mvelaserve prelisting statement

Mvelaserve Limited (Incorporated in the Republic of South Africa)

(Registration number 1999/003610/06) JSE Share code: MVS ISIN: ZAE000151353

(“Mvelaserve” or the “Group”)

PRE-LISTING STATEMENT

The defi nitions and interpretations set out on pages 10 to 14 of this Pre-listing Statement apply mutatis mutandis to this section of the Pre-listing Statement.

Prepared and issued in terms of the Listings Requirements of the JSE Limited relating to the listing of the entire issued share capital of Mvelaserve on the JSE.

Proposed Listing Date on the JSE from the commencement of business on Monday, 29 November 2010

This Pre-listing Statement is not an invitation to the general public to subscribe for or purchase Mvelaserve Ordinary Shares, but is issued in compliance with the Listings Requirements and with the Companies Act for the purposes of giving information to the public with regard to Mvelaserve.

This Pre-listing Statement has been prepared on the assumption that the ordinary and/or special resolutions proposed in the notice of general meeting forming part of the circular to shareholders of Mvela Group dated 27 October 2010, which is enclosed in the same envelope with this Pre-listing Statement, will be passed at the general meeting of shareholders of Mvela Group to be held on Thursday, 18 November 2010, and that the special resolution, if included, is registered at CIPRO, and that the Unbundling (the details of which are reflected in the Mvela Group circular), will accordingly be implemented. This Pre-listing Statement should be read in conjunction with the Mvela Group circular .

The Listing is conditional on:• the registration of the special resolutions passed by Mvelaserve Ordinary Shareholders related to the alteration of the share capital

of Mvelaserve, as detailed in paragraph 39 to this Pre-listing Statement, by CIPRO;• the passing, by Mvela Group shareholders at the Mvela Group combined general meeting, of the requisite resolutions required to approve

the Unbundling; and • the registration of any special resolutions passed by Mvela Group shareholders related to the Unbundling by CIPRO (if required).

At the Listing Date the authorised share capital of Mvelaserve will comprise 500 000 000 Ordinary Shares with no par value. Mvelaserve will have an issued ordinary share capital comprising 141 561 673 Ordinary Shares with no par value. There will be no other class of shares authorised or issued by Mvelaserve at the Listing Date. All the Ordinary Shares in Mvelaserve rank pari passu in all respects, and all have equal rights to participate in capital, dividend and profit distributions by Mvelaserve. The Ordinary Shares are fully paid -up and freely transferrable. Mvelaserve does not have any treasury shares.

Approval of Mvelaserve’s application for the listing of 141 561 673 Ordinary Shares in the “Business Support Services” sector of the JSE lists, under the abbreviated name “Mvelasv” JSE code “MVS” and ISIN: ZAE000151353 has been granted by the JSE, subject to fulfi lment of the conditions precedent referred to on page 9 of this Pre-listing Statement. It is anticipated that the Listing will become effective from the commencement of business on or about Monday, 29 November 2010. .

The Ordinary Shares will only be traded in electronic form and as such all shareholders who elect to receive Ordinary Shares in certificated form will have to dematerialise their certificated Ordinary Shares should they wish to trade therein.

The Directors, whose names are given in the “Corporate information” section of this Pre-listing Statement, collectively and individually, accept responsibility for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this Pre-listing Statement contains all information required by law and the Listings Requirements.

Each of the investment bank and sponsor, legal advisers, reporting accountants and auditors, and transfer secretaries have consented in writing to act in the capacities stated and to their names being included in this Pre-listing Statement and have not withdrawn their consent prior to the publication of this Pre-listing Statement. The reporting accountants and auditors have consented to the inclusion of their reports in the form and context in which they appear and have not withdrawn such consent prior to the publication of this Pre-listing Statement.

Copies of this Pre-listing Statement are only available in English and may be obtained during normal business hours from the date of this Pre-listing Statement until 26 November 2010 from the registered office of Mvelaserve, and the offices of the investment bank and sponsor , the addresses of which are set out in the “Corporate Information” section of this Pre-listing Statement.

Date of issue: Wednesday, 27 October 2010

Investment bank and sponsor Legal advisers Reporting accountants and auditors Debt structuring advisers

IMPORTANT LEGAL NOTES

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Many of the statements included in this Pre-listing Statement are forward-looking statements that involve risks and uncertainties. Forward-looking statements may generally be identified by the use of terminology such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, or similar phrases. Other than statements of historical acts, all statements, including, among others, statements regarding the future financial position of the Mvelaserve, business strategy, projected levels of growth in its market, projected costs, estimates of capital expenditures and plans and objectives of management for future operation, are forward-looking statements. The actual future performance of Mvelaserve could differ materially from these forward-looking statements. Important factors that could cause actual results to differ materially from these expectations include those risks set out in Part E of this Pre-listing Statement headed “Risk factors”, as well as other matters not yet known to the Directors or not currently considered material by them. Forward-looking statements should not be relied on and are deemed to be of no force and effect. Any reliance placed on forward-looking statements should be circumscribed and qualified by the contents of the cautionary statements made in this Pre-Listing Statement. Moreover, unless the Board is required by law or the Listings Requirements to update these statements, they will not update any of these statements after the date of this Pre-listing Statement, either to equate them to actual results or to changes in their expectations.

Special note regarding date of information provided

Unless the context clearly indicates otherwise, all information provided in this Pre-listing Statement is provided as at the Last Practicable Date.

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CORPORATE INFORMATION

Directors of Mvelaserve

M S M Xayiya (Executive Chairman) †J M S Ferreira (Chief Executive Officer)G E R öth (Chief Financial Officer)O A Mabandla * †S Masinga * †N Mbalula * †F N Mantashe * †G D Harlow * †M J Schermers #P A M Mahlangu-Armstrong #Y Z Cuba #

* Independent non-executive

† Appointed as a director of Mvelaserve with effect from the Listing Date.

# Current directors of Mvelaserve who will resign with effect from the Listing Date.

Investment bank and sponsor

Investec Bank Limited(Registration number 1969/004763/06)Second Floor, 100 Grayston DriveSandownSandton, 2196(PO Box 785700, Sandton, 2146)

Reporting accountants and auditors

PKF (Jhb) Inc.(Registration number 1994/001166/21)42 Wierda Road WestWierda ValleySandton, 2169(Private Bag X10046, Sandton, 2146)

Debt structuring advisers

Nedbank Limited(Registration number 1951/0000009/06)135 Rivonia RoadSandownSandton, 2169(PO Box 1144, Johannesburg, 2000)

Company secretary and registered office

Mvelaphanda Management Services (Proprietary) LimitedRegistration number 2000/012781/0728 Eddington CrescentHighveld Technopark, Centurion, 0169(PO Box 67501, Highveld, 0169)

Legal advisers

Cliffe Dekker Hofmeyr Inc.(Registration number 2008/018923/21)1 Protea PlaceSandton, 2196(Private Bag X7, Benmore, 2010)

Transfer secretaries

Computershare Investor Services (Proprietary) Limited(Registration number 2004/003647/07)Ground Floor70 Marshall StreetJohannesburg, 2001

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CONTENTS

Page

IMPORTANT LEGAL NOTES Inside front cover

CORPORATE INFORMATION 1

SALIENT INFORMATION 5

DEFINITIONS AND INTERPRETATIONS 10

PRE-LISTING STATEMENT 1 5

PART A: THE BUSINESS OF MVELASERVE 1 5

1. Nature of business 1 5

2. Key strengths 1 6

3. Mvelaserve’s strategies for growth 1 6

4. Incorporation and history 1 7

5. Group structure and business units 1 8

6. Major and controlling shareholders 23

7. Prospects 24

8. Rationale for listing 24

9. Key investment considerations 25

10. Black economic empowerment 25

11. Information technology 2 5

12. Employees 26

13. Training programmes 26

14. HIV/Aids 27

15. Corporate social investment 27

16. Regulatory environment 27

PART B: MANAGEMENT AND CORPORATE GOVERNANCE 3 2

17. Directors and management 3 2

18. Appointment, qualification, remuneration and borrowing powers of directors 3 5

19. Directors’ interests in the share capital of Mvelaserve 3 6

20. Directors’ interests in transactions 3 6

21. Management lock-in 3 6

22. Corporate Governance 3 6

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PART C: FINANCIAL INFORMATION – HIST ORICAL FINANCIAL INFORMATION, PRO FORMA FINANCIAL INFORMATION AND DIVIDEND POLICY 42

23. Historical financial information 4 2

24. Loan capital and material loans 4 6

25. Dividends and dividend policy 4 6

26. Material changes 4 6

27. Working capital statement 4 6

PART D: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS 4 7

28. Revenue 4 8

29. Operating costs 4 8

30. Operating profit 4 8

31. Depreciation 4 8

32. Employee costs 4 8

33. Finance costs 49

34. Taxation 49

35. Cash flow analysis 49

36. Analysis of statement of financial position 4 9

PART E: RISK FACTORS 50

37. Risks related to Mvelaserve’s business 50

PART F: SHARE CAPITAL 5 3

38. Share capital 5 3

39. Alterations to share capital in the past three years 5 4

40. Ordinary shares issued otherwise than for cash 5 4

41. Options or preferential rights in respect of shares 5 4

42. Previous offers 5 4

PART G: PARTICULARS OF THE LISTING 5 5

43. Listing of Mvelaserve Ordinary Shares on the JSE 5 5

44. Exchange Control Regulations 5 5

45. Dematerialisation of Mvelaserve Ordinary Shares 5 5

46. Strate 5 5

PART H: TAX AND EXCHANGE CONTROL 5 6

47. Taxation issues 5 6

48. Exchange Control 5 9

49. Unbundling 60

50. Tax consequences in respect of the Unbundling 61

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PART I: ADDITIONAL INFORMATION 6 5

