354 504) (90 000) 14 827 468

Restraint of trade 1 069 489 – – (515 322) (554 167) –

27 762 093 3 239 080 (4 758) (988 639) (14 676 515) 15 331 261

notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

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5. intanGible assets (continueD)Reconciliation of intangible assets – Company

Opening balance

RAdditions

RDisposals

RAmortisation

RTotal

R2013Computer software 49 269 484 810 – (52 432) 481 647

Reconciliation of intangible assets – Company 2012Computer software 148 810 17 605 (96 949) (20 197) 49 269

The amortisation expense and impairment losses have been included in the line item “operating expenses” in the statement of profit or loss and other comprehensive income. For a more detailed breakdown, refer to note 21.

The group holds various registrations in certain subsidiaries within its Agricultural division.

Prior to their impairment, the useful life of patents, trademarks and other rights was considered indefinite. It was not bound by any expiry period, as there was no foreseeable limit to the period over which the asset was expected to generate net cash flows for the group.

Prior to its impairment, the useful life of the customer contract was considered indefinite. It was not bound by any expiry period, as there was no foreseeable limit to the period over which the asset was expected to generate net cash flows for the group.

A lack of revenue from Linktrade Foods for the prior period necessitated the group to review the value of the customer contract during the 2012 financial year. It was decided by the board to impair the carrying amount of R5 948 994 of the customer contracts to zero. This impairment was included in the loss for the prior year from discontinued operations in the statement of profit or loss and other comprehensive income.

During the 2012 financial year, So Gourmet was liquidated and trademarks with a carrying amount of R3 114 343 were impaired to zero. This impairment was included in the loss for the year from discontinued operations in the statement of profit or loss and other comprehensive income.

During the 2012 financial year, the group decided to discontinue its fruit and vegetable operations in Cape Town, Just Fruit & Veg. The following was impaired as a result and included in the loss for the year from discontinued operations in the statement of profit or loss and other comprehensive income:

Patents, trademarks and recipes – R4 969 011

Product development cost – R90 000

Restraint of trade – R554 167

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6. investment in subsiDiaries

Name of company Activity

% holding

2013

% holding

2012

Carrying amount

2013R

Carrying amount

2012R

Ububele Agri (Pty) Limited Investment holdings 100.00 100.00 101 900 886 174 180 949

Ububele Foods (Pty) Limited Investment holdings 100.00 100.00 120 120

Ububele Holdings Namibia (Pty) Limited Investment holdings 51.00 51.00 51 51

Ububele Holdings Mozambique Limited Investment holdings 60.00 60.00 60 60

IAMU Holding Company Limited Investment holdings 50.00 50.00 569 569

Ububele Equity (Pty) Limited Investment in movable and immovable property 100.00 100.00 100 100

101 901 786 174 181 849

Reconciliation on investment in subsidiariesOpening balance 174 181 849 174 181 849

Impairment loss (72 280 063) –

Closing balance 101 901 786 174 181 849

The investment in Ububele Agri (Pty) Limited was impaired due to lower than expected profits in the Agriculture division during the current and prior financial periods.

The carrying amounts of subsidiaries are reflected at cost less impairments.

Investments in subsidiaries are valued as stated in note 1.

The net indebtedness of group companies is stated in note 12 to the financial statements.

notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

7. DeferreD taxation Group Company

2013R

2012R

2013R

2012R

Deferred tax asset/(liability)Accruals and provisions 176 519 212 958 9 250 –

Available-for-sale financial assets (530 677) (416 048) – –

Impairment of investments – 29 400 – –

Intangible assets (1 663 426) (985 750) – –

Prepayments – (18 670) – –

Property, plant and equipment (916 155) (2 737 093) 10 910 –

Tax losses available for set-off against future taxable income 19 823 892 22 802 398 4 587 690 4 567 135

16 890 153 18 887 195 4 607 850 4 567 135

Reconciliation of deferred tax asset/(liability)At beginning of the year 18 887 195 14 467 555 4 567 135 3 819 519

Increase/(decrease) in tax losses available for set-off against future taxable income (2 978 506) 6 247 228 20 555 (1 081 566)

Rate change recognised in other comprehensive income – (100 758) – –

Temporary differences 981 464 (1 726 830) 20 160 1 829 182

16 890 153 18 887 195 4 607 850 4 567 135

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7. DeferreD taxation (continueD)Movement in temporary differences for the group during the year 2013:

Openingbalance

Recognised inprofit or loss

Recognised in other

comprehensive income

Closingbalance

Accruals and provisions 212 958 (36 439) – 176 519 Available-for-sale financial assets (416 048) – (114 629) (530 677) Impairment of investments 29 400 (29 400) – – Intangible assets (985 750) (677 676) – (1 663 426) Prepayments (18 670) 18 670 – – Property, plant and equipment (2 737 093) 1 820 938 – (916 155) Tax losses 22 802 398 (2 978 506) – 19 823 892 18 887 195 (1 882 413) (114 629) 16 890 153

Movement in temporary differences for the group during the year 2012:Accruals and provisions 1 381 267 (1 168 309) – 212 958

Available-for-sale financial assets (182 541) – (233 507) (416 048)

Impairment of investments 29 400 – – 29 400

Intangible assets (251 938) (733 812) – (985 750)

Prepayments – (18 670) – (18 670)

Property, plant and equipment (2 764 575) 27 482 – (2 737 093)

Tax losses 16 255 942 6 546 456 – 22 802 398

14 467 555 4 653 147 (233 507) 18 887 195

Group Company2013

R2012

R2013

R2012

R

Non-current assets 20 355 785 23 242 621 4 607 850 4 567 135

Non-current liabilities (3 465 632) (4 355 426) – –

16 890 153 18 887 195 4 607 850 4 567 135

Recognition of the deferred taxation asset is supported by independent profit forecasts which indicate that sufficient future profits will occur to be able to utilise the deferred taxation asset recognised in the annual financial statements.

The unrecognised deferred tax asset relates to computed and assessed losses and amounted to R21 716 167 (2012: Rnil) and will be recognised again when the trading conditions improve, which will make it more probable that the future taxable profit will allow the deferred tax asset to be recovered.

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notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

8. available-for-sale financial assets at fair value Group Company

2013R

2012R

2013R

2012R

Unlisted shares 5 179 892 4 565 856 – –

Non-current assets Available-for-sale 5 179 892 4 565 856 – –

Fair value hierarchy of financial assets at fair valueFor financial assets recognised at fair value, disclosure is required of a fair value hierarchy which reflects the significance of the inputs used to make the measurements.

Level 1 represents those assets which are measured using unadjusted quoted prices for identical assets.

Level 2 applies inputs other than quoted prices that are observable for the assets either directly (as prices) or indirectly (derived from prices).

Level 3 applies inputs which are not based on observable market data (unobservable input). Net asset values were used to value the available-for-sale financial assets at fair value.

Level 3 Unlisted shares 5 179 892 4 565 856 – –

Movement for the year Opening balance 4 565 856 3 854 737 – –

Revaluation reserve 499 405 477 611 – –

Taxation on revaluation 114 631 233 508 – –

Closing balance 5 179 892 4 565 856 – –

9. loans to Group companiesSubsidiaries

Amounts due on loan account from subsidiaries – – 194 107 624 211 854 553

R156 334 670 (2012: R148 964 500) of these loans bear interest at rates linked to the South African prime lending rate, which was 8.5% for the year under review (2012: 9%), and is repayable on 31 December 2014. The remaining current portion of these loans are interest-free and have no fixed date of repayment.

The fair value of the long-term borrowings approximates the carrying value, as the current market rates of interest do not differ materially from those specified in the loan agreements. The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

– – 194 107 624 211 854 553

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10. traDe anD other receivablesTrade receivables – net 151 068 052 144 675 495 19 059 650 15 915 257

Value added taxation 7 592 795 6 867 781 – –

Other receivables 2 086 891 3 174 073 357 440 29 675

160 747 738 154 717 349 19 417 090 15 944 932

Trade and other receivables past due but not impairedTrade and other receivables which are less than 3 months past due are not considered to be impaired. At 30 June 2013, R118 836 327 (2012: R42 726 191) were past due but not impaired.

The ageing of amounts past due but not impaired is as follows:

Between 60 and 90 days 22 508 453 6 138 062 – –

Greater than 90 days 96 327 874 36 588 129 11 250 206 –

118 836 327 42 726 191 11 250 206 –

Trade and other receivables impairedAs of 30 June 2013, trade and other receivables of R10 149 794 (2012: R411 944) were impaired and provided for.

9. loans to Group companies (continueD) Group Company

2013R

2012R

2013R

2012R

Non-current assets – – 151 334 715 162 287 727

Current assets – – 42 772 909 49 566 826

– – 194 107 624 211 854 553

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notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

10. traDe anD other receivables (continueD)The ageing of these receivables is as follows:

Group Company2013

R2012

R2013

R2012

R

Greater than 90 days 10 149 794 411 944 – –

Interest is charged on outstanding accounts at rates linked to the South African prime lending rate.The group has raised an impairment provision for trade receivables in all ageing status levels based on estimated irrecoverable amounts from the sale of merchandise, determined by reference to past default experience.

Trade debtors in the Agri division are insured by Coface and our receivables book is monitored by senior management, as follows:§ Sales representatives visit farmers weekly to monitor their farming practices and to ensure that farmers follow the prescribed spraying

programmes.§ Sales representatives report their findings to the financial controller of the relevant entity in his operating area.§ A detailed report of the receivables book within the group is presented monthly to the EXCO of Ububele, where the operational director regularly

evaluates the accounts of those customers with larger exposures to ensure that trends do not develop that could lead to high risks.§ A detailed report on the receivables book of Ububele is also presented to the full board of directors every three months, including a

separate report highlighting customers that might default/has defaulted.§ Before accepting any new credit customer, the group assesses the potential customer’s credit quality and defines credit limits for each

customer. Limits are reviewed periodically in accordance with the requirements of the National Credit Act and upon request by a customer.

Subsidiaries in the Agricultural division make use of independent agents to sell their inventory and these agents are also primarily responsible for collecting their relating outstanding debtors.

In certain instances, if there is a slight doubt in the repayment ability of a customer, the debt is secured with:§ notarial bonds over movable property;§ cession on the crops;§ customers are requested to pay a deposit, 50% of the value of goods to be supplied to them; or§ lease contracts on certain portions of a customer’s farm. The ownership of the crop on the land is thus passed on to the Ububele Group.

Subsidiaries in the Agricultural division make use of independent agents to sell their inventory and these agents are also responsible for collecting their related outstanding debtors. At 30 June 2013, an amount of R21 587 687 (2012: R23 079 514) has been retained from distributions payable to agents relating to outstanding debtors.

The carrying value of trade and other receivables, trade and other receivables past due but not impaired and trade and other receivables impaired approximates their fair value.

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10. traDe anD other receivables (continueD) Group Company2013

R2012

R2013

R2012

R

Movement in impairment provisionBalance at beginning of year 411 944 340 070 – –

Impairment losses recognised on receivables 10 149 794 411 944 – –

Impairment losses reversed (411 944) (340 070) – –

10 149 794 411 944 – –

Gross trade receivables 161 217 846 145 087 439 19 059 650 15 915 257

Impairment provision (10 149 794) (411 944) – –

Net trade receivables 151 068 052 144 675 495 19 059 650 15 915 257

11. inventoriesRaw materials 222 064 4 518 574 – –

Merchandise for resale 86 643 839 85 199 447 – –

86 865 903 89 718 021 – –

The cost of inventories expensed for the year amounted to R524 313 785 (2012: R472 315 742).

Inventories are valued as stated in note 1.

12. loans receivableCB Nel 1 198 655 1 198 655 – –

This loan is unsecured, bears interest at the South African prime lending rate plus 1% and is currently repayable.

The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

Other loans 1 029 786 1 052 117 – –

These loans are unsecured, bear interest at varying rates and have no fixed terms of repayment.

The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

2 228 441 2 250 772 – –

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notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

13. cash anD cash equivalents Group Company2013

R2012

R2013

R2012

RCash and cash equivalents consist of:Cash on hand 17 368 26 528 – – Bank balances 14 225 338 17 843 002 2 165 108 186 129 Bank overdraft (1 119 737) (44 678) – (44 599) 13 122 969 17 824 852 2 165 108 141 530

The carrying value of cash and cash equivalents approximates the fair value.

14. DiscontinueD operations anD non-current assets helD for saleDuring the period under review, the company disposed of its equity share and claims in Unique Dairy Products (Pty) Limited (UDP). The disposal forms part of the company’s strategy to disinvest in the short to medium term from the food sector and divert all of its available resources and effort into the agricultural and service sectors.

During the 2012 financial year, the group decided to discontinue its fruit and vegetable operations, Fine Cut Fruit & Veg (Pty) Limited based in Cape Town. The assets and liabilities of this company was sold on 19 May 2012 for an amount of R2 million.

So Gourmet (Pty) Limited was also liquidated during the 2012 financial year, and the decision was taken to discontinue Linktrade Foods (Pty) Limited.

The decision was taken by the board to discontinue these operations due to a lack of return on investment.

Group Company2013

R2012

R2013

R2012

RProfit and lossRevenue 47 176 550 104 390 655 – – Expenses (45 643 008) (152 431 572) – – Net profit/(loss) before tax 1 533 542 (48 040 917) – – Tax – 859 805 – – 1 533 542 (47 181 112) – –

Assets and liabilitiesNon-current assets held for sale Property, plant and equipment 515 000 1 294 645 – –

Cash flows from discontinued operations Net cash outflows from operating activities (7 513 665) (7 434 011) – – Net cash inflows from investing activities 671 139 2 522 956 – – Net cash inflows from financing activities 1 310 751 5 017 197 – – (5 531 774) 106 142 – –

Refer to note 37 for additional disclosures regarding the impairments as a result of the discontinued operations.

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15. share capital anD premium Group Company

2013R

2012R

2013R

2012R

Authorised300 000 000 (2012: 300 000 000)

Ordinary shares of R0.50 (2012: R0.50) each 150 000 000 150 000 000 150 000 000 150 000 000

Issued

Ordinary shares 89 191 409 89 208 909 89 208 912 89 208 912

Share premium 11 790 519 11 790 519 140 133 457 140 133 457

100 981 928 100 999 428 229 342 369 229 342 369

Reconciliation of number of shares issued: Opening balance 178 417 824 177 167 824 – –

Shares issued/(repurchased) (35 000) 1 250 000 – –

178 382 824 178 417 824 – –

16. other reservesBalance at the beginning of the period

Available-for-sale financial assets reserve 2 395 148 1 917 537 – –

Revaluation of unlisted investments 614 035 578 369 – –

Taxation on revaluation reserve (114 630) (100 758) – –

Balance at the end of the period – Available-for-sale financial assets reserve 2 894 553 2 395 148 – –

Total gains or losses on available-for-sale financial assets are recognised in other comprehensive income.

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[112 ] U B U B E L E i n t e g r a t e d r e P O r t

notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

17. loans payableGroup Company

2013R

2012Restated

R

2011Restated

R2013

R2012

R

Held at amortised costLoan R Wehnert 3 500 000 – – – –

This loan bears no interest and is repayable in 20 equal monthly instalments.

The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

Loan SA Roux 3 057 189 – – – –

This loan bears interest at South African prime plus 3% and is repayable on 30 November 2013.

The fair value of the long-term borrowings approximates the carrying value, as the current market rates of interest do not differ materially from those specified in the loan agreements. The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

Bank Windhoek – Building loan 6 594 004 1 153 313 – – –

The loan bears interest at the Namibian prime lending rate (9.25%) plus 1% and is repayable in 120 instalments. The loan is secured by the first leasehold bond over portion 3 of Farm Ondekaremba.

The fair value of the long-term borrowings approximates the carrying value, as the current market rates of interest do not differ materially from those specified in the loan agreements. The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

Bank Windhoek – Suspensive sale 2 861 803 977 181 – – –

The loan bears interest at the Namibian prime lending rate (9.25%) plus 1% and is repayable in 60 instalments.

The fair value of the long-term borrowings approximates the carrying value, as the current market rates of interest do not differ materially from those specified in the loan agreements. The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

Absa term loan – – 1 624 029 – –

This loan bore interest at the South African prime lending rate plus three percentage points. The loan was repayable in monthly instalments of R52 747 and was secured by trade and other receivables.

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17. loans payable (continueD)Group Company

2013R

2012Restated

R

2011Restated

R2013

R2012

R

Land Bank loan 180 345 179 180 000 000 89 999 610 180 345 179 180 000 000

This loan bears interest at the South African prime lending rate (2012 and 2011: Prime lending rate minus one percentage point) and is repayable on 31 December 2014, or renewable at the discretion of the bank on that date.

The fair value of the long-term borrowings approximates the carrying value, as the current market rates of interest do not differ materially from those specified in the loan agreements.

Land Bank term loan 33 020 170 37 496 035 – 33 020 170 37 496 035

This loan bears interest at the South African prime lending rate plus 0.5% (2012 and 2011: South African prime lending rate) and is repayable over 96 monthly instalments by 31 December 2019.

The fair value of the long-term borrowings approximates the carrying value, as the current market rates of interest do not differ materially from those specified in the loan agreements. The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

Loans from directors – 32 426 80 286 – –

These loans were interest-free and had no fixed date of repayment.

The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

Loans from directors of subsidiaries – 12 994 891 4 732 107 – –

These loans bore interest at 11% and were repayable on 1 October 2012.

The fair value of the long-term borrowings approximates the carrying value, as the current market rates of interest do not differ materially from those specified in the loan agreements.

Other 285 538 61 170 555 202 – –

These loans are interest free and have no fixed date of repayment.

The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

229 663 883 232 715 016 96 991 234 213 365 349 217 496 035

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[114 ] U B U B E L E i n t e g r a t e d r e P O r t

notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

17. loans payable (continueD)The Land Bank loans are secured as follows:

Limited Notarial Covering bonds over the movable assets of certain subsidiaries.

Deeds of cession whereby the certain subsidiaries ceded in securitatem debiti all their rights, title and interest in certain assets, as stipulated in the Deed of Cessions to Land Bank.

Deeds of cession whereby certain subsidiaries ceded all their rights, title and interest in their insurance policies to Land Bank.

Deed of cession whereby Ububele Holdings Limited ceded its rights, title and interest in the loan accounts to certain subsidiaries to Land Bank.

Cross suretyships supplied by certain subsidiaries.

In terms of Section 30 of the Land Bank Act, all agricultural produce and all products manufactured therefrom are subject to a pledge in favour of the Land Bank.

The Bank Windhoek loans are secured as follows:

Lease bond for R7 100 000 over admin and kitchen block at Hosea Kutako, B1 main road, 35 km east of Windhoek, Namibia.

Unlimited suretyship by Ububele Holdings Limited.

Unlimited suretyship by Hanganeni Investments Holdings (Pty) Limited.

Cession over lease agreement by Ububele Alpine In-Flight (Pty) Limited.

Underlying assets on the suspensive sale agreement.