51. Restructuring 6 5

52. Information on Subsidiaries 6 5

53. Principal immovable property owned or leased 6 5

54. Property and Subsidiaries acquired or to be acquired and vendors 6 5

55. Disposal of property 6 5

56. Interests of advisers and promoters, and amounts paid or payable to promoters 6 5

57. Material contracts 6 5

58. Material capital commitments 6 6

59. Contingent liabilities 6 6

60. Lease payments 6 6

61. Loan capital and material loans 6 6

62. Litigation statement 6 6

63. Expenses 6 7

64. Commissions paid or payable in respect of underwriting 6 7

65. Consents 6 7

66. Documents available for inspection 6 7

67. Directors’ responsibility statement 6 8

ANNEXURE 1 The Restructuring 6 9

ANNEXURE 2 The audited and reviewed consolidated fi nancial information of Mvelaserve and its Subsidiaries for the year ended 30 Ju ne 2010 and the years ended 30 June 2009 and 30 June 2008, respectively 71

ANNEXURE 3 Reporting accountants’ report on the historical financial information of Mvelaserve and its Subsidiaries 11 7

ANNEXURE 4 Unaudited pro forma statement of comprehensive income and statement of financial position of Mvelaserve 11 9

ANNEXURE 5 Independent reporting accountants’ report on the unaudited pro forma statement of comprehensive income and statement of financial position of Mvelaserve 123

ANNEXURE 6 Particulars and remuneration of the Directors and senior management of Mvelaserve 1 25

ANNEXURE 7 Details of Subsidiary companies and their directors 13 5

ANNEXURE 8 Details of principal immovable properties leased or owned 141

ANNEXURE 9 Material acquisitions and disposals in the preceding 3 years 142

ANNEXURE 10 Details of material borrowings and material loans 143

ANNEXURE 11 Material contracts entered into by Mvelaserve In the 2 years preceding the date of thePre-listing Statement 14 5

ANNEXURE 12 Extracts from the Articles of Association 14 6

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SALIENT INFORMATION

The following information is only a summary of the more detailed information contained in the main body of this Pre-listing Statement, and it may not contain all the information that investors should consider before deciding to invest in the Mvelaserve Ordinary Shares. Investors should read the entire Pre-listing Statement, including the “Risk Factors” and the historical consolidated financial information and other information about Mvelaserve contained herein.

The definitions and interpretations set out in pages 10 to 14 of this Pre-listing Statement apply mutatis mutandis to this “Salient Information” section of the Pre-listing Statement.

OVERVIEW

Mvelaserve is a leading provider of integrated outsourced business support services in South Africa through its network of operating subsidiaries, employing approximately 30 000 people.

The Group offers a wide range of integrated services in the areas of facilities management, security, catering and cleaning. It also provides services in the gambling, pie manufacturing and franchising as well as freight markets. The Group operates under four business units, namely: facilities management, security, catering and cleaning and diversified services.

Mvelaserve has a decentralised management structure to afford substantial autonomy to the business units where the focus is on expansion through growth.

Mvelaserve’s operating principles are:

• autonomy of the individual subsidiaries under skilled entrepreneurial, experienced and decentralised operational management;

• leadership and support from an experienced team of corporate executives;

• strong fi nancial management and operating systems at subsidiary level, with a strong focus on corporate governance practices;

• diversifi cation of service offerings;

• maximising cross-selling opportunities via the client relationship management system developed by the corporate office; and

• group procurement activities.

Mvelaserve’s intention is to become the leading provider of integrated outsourced business support services to South Africa and the rest of the continent.

KEY STRENGTHS

Mvelaserve’s key strengths include:

• Balanced business portfolio

Mvelaserve has a balanced portfolio across its markets and regions of operation. It has a balanced client portfolio, including both private sector and government organisations.

• Proven financial performance

Mvelaserve has consistently achieved significant year-on-year growth, margin enhancement and increased profitability. This has resulted in strong cash flows and improved returns to shareholders.

• Operational advantages

Mvelaserve’s operational advantages include, inter alia:

• well established and recognised brands;

• strong portfolio of blue chip clients;

• leading position in attractive markets;

• preferred supplier status in many industries;

• established national footprint;

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• experienced, strong entrepreneurial and skilled senior management, with a proven track record;

• diversified offering of outsourced services ;

• a committed and loyal workforce;

• consistently strong corporate governance practices;

• long-standing business relationships;

• entrenched cross-selling capability; and

• thorough understanding of the markets in which it operates.

• Empowerment credentials

Currently as a result of the 100% shareholding by Mvela Group, Mvelaserve has an effective 68.5% BEE shareholding excluding Mandated Investments ( 45.4% BEE shareholding including Mandated Investments). Immediately after the Listing and Unbundling, Mvelaserve will have the same ordinary shareholder profile as Mvela Group, giving it an equally strong BEE ownership platform.

STRATEGIES FOR GROWTH

Mvelaserve’s strategy is to continue to grow and build the business into the recognised leader in integrated outsourced business support services in South Africa and the rest of the continent. This will be achieved by:

• Optimising profitability of established businesses

Mvelaserve intends to continue its ongoing business optimisation programmes, strengthening margins, empowering the management teams of each subsidiary, and seeking to maximise shareholder returns.

• Improving market positioning

Mvelaserve aims to maintain its recognised leadership in the integrated outsourced business support services market. Mvelaserve continually seeks opportunities to further strengthen its position as a market leader, and is confident that the Group is well-positioned to benefit from recovering economic growth in South Africa and the rest of the continent.

• Organic expansion

Mvelaserve intends to penetrate new markets leveraging off its BEE platform and client base.

• Growing through strategic acquisitions

Mvelaserve seeks to grow though investing in businesses with the potential to enhance the current service offering while growing free cash flow and return on investment.

• Expanding the Group’s footprint into the continent of Africa

Mvelaserve aims to leverage off its well -established, recognised brands to expand the Group’s footprint on the rest of the continent. This will initially be achieved by following the Mvelaserve client base and establishing separate decentralised businesses with select local partners in the target countries.

SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION

The summarised consolidated statement of comprehensive income and statement of financial position of Mvelaserve and its subsidiaries for the financial years end ed 30 June 2010 and 2009 are set out below.

This information has been extracted from the audited consolidated financial statements included in Annexure 2 to this Pre-listing Statement. This information should be read in conjunction with such financial statements and the related notes.

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Summarised consolidated statement of comprehensive income

12 months ended 30 June 2010 2009(R’000) (Audited) (Reviewed)

Revenue 4 061 998 3 601 257

Profit from operations 291 287 190 59 2Net finance costs (60 494) (92 383)Fair value adjustments and net loss from investments (2 726) (40 564) Share of profits from associates 6 075 3 463

Profit before tax 234 14 2 61 108Taxation (80 282) (72 753)

Profit/( Loss) for the year from continuing operations 153 86 0 (11 645)Profit for the year from discontinued operations 1 155 1 533

Total comprehensive income for the year 155 015 (10 112)

Attributable to:

Ordinary shareholders 151 798 (12 473)Minority shareholders 3 217 2 361

Weighted average number of ordinary shares in issue 100 100Earnings per ordinary share (R’000) 1 518 (125)Headline earnings per ordinary share (R’000) 1 51 4 (143)Diluted earnings per ordinary share (R’000) 1 518 (125)Diluted headline earnings per ordinary share (R’000) 1 51 4 (143)

Additional information

EBITDA (R’000) 400 970 296 243Operating profit margin 7.2% 5.3%EBITDA margin 9.9% 8.2%Profit before taxation margin 5.8% 1.7%Revenue growth 12.8% Operating profit growth 52.8% EBITDA growth 35.4% Profit before taxation growth 283.2%

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Summarised consolidated statement of financial position

At 30 June 2010 2009(R’000) (Audited) (Reviewed)

ASSETS

Non- current assets 975 10 5 928 440

Property, plant and equipment 387 619 312 602Intangible assets 545 33 5 54 4 000Other non-current assets 42 15 1 71 838

Current assets 1 753 501 1 417 826

Trade and other receivables 763 87 6 705 467Trade and other receivables – Mvela Group 97 878 97 878Cash and cash equivalents 374 809 210 251Other current assets 516 938 404 230

Assets in disposal group held for sale 5 045 –

Total assets 2 733 651 2 346 266

EQUITY AND LIABILITIES

Capital and reserves 233 30 0 78 899

Shareholders’ equity 2 27 817 76 019Distributable reserves 5 483 2 879

Non-current liabilities 1 367 158 1 179 327

Interest bearing liabilities – preference share funding 482 438 482 438Non -interest bearing liabilities – Mvela Group 722 117 566 362Other non-current liabilities 162 60 3 130 527

Current liabilities 1 133 19 3 1 088 042

Trade and other payables 793 73 6 748 003Interest bearing liabilities – Mvela Group 100 478 93 560Other current liabilities 238 979 246 479

Liabilities in disposal group held for sale – –

Total equity and liabilities 2 733 651 2 346 266

Net number of ordinary shares in issue 100 100Net asset value per ordinary share (R’000) 2 278 7 60 Net tangible assets per ordinary share (R’000) (3 550 ) (5 010)

PROSPECTS

The outsourced business support services industry in South Africa is intrinsically linked to the growth in global gross domestic product (“GDP”) as well as South African GDP, particularly as it relates to business and consumer growth. After the adverse economic conditions created by the global financial crisis experienced in the past two years, South Africa appears to be on the path to economic recovery. However, the rate thereof remains uncertain. Improved fundamentals of a lower interest rate, and lower inflation environment, and improved consumer demand will assist in speeding up the recovery.

It is the opinion of the Directors that as primarily business-to-business outsourced support service providers, with some exposure to the consumer market, Mvelaserve was not adversely affected by the global financial crisis in the past two years and is well positioned to take further advantage of economic growth in South Africa and the rest of the continent. The Group will continue to seek to partner with clients in the management of their assets, affording clients the room to concentrate on their core business, while Mvelaserve delivers a value-for-money basket of non-core services. Mvelaserve will, with strategic acquisitions, internal development and internal growth, improve service offerings to its client base.

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THE UNBUNDLING

Subject to the fulfilment of the conditions precedent set out in the paragraph below, Mvela Group will distribute the Mvelaserve Ordinary Shares to its shareholders by way of the Unbundling, which Ordinary Shares will be listed in the “Business Support Services” sector of the Main Board of the JSE. All Mvela Group Ordinary Shareholders will receive 25 Mvelaserve Ordinary Shares for every 100 Mvela Group Shares held by them on the Record Date , on the assumption that all Mvela Group preference shares are converted into Mvela Group Shares to the extent that all Mvela Group preference shares are not converted into Mvela Group Ordinary Shares, the provisional entitlement ratio of 25 Mvelaserve Ordinary Shares for every 100 Mvela Group Shares, will change. The entitlement ratio will be confirmed or, revised, as the case may be, in the Mvela Group finalisation announcement which is expected to be released on SENS on or about Friday, 19 November 2010.

The Unbundling will be in terms of section 90 of the Companies Act, the relevant provisions of the Listings Requirements and section 46 of the Income Tax Act. The Unbundling will be implemented such that each beneficial owner of Mvela Group Shares will become a beneficial owner of unbundled Mvelaserve Ordinary Shares.

CONDITIONS PRECEDENT

The JSE has approved the Listing subject to the following conditions precedent:

• the registration of the special resolutions passed by Mvelaserve Ordinary Shareholders related to the alteration of the share capital of Mvelaserve, as detailed in paragraph 39 to this Pre-listing Statement, by CIPRO;

• the passing by Mvela Group Ordinary Shareholders at the Mvela Group Combined General Meeting of the requisite resolutions required to approve the Unbundling; and

• the registration by CIPRO of any special resolution required to be passed in connection with the Unbundling.

RISK FACTORS

The section of this Pre-listing Statement entitled “Risk Factors” describes certain risk factors that should be considered together with the other information in this Pre-listing Statement before making a decision to invest in the listed Mvelaserve Ordinary Shares post the Listing. Although information has been provided in this Pre-listing Statement in relation to Mvelaserve Ordinary Shares, a Prospective Investor should use his or her own judgment and seek advice from an independent financial adviser as to the appropriate value of Mvelaserve Ordinary Shares.

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DEFINITIONS AND INTERPRETATIONS

In this Pre-listing Statement, unless the context indicates otherwise, the words in the first column shall have the meanings assigned to them in the second column, the singular includes the plural and vice versa, an expression which denotes one gender includes the other genders, a natural person includes a juristic person and vice versa and cognate expressions shall bear corresponding meanings.

“Articles” or “Articles of Association” the articles of association of Mvelaserve;

“BBBEE Act” the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, as amended;

“BEE” black economic empowerment, as defined in the BBBEE Act;

“BMO Food Services” BMO Food Services (Proprietary) Limited (registration number 1998/013348/07), a private company duly incorporated in South Africa and wholly-owned by King Pie Holdings;

“Board of Directors”, “Board” or the board of directors of Mvelaserve at the Listing Date and whose names “Directors” are given in the Corporate Information section of this Pre-listing Statement;

“Business Day” any day other than a Saturday, Sunday or an official public holiday in South Africa;

“CEMS” Central Electronic Monitoring System, a system established by the National Gambling Board to monitor and record gambling revenue from LPM’s, to ensure that correct gaming levies and taxes are collected by the regulator while the players are protected at the same time;

“Certificated Ordinary Shares” Ordinary Shares that have not been Dematerialised;

“CGT” Capital Gains Tax as levied in terms of the Eighth Schedule to the Income Tax Act;

“CIPRO” Companies and Intellectual Property Registration Office;

“Cliffe Dekker Hofmeyr” Cliffe Dekker Hofmeyr Inc. (registration number 2008/018923/21), a company duly incorporated in South Africa, being the legal advisers of Mvelaserve;

“Closed Periods” closed periods as defined in the Listings Requirements;

“Codes” the Codes of Good Practice on Broad-Based Black Economic Empowerment, issued by the Minister of Trade and Industry in South Africa and gazetted on 9 February 2007, specifying empowerment measurement principles and targets consistent with the objectives of the BBBEE Act;

“Common Monetary Area” South Africa, the Republic of Namibia and the Kingdoms of Swaziland and Lesotho;

“Companies Act” the Companies Act, No. 61 of 1973, as amended;

“Competition Act” the Competition Act, No. 89 of 1998, as amended;

“Contract Forwarding” Rebhold Freight Services 2000 (Proprietary) Limited (registration number 1987/000113/07), a private company duly incorporated in South Africa, trading as Contract Forwarding, and wholly-owned by Mvelaserve;

“CPA” the Consumer Protection Act, No. 68 of 2008, as amended;

“CSDP” Central Securities Depository Participant, a participant as defined in section 1 of the Securities Services Act, No. 36 of 2004, as amended;

“Debt Restructure” the process of replacing the preference share funding of Mvelaserve as per the historical financial information for the year ended 30 June 2010, as presented in Annexure 2 to this Pre-listing Statement, with new debt from Nedbank Limited;

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“Dematerialise” the process whereby physical share certificates are replaced with electronic records evidencing ownership of shares for the purpose of Strate, being “uncertificated securities” as defined in section 91A of the Companies Act;

“Dematerialised Ordinary Shares” Ordinary Shares that have been Dematerialised;

“dividend cover” the ratio obtained by expressing after-tax earnings per share as a fraction of dividends paid per share;

“Dividend Tax Legislation” means Part VIII of Chapter II of the Income Tax Act as initially promulgated by section 56(1) of Act No 60 of 2008 and subsequently amended;

“documents of title” share certificates, certified transfer deeds, balance receipts or any other documents of title to certificated shares;

“EBITDA” earnings before interest, taxation, depreciation and amortisation;

“Employment Equity Act” the Employment Equity Act, No. 55 of 1998, as amended;

“entitlement ratio” the fi nal number of Mvelaserve Ordinary Shares to which a Mvela Group Ordinary Shareholder is entitled, pursuant to the Unbundling for every 100 Mvela Group Shares held by the Mvela Group Ordinary Shareholder on the Record Date;

“Exchange Control Regulations” the Exchange Control Regulations of South Africa, as amended, promulgated in terms of section 9 of the South African Currency and Exchanges Act, No. 9 of 1933, as amended;

“Excon” the Exchange Control Department of the South African Reserve Bank;

“Gambling Act” the National Gambling Act, No. 7 of 2004, as amended;

“HDSA” historically disadvantaged South Africans;

“HIV/AIDS” Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome;

“IFRS” International Financial Reporting Standards issued by the International Accounting Standards Board, as amended from time to time;

“Income Tax Act” the Income Tax Act, No. 58 of 1962, as amended;

“Investec Bank” Investec Bank Limited (registration number 1969/004763/06), a public company duly incorporated in South Africa, whose shares are listed on the JSE, being the investment bank and sponsor to Mvelaserve;

“JSE” JSE Limited (registration number 2005/022939/06), a public company duly incorporated in South Africa, which is licensed to operate an exchange under the Securities Services Act, No. 36 of 2004, as amended;

“Khuseti” or “Khuseti Holdings” collectively, King Pie Holdings and BMO Food Services;

“King Code” the South African Code of Corporate Practices and Conduct as set out in the third King Report on Corporate Governance;

“King Pie Holdings” King Pie Holdings (Proprietary) Limited (registration number 1997/008676/07), a private company duly incorporated in South Africa, and wholly-owned by Mvelaserve;

“Last Practicable Date” close of business, Wednesday, 20 October 2010 , being the last practicable date prior to fi nalisation of this Pre-listing Statement;

“limited payout machines” gambling machines outside of a casino in respect of the playing of which the stakes or “LPM’s” and prizes are limited as prescribed by the gambling regulations;

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“Listing” the admission of the Mvelaserve Ordinary Shares to the list maintained by the JSE of securities admitted to listing and trading on the exchange operated by the JSE;

“Listing Date” the date upon which Mvelaserve lists its Ordinary Shares on the exchange operated by the JSE, which is expected to be on or about Monday, 29 November 2010;

“Listings Requirements” the listings requirements of the JSE;

“ management” the senior management of Mvelaserve;

“Mandated Investments” any investments made by or through any third party regulated by legislation on behalf of the actual owner of the funds pursuant to a mandate given by the owner of the funds, whose mandate is governed by that legislation. Mandated investments include investments by pension funds and unit trusts;

“Memorandum” or “Memorandum the memorandum of association of Mvelaserve; of Association”

“Mvela Group” Mvelaphanda Group Limited (registration number 1995/004153/06), a public company duly incorporated in South Africa whose shares are listed on the JSE, which, prior to the Listing and Unbundling, holds 100% of Mvelaserve Ordinary Shares;

“Mvela Group circular” the circular to shareholders of Mvela Group, dated 2 7 October 2010 , enclosed and posted in the same envelope with this Pre-listing Statement;

“Mvela Group Combined General the combined meeting of Mvela Group shareholders convened, in terms of the Meeting” notice of combined general meeting attached to and forming part of the Mvela

Group circular, to vote on the special and ordinary resolutions required to implement the Unbundling, which will take place at Melrose Arch Hotel, High Street, Melrose Arch, Johannesburg at 10:00 on Thursday, 18 November 2010;

“Mvela Group Ordinary Shareholders” the registered holders of Mvela Group Shares, from time to time;

“Mvela Group Shares” ordinary shares with a par value of R0.001 each in the issued share capital of Mvela Group;

“Mvelaphanda Holdings” Mvelaphanda Holdings (Proprietary) Limited (registration number 1999/011391/07), a private company duly incorporated and registered in South Africa and currently a shareholder of Mvela Group;

“Mvelaphanda Management Services” Mvelaserve Management Services (Proprietary) Limited (registration number or “MMS” 2000/012781/07), a private company duly incorporated in South Africa, and

wholly-owned by Mvelaserve;

“Mvelaserve” Mvelaserve Limited (1999/003610/06), a public company duly incorporated in South Africa;

“Mvelaserve Group” or “Group” Mvelaserve, and any company which is a Subsidiary of Mvelaserve ;

“Mvelaserve Ordinary Shares” or ordinary shares with no par value in the issued share capital of Mvelaserve;“Ordinary Shares”

“Mvelaserve Ordinary Shareholder” the registered holders of Mvelaserve Ordinary Shares, from time to time;

“NAV” net asset value;

“Nedbank Limited” or “Nedbank” Nedbank Limited (registration number 1951/0000009/06), a public company duly incorporated and registered in South Africa;