Group Company

2013R

2012Restated

R

2011Restated

R2013

R2012

R

Non-current liabilities At amortised cost 216 783 748 219 393 719 91 373 641 208 365 394 217 496 035

Current liabilities At amortised cost 12 880 135 13 321 297 5 617 593 4 999 955 –

229 663 883 232 715 016 96 991 234 213 365 349 217 496 035

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18. amounts Due on instalment sale aGreements Group Company

2013R

2012R

2013R

2012R

Liabilities under instalment sale agreements bearing interest at rates linked to South African prime lending rate, which were on average 8.5% (2012: 9%) for the year under review and repayable in monthly instalments of R229 148 (2012: R240 024). Secured by property, plant and equipment as stated in note 3. The fair value of the long-term borrowings approximates the carrying value, as the current market rates of interest do not differ materially from those specified in the loan agreements. The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

4 932 774 8 025 372 – –

Non-current liabilities 2 775 805 4 764 571 – –

Current liabilities 2 156 969 3 260 801 – –

4 932 774 8 025 372 – –

19. traDe anD other payablesGroup Company

2013R

2012Restated

R

2011Restated

R2013

R2012

R

Trade payables 139 831 587 103 761 721 109 865 341 3 049 813 1 765 798

Value added taxation 2 013 979 2 835 242 2 256 749 827 404 1 993 948

Accruals and other payables 7 375 638 11 833 009 6 115 766 2 233 376 1 476 426

149 221 204 118 429 972 118 237 856 6 110 593 5 236 172

20. revenue Group Company

2013R

2012R

2013R

2012R

Sale of goods 631 935 106 580 510 000 – – Rendering of services 4 583 242 1 896 218 12 263 158 16 608 737 636 518 348 582 406 218 12 263 158 16 608 737

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[116 ] U B U B E L E i n t e g r a t e d r e P O r t

notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

21. operatinG profit Group Company

2013R

2012R

2013R

2012R

Operating profit for the year is stated after accounting for the following:

Income Decrease in provision for doubtful debts 361 354 340 070 – – Discount received 198 498 193 349 – – Profit on loans written off – 460 440 – – Profit on disposal of property, plant and equipment 481 156 – – – Recoveries 8 130 394 428 – – Rental income 540 247 542 611 – –

Expenditure Administration and management fees paid 1 260 000 1 098 824 – 1 594 737 Advertising 4 556 952 3 979 098 120 464 – Amortisation of intangible assets 1 612 800 890 025 52 433 20 197 Auditors’ remuneration 1 678 251 1 506 535 295 202 410 750 Consulting fees 2 583 365 4 035 179 26 775 187 691 Depreciation on property, plant and equipment 5 584 920 6 394 748 55 288 86 634 Discount allowed 129 291 179 880 – – Employee costs 46 950 698 46 129 420 10 805 569 9 240 316Increase in provision for doubtful debts 8 760 993 126 677 – – Insurance 3 336 801 3 515 636 18 882 18 976 Irrecoverable loan written off – 10 128 – 10 128 Lease rentals on operating lease 5 044 925 4 800 628 269 283 276 876 Legal fees 3 023 387 315 561 712 795 14 405Loss on disposal of property, plant and equipment – 358 734 45 646 – Loss on foreign exchange 4 457 303 2 227 736 – – Motor vehicle expenses 1 879 554 3 289 198 – – Petrol and oil 5 037 865 3 778 895 – – Repairs and maintenance 2 388 786 2 064 218 – – Transport and freight 4 127 637 3 757 252 – – Travel 2 078 978 2 652 041 132 629 202 900

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22. investment revenue Group Company2013

R2012

R2013

R2012

R

Dividend revenue Unlisted financial assets – local 306 466 259 520 – –

Interest revenue Loan accounts – – 18 978 579 15 254 274

Bank accounts 368 302 281 878 – –

Interest charged on trade and other receivables 11 452 205 8 251 516 – –

Other interest 41 243 31 166 – –

11 861 750 8 564 560 18 978 579 15 254 274

12 168 214 8 824 080 18 978 579 15 254 274

Interest per financial statement category Loans and receivables (including cash and bank balances) 11 861 750 8 564 730 18 978 579 15 254 274

23. finance costsBank overdraft and acceptances 1 490 671 825 500 1 474 110

Interest-bearing borrowings 568 103 645 343 – –

Late payment of taxation 312 751 233 916 179 347 186 178

Loans payable 19 529 725 13 746 256 19 100 377 13 515 283

Other interest paid 162 011 240 624 – –

Minority shareholders – 2 825 589 – –

Trade and other payables 823 868 323 959 595 620

22 887 129 18 841 187 19 281 793 13 702 191

24. taxationMajor components of the tax expenseCurrent Local income taxation – current period 2 747 755 5 804 958 – –

Secondary taxation on companies – 2 024 236 – 354 336

2 747 755 7 829 194 – 354 336

Deferred

Originating and reversing temporary differences 619 801 (144 038) (40 717) (747 616)

(Increase)/decrease in taxation losses provided for 3 081 561 (3 426 185) – –

3 701 362 (3 570 223) (40 717) (747 616)

6 449 117 4 258 971 (40 717) (393 280)

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[118 ] U B U B E L E i n t e g r a t e d r e P O r t

notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

24. taxation (continueD) Group Company2013

%2012

%2013

%2012

%

Reconciliation of the tax expenseReconciliation between applicable tax rate and average effective tax rate.

Applicable tax rate (%) 28.00 28.00 28.00 28.00

Tax losses utilised (%) (29.43) (59.18) (0.67) 2.91

Secondary tax on companies (%) – 79.17 – –

Other differences, including effect of foreign taxation rates (%) (33.27) (2.46) (27.28) (32.70)

(34.70) 45.53 0.05 (1.79)

25. earninGs per shareThe calculation of basic and headline earnings per share is based on the following attributable profits and weighted average number of shares.

Continued operations Loss attributable to parent shareholders (27 398 876) (1 092 472)

(Profit)/loss on disposal of property, plant and equipment (481 156) 363 492

Profit on disposal of investment (1 232 488) –

Impairment of assets 7 417 452 –

Headline earnings (21 695 069) (728 980)

Discontinued operations Profit/(loss) attributable to parent shareholders 1 308 139 (47 171 744)

Loss on disposal of property, plant and equipment – 576 018

Impairment of assets – 39 275 617

1 308 139 (7 320 109)

Weighted average number of ordinary shares in issue 178 411 879 177 844 054

Weighted average number for diluted shares 178 411 879 177 844 054

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25. earninGs per share (continueD) Group Company2013

R2012

R2013

R2012

R

Earnings per share (cents): Basic earnings per share from continuing operations (15.36) (0.61)

Diluted basic earnings per share from continuing operations (15.36) (0.61)

Basic earnings per share from discontinued operations 0.73 (26.52)

Diluted basic earnings per share from discontinued operations 0.73 (26.52)

Headline earnings per share from continuing operations (12.16) (0.41)

Headline earnings per share from discontinued operations 0.73 (4.12)

The calculation of earnings per share is based on 178 411 879 (2012: 177 844 054) weighted average number of shares in issue during the period, excluding weighted average treasury shares.

26. cash (useD in)/GenerateD from operationsProfit/(loss) before taxation (18 583 996) 9 354 691 (80 918 238) (21 973 244)

Adjustments for: Depreciation and amortisation 8 828 310 7 284 773 107 722 86 635

Loss/(profit) on disposal of assets (481 156) 292 463 45 646 25 650 001

Loss (profit) on foreign exchange 4 457 303 2 227 736 – –

Dividends received (306 466) (259 520) – –

Interest received (11 861 750) (8 564 560) (18 978 579) (15 254 274)

Finance costs 22 887 129 19 249 328 19 281 793 13 702 191

Fair value adjustments – (477 611) – –

Impairment loss 7 417 452 39 916 345 79 780 763 –

Profit on disposal of investment (1 232 488) – – –

Profit/(loss) from discontinued operations 1 533 542 (47 181 112) – –

Proceeds from loan written off – 10 128 – –

Provision for doubtful debts 8 760 933 71 874 – –

Changes in working capital: Inventories (2 852 118) (16 754 664) – 4 135 882

Trade and other receivables (8 863 399) (24 890 092) (3 472 257) (7 497 972)

Trade and other payables 31 933 840 2 549 369 873 818 (3 206 957)

Derivative financial instruments – (45 846) – –

41 637 136 (17 216 698) (3 279 332) (4 357 738)

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[12 0 ] U B U B E L E i n t e g r a t e d r e P O r t

notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

27. taxation paiD Group Company2013

R2012

R2013

R2012

R

Balance at beginning of the year (2 244 723) 12 167 – –

Current tax for the year recognised in profit or loss (2 747 755) (7 829 194) – (354 336)

Balance at end of the year 145 728 2 244 723 – –

(4 846 750) (5 572 304) – (354 336)

28. acquisition of non-controllinG interest in subsiDiariesDuring the year under review, the group purchased the remainder of Flamingo In-Flight Catering’s (Previously Alpine In-Flight Services) share capital from the non-controlling shareholders for an amount of R7 000 500. The company already had control over Flamingo and its assets and liabilities were fully consolidated in prior years.

During the 2012 financial year, the group purchased the remainder of Enviro Crop Protection (Pty) Limited (Previously Erintrade) share capital (49.9%) from the non-controlling shareholders for an amount of R40 million. The company already had control over Enviro Crop Protection and its assets and liabilities were fully consolidated in prior years.

29. DiviDenDs paiD Group Company2013

R2012

R2013

R2012

R

Dividends declared and paid by subsidiaries to non-controlling interest (6 057 974) (8 832 801) – –

Dividends declared and paid by the holding company – (3 543 356) – (3 543 356)

(6 057 974) (12 376 157) – (3 543 356)

30. commitmentsOperating leases – as lesseeMinimum lease payments due – within one year 2 402 146 5 042 838 374 238 –

– in second to fifth year inclusive 5 052 096 15 336 504 725 141 –

7 454 242 20 379 342 1 099 379 –

Operating lease payments represent rentals payable by the group for certain of its properties. Leases are negotiated for an average term of four to seven years and rentals escalate at fixed amounts each year. No contingent rent is payable.