“New Companies Act” the Companies Act, No. 71 of 2008, as amended, which has been promulgated and will eventually replace the Companies Act upon coming into force;

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“NGB” the National Gaming Board, a regulatory board established by the National Gambling Act, No. 7 of 2004, as amended, charged with the responsibility of overseeing and regulating the gambling industry in South Africa;

“New Companies Act” the Companies Act, No. 71 of 2008, as amended, which has been promulgated and will eventually replace the Companies Act upon coming into force;

“Participant” a central securities depository participant, in terms of the Securities Services Act;

“PKF” PKF (Jhb) Inc, Registered Accountants and Auditors, Chartered Accountants (SA) (registration number 1994/001166/21), a company duly incorporated in South Africa, being the reporting accountants and auditors of Mvelaserve;

“Pre-listing Statement” this pre-listing statement and its annexures, dated 27 October 2010;

“Prospective Investor” investors who will acquire Mvelaserve Ordinary Shares as a result of the Unbundling, or who wish to acquire Mvelaserve Ordinary Shares after the Listing;

“Protea Coin” or “Protea Coin Group” collectively, Protea Coin Group (Technical and Physical Security) (Proprietary) Limited (registration number 1999/001641/07), and Protea Coin Group (Assets-in-transit and Armed Reaction) (Proprietary) Limited (registration number 1999/003646/07), private companies duly incorporated in South Africa, and wholly-owned by Mvelaserve;

“PSIRA” Private Security Industry Regulatory Authority of South Africa;

“Rand” or “R” the lawful currency of South Africa;

“Record Date” the last date on which Mvela Group Ordinary Shareholders are required to be recorded in the register as such in the Mvela Group register in order to participate in the Unbundling, which is expected to be the close of business on Friday, 3 December 2010 or such date as may be later amended;

“Restructuring” the restructuring activities prior to the Listing Date, including the acquisition of Zonke by Mvelaserve from Mvela Group, settlement of all inter-company loans between Mvelaserve Group and Mvela Group, and the sale of Mvelaserve Group’s investment in Stamford Sales to Mvela Group, as detailed in Annexure 1 to this Pre-listing Statement;

“Royalserve Catering” Royalserve Catering (Proprietary) Limited (registration number 1994/005030/07 ), a private company duly incorporated in South Africa, and wholly-owned by Mvelaserve;

“Royalserve Cleaning” Royalserve Cleaning (Proprietary) Limited (registration number 2000/011155/07), a private company duly incorporated in South Africa, and wholly-owned by Mvelaserve;

“SABS” South Africa Bureau of Standards;

“SARB” South African Reserve Bank;

“Securities Services Act” the Securities Services Act, No. 36 of 2004, as amended;

“SENS” the Securities Exchange News Service of the JSE;

“Stamford Sales” Rebhold Distribution Services (registration number 1987/000472/07 ), a private company duly incorporated in South Africa;

“STC” Secondary Tax on Companies levied in terms of section 64B of the Income Tax Act or any similar taxing provision;

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“Strate” Strate Limited (registration number 1998/022242/06), a public company duly incorporated in South Africa, being the company responsible for operating the electronic settlement system for transactions that take place on the JSE and off-market transactions;

“Strate System” a clearing and settlement environment for security transactions to be settled and transfer of ownership to be recorded electronically, managed by Strate;

“Subsidiary” a subsidiary as defined in the Companies Act;

“Telkom” Telkom SA Limited (registration number 1991/005476/06), a public company duly incorporated in South Africa whose shares are listed on the JSE;

“TFMC” TFMC Holdings (Proprietary) Limited (registration number 2000/001009/07), a private company duly incorporated in South Africa, being the holding company of the companies operating under the TFMC brand, and wholly-owned by Mvelaserve;

“Transfer secretaries” Computershare Investor Services (Proprietary) Limited (registration number 2004/003647/07), a private company duly incorporated in South Africa;

“Unbundling” the proposed distribution by Mvela Group to Mvela Group ordinary shareholders, of Mvelaserve Ordinary Shares, equating to 100% of the entire issued ordinary share capital of Mvelaserve, which will be implemented in terms of section 46 of the Income Tax Act, following the Listing;

“VAT” value-added tax levied in terms of the South African Value-Added Tax Act, 1991 (Act 89 of 1991), as amended or replaced from time to time;

“Zonke” or “Zonke Monitoring Zonke Monitoring Systems (Proprietary) Limited (registration number Systems” 2000/017501/07), a private company duly incorporated in South Africa,

and seventy-five percent (75%) owned by Mvelaserve after the Restructuring; and

“Zonke acquisition” the acquisition of 75% of the issued share capital of Zonke from Mvela Group by Mvelaserve, as fully described in Annexure 1 to this Pre-listing Statement.

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Mvelaserve Limited(Incorporated in the Republic of South Africa)

(Registration number 1999/003610/06)JSE Share code: MVS ISIN: ZAE000151353

(“Mvelaserve” or the “Group”)

PRE-LISTING STATEMENT

In this Pre-listing Statement, unless otherwise stated or the context clearly indicates otherwise, the words in the definitions and interpretations section shall have the meanings stated therein, words in the singular shall include the plural and vice versa, words importing one gender shall include the other genders and references to persons shall include juristic persons and vice versa.

PART A: THE BUSINESS OF MVELASERVE

1. NATURE OF BUSINESS

Mvelaserve is a leading provider of integrated outsourced business support services in South Africa through its network of operating subsidiaries, employing approximately 30 000 people.

Mvelaserve offers a wide range of integrated services in the areas of facilities management, security, catering and cleaning. It also provides services in the gambling, pie manufacturing, franchising and freight markets.

The Group operates four business units, namely:

• facilities management;

• security;

• catering and cleaning; and

• diversified services.

Mvelaserve has a decentralised management structure to afford substantial autonomy to the business units where the focus is on organic growth as well as expansion of its service offerings.

Mvelaserve’s operating principles are:

• autonomy of the individual subsidiaries under skilled, entrepreneurial, experienced and decentralised operational management;

• leadership and support from an experienced team of corporate executives;

• strong financial management and operating systems at subsidiary level, with a strong focus on corporate governance practices;

• diversifi cation of service offerings;

• maximising cross-selling opportunities via the client relationship management system developed by the corporate office; and

• group procurement activities.

Mvelaserve’s intention is to become the leading provider of integrated outsourced business support services to South Africa and the rest of the continent.

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2. KEY STRENGTHS

Mvelaserve’s key strengths include:

• Balanced business portfolio

Mvelaserve has a balanced portfolio across its markets and regions of operation. It has a balanced client portfolio, including both private sector and government organisations.

• Proven financial performance

Mvelaserve has consistently achieved significant year-on-year growth, margin enhancement and increased profitability. This has resulted in strong cash flows and improved returns to shareholders.

• Operational advantages

Mvelaserve’s operational advantages include, inter alia:

• well established, recognised brands;

• strong portfolio of blue chip clients;

• leading position in attractive markets;

• preferred supplier status in many industries;

• established national footprint;

• experienced, entrepreneurial and skilled senior management, with a proven track record;

• diversified offering of outsourced services;

• committed and loyal workforce;

• consistently strong corporate governance practices;

• long-standing business relationships;

• entrenched cross-selling capability; and

• thorough understanding of the markets in which it operates.

• Empowerment credentials

Currently as a result of the 100% shareholding by Mvela Group, Mvelaserve has an effective 68.5% BEE shareholding excluding Mandated Investments ( 45.4% BEE shareholding including Mandated Investments). Immediately after the Listing and Unbundling, Mvelaserve will have the same shareholder profile as Mvela Group, giving it an equally strong BEE ownership percentage.

3. MVELASERVE’S STRATEGIES FOR GROWTH

Mvelaserve services a broad range of companies in various sectors, including infrastructure, financial, retail, public sector, mining, telecommunication and construction . The Group is well positioned to benefit from the growth of these and other industries once positive sentiment returns to the global and local economy.

Mvelaserve’s strategy is to continue to grow and build the business into the recognised leader of integrated outsourced business support services in South Africa and the rest of the continent.

This will be achieved by:

• Optimising profitability of established businesses

Mvelaserve intends to continue its ongoing business optimisation programmes, strengthening margins, empowering the management teams of each subsidiary and seeking to maximise shareholder returns.

• Improving market positioning

Mvelaserve aims to maintain its recognised leadership status in the integrated outsourced business support services markets. Mvelaserve continually seeks opportunities to further strengthen its position as a market leader and is confident that the Group is well-positioned to benefit from recovering economic growth in South Africa and the rest of the continent.

• Organic expansion

Mvelaserve intends to penetrate new markets leveraging off its BEE platform and client base.

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• Growing through strategic acquisitions

Mvelaserve seeks to grow through investing in businesses with the potential to enhance the current service offering while growing free cash flow and return on investment.

• Expanding the Group’s footprint into the continent of Africa

Mvelaserve aims to leverage off its well established, recognised brands to expand the footprint on the rest of the continent. This will initially be achieved by following the Mvelaserve client base and establishing separate decentralised businesses with select local partners in the target countries.

4. INCORPORATION AND HISTORY

Mvelaserve was incorporated and registered in South Africa in 1999 as a private limited liability company under the Companies Act, with the name Lexshell 296 Investment Holdings (Proprietary) Limited and registration number 1999/003610/07. In 2000 it was converted to a public limited liability company and its name was changed to Rebserve Limited (“Rebserve”). In 2005 its name was again changed to “Mvelaserve”. The business of the company, and its principal activity, is to act as an investment holding company to a number of subsidiary companies that provide outsourced business support services in the areas of facilities management, security, catering, cleaning and other diversified services. The registered address and head office of the Company is 28 Eddington Crescent, Highveld Technopark, Centurion, 0169, South Africa.

Mvelaserve has not changed its name in the last three years preceding this Pre-listing Statement.

History

1995 – 2003

Rebhold Holdings Limited (“Rebhold”) was incorporated in South Africa on 12 May 1995 under the name Gainer Investments (Proprietary) Limited as an investment holding company. Rebhold held investments in businesses which covered a diversified range of distribution activities primarily in the liquor, food and freight forwarding industries.

From 1997 to 1998, Rebhold grew both organically and by acquiring businesses in its key areas of expertise, to create one of the leading wholesale and distribution groups in South Africa. During this time the businesses of Royal Food Services (Proprietary) Limited and Stamford Sales were acquired.

Rebhold identified the services sector as one which offered good growth prospects while generating strong cash flows, and developed a strategy to create South Africa’s leading services group through its wholly-owned subsidiary Rebserve, which was incorporated on 19 February 1999. Rebhold had already developed an expertise in operating services businesses through its food services and freight forwarding businesses which had been acquired at the time of the initial public listing in 1996.

In August 1999, Rebserve acquired the business of Coin Security and in November 1999 agreement was reached with Molope Group Limited (“Molope”) for Rebserve to acquire certain profi table services businesses from Molope. These businesses included JIC Mining Services (Proprietary) Limited, Trollope Mining Services (Proprietary) Limited, Protea Security Services and Mining Residential Services (Proprietary) Limited. Khuseti Holdings (the holder of the master franchise of the King Pie brand) was acquired in 1999.

TFMC was established in 2000 through the outsourcing of the property and facilities management functions of Telkom as a joint venture between WS Atkins plc, a support services group based in the United Kingdom, and Rebserve.

The cleaning business was strengthened with the acquisition of the Berco Cleaning and Mediguard brands in 2001.

By 2001 Rebserve had become a leading outsource services group in South Africa which offered a comprehensive range of facilities management, professional services, mining services, technical services, food services and support services to the corporate, industrial and mining sectors.

In 2003, Rebserve acquired Sechaba Afrika (Proprietary) Limited, the outsourced catering business.

Zonke won the NGB’s sole CEMS contract in November 2003.

2004 – 2008

In December 2003 Rebhold and Mvelaphanda Holdings merged certain of the businesses and assets of Mvelaphanda Holdings and Rebserve, and in 2004 the merged entity was renamed “Mvelaphanda Group”. Mvela Group then positioned itself as South Africa’s foremost black-controlled, owned and managed diversified services group.

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TFMC became a wholly-owned subsidiary of Rebserve in 2004 after WS Atkins plc disposed of their interest in the joint venture.

With effect from 23 December 2005, the Rebserve changed its name from Rebserve to Mvelaserve Limited.

In 2007 the businesses of Protea Security and Coin Security, which were previously managed separately with no cross -selling of services, were merged under one operating entity, namely Protea Coin. The merger of the two security businesses was a strategic move to create an entity capable of offering an integrated set of security services to the South African market, including integrated guarding services, assets-in-transit, armed reaction, risk management and technical security solutions.

In 2008 Mvelaserve undertook a restructuring whereby the current divisions of facilities management, security, catering and cleaning and diversified services were established. This was done to provide greater autonomy to the major outsourcing business units where the focus would be on the organic growth of existing service offerings and client bases.

2009

In June 2009 Mvelaserve was used as the vehicle to manage the operating entities separately from Mvela Group and a separate management team was established in Mvelaserve to lead and support the Subsidiaries, ensuring continued growth of Mvelaserve and its Subsidiaries. In October 2009 the businesses of Royal Sechaba and Mvelaserve Cleaning were merged under one management team and the name was subsequently changed to Royalserve operating under the brand names of Royalserve Catering and Royalserve Cleaning.

In September 2009, Mvela Group announced to its shareholders that it would pursue a process of unlocking value for its shareholders in the most effi cient manner. As part of this process, the board of directors of Mvela Group considered different alternatives to realise value from its investment in Mvelaserve. The board of directors of Mvela Group concluded that a listing of the Mvelaserve Ordinary Shares on the JSE, and the unbundling by Mvela Group of all of its Mvelaserve Ordinary Shares to Mvela Group Ordinary Shareholders would best serve the interests of its shareholders .

5. GROUP STRUCTURE AND BUSINESS UNITS

5.1 Group structure

The following chart provides an overview of Mvelaserve’s operational structure subsequent to the Restructure on the Last Practicable Date:

Mvelaphanda Management Service is the company secretary of Mvelaserve Group, as detailed in the “Corporate Information” section of this Pre-Listing S tatement.

75%

MvelaphandaManagement

Services*

FacilitiesManagement

SecurityCleaning and

CateringDiversifi ed Services

100%

100% 100% 100% 100% 100%

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5.2 Business Units

Mvelaserve has a well-balanced and diversifi ed portfolio of businesses servicing many different industries and geographies. The following table illustrates Mvelaserve’s businesses with its four business segments: Facilities Management, Security, Cleaning and Catering, and Diversifi ed services. Revenue and EBITDA totals are provided for the year s ended 30 June 2010 and 30 June 2009, on a pro forma basis and include the results of Zonke, which was acquired by Mvelaserve subsequent to 30 June 2010 in terms of the Restructuring.

Financial information for year ended 30 June (R million)Business Description 2010 2009

Consolidated

• corporate head office located in Centurion, Consolidated 4 11 2 3 5 09 South Africa, responsible for the Group, revenue strategy support, procurement and risk Consolidated 4 48 371 management EBITDA

(excluding headoffice costs)

Facilities Management

• the largest facilities management company in Revenue 1 106 1 1 08 South Africa % group revenue 26. 9% 31. 6% • specialises in infrastructure project support EBITDA 179 188 services % group EBITDA 4 0. 0% 50.7%

Security

• a market-leading provider of integrated Revenue 1 57 7 1 263 security solutions % group revenue 3 8. 4% 37.1% • specialises in asset-in-transit security and EBITDA 17 4 106 guarding % group EBITDA 38.8% 28.6%

Cleaning and Catering

• cleaning which focuses on contract cleaning, Revenue 1 0 88 75 6 specialised healthcare cleaning, and industrial % group revenue 2 6. 5% 21. 5% cleaning services • catering which focuses on contract food EBITDA 40 3 9 solutions, and central kitchen facilities % group EBITDA 8.9% 10.5%

Diversified Services

• franchisor of the King Pie brand and owner of Revenue 159 153 BMO Food Services which manufactures the % group revenue 3. 9% 4. 4% King Pie product range EBITDA 29 1 4 % group EBITDA 6. 5% 3.8%

• freight forwarding and customs clearance agents Revenue 13 2 17 6 for the import and export markets % group revenue 3.2% 5.0% • branches in Johannesburg, Cape Town and EBITDA 5 5 Durban % group EBITDA 1.1% 1. 3%

• monitors the LPM industry in South Africa in Revenue 50 5 3 terms of a contract signed with the NGB % group revenue 1.2% 1.5% EBITDA 2 1 19 % group EBITDA 4. 7% 5. 1%

5.2.1 Facilities Management – TFMC

Overview

TFMC is the largest facilities management company in South Africa by square metres covered, providing comprehensive facilities management services.

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TFMC aims to selectively grow differentiated businesses to build a portfolio of strong client partnerships in the private and the public sectors, yielding sustainable profits and cash by using systems and expertise developed from first-order facilities management outsourcing in the telecommunications industry.

The business is comprised of two divisions, namely Telkom and Customised Solutions.

• Telkom – TFMC’s main client, Telkom, accounted for approximately 89% of its revenue for the year ended 30 June 2010.

TFMC provides total integrated facilities management services to Telkom in respect of 1 979 sites with a total of 8 000 properties (in excess of 2.3 million square metres), 135 retail sites, 11 435 masts and all ancillary telecommunications infrastructure. Many of these facilities are mission critical to Telkom and are maintained on a 24-hour, 365-days per year basis. The business has a national footprint across 32 regional offices.

Total integrated facilities management services provided to Telkom include facilities management, corporate real estate management, professional engineering services and project management, and maintenance.

TFMC has had extensive experience and intellectual property through its contract with Telkom, establishing it as the preferred facilities management service provider to Telkom.

In July 2010, Mvelaserve (through Mvela Group) announced an extension of its agreement with Telkom for the period 1 April 2011 to March 2016. The new agreement was signed in August 2010.

• Customised Solutions – other facilities management contracts are grouped under Customised Solutions. Clients that are being serviced under Customised Solutions comprise clients from a wide range of sectors, including the Department of Trade and Industry, Cell C (Proprietary) Limited, Kumba Iron Ore Limited and South African Bureau of Standards. Customised Solutions also has various clients in the infrastructure project support services sector which supplies catering and facilities management services to clients in remote sites and to clients requiring catering and village management services in support of major infrastructure projects. With the development of large infrastructure projects in South Africa and on the rest of the continent, Customised Solutions is well positioned to grow in this market sector.

In line with Mvelaserve’s strategy to use the existing contract base to grow new business, the Customised Solutions pipeline is full of opportunities. A focus on these opportunities should enable TFMC to reduce its reliance on the agreement with Telkom .

TFMC’s key strengths include:

• demonstrated ability to deliver value for money and improvements in service levels with associated cost savings for clients;

• financial capacity and capability;

• leading integrated information technology service platform (SAP) with transportable processes which can integrate with local operating platforms;

• extensive intellectual property associated with the Telkom agreement;

• extensive management and employee resources;

• positive record with employees and trade unions; and

• national experience with an extended scope of services offered over the entire footprint of South Africa.

5.2.2 Security – Protea Coin

Protea Coin is the leading provider of integrated risk reduction solutions to various industry sectors throughout South Africa, with a total workforce of over 16 000 employees.

Protea Coin operates through three primary divisions:

• Assets-in-transit (“AIT”) – services include bulk cash transportation, daily banking and deposit services, ATM management and valuable assets transportation. The division has 30 depots on a national level, with a fleet of more than 450 state-of-the-art armoured vehicles, processing over 22 500 transactions daily. The main customers of AIT are banks and cash retailers. An integrated cash management and electronic cash acceptance device division complements the AIT services resulting in a packaged solution offering to clients that also include short -term insurance cover.

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• Guarding – manned guarding services to the private and public sector with value-added services such as a specialised reaction unit, a canine unit, an equestrian unit, and a cargo risk management solution unit. Protea Coin is a market leader in mining guarding services, providing specialised security solutions to the mining sector including the security around prime product, access control to mining facilities, bullion/product transportation (road and air), surveillance and crime prevention (especially illegal mining), and risk management consulting to the mining industry.