Already contracted for but not provided for:§ Inventory R23 168 121§ Authorised capital expenditure R260 069

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31. relateD partiesRelationships

Subsidiaries Refer to note 6

Entities under common management Familie Roux Eiendomme (Pty) Limited

Plastikon (Pty) Limited

Thebe Packaging (Pty) Limited

Styleprops 182 (Pty) Limited

TGP Properties CC

Creative Flavours International

Infogold Investments 133 CC

Greeff & Claassen

Pavilion Conference Centre (Pty) Limited

Lanpack Manufacturers CC

Long Life Products (Pty) Limited

Romo Park Properties

Unibert Group Services (Pty) Limited

Significant shareholders Mentele Investments (Pty) Limited

K2012197774 (South Africa) (Pty) Limited

Miramare Investments (Pty) Limited

Kleinhans Family Trust

Dirk Willem Ryk Trust

Hanganeni Investment Holdings (Pty) Limited

Directors HW Cloete

CA Hall Appointed 28 August 2013

TB Hayter Resigned 27 August 2013

JT Kleinhans Resigned 27 October 2012, Appointed 28 August 2013

MJ Krastanov Resigned 27 August 2013

E Kruger

MK Makaba

JMK Matlala Removed 28 August 2013

MP Mocke Removed 28 August 2013

JD Newton Appointed 28 August 2013

CH Rickens Appointed 28 August 2013

SA Roux

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[12 2 ] U B U B E L E i n t e g r a t e d r e P O r t

notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

31. relateD parties (continueD) Group Company2013

R2012

R2013

R2012

RRelated party balancesLoan accounts – Owing (to)/by related parties Shareholders 31 016 167 396 – – Entity under common directorship 247 121 556 245 – – Loans to directors – (32 426) – – Loans to directors of subsidiaries 1 000 (12 994 891) – –

Amounts included in trade receivables regarding related parties Entity under common directorship 169 160 169 160 – – Subsidiaries – – 19 057 308 15 508 613

Amounts included in trade payables regarding related parties Entity under common directorship 1 068 152 643 626 – – Subsidiaries – – 1 391 933 1 374 660

Related party transactions

Management fees paid Subsidiary – 600 000 – 1 200 000

Purchases of goods and services Entities under common directorship 2 537 736 6 011 296 – –

Rent paid to/(received from) related parties Entities under common directorship 2 839 837 3 390 905 – –

Management fees received Entities under common management – – – – Subsidiaries – – 12 263 158 16 608 737

Interest received Subsidiaries – – 18 978 579 15 254 274

Interest paid Subsidiaries – – – 186 647 Entities under common directorship 91 779 – – –

Compensation to directors and other key management Short-term employee benefits 7 414 181 10 617 500 5 138 250 8 357 798

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31. relateD parties (continueD)During the period under review, the Company disposed of its equity share and claims in UDP.

The Company entered into an agreement with The Stephan Roux Family Trust, duly represented by Mr Stephan Abraham Roux (a director of Ububele) and Mr Stefan van der Berg, in terms of which the Company disposed of:§ 100% of its equity stake and loan accounts in UDP; and§ all trademarks relating to UDP and Uni-Way Logistics, with the specific exclusion of the trademark “Just Fresh”.

The total consideration payable for the shares and claims in terms of the agreement, net of possible bad debts at 30 June 2013, was R22 870 682, and a profit of R1 232 488 was realised on the sale.

Further related party details are as follows:Group companies – refer to note 9Loans payable – refer note 17Directors’ emoluments – refer note 32

32. Directors’ emoluments Group Company2013

R2012

R2013

R2012

RExecutive directors – basic salaryHW Cloete 1 976 784 2 113 266 1 976 784 2 113 266

MP Mocke 1 924 130 1 973 165 1 924 130 1 973 165

JMK Matlala 300 000 300 000 300 000 300 000

SA Roux 242 250 581 400 – 581 400

E Kruger 937 336 936 150 937 336 936 150

5 138 250 5 903 981 5 138 250 5 903 981

Directors of subsidiaries DN Alexander 2 275 931 2 042 649 – –

Basic salary 1 290 000 1 110 000

Travel allowance 210 000 722 649

Performance bonus 775 931 210 000

RT Wimbush – 692 400 – –

RP Wimbush – 507 000 – –

2 275 931 3 242 049 – –

Non-executive directors – fees for services as directorsJT Kleinhans (Severance payment) 1 248 000 1 369 296 1 248 000 1 369 296

LN Altini 51 018 – 51 018 –

TB Hayter 168 000 126 000 168 000 126 000

MJ Krastanov 192 000 120 000 192 000 120 000

MK Makaba 264 000 90 000 264 000 90 000

SA Roux 56 000 – 56 000 –

1 923 018 1 705 296 1 923 018 1 705 296

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[12 4 ] U B U B E L E i n t e g r a t e d r e P O r t

notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

33. risk manaGementCapital risk managementThe group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the group consists of debt, which includes the borrowings (excluding derivative financial liabilities) disclosed in notes 17 and 18, cash and cash equivalents disclosed in note 13, and equity as disclosed in the statement of financial position.

The group monitors capital using a gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the statement of financial position) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the statement of financial position plus net debt.

The gearing ratio at 2013 and 2012 respectively were as follows:

Group Company

Notes2013

R2012

R2013

R2012

RTotal borrowings Finance lease obligation 18 4 932 774 8 025 372 – –

Other financial liabilities 17 229 663 883 232 671 257 213 365 349 217 496 035

234 596 657 240 696 629 213 365 349 217 496 035

Less: Cash and cash equivalents 13 (13 122 969) (17 824 852) (2 165 108) (141 530)

Net debt 221 473 688 222 871 777 211 200 241 217 354 505

Total equity 15 031 232 51 107 372 103 339 167 184 216 688

Total capital 236 504 920 273 979 149 314 539 408 401 571 193

Gearing ratio (%) 94 81 67 54

Financial risk managementThe group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk.

There have been changes in the group and company’s risk management procedures during the year under review. In the prior financial periods, the group’s overall risk management programme focused on the unpredictability of financial markets and sought to minimise potential adverse effects on the group’s financial performance. The group used derivative financial instruments to hedge certain risk exposures. Risk management was carried out by a central treasury department (group treasury) under policies approved by the board. Group treasury identified, evaluated and hedged financial risks in close co-operation with the group’s operating units. The board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. For operational reasons, forex risk remains uncovered from shipment date to payment date and payment is effected at spot rates. Going forward, the group will assess the operations on a day-to-day basis to minimise the currency risk exposure.

Liquidity riskThe directors of the company constantly monitor the liquidity of the group and actively manage the group’s cash resources as to maintain sufficient working capital requirements.

The group has minimised its liquidity risk by ensuring that it has adequate reserves and banking facilities and by periodically monitoring future commitments, credit facilities, and forecast and actual cash flows.

The table below analyses the group and company’s financial liabilities into the relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. The fair value of the long-term borrowings approximates the carrying value, as the current market rates of interest do not differ materially from those specified in the loan agreements. The fair value of short-term borrowings approximates the carrying value, due to the short-term nature of these balances.

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33. risk manaGement (continueD)Less than

1 yearGreater than

1 yearGroupAt 30 June 2013 Trade and other payables 147 207 225 – Amounts due on instalment sale agreements 2 156 969 2 775 805Loans payable 12 880 135 216 783 748Bank overdraft and acceptances 1 119 737 – Commitments 25 830 336 5 052 096

At 30 June 2012 Trade and other payables 115 594 730 –

Amounts due on instalment sale agreements 3 260 801 4 764 571

Loans payable 13 321 297 219 393 719

Bank overdraft and acceptances 44 678 –

Commitments 5 042 838 15 336 504

CompanyAt 30 June 2013 Trade and other payables 5 283 189 –Loans payable 4 999 955 208 365 394Commitments 374 238 725 141

At 30 June 2012 Trade and other payables 3 242 224 –

Bank overdraft and acceptances 44 599 –

Loans payable 217 496 035

Interest rate riskAt 30 June 2013, if interest rates on rand-denominated borrowings had been 1% higher/lower with all other variables held constant, post-tax profit for the year would have been R2 296 125 (2012: R2 660 706) lower/higher, mainly as a result of higher/lower interest expense on the Land Bank loan.

In the normal course of business, the group is exposed to the effects of movements in interest rates. At year-end, instalment sale agreements and shareholder loans and trade receivable and payables were exposed to interest rate variances.

The group minimises its exposure to interest rate fluctuations by positioning new and refinanced loans according to the expected movements in interest rates and only apply for these loans via major banks, which have established interest rate allocation criteria. The decision-making framework in terms of which financial risks are evaluated and managed, lies with the executive directors. The interest rate characteristics of new borrowings are positioned according to expected movements in interest rates.

Credit riskCredit risk consists mainly of cash deposits, cash equivalents, derivative financial instruments and trade debtors. The group only deposits cash with major banks with high quality credit standing and limits exposure to any one counterparty.

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[126 ] U B U B E L E i n t e g r a t e d r e P O r t

notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

33. risk manaGement (continueD)Credit risk (continued)Trade receivables consist of a small concentrated customer base and the granting of credit is dependent on each individual debtor’s creditworthiness, which is reviewed on a periodic basis.

At year-end, the group did not consider there to be any significant concentration of credit risk which had not been adequately provided for.

With respect to credit risk arising from the cash and cash equivalents, trade and other receivables, loans receivable, deposits and loans to group companies, the company’s exposure to credit risk arises from default of the counterparty, with maximum exposure equal to the carrying amounts of these instruments, as disclosed in notes 9, 10, 12 and 13. There is no provision for bad debts against this balance and no impairments recorded, other than those disclosed.

Foreign exchange riskThe group trades internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities.

Transactional foreign exchange riskThe group has transactional currency exposures arising through the acquisition of goods in currencies other than the functional currency.

Group Company2013

R2012

R2013

R2012

RForeign currency exposure at the end of the reporting period

Liabilities

Trade creditors, $4 377 028 (2012: $1 077 482) converted at a year-end exchange rate of $1:R9.87 (2012: R8.27) 43 201 266 8 910 776 – –

Rate variance +10% (4 320 126) (891 078) – –

Rate variance –10% 4 320 126 891 078 – –

– – – –

Already contracted for but not provided for

§ Inventory R23 168 121

The group reviews its foreign currency exposure, including commitments on an ongoing basis. Where considered necessary, the group hedges its foreign exchange exposure by entering into foreign exchange contracts.