• Technical – entails the design, installation and monitoring of high-technology surveillance security solutions, monitored by a national control centre facility. The national control centre further allows for the development of disaster recovery and emergency planning facilities for clients. This division also has the capability for state-of-the-art access control with time and attendance interface through its recent acquisition of SACO systems , RFID and 3VR facial recognition forms part of this portfolio.

In addition to these core offerings, Protea Coin offers investigations and intelligence services, close protection, aviation security and fleet monitoring services. Protea Coin also acts as a security consultant on an international basis, more specifically in Nigeria and in the United Arab Emirates through a 49% shareholding in Al-Jaber Coin Security Group L.L.C, which operates a fully fledged security service provider employing in the region of 3 000 security personnel.

Protea Coin’s competitive advantage of being one of three national AIT providers, combined with its track record in mining security and a large base of clients in the guarding division has facilitated the seamless integration of security solutions to a portfolio of blue-chip clients in South Africa and has resulted in higher operating margins being earned.

Protea Coin has its own specialised training facilities to provide training to the security officers employed in these businesses. This training includes the grading of security officers in terms of PSIRA regulations, training for the specialist divisions such as the VIP protection unit, canine and equestrian units, the critical situation unit, special investigations unit, asset-in-transit vehicle crews and armed security officers.

Protea Coin’s key strengths include:

• seamless integration of security solutions to a portfolio of blue-chip clients;

• largest security service provider to the mining industry; and

• market leader in AIT services in South Africa.

5.2.3 Cleaning and Catering – Royalserve

Royalserve is a specialist contract cleaning and outsourced food services company. The business unit operates under two main divisions, Royalserve Catering and Royalserve Cleaning:

• Royalserve Catering – an outsourced food solutions company. The core business is the provision of contract catering services to, inter alia, the healthcare, tertiary education, mining, industrial and corporate sectors across Southern Africa. In addition, it has a special events division and food preparation facilities. Royalserve Catering is the third largest contract caterer in South Africa by turnover.

Royalserve Catering services the market through three business units:

• Contract food solutions – supply of outsourced food solutions to work forces across all market sectors, from high-end executive dining to factory worker catering. Specialising in the education and healthcare sectors ;

• Central kitchen – a state-of-the-art food production kitchen in Centurion to service the contract food solutions and large infrastructure clients; and

• Remote site catering – project catering in remote sites in South Africa and Mozambique.

• Royalserve Cleaning – the third largest cleaning company in Southern Africa, offers cleaning solutions in all major centres of South Africa and Namibia. Clients cover a multitude of sectors including corporate, commercial, hospitality, healthcare, education and industrial.

Royalserve Cleaning has three divisions each focused on a specific market:

• Contract Cleaning and Hospitality – provides cleaning services to commercial, retail, education and industrial facilities on a national basis. The division also provides integrated solutions to the hospitality and leisure industry including front-of-house, housekeeping and back-of-house functions ;

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• Healthcare Cleaning Services – market leader in specialised cleaning services to hospitals, clinics, doctors’ rooms, frail-care centres and retirement homes in South Africa. Managers are recruited directly from the healthcare industry, many being qualified nursing sisters. Their experience provides this division with intricate knowledge of the healthcare working environment ; and

• Industrial Cleaning – operates high-pressure blasting machines to facilitate the cleaning of plant and equipment in the petrochemical, paper, fishing and wine industries, which cannot be cleaned by conventional cleaning methods.

Royalserve’s strategy is consistent with that of Mvelaserve by using the existing revenue base as a platform to strengthen partnerships and accelerate operating margin growth through the development of higher margin offerings. Royalserve has a strong market position and intends to use the existing base of national public and private clients, to increase its market share of this business unit and its various divisions.

Royalserve’s key strengths include:

• third largest cleaning service provider in South Africa with well-established brands;

• state-of-the-art central kitchen to supply all catering business units; and

• focus on employee and skills development to ensure excellence in service.

5.2.4 Diversified Services

Diversified Services’ strategy is to generate free cash flow in order to increase capital available for the further growth of Mvelaserve. Entrepreneurial management and small to medium businesses in high-growth sectors characterise this business unit.

The companies in this business unit are as follows:

5.2.4.1 Khuseti

Khuseti is the franchisor of the King Pie Brand and the owner of BMO Food Services which manufactures the King Pie product range.

King Pie Holdings has over 300 outlets in South Africa, with further outlets in Botswana, Mozambique, Namibia, Swaziland and Zambia. The King Pie product offering consists mainly of puff pastry pies which are compl emented by cooldrinks, chips, muffins and other confectionery products. King Pie outlets come in various sizes including King Pie Express (kiosk), King Pie Cafe (sit-down offering) and King Pie 2 Go (medium-sized take-away with limited seating). The company focuses exclusively on franchisor activities and all outlets are owned and operated by franchisees.

BMO Food Services manufactures the King Pie product range, using a newly built state-of-the-art, semi-mechanised manufacturing facility in Midrand. The pies are primarily distributed to the King Pie Holdings franchises. BMO Food Services has recently started bulk distribution of pies to selected retail and convenience outlets around the country, and is currently in negotiations with a number of the large retail chains.

Khuseti earns the following types of revenue:

• royalties/management service fee received from franchisees – dependent on the number of franchises and revenue earned by the franchisees;

• initial joining fee and design fee levied on new franchisees; and

• revenues generated from the sale of pies to the King Pie franchisees and other retailers.

Khuseti’s key strengths include:

• state-of-the-art manufacturing facility;

• award-winning franchising;

• respected and recognised brand; and

• export capabilities.

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5.2.4.2 Zonke

Zonke is the sole provider of the CEMS for the LPM industry in South Africa. The monitoring of the LPM industry became effective in June 2003, due to legislation requiring this industry to be monitored. Monitoring is governed by the National Gambling Board and is contracted out to Zonke.

The fees and tariffs charged by Zonke as the CEMS operator are based on the gross gaming revenue (“GGR”), which is the Rand value of the difference between total bet and total win (including VAT and gambling tax) i.e. total cash or credits played less winnings paid to players. The route operators (the companies licensed to own and operate LPMs) pay these fees directly to Zonke. Zonke also sells smart cards to the route operators. Only licensed operators can be in possession of a smart card, without which the activation of machines on site is not possible.

Data is collected directly from the premises of the site operators (the companies on whose premises the LPM’s are operated) by dial up communication with the site data logger (“SDL”), which monitors all activities on the machines on site and enables play on the machines. The SDL is sold on a once-off basis to the route operator, who then installs it on site, with each SDL linking to a maximum of five machines.

Zonke earns the following types of revenue:

• monitoring fees, which are percentage based on GGR generated by each LPM in operation;

• sale of SDL and smart cards to the route operators;

• hardware and software maintenance contract fees; and

• fees for training and other maintenance on equipment.

The CEMS contract was initially awarded on the basis of monitoring 50 000 LPM’s throughout South Africa. However, as at 30 June 2010 only about 5 500 LPM’s were in operation. This is due to the slower than anticipated awarding of new LPM licences in the various provinces, particularly in Gauteng. The roll out of LPM operator licences is gaining momentum and it is expected that this will further improve the profitability of Zonke going forward.

5.2.4.3 Contract Forwarding

Contract Forwarding is a medium-sized international freight forwarding and customs broker, boasting full facilities in Johannesburg, Durban and Cape Town.

Contract Forwarding is a fully accredited IATA (International Air Transport Association) cargo agent and a member of SAAFF (South African Association of Freight Forwarders). The company is one of two South African members of Feta Freight Systems International (“FFSI”), a worldwide network of over 90 companies in over 65 countries . All members of FFSI are required to maintain the highest levels of professional service to all partners and clients in order to retain their membership and are constantly evaluated on their performance.

Contract Forwarding provides the following services to its clients:

• forwarding through its international network of agents;

• international sea freight and airfreight imports and export services;

• customs consultancy – assistance in determining correct customs value and tariff heading;

• customs clearance services; and

• freight warehousing in a company-operated warehouse equipped with mechanical handling facilities.

Revenue is received from performing international freight forwarding and customs clearing services. Revenue is not contractual and is receivable once the service is performed. The revenue is dependent on the level of activity related to the importing and exporting of goods, which is affected by the broader economy of South Africa.

6. MAJOR AND CONTROLLING SHAREHOLDERS

Mvelaserve has been a wholly-owned subsidiary of Mvela Group since 2004, as set out in paragraph 4 above. The registered office of Mvela Group is 1st Floor, 30 Melrose Boulevard, Melrose Arch, Johannesburg, 2076.There has been no change in controlling shareholders of Mvelaserve and its subsidiaries in the past five years. Following the Unbundling, there will be no controlling shareholder in Mvelaserve.

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Immediately following the Unbundling, Mvela Group Ordinary Shareholders will hold Mvelaserve Ordinary Shares in proportion to their shareholdings in Mvela Group. Consequently, based on the provisional entitlement ratio of 25 Mvelaserve Ordinary Shares for every 100 Mvela Group Shares, the Mvelaserve Ordinary Shareholders other than directors, that will directly or indirectly beneficially hold approximately 5% or more of the Ordinary Shares, immediately after the Unbundling (based on their Mvela Group shareholdings at the Last Practicable Date), will be as follows:

Number of Percentage of Ordinary Shares Ordinary Shares held6 in issue

DirectMvelaphanda Holdings1 16 000 000 1 1.3 Clidet 603 (Proprietary) Limited2 9 938 163 7.0Mvelaphanda Treasury and Finance (Proprietary) Limited3 8 941 321 6.3 CoroLife Special Opportunities Portfolio 4 5 928 280 4.2

Indirect

Mvelaphanda Empowerment Trust 5 8 002 920 5.7

Total 48 810 683 34.5

Notes:

1. The shareholders of Mvelaphanda Holdings are as follows:1.1 TJS Family Trust (Beneficiaries: T M G Sexwale, J A Sexwale, C M Sexwale and G M Sexwale).1.2 Matimba Trust (Beneficiaries: W Willcox, M J Willcox and L MacKenzie).1.3 Dikela trust (Beneficiaries: S Xayiya, B Xayiya, M S M Xayiya and N Maquto).1.4 Mvelaphanda Empowerment Trust (Beneficiaries: G M Sexwale, C M Sexwale and any other natural person as selected by the trustees).1.5 Mvelaphanda Investment Trust (Beneficiaries: W Willcox, M J Willcox and L Mackenzie).

2. 100% held by Mvelaphanda Holdings.3. 100% held by Mvela Group.

4. A fund administered by Coronation Fund Managers.

5. Held via Mvelaphanda Holdings.

6. The number of Ordinary Shares held is based on an assumed entitlement ratio of 25 Ordinary Shares for every 100 Mvela Group Shares.

Save as indicated above and as at the Last Practicable Date, the Directors are not aware of any shareholder or D irector who is, directly or indirectly, beneficially interested in approximately 5% or more of the issued share capital of Mvela Group, and hence Mvelaserve.

There has been no change in control of Mvelaserve in the five year period preceding the date of this Pre-listing Statement.

7. PROSPECTS

The outsourced support services industry in South Africa is intrinsically linked to the growth in global gross domestic product (“GDP”) as well as South African GDP, particularly as it relates to business and consumer growth. After the adverse economic conditions created by the global financial crisis experienced in the past two years, South Africa appears to be on the path to economic recovery. However, the rate thereof remains uncertain. Improved fundamentals of a lower interest rate, and lower inflation environment, and improved consumer demand will assist in speeding up the recovery.

It is the opinion of the Directors that as primarily business-to-business outsourced support service providers, with some exposure to the consumer market, Mvelaserve was not adversely affected by the global financial crisis in the past two years and is well positioned to take advantage of further economic growth in South Africa and the rest of the continent. The Group will continue to seek to partner with clients in the management of their assets, affording clients the room to concentrate on their core business, while Mvelaserve delivers a value-for-money basket of non-core services. Mvelaserve will with strategic acquisitions, internal development and internal growth improve service offerings to its client base.

8. RATIONALE FOR LISTING

The Directors believe that the Group has the operational and financial capacity to pursue its intended vision and mission independently. The Listing will allow the Group to achieve the following:

• enhance Mvelaserve shareholder value;

• enhance the public profile and general public awareness of Mvelaserve;

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• provide Mvelaserve with a further source if required, from which capital can be raised, to facilitate future expansion; and

• afford institutions, private clients, other business associates of Mvelaserve and members of the public the opportunity to participate directly in the equity of Mvelaserve.

9. KEY INVESTMENT CONSIDERATIONS

The Directors believe that the Listing presents the following key investment considerations:

• leading positions in facilities management, security, catering and cleaning industries in South Africa;

• experienced, entrepreneurial management team supported by skilled industry experts;

• operational excellence using specialist skills in integrated facilities management, AIT and healthcare cleaning;

• rapidly growing client base both in the private and public sector;

• national footprint, with some presence in selected international markets;

• impressive and proven track record by management in the services industry; and

• solid BEE credentials.

10. BLACK ECONOMIC EMPOWERMENT

BEE is a central part of the South African Go vernment’s economic transformation strategy. A multi-faceted approach to BEE has been adopted which aims to increase the number of black people that manage, own and control South Africa’s economy. The three core elements of the South African Government’s BEE policy are: direct empowerment through ownership and control of enterprises and assets; human resource development and employment equity; and indirect empowerment through preferential procurement policies aimed at ensuring that black people benefit from South African tenders.

Several industries have taken the initiative to set their own specific targets related to, inter alia, the three core areas of BEE. These initiatives have been incorporated in transformation charters. Each transformation charter contains a scorecard against which industry members are measured on their BEE progress. The scores achieved are important in competing and tendering for business from the public and private sectors. The scorecards have a cascading effect, with each commercial enterprise requiring a measure of BEE compliance from enterprises with which they do business, in order that they too can reach their BEE targets.

Mvelaserve is addressing its BEE credentials and initiatives to maximise the BEE scorecard points achieved by the Group, including maximising the “bonus points”, in terms of the Codes.

Maximising the BEE scorecard points is a clear indication of Mvelaserve’s commitment to BEE, and is an important element in securing new business and contracts for Mvelaserve’s subsidiaries and positions Mvelaserve as the BEE supplier of choice in the industries in which it operates.

Prior to the Listing, the Company is 100% owned by Mvela Group, an investment holding company listed on the JSE. As at 26 March 2010, Mvela Group underwent an independent BEE equity verification process, which placed the BEE shareholding of Mvela Group at 68.5%, excluding Mandated Investments. This translates to an effective 45.4% BEE shareholding of Mvelaserve, including Mandated Investments. The anchor BEE shareholder of Mvela Group is Mvelaphanda Holdings with a direct holding of 19.3%. All the Mvela Group shareholders will receive the proportionate shareholding in Mvelaserve upon implementation of the Unbundling.

Post the Listing, Mvelaserve will commission its own independent BEE verification process.

11. INFORMATION TECHNOLOGY

Mvelaserve has established an in-house information technology (“IT”) service provider under the leadership of the technical division within Protea Coin. This in-house service provider has a team of permanent IT technicians available to service various needs, including, but not limited to, maintaining the anti-virus programmes, firewalls and adequate backup systems and procedures, of the various subsidiaries on a daily basis.

The Group relies on SAP, AccPac and Pastel for its accounting needs and reviews the usage of the software programmes on a regular basis. Where necessary the usage of the software programmes is modified to suit the Group’s specific needs.

The Mvelaserve head office ensures that there is adequate information security and data integrity at each of the subsidiaries via correct risk management programmes and internal audit processes.

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12. EMPLOYEES

The Subsidiaries of Mvelaserve operate in labour intensive industries including security, cleaning and catering, accounting for a large workforce.

The following table sets out the number of employees of the Group, for the financial years ended 30 June 2010, 2009 and 2008, respectively:

Financial year ended 30 June 2010 2009 2008

HDSA 27 947 92.7% 24 656 92.0% 23 659 91.8%

Non-HDSA 2 207 7.3% 2 145 8.0% 2 101 8.2%

Total employees 30 154 26 801 25 760

Mvelaserve strives to be an employer of choice among workers and a leader in the development of human resources and human capital. This drive is underpinned by the development and training of employees from previously disadvantaged backgrounds to ensure that Mvelaserve will continue to be representative of the demographics of South Africa.

Mvelaserve remains committed to the principles and spirit of the Employment Equity Act and firmly endorses the four key areas of employment equity identified by the Employment Equity Act, namely:

• elimination of discrimination in decision-making;

• promotion of employee diversity;

• introduction of measures and procedures for transformation; and

• reduction of barriers to advancement of the disadvantaged.

13. TRAINING PROGRAMMES

Having the appropriately skilled people at all levels is crucial to Mvelaserve’s long-term success, while comprehensive and effective training also supports the fast-tracking of HDSA employees up the management ladder.

Mvelaserve’s operating businesses offer vocational and specific skills-based training to their employees. This training is essential to maintaining the high quality of service and expertise that has made many of Mvelaserve’s operating businesses leaders in their industries. The formal structures established for training include, amongst others, operation of in-house training facilities, on-site training programmes, participation in Mvelaserve and industry training and learnership programmes.

Details of the specific training initiatives of Mvelaserve’s largest operations are set out below:

• TFMC

TFMC provides comprehensive training programmes for its employees, which range from competency training for technicians, health and safety training for Occupational Health and Safety representatives, as well as functional training in a range of subjects. A management development programme, which provides training to middle management on business management techniques for problem-solving, communications, teambuilding, business processes and human behaviour in organisations has also been developed.

• Protea Coin

Protea Coin has specialised training facilities to provide training to its security officers. The training includes the grading of security officers in terms of PSIRA regulations, training for the specialist divisions such as the VIP protection unit, canine and equestrian units, special investigations unit, AIT vehicle crews and armed security officers.

• Royalserve

Royalserve Cleaning operates dedicated training teams. These teams provide on-site training to employees on subjects such as the use and operation of cleaning equipment, use of alternative cleaning materials and specialised cleaning techniques. The healthcare division provides specialised training in the field of infection control and health management issues.

Royalserve Catering provides training courses that cover a wide range of subjects, including manager and supervisor development, occupational health and safety, customer service, hazard analysis and critical control point (“HACCP”) procedures compliance. Royalserve Catering also provides training on basic cooking skills, and nutrition and dietary-related courses.

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14. HIV/AIDS

As a large-scale employer, Mvelaserve recognises that the HIV/Aids pandemic is likely to have an impact on the Group. Certain of Mvelaserve’s businesses are reporting increased levels of staff illness, absenteeism and employee deaths. This has a negative impact on occupational health and safety, employee productivity, employee benefit costs and staff morale.

Mvelaserve has accordingly adopted a policy on life-threatening diseases aimed at preventing discrimination against HIV-positive employees in the workplace, who are assisted to remain healthy and productive for as long as possible. This policy lays down universally accepted guidelines regarding HIV testing, confidentiality of medical information and disclosure of HIV status. All employees are briefed on the rights of those suffering from HIV/Aids or other life-threatening diseases, and sufferers of these illnesses are referred to independent medical and counselling service providers when required.

15. CORPORATE SOCIAL INVESTMENT

The corporate social investment (“CSI”) initiatives of Mvelaserve extend countrywide and seek to improve the lives of numerous communities across South Africa. Most of the CSI activities of Mvelaserve are found in the projects undertaken by the Mvelaserve businesses. CSI activities of Mvelaserve’s businesses provide financial and non-financial support to benefit organisations and associations. These worthy initiatives are mostly in the areas of education, skills training and job creation, caring for children and abused women and HIV/Aids support.

16. REGULATORY ENVIRONMENT

Other than the Companies Act and the JSE Listings Requirements, Mvelaserve is subject to certain legislation and regulations. Some of the principal South African legislation regulating the different industries in which Mvelaserve operates is highlighted below.