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34. seGment informationThe group has three operating segments as described below, which are the group’s strategic business units. The strategic business units are managed separately as they offer entirely different services. For each of the strategic business units, the board reviews internal management reports on at least a quarterly basis. The following summary describes the operations in each of the group’s reportable segments, being agriculture, Namibia and foods.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before interest and income tax, as included in the internal management reports. Segment profit before net finance income/expenses and income tax is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

2013Agriculture

RNamibia

RFoods

R

Foods –discontinued

R

Sub-total

R

Holding company

RTotal

RRevenue – external 590 881 516 45 636 832 – 46 595 646 683 113 994 – 683 113 994Revenue – internal 187 873 884 13 256 536 1 260 000 2 367 412 204 757 832 12 263 158 217 020 990Interest income 11 788 210 338 762 41 242 95 12 168 309 – 12 168 309Finance costs 20 802 149 1 591 834 503 140 42 379 22 939 502 9 994 22 949 496Depreciation and amortisation 4 317 518 2 601 569 170 912 1 708 794 8 798 793 – 8 798 793Segment profits/(losses)

attributable to parent shareholders (1 835 885) 1 619 741 (13 360 871) 1 308 139 (12 268 876) (13 821 861) (26 090 737)

Segment profits attributable to non-controlling interest – 2 365 763 – 225 403 2 591 165 – 2 591 165

Trade and other payables 137 583 716 5 691 412 1 352 764 – 144 627 892 4 593 312 149 221 204Trade and other receivables 143 504 014 10 634 876 6 287 868 – 160 426 758 320 980 160 747 738

During the current financial year, the agriculture division provided for doubtful debts in the amount of R8 311 155.

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notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

35. financial assets by cateGoryThe accounting policies for financial instruments have been applied to the line items below:

Loans and receivables

R

Available-for-sale

RTotal

RGroup – 2013Loans receivable 2 228 441 – 2 228 441Available-for-sale financial assets at fair value – 5 179 892 5 179 892Trade and other receivables 153 154 943 – 153 154 943Cash and cash equivalents 14 242 706 – 14 242 706

169 626 090 5 179 892 174 805 982

Group – 2012Loans receivable 2 250 772 – 2 250 772Available-for-sale financial assets at fair value – 4 565 856 4 565 856Trade and other receivables 147 849 568 – 147 849 568Cash and cash equivalents 17 869 530 – 17 869 530

167 969 870 4 565 856 172 535 726

34. seGment information (continueD)

2012Agriculture

RNamibia

RFoods

R

Foodsdiscontinued

R

Sub-total

R

Holdingcompany

RTotal

RRevenue – external 540 453 960 43 152 259 – 103 951 207 687 557 426 – 687 557 426Revenue – internal 149 642 809 – 7 088 193 29 918 596 186 649 598 16 608 737 203 258 335Interest income 8 625 338 171 238 893 1 063 8 798 532 26 781 8 825 313Finance costs 15 203 440 107 807 1 596 965 693 882 17 602 094 1 932 975 19 535 069Depreciation and amortisation 3 027 376 214 606 – 3 761 390 7 003 372 – 7 003 372Segment profits/(losses)

attributable to parent shareholders 13 072 012 2 350 779 (10 999 489) (37 873 246) (33 449 944) (14 814 272) (48 264 216)

Segment profits attributable to non-controlling interest – 6 188 462 (270) (9 368) 6 178 824 – 6 178 824

Trade and other payables 93 995 506 7 803 068 2 251 894 11 994 245 116 044 713 2 385 259 118 429 972Trade and other receivables 131 943 056 11 208 240 624 704 9 434 340 153 210 340 1 507 009 154 717 349

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36. financial liabilities by cateGoryThe accounting policies for financial instruments have been applied to the line items below:

Financial liabilities at

amortised cost

RTotal

RGroup – 2013Loans payable 229 663 883 229 663 883Trade and other payables 147 207 225 147 207 225Bank overdraft 1 119 737 1 119 737Amounts due on instalment sale agreements 4 932 774 4 932 774 382 923 619 382 923 619

Group – 2012Loans payable 232 671 257 232 671 257Trade and other payables 115 594 730 115 594 730Bank overdraft 44 678 44 678 Amounts due on instalment sale agreements 8 025 372 8 025 372

356 336 037 356 336 037

Company – 2013Loans payable 213 365 349 213 365 349Trade and other payables 5 283 189 5 283 189Bank overdraft – – 218 648 538 218 648 538

Company – 2012Loans payable 217 496 035 217 496 035 Trade and other payables 3 242 224 3 242 224Bank overdraft 44 599 44 599 220 782 858 220 782 858

35. financial assets by cateGory (continueD)Loans and

receivablesR

TotalR

Company – 2013Loans to group companies 194 107 624 194 107 624Trade and other receivables 19 417 090 19 417 090Cash and cash equivalents 2 165 108 2 165 108

215 689 822 215 689 822

Company – 2012Loans to group companies 211 854 554 211 854 554 Trade and other receivables 15 994 932 15 994 932 Cash and cash equivalents 186 129 186 129

228 035 615 228 035 615

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notes to the annual financial statements (continued) Þfor the year ended 30 June 2013

37. impairment of intanGible assets anD GooDwillDuring the period under review, the company impaired the following intangible assets and goodwill:

Group Company2013

R2012

R2013

R2012

RContinuing operations Fine Cut trademark (goodwill) 7 417 452 – – –

Discontinued operations Unique Dairy Products (Milkworx) goodwill – 9 298 498 – –

Linktrade customer contract – 5 948 994 – –

Just Fruit & Veg recipes – 4 968 966 – –

Just Fruit & Veg goodwill – 15 854 816 – –

Just Fruit & Veg brands – 90 000 – –

Just Fruit & Veg restraint of trade – 554 167 – –

So Gourmet trademark – 3 114 343 – –

7 417 452 39 829 784 – –

Given the decision taken in 2012 to primarily disinvest from the food sector, the board of directors decided to impair the remaining Just Fresh brand. This brand currently holds minimal usage at our airline catering company in Namibia.

During the period under review, the company disposed of its equity share and claims in Unique Dairy Products (Pty) Limited (UDP). The disposal forms part of the company’s strategy to disinvest in the short to medium term from the food sector and divert all of its available resources and effort into the agricultural and services sectors.

During the 2012 financial year, the group decided to discontinue its fruit and vegetable operations in Cape Town, Just Fruit & Veg (Pty) Limited. The assets and liabilities of this company was sold on 19 May 2012 for an amount of R2 million.

So Gourmet (Pty) Limited was also liquidated during the 2012 financial year, and the decision was taken to discontinue Linktrade Foods (Pty) Limited.

The decision was taken by the board to discontinue these operations due to a lack of return on investment

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Provisional/fair value of assets acquired and liabilities assumedTotal

RProperty, plant and equipment 1 094 342 Deferred taxation 232 663 Inventories 20 310 713 Loans receivable 2 771 507 Trade and other receivables 9 474 833 Cash and cash equivalents 70 475 Interest-bearing borrowings (2 353 824) Loans payable (3 272 430) Provisions (451 145) Bank overdraft (3 860 314) Trade and other payables (20 197 816) Total identifiable net assets 3 819 004 51% share of the total identifiable net assets 1 947 692 Goodwill 1 145 388

3 093 080

Acquisition date fair value of consideration paid 3 093 080 Cash 3 093 080 Non-controlling interest in acquiree on acquisition date 1 871 312

The non-controlling interest in the acquiree is based on the fair value of the assets and liabilities of the acquiree at acquisition date.

A deposit of R2 833 010 relating to the purchase price of Turf-Ag was made in June 2013.

On 5 September 2013, the board took a decision to sell the company’s share in Mediva Group Holdings (Pty) Limited, our Namibian subsidiary.

38. continGenciesA possible contingent liability may exist in terms of the employment contract of a director removed from the board of 28 August 2013, the amount of which is uncertain.

Enviro Weed Control Namibia (Pty) Limited is defending an action brought against them to the value of N$ 654 959 plus 20% interest. Whilst a liability is not admitted, the fines and legal costs cannot be predicted by the directors.

A summons was received out of the Bloemfontein High Court on 27 September 2013 in the amount of R85 075 778, relating to crop damages suffered by a customer. Our insurance company has instructed their attorneys on our behalf, who has filed a notice of defence herein. Recent tests of the product in question have indicated good grounds for defending the claim.

39. GoinG concernThe audited annual financial statements have been prepared on the going concern basis. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

40. events after the reportinG perioDOn 1 July 2013, the Group acquired 51% of the voting equity interest of Turf-Ag Products (Pty) Limited which resulted in the Group obtaining control over Turf-Ag Products (Pty) Limited. Turf-Ag imports and distributes agricultural and turf irrigation equipment. Turf-Ag operates throughout South Africa and supplies products to the agriculture and turf market. The company holds the distribution rights to the well-known American irrigation brand, Hunter.

The rationale for the acquisition and goodwill paid is that it will add complementary products to the basket of products currently supplied to Ububele customers. In addition, Ububele is in the process of installing approximately 100 weather stations throughout South Africa over a three year period, to provide its customers with accurate, up to date weather information. Ububele considers water management to be a critical future resource focus area in Africa. With its new investment into water management and irrigation, Ububele will enable its customers to farm more scientifically and more effectively.

Although the group obtained effective control on 1 July 2013, the new board of directors feel that the investment is not a fit for Ububele going forward and are looking at options to revert the group’s interest to the previous shareholders of Turf-Ag or disposing of its shares.

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[132 ] U B U B E L E i n t e g r a t e d r e P O r t

notice of annual General meetinG Þfor the year ended 30 June 2013

Notice is hereby given that an annual general meeting of shareholders of the Company will be held on Thursday, 5 December 2013, at 10:00 at Ububele Holdings, Ground Floor, Acorn House, Old Oak Office Park, Corner of Old Oak and Durban Roads, Bellville (“the Annual General Meeting”) to deal with such business as may lawfully be dealt with at the Annual General Meeting and to consider and, if deemed fit, pass, with or without modification, the ordinary and special resolutions set out in the agenda hereunder in the manner required by the Companies Act, 71 of 2008, as amended (“the Companies Act”), the memorandum of incorporation (“MOI”) of the Company and the Listings Requirements of the JSE Limited (“JSE Listings Requirements”).

The record date on which members must be recorded as such in the register maintained by the transfer secretaries of the Company for the purpose of being entitled to attend and vote at the Annual General Meeting is Friday, 29 November 2013, with the last day to trade being Friday, 22 November 2013.

This notice is important and requires your immediate attention. If you are in any doubt as to what action you should take, please consult your broker, Central Securities Depository Participant (“CSDP”), legal advisor, banker, financial advisor, accountant or other professional advisor immediately. If you have disposed of all your shares in the Company, please forward this document, together with the enclosed form of proxy, to the purchaser of such shares or the broker, banker or other agent through whom you disposed of such shares.

The Company will not be providing for electronic participation in the Annual General Meeting. Annual General Meeting participants (including shareholders and proxies) are required to provide reasonably satisfactory identification before being entitled to attend or participate in a shareholders’ meeting. Forms of identification include valid identity documents, driver’s licences and passports.

aGenDa

1. presentation of annual financial statements for the year enDeD 30 June 2013The consolidated audited annual financial statements of the Company (as approved by the board of directors of the Company (“Board”)), incorporating the external auditor, audit and risk committee, social and ethics committee and directors’ reports for the year ended 30 June 2013, have been distributed as required and will be presented at the Annual General Meeting.

The complete audited annual financial statements of the Company will be available on the Company’s website at www.ububele.co.za.

2. orDinary resolution number 1Re-election of directors who retire by rotation in terms of the MOI of the Company “Resolved that shareholders re-elect by way of series of votes, the following directors who retire by rotation in terms of clause 26.2 of the Company’s MOI, and who, being eligible, have offered themselves for re-election:

2.1 MK (Kabs) Makaba

2.2 SA (Stephan) Roux”

A brief biography in respect of the director offering himself for re-election is contained in the integrated annual report available on www.ububele.co.za.

The percentage of voting rights that will be required for each sub-resolution to be adopted is more than 50% of the votes exercised on each sub-resolution.

3. orDinary resolution number 2Appointment of director“Resolved that, JD (John) Newton, being a new appointment to the Board, who retires in terms of clause 26.2 of the Company’s MOI and, being eligible and offering himself for re-election, be and is hereby re-elected as an independent non-executive director of the Company, with effect from the end of this Annual General Meeting.”

A brief biography of John Newton is available on www.ububele.co.za.

The percentage of voting rights that will be required for this resolution to be adopted is more than 50% of the votes exercised on this resolution.

UBUBELE HOLDINGS LIMITED(Incorporated in the Republic of South Africa)(Registration number: 1998/011074/06)(“Ububele” or “the Company” or “the Group”)ISIN Code: ZAE000140182 Share Code: UBU

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4. orDinary resolution number 3Reappointment of external auditor

“Resolved that shareholders authorise the Board to reappoint Nolands Inc., Nolands House, River Park, River Lane, Mowbray, Cape Town 7700 as the independent external auditors of the Company and Allan Mundell as the individual designated auditor of the Company for the ensuing year.”

The percentage of voting rights that will be required for this resolution to be adopted is more than 50% of the votes exercised on the resolution.

5. orDinary resolution number 4 Election of audit and risk committee members Note: For the avoidance of doubt, all references to the audit and risk committee of the Company is a reference to the audit committee as contemplated in the Companies Act.

“Resolved that shareholders elect, each by way of a separate vote, subject to their reappointment as directors in terms of ordinary resolution number 1 above (where applicable) the following non-executive directors as members of the Ububele audit and risk committee, with effect from the end of this Annual General Meeting until the conclusion of the next annual general meeting of the Company:

5.1 John Newton (Chairman);

5.2 Kabs Makaba; and

5.3 CA (Colin) Hall”

Brief biographies of these directors offering themselves for election as members of the Ububele audit and risk committee is available on www.ububele.co.za.

The percentage of voting rights that will be required for each sub-resolution to be adopted is more than 50% of the votes exercised on each sub-resolution.

6. orDinary resolution number 5 Endorsement of Ububele remuneration policy

“Resolved that shareholders endorse, by way of a non-binding advisory vote, the Company’s remuneration policy as set out on page 44 of the integrated report (excluding the remuneration of the non-executive directors and the members of Board committees for their services as directors and members of board committees).”

The percentage of voting rights that will be required for this resolution to be adopted is more than 50% of the votes exercised on the resolution.

7. orDinary resolution number 6 General authority to issue shares for cash “Resolved that subject to the JSE Listings Requirements, the directors be and are hereby granted a general authority to issue all or any of

the authorised but unissued shares in the capital of the Company, for cash, as and when they in their discretion deem fit, subject to the Companies Act, the MOI of the Company, the Listings Requirements of the JSE, when applicable, and the following limitations, namely that:

§ the equity securities 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 limited to such securities or rights that are convertible into a class already in issue;

§ any such issue will only be made to “public shareholders” as defined in the JSE Listings Requirements and not related parties, unless the JSE otherwise agrees;

§ the number of shares issued for cash shall not in the aggregate in any one financial year exceed 50% (fifty percent) of the Company’s issued share capital of ordinary shares. As at the date of this notice 50% (fifty percent) of the Company’s issued share capital of ordinary shares represent 89 208 912 shares;

§ this authority be valid until the Company’s next annual general meeting, provided that it shall not extend beyond 15 (fifteen) months from the date that this authority is given;

§ a paid press announcement giving full details, including the impact on the net asset value and earnings per share, will be published at the time of any issue representing, on a cumulative basis within 1 (one) financial year, 5% (five percent) or more of the number of shares in issue prior to the issue; and

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§ in determining the price at which an issue of shares may be made in terms of this authority, the maximum discount permitted will be 10% (ten percent) of the weighted average traded price on the JSE of those shares over the 30 (thirty) business days prior to the date that the price of the issue is determined or agreed by the directors of the Company.”

The percentage of voting rights that will be required for this resolution to be adopted is at least 75% of the votes exercised on the resolution as required in terms of the JSE Listings Requirements. The controlling shareholder and designated advisor (and their associates) are precluded from voting on this resolution in accordance with the JSE Listings Requirement for the Alternative Exchange.

8. orDinary resolution number 7 Authority to sign all required documents “Resolved that, subject to the passing of the ordinary and special resolutions at the Annual General Meeting, any director of the Company or

the Company Secretary be and is hereby authorised to sign all documents and perform all acts which may be required to give effect to such ordinary and special resolutions.”

The percentage of voting rights that will be required for this resolution to be adopted is more than 50% of the votes exercised on the resolution.

9. special resolution number 1 General authority to acquire (repurchase) shares “Resolved that the Company and the subsidiaries of the Company be and are hereby authorised by way of a general approval as

contemplated in sections 46 and 48 of the Companies Act, to acquire from time to time any or all of the issued ordinary shares of the Company, upon such terms and conditions and in such amounts as the directors of the Company or the directors of the subsidiary company may from time to time determine, but subject to the MOI of the Company and the provisions of the Companies Act, when applicable and provided that:

§ Any such acquisition of ordinary shares shall be effected through the order book operated by the JSE trading system and made without any prior understanding or arrangement between the Company and the counterparty.

§ This general authority shall be valid until the earlier of the Company’s next annual general meeting or the variation or revocation of such general authority by special resolution at any subsequent general meeting of the Company, provided that it shall not extend beyond 15 (fifteen) months from the date of passing of this special resolution number 1.

§ An announcement will be published as soon as the Company or any of its subsidiaries have acquired ordinary shares constituting, on a cumulative basis, 3% (three percent) of the number of ordinary shares in issue and for each 3% (three percent) in aggregate of the initial number acquired thereafter, in compliance with paragraph 11.27 of the JSE Listings Requirements.

§ Acquisitions of shares in aggregate in any one financial year may not exceed 20% (twenty percent) (and 10% (ten percent) in the case of a subsidiary company acquiring shares issued by the Company) of the Company’s ordinary issued share capital, as the case may be, as at the date of passing of this special resolution number 1.

§ Ordinary shares may not be acquired at a price greater than 10% above the weighted average of the market value at which such ordinary shares traded for the five business days immediately preceding the date the transaction is affected. The JSE should be consulted for a ruling if the Company’s securities have not traded in such five business day period.

§ The Board authorises the acquisition if the Company passes the solvency and liquidity test, and that from the time that the test is done, there are no material changes to the financial position of the Company.

§ The Company has been given authority by its MOI. § At any point in time, the Company and/or its subsidiaries may only appoint one agent to effect any such acquisition. § The Company and/or its subsidiaries undertaking that they will not enter the market to so acquire the Company’s shares until the

Company’s sponsor has provided written confirmation to the JSE regarding the adequacy of the Company’s working capital in accordance with Schedule 25 of the JSE Listings Requirements.

§ A resolution has been passed by the Board confirming that the Board has authorised the general repurchase, that the Company passed the solvency and liquidity test and that since the test was done, there have been no material changes to the financial position of the Group.

§ The Company and/or its subsidiaries not acquiring any shares during a prohibited period, as defined in the JSE Listings Requirements unless a repurchase programme is in place, where dates and quantities of shares to be traded during the prohibited period are fixed and full details of the programme have been disclosed in an announcement over the Stock Exchange News Service prior to the commencement of the prohibited period.”

notice of annual General meetinG (continued) Þfor the year ended 30 June 2013

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Although no such repurchases are currently in contemplation, the directors undertake that they will not affect a general repurchase of shares as contemplated above unless the following can be met:

§ the Company and the Group would in the ordinary course of their business be able to pay their debts; § the consolidated assets of the Company and the Group would exceed the consolidated liabilities of the Company and the Group

respectively, such assets and liabilities being fairly valued and recognised and measured in accordance with the accounting policies used in the financial statements contained in the integrated annual report;

§ the issued capital and reserves of the Company and the Group would be adequate for the purposes of the Company and the Group’s business; and

§ the Company and the Group’s working capital would be sufficient for their requirements.

The JSE Listings Requirements require, in terms of paragraph 11.26, the following disclosures, which is also available on www.ububele.co.za:

§ Directors and management § Major shareholders § Directors’ interests in securities § Share capital of the Company

Litigation statement In terms of paragraph 11.26 of the JSE Listings Requirements, the directors are not aware of any legal or arbitration proceedings that are

pending or threatened, that may have or had in the recent past, being at least the previous 12 (twelve) months, a material effect on Ububele’s financial position.

Directors’ responsibility statement The directors, collectively and individually accept full responsibility for the accuracy of the information pertaining to this special resolution and

certify that, to the best of their knowledge and belief, there are no facts that have been omitted which would make any statements false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this special resolution contains all information required by law and the JSE Listings Requirements.

Material changes Other than the facts and developments reported on in the integrated annual report, there have been no material changes in the financial or

trading position of the Company and its subsidiaries since the date of signature of the audit report and up to the date of the notice of Annual General Meeting.

The directors have no specific intention, at present, for the Company or its subsidiaries to acquire any of the Company’s shares but consider that such a general authority should be put in place should an opportunity present itself to do so during the year, which is in the best interests of the Company and its shareholders.

The directors are of the opinion that it would be in the best interests of the Company to extend such general authority and thereby allow the Company or any of its subsidiaries to be in a position to acquire the shares issued by the Company through the order book of the JSE, should the market conditions, tax dispensation and price justify such an action.

The percentage of voting rights that will be required for this resolution to be adopted is at least 75% of the votes exercised on the resolution.

Reason and effect of special resolution number 1 The reason and effect for special resolution number 1 is to grant the Company a general approval to acquire its own issued shares

(and any subsidiary company to acquire shares issued by the Company) on such terms, conditions and such amounts determined from time to time by the directors of the Company by the limitations set out above.

Pursuant to and in terms of the JSE Listings Requirements, the directors of the Company hereby state: § The directors of the Company have no specific intention to effect the provisions of special resolution number 1 but will, however,

continually review this position having regard to prevailing circumstances. § The intention of the Company and/or its subsidiaries is to utilise the general authority to repurchase, if at some future date the

cash resources of the Company are in excess of its requirements.

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[136 ] U B U B E L E i n t e g r a t e d r e P O r t

§ The method by which the Company and any of its subsidiaries intend to repurchase its securities and the date on which such repurchase will take place, has not yet been determined.

10. special resolution number 2 remuneration of non-executive directors

“Resolved that the Board and committee membership fees for non-executive directors for the financial year ending 30 June 2013, as set out in the note below, be and are hereby authorised, in accordance with section 66(8) – (9) of the Companies Act and that the Company may continue to pay directors’ fees at the annual rates specified in the note below, for the period from 30 June 2013 until the Company’s next annual general meeting.”

Board/Committee Chairman MemberBoard (monthly retainer) R18 000 R8 000Committee (monthly retainer) R4 000 R2 000

The percentage of voting rights that will be required for this resolution to be adopted is at least 75% of the votes exercised on the resolution.

Reason and effect of special resolution number 2 The Companies Act requires shareholder approval of directors’ fees prior to payment of such fees. The effect of special resolution number 2

is that the Company will be able to pay its non-executive directors for the services they render to the Company as directors without requiring further shareholder approval until the next annual general meeting of the Company.

11. special resolution number 3 financial assistance in terms of sections 44 and 45 of the companies act

“Resolved that the Board of the Company be and is hereby authorised, subject to sections 44 and 45 of the Companies Act, the Company’s MOI and the JSE Listing Requirements, to authorise the Company to provide direct or indirect financial assistance to a director or prescribed officer of the Company or of a related or inter-related company, to a related or inter-related company or corporation, or to a member of a related or inter-related corporation, or to a person related to any such company, corporation, director, prescribed officer or member, provided that no such financial assistance may be provided at any time in terms of this authority after the expiry of two years from the date of the adoption of this special resolution number 3.”

The percentage of voting rights that will be required for this resolution to be adopted is at least 75% of the votes exercised on the resolution.

Reason and effect of special resolution number 3 The reason for, and effect of, the special resolution referred to above, is to permit the Company to provide direct or indirect financial assistance

to the entities referred to above.

This notice constitutes notice in terms of section 45(5) of the Companies Act that the Board has passed the same resolution, which resolution will take effect on the passing of special resolution number 3 set out above.

notice of annual General meetinG (continued) Þfor the year ended 30 June 2013

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U B U B E L E i n t e g r a t e d r e P O r t [137]

votinG instructions In terms of the Companies Act, any member entitled to attend and vote at the Annual General Meeting may appoint one or more persons as proxy, to attend and speak and vote in his/her stead. A proxy need not be a member of the Company. Forms of proxy must be deposited at the office of the transfer secretaries not later than 48 hours before the time fixed for the Annual General Meeting (excluding Saturdays, Sundays and public holidays).

If your Ububele shares have been dematerialised and are held in a nominee account, then your CSDP or broker, as the case may be, should contact you to ascertain how you wish to cast your vote at the Annual General Meeting and thereafter cast your vote in accordance with your instructions.

If you have not been contacted it would be advisable for you to contact your CSDP or broker, as the case may be, and furnish them with your instructions. If your CSDP or broker, as the case may be, does not obtain instructions from you, they will be obliged to act in terms of your mandate furnished to them, or if the mandate is silent in this regard to abstain from voting.

Dematerialised shareholders whose shares are held in a nominee account must not complete the attached form of proxy. Unless you advise your CSDP or broker timeously in terms of the agreement between yourself and your CSDP or broker by the cut-off time advised by them that you wish to attend the Annual General Meeting or send a proxy to represent you at the Annual General Meeting, your CSDP or broker will assume you do not wish to attend the Annual General Meeting or send a proxy. If you wish to attend the Annual General Meeting, your CSDP or broker will issue the necessary letter of representation to you to attend the Annual General Meeting.

Shareholders who have dematerialised their shares through a 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, or they must provide the CSDP or broker with their voting instructions in terms of the relevant custody agreement/mandate entered into between them and the CSDP or broker.

shareholDer riGhts It is requested that forms of proxy should be forwarded to reach the Company’s transfer secretaries at the address provided on page 26 by no later than 10:00 on Tuesday, 3 December 2013.

By order of the BoardUbubele Holdings Limited

5 November 2013

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[138 ] U B U B E L E i n t e g r a t e d r e P O r t

explanatory notes to the notice of annual General meetinG anD proposeD resolutions

1. presentation of annual financial statements The annual financial statements (as approved by the directors) are required to be presented to the shareholders at the Annual General Meeting.

2. rotation anD re-election of Directors The rotation of directors is fully governed in terms of articles 26.2 of the MOI of the Company, which require one third of the non-executive

directors to retire from office at the Annual General Meeting. The retiring directors at each annual general meeting shall be those who have been longest in office since their last election or appointment. If at the date of the annual general meeting any director will have held office for a period of three years since his last election or appointment he shall retire at such meeting either as one of the directors to retire in pursuance of the foregoing or additionally thereto. A retiring director shall act as a director throughout the meeting at which he retires. The retiring directors shall be eligible for re-election. Kabs Makaba and Stephan Roux offer themselves for re-election.

3. appointment of Director John Newton was appointed by the Board as an independent non-executive director. The reason for the ordinary resolution is that the MOI

of the Company and to the extent applicable the Companies Act, requires that appointments made by the Board of the Company must be confirmed by shareholders at a general meeting of shareholders.

4. reappointment of external auDitor The audit and risk committee considered and assessed the independence of the external auditor, Nolands Inc., Nolands House, River Park,

River Lane, Mowbray, Cape Town 7700 in accordance with section 90 of the Companies Act. The audit and risk committee were satisfied with Nolands Inc.’s independence. Furthermore, the Ububele audit and risk committee has, in terms of paragraph 3.86 of the JSE Listings Requirements, considered and satisfied itself that Allan Mundell, the reporting accountant and individual auditor, is accredited to appear on the JSE List of Accredited Auditors, in compliance with section 22 of the JSE Listings Requirements. The audit and risk committee nominated the reappointment of Nolands Inc. as registered auditor for the financial year ending 30 June 2014, with Allan Mundell as the individual designated auditor of the Company for the ensuing year. The Board has accepted the recommendation of the audit and risk committee subject to shareholder approval as required in terms of section 90(1) of the Companies Act.

The auditors will remain the appointed auditors until the conclusion of the next annual general meeting of the Company. The remuneration of the auditors shall be fixed by agreement with the Company.

5. election of auDit anD risk committee members In terms of section 94(2) of the Companies Act, the Company must elect an audit committee comprising at least three members. The audit

committee is no longer a committee of the Board, but a committee elected by the shareholders at each annual general meeting of the Company. The proposed members of the audit committee have experience in audit, accounting, economics, human resources, commerce and general industry, among others.

The Board confirms that John Newton and Colin Hall are independent non-executive directors as contemplated in King III Code of Governance Principles for South Africa and the JSE Listings Requirements. Colin Hall is the chairman of the Board. Kabs Makaba is not independent but he is a non-executive director. Each member of the audit and risk committee of the Company is a suitably qualified and skilled director of the Company. The members of the committee are not involved in the day-to-day management of the business or have not been so involved at any time of the previous financial year. None of the members are a prescribed officer or full-time employee of the Company or another related or inter-related company, or have been such an officer or employee at any time during the previous three financial years. None of the members were a material supplier or customer of the Company.

6. enDorsement of ububele’s remuneration policy The endorsement of Ububele’s remuneration policy as set out on page 44 of the integrated report is of an advisory nature only and failure to

pass this resolution will therefore not have any legal consequences relating to existing arrangements. However, the Board will take the outcome of the vote into consideration when considering the Company’s remuneration policy in the remuneration of executive directors.

notice of annual General meetinG (continued) Þfor the year ended 30 June 2013

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U B U B E L E i n t e g r a t e d r e P O r t [139 ]

7. General authorisation to issue shares for cash For listed entities wishing to issue shares for cash, it is necessary for the Board to obtain the prior authority of shareholders in accordance with

the JSE Listings Requirements. The reason for this resolution is accordingly to obtain a general authority from shareholders to issue shares for cash in compliance with the Listings Requirements of the JSE.

8. authority to siGn all requireD Documents This requests authority to be given to a director or the Company Secretary to sign such documents and execute such actions as will be required

to register and give effect to the resolutions passed.

9. General authority to acquire (repurchase) shares This is to grant the Company and its subsidiaries a general authority to facilitate the acquisition by the Company and/or its subsidiaries of the

Company’s own shares, which general authority shall be valid until the next annual general meeting of the Company, provided that this general authority shall not extend beyond 15 (fifteen) months from the date of the passing of special resolution number 1.

10. remuneration of non-executive Directors In terms of section 66(8) – (9) of the Companies Act, remuneration may only be paid to directors, for their service as directors, in accordance

with a special resolution approved by the shareholders within the previous two years and if not prohibited in terms of a Company’s MOI.

11. financial assistance in terms of sections 44 anD 45 of the companies act This general authority would allow the Company inter alia to make inter-company loans to subsidiaries as well as grant letters of support and

guarantees in appropriate circumstances. The existence of a general shareholder authority would avoid the need to refer each instance to members for approval which might impede the transaction and add time and expense. If approved, this general authority will expire at the end of two years.

This general authority also authorises financial assistance to any of the Company’s directors, or prescribed officers or to any other person who is a beneficiary of the share incentive scheme in order to facilitate their participation.

The Board must when considering such assistance either for the specific recipient, or generally for a category ensure that: § The Company will satisfy the solvency and liquidity test immediately after providing the financial assistance. § The terms under which the financial assistance is proposed to be given are fair and reasonable to the Company.

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[14 0 ] U B U B E L E i n t e g r a t e d r e P O r t

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form of proxy Þ

FORM OF PROXY FOR THE ANNUAL GENERAL MEETING TO BE HELD AT OLD OAK ON THURSDAY, 5 DECEMBER 2013, AT 10:00 – FOR USE BY CERTIFICATED ORDINARY SHAREHOLDERS AND DEMATERIALISED ORDINARY SHAREHOLDERS WITH “OWN NAME” REGISTRATION ONLYHolders of dematerialised ordinary shares other than “own name” registration must inform their CSDP or broker of their intention to attend the Annual General Meeting and request their CSDP to issue them with the necessary authorisation to attend the annual general meeting in person or provide their CSDP of broker with their voting instructions should they not wish to attend the Annual General Meeting in person but wish to be represented thereat.

I/We _______________________________________________________________________________________________________(Please print)

of (address ___________________________________________________________________________________________________

being the registered holder(s) of ______________________________________ ordinary shares in the capital of the Company do hereby appoint

1. ____________________________________________________________________________________________ or failing him/her,

2. ____________________________________________________________________________________________ or failing him/her,

3. the chairman of the Annual General Meeting, as my/our proxy to act on my/our behalf at the annual general meeting of the Company which will be held on Thursday, 5 December 2013, 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 shares registered in my/our name/s, in accordance with the following instructions:

Number of ordinary shares For Against Abstain1. Presentation of annual financial statements2. Ordinary resolution number 1: Re-election of directors who retire by rotation 2.1 Kabs Makaba

2.2 Stephan Roux3. Ordinary resolution number 2: Appointment of director – John Newton4. Ordinary resolution number 3: Reappointment of external auditor 5. Ordinary resolution number 4: Election of audit and risk committee members 5.1 John Newton (Chairman)

5.2 Kabs Makaba5.3 Colin Hall

6. Ordinary resolution number 5: Endorsement of Ububele remuneration policy 7. Ordinary resolution number 6: General authority to issue shares for cash8. Ordinary resolution number 7: Authority to sign all required documents 9. Special resolution number 1: General authority to acquire (repurchase) shares 10. Special resolution number 2: Remuneration of non-executive directors 11. Special resolution number 3: Financial assistance

Please indicate with an “X” in the appropriate spaces provided above how you wish your vote to be cast. If no indication is given, the proxy will be entitled to vote or abstain as he/she deems fit.

Signed at ________________________________________________________________ on ___________________________ 2013.

Signature __________________________________________________________________________________________________

Assisted by me (where applicable) _________________________________________________________________________________

UBUBELE HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1998/011074/06) (“Ububele” or “the Company” or “the Group”)ISIN Code: ZAE000140182 Share Code: UBU

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SUMMARY OF RIGHTS CONTAINED IN SECTION 58 OF THE COMPANIES ACTIn terms of section 58 of the Companies Act:

§ a shareholder of a company may, at any time and in accordance with the provisions of section 58 of the Companies Act, appoint any individual (including an individual who is not a shareholder) as a proxy to participate in, and speak and vote at, a shareholders’ meeting on behalf of such shareholder;

§ a proxy may delegate her or his authority to act on behalf of a shareholder to another person, subject to any restriction set out in the instrument appointing such proxy;

§ irrespective of the form of instrument used to appoint a proxy, the appointment of a proxy is suspended at any time and to the extent that the relevant shareholder chooses to act directly and in person in the exercise of any of such shareholder’s rights as a shareholder;

§ any appointment by a shareholder of a proxy is revocable, unless the form of instrument used to appoint such proxy states otherwise;

§ if an appointment of a proxy is revocable, a shareholder may revoke the proxy appointment by: (i) cancelling it in writing, or making a later inconsistent appointment of a proxy and (ii) delivering a copy of the revocation instrument to the proxy and to the relevant company;

§ a proxy appointed by a shareholder is entitled to exercise, or abstain from exercising, any voting right of such shareholder without direction, except to the extent that the relevant company’s memorandum of incorporation, or the instrument appointing the proxy, provides otherwise; and

§ if the instrument appointing a proxy or proxies has been delivered by a shareholder to a company, then, for so long as that appointment remains in effect, any notice that is required in terms of the Companies Act or such company’s memorandum of incorporation to be delivered to a shareholder must be delivered by such company to:

§ the relevant shareholder; or§ the proxy or proxies, if the relevant shareholder has: (i) directed such company to do so, in writing and (ii) paid any reasonable

fee charged by such company for doing so.

Notes to form of proxy

1. An ordinary shareholder holding dematerialised shares by “own name” registration, or who holds shares that are not dematerialised, may insert the name of a proxy or the names of two alternative proxies of the ordinary 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 proxy form and who is present at the Annual General Meeting will be entitled to act as proxy to the exclusion of those whose names follow. Should a proxy not be specified, this will be exercised by the chairman of the Annual General Meeting. A proxy need not be a shareholder of the Company.

2. An ordinary shareholder is entitled to one vote on a show of hands and, on a poll, to that proportion of the total votes in the Company which the aggregate amount of the nominal value of the shares held by him/her bears to the aggregate amount of the nominal value of all the shares issued by the Company. An ordinary shareholder’s instructions to the proxy must be indicated by inserting the relevant number of votes exercisable by the ordinary shareholder in the appropriate box(es). An “X” in the appropriate box indicates the maximum number of votes exercisable by that shareholder. Failure to comply with the above will be deemed to authorise the proxy to vote or to abstain from voting at the Annual General Meeting as he/she deems fit in respect of the entire shareholder’s votes exercisable thereat. An ordinary shareholder or his/her proxy is not obliged to use all the votes exercisable by the ordinary shareholder, or to cast all those votes exercised in the same way, but the total of the votes cast and in respect whereof abstention is recorder may not exceed the total of the votes exercisable by the ordinary shareholder.

3. If any ordinary shareholder does not indicate on this instrument that his/her proxy is to vote in favour of or against any resolution or to abstain from voting, or give contradictory instructions, or should any further resolution(s) or any amendment(s) which may be properly put before the Annual General Meeting be proposed, the proxy shall be entitled to vote as he/she thinks fit.

4. The completion and lodging of this proxy form will not preclude the relevant shareholder from attending the Annual General Meeting and speaking and voting in person thereat instead of any proxy appointed in terms thereof.

5. Documentary evidence establishing the authority of a person signing the proxy form in a representative capacity must be attached to this form, unless previously recorded by the Company or waved by the chairman of the Annual General Meeting.

6. The chairman of the Annual General Meeting may reject or accept any proxy form which is completed and/or received other than in compliance with these notes.

7. A proxy may not delegate his/her authority to act on behalf of the shareholder, to another person.

8. It is requested that this proxy form should be completed and returned to the Company’s transfer secretaries, Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2017), so as to reach them by no later than 10:00 on Tuesday, 3 December 2013.

9. Should a shareholder lodge the proxy form with the transfer secretaries less than 24 hours before the Annual General Meeting, such shareholder will also be required to furnish a copy of such proxy form to the chairman of the Annual General Meeting before the appointed proxy exercises any such shareholder’s rights at the Annual General Meeting.

ADDITIONAL FORMS OF PROXY ARE AvAILABLE FROM THE TRANSFER SECRETARIES ON REQUEST.

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To:

The Directors

UBUBELE HOLDINGS LIMITED

I/We, ______________________________________________________________________________ the undersigned(please print)

of address _______________________________________________________________________________________

being the registered holder(s) of __________________________________ ordinary shares in the capital of the Company and/or

hereby elect to receive any documents or notices from Ububele, by electronic post, to the extent that the Company is permitted to so distribute any notices, documents, records or statements in terms of the Companies Act, 71 of 2008, as amended, and any and every other statute, ordinance, regulation or rule in force from time to time, including the Listings Requirements of the JSE Limited, concerning companies and affecting Ububele.

I/We hereby furnish the following email address and/or fax number for such electronic communication:

Email address _____________________________________________________________________________________

Fax number ______________________________________________________________________________________

Any written amendment or withdrawal of any such notice of consent by me/us, shall only take effect if signed by me/us and received by the Company.

Signed at ________________________________________________________ on _______________________ 2013.

Signature _______________________________________________________________________________________

Assisted by me (where applicable) ______________________________________________________________________

Please complete and return this election form to Ububele’s Company Secretary, Fusion Corporate Secretarial Services (Pty) Limited PO Box 68528, Highveld, 0169 and fax number: 0866166545 by no later than Tuesday, 3 December 2013.

UBUBELE HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1998/011074/06) (“Ububele” or “the Company” or “the Group”)ISIN Code: ZAE000140182 Share Code: UBU

election form Þ

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Country of incorporation and domicile South Africa

Nature of business and principal activities Investment holdings

Directors Dr MK Makaba

HW Cloete

E Kruger

CA Hall

JT Kleinhans

JD Newton

CH Rickens

SA Roux

Registered office Ground Floor Acorn House

East Wing

Old Oak Office Park

9th Floor Metlife Centre

Cnr. Old Oak & Durban Roads

Bellville

7530

Postal address PO Box 4637

Tyger Valley

7536

Auditors Nolands Inc

Registered auditors

Designated Adviser PSG Capital

Secretary Fusion Corporate Secretarial Services

General information Þ

GREYMATTER & FINCH # 7230

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