It should be noted that all legislation is subject to amendment and it is not possible to predict the outcome or timing of amendments and/or modifications to the applicable legislation and regulations promulgated in terms thereof, or their impact. Further, the contents of this paragraph 16 are by no means a comprehensive exposition of the importance of the relevant legislation but are intended to be a brief overview thereof.

National Gambling Act, No. 7 of 2004, as amended (“Gambling Act”)

In terms of the Gambling Act, the NGB has provided for the introduction of a CEMS for LPM’s. The principal parties in the establishment and operation of the CEMS for LPM’s is the NGB and the CEMS Operator. The purpose of the CEMS Operator is to monitor LPM’s.

In terms of the Gambling Act, the NGB has the responsibility to regulate the CEMS to ensure compliance with the Gambling Act and other relevant legislation and adherence to good business practices. The NGB has the objective to promote uniform norms and standards that shall apply in all provinces and bring uniformity in legislation relating to gambling in South Africa.

The NGB has determined that the CEMS assists in the achievement of these objectives and that such a system shall, by conforming to the guiding principles, achieve high levels of data integrity and security, and provide a level playing field for all participants in the LPM industry.

Zonke holds the sole CEMS Operator agreement in South Africa, and has the responsibility to carry out its responsibilities in accordance with the Gambling Act and the directives of the NGB. Since it was first awarded the CEMS contract in 2003, Zonke has carried out its duties with a high level of responsibility in adherence to the Gambling Act, and will continue to do so for the duration of its agreement.

Private Security Industry Regulation Act, No. 56 of 2001, as amended (“PSIRA Act”)

The PSIRA Act provides for the regulation of the private security industry and for that purpose a regulatory authority was established to provide for matters connected therewith. The rights which are recognised and protected in terms of the PSIRA Act are the fundamental rights to life and security of person as well as the right not to be deprived of property. It is recognised in terms of the PSIRA Act that security service providers and the private security industry in general play an important role in protecting and safeguarding the aforesaid fundamental rights and the PSIRA Act, therefore, aims to maintain a trustworthy and legitimate private security industry which acts in terms of the principles contained in the Constitution of the Republic of South Africa (“Constitution”) and other applicable laws, so as to ensure that there is greater safety and security in the country. Protea Coin has been part of the security industry for many years, and has always maintained the highest level of security industry principles. The Group will continue to uphold the spirit of PSIRA Act and will continue to ensure that its personnel comply with the requirements.

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Firearms Control Act, No. 60 of 2000, as amended (“Firearms Act”)

The purpose of the Firearms Act is to enable the Go vernment of South Africa to fulfil its duty in terms of the Constitution to protect every person’s right to life and the right to security of a person, which includes, among other things, the right to be free from all forms of violence from either public or private sources. It is further envisaged that the Firearms Act will prevent the proliferation of illegally possessed firearms by providing for the removal of these firearms from society and by improving control over legally possessed firearms, and to prevent crime involving the use of firearms. The Government will also be able to control the supply, possession, safe storage, transfer and use of firearms and to detect and punish the negligent or criminal use of firearms by enforcing the provisions of the Firearms Act. In terms of section 120 of the Firearms Act, offences liable for prosecution in terms of its provisions range from causing bodily injury to any person or causing damage to property of any person by negligently using a firearm or to selling, supplying or in any other manner giving possession of a firearm or ammunition to a person who is not allowed in terms of the Firearms Act to possess that firearm or ammunition. Any person convicted of a contravention of or a failure to comply with certain sections of the Firearms Act may be sentenced to a fine or to imprisonment for a period as provided for in terms of the schedules to the Firearms Act. Administrative fines which may be imposed in terms of the Firearms Act range from between R5 000 to R100 000.

Foodstuffs, Cosmetics and Disinfectants Act, No. 54 of 1972, as amended (“Foodstuffs Act”)

As the operations of Royalserve Catering and Khuseti entail the manufacture, sale and supply of food, these entities are regulated by the Foodstuffs Act and the regulations thereunder.

The objective of the Foodstuffs Act is to control the sale, manufacture and importation of foodstuffs, cosmetics and disinfectants, and to provide for incidental matters. “Foodstuff ” is defined as “any article or substance (except a drug as defined in the Drugs Control Act, Act No. 101 of 1965) ordinarily eaten or drunk by man or purporting to be suitable, or manufactured or sold, for human consumption, and includes any part or ingredient of any such article or substance, or any substance used or intended or destined to be used as a part or ingredient of any such article or substance .”

Under the Foodstuffs Act, it is a criminal offence to sell, manufacture or import for sale, any foodstuff which: (i) contains or has been treated with a prohibited substance ; (ii) contains a particular substance in a greater measure than that permitted by regulation ; (iii) has been treated with a substance containing a particular substance in a greater measure than that permitted by regulation ; (iv) does not comply with any standard of composition, strength, purity or quality prescribed by regulation for or in respect of it or any standard so prescribed for or in respect of its other attributes or (iv) the sale of which is prohibited by regulation. It also constitutes a criminal offence to sell, or to manufacture or to import for sale, any foodstuff or cosmetic: (i) which is contaminated, impure or decayed, or is in terms of any regulation deemed to be, harmful or injurious to human health or (ii) which contains or has been treated with a contaminated, impure or decayed substance.

In respect of advertising, a person is guilty of an offence if he or she publishes a false or misleading advertisement of any foodstuff, cosmetic or disinfectant; or for purposes of sale, describes any foodstuff, cosmetic or disinfectant in a manner which is false or misleading as regards its origin, nature, substance, composition, quality, strength, nutritive value or other properties or the time, mode or place of its manufacture; or sells, or imports for sale, any foodstuff, cosmetic or disinfectant described in the manner aforesaid.

An act of an employee, manager or agent which constitutes an offence under the Foodstuffs Act will, subject to certain exceptions, be deemed to be the act or omission of the employer or principal and such employer or principal may be convicted and sentenced in respect of the offence.

The Foodstuffs Act makes provision for the appointment of inspectors by the Director-General of Health. An inspector may at all reasonable times enter upon any premises on or in which any foodstuff, cosmetic or disinfectant is or is suspected to be manufactured, treated, graded, packed, marked, labelled, kept, stored, conveyed, sold, served or administered or on or in which any other operation or activity with or in connection with any foodstuff, cosmetic or disinfectant is or is suspected to be carried out.

Customs and Excise Act, No. 91 of 1964, as amended (“Customs Act”)

The principal piece of legislation applicable to the operations of Contract Forwarding is the Customs Act and the numerous schedules thereto dealing with import and export tariffs and classification.

The Customs Act prohibits and controls the importation, export, manufacture or use of certain goods. Despite any other registration required by the Customs Act, the Commissioner of the South African Revenue Service (“Commissioner”) may require all persons or classes of persons participating in activities regulated by the Customs Act to register.

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No person is permitted to perform any act or be in possession of or use anything in respect of which a licence is prescribed in Schedule 8 to the Customs Act unless such person has obtained the appropriate licence on payment of the requisite licensing fees. In particular, no person except a licensed clearing agent or a person specified by rule may represent any principal as a consultant or agent for purposes of transacting any business on behalf of such principal in relation to customs and excise matters until such a principal is registered with the Commissioner.

The Commissioner may refuse any application for a new licence or the renewal of a licence on specified grounds. The Commissioner may also cancel or suspend a licence on specified grounds. Such grounds would include the fact that the holder of such licence is sequestrated or liquidated, no longer carries on the business for which the licence was issued, is no longer qualified according to the prescribed qualifications, failed to pay any amount demanded under the Customs Act within 30 days from the date of such demand, or that the holder of such licence or the employee of such licensee has contravened or failed to comply with the provisions of the Customs Act, has been convicted of an offence under the Customs Act, has been convicted of an offence involving dishonesty, or has failed to comply with any condition or obligation imposed by the Customs Act or by the Commissioner in respect of such licence.

Contract Forwarding possesses all requisite licences under the Customs Act and is in compliance with such licences and the Customs Act.

Consumer Protection Act, No. 68 of 2008 (“CPA”)

Mvelaserve’s operating subsidiaries are primarily involved in the provision of goods and services to consumers and therefore the CPA will have a substantial impact on their operations.

The CPA was assented to on 24 April 2009 and was published in GG32186/29-4-2009 and for the most part takes effect 18 months after the date on which it was signed by the President of South Africa. The CPA is a watershed development in the field of consumer protection in South Africa and it will have a material impact on the relationship between consumers and businesses.

The CPA establishes a comprehensive legal framework in so far as consumer s’ entitlements and suppliers’ responsibilities are concerned. The purposes of the CPA are to promote and advance the social and economic welfare of consumers in South Africa. The preamble of the CPA emphasises the need for both a positive economic environment and appropriate legal framework that entails the promotion of an environment that supports and strengthens a culture of consumer rights and responsibilities, business innovation and enhanced performance.

Section 1 of the CPA, which sets out definitions, defines what is meant by “consumer” for purposes of the CPA, which, inter alia, means a person to whom goods or services are marketed in the ordinary course of business, a person who has entered into a transaction with a supplier (a person who markets any goods or services) in the ordinary course of business and someone who is a user, or a recipient or beneficiary of those particular services. The CPA regulates “transactions” as contemplated therein, which are defined as, in respect of a person acting in the ordinary course of business :

• an agreement between or among that person and one or more other persons for the supply or potential supply of any goods or services in exchange for consideration; or

• the supply by that person of any goods to or at the direction of a consumer for consideration; or

• the performance by, or at the direction of, that person of any services for or at the direction of a consumer for consideration.

In terms of section 5(1)(a) the CPA is applicable to every transaction occurring within South Africa, unless it is exempted in terms of sub-sections 5(2) – (4). The application incorporates the promotion of goods or services and also applies to the supplier of any goods or services unless exempted. Grounds for exemption are, inter alia, when goods or services are supplied to the state and where the consumer is a juristic person whose asset value or turnover exceeds the prescribed threshold value. A regulatory authority may also apply for an industry wide exemption relating to that industry’s particular goods or services.

The CPA establishes a strict liability, and provides that any producer or importer, distributor or retailer of any goods is liable for any harm caused wholly or partly as a consequence of supplying any unsafe goods, a product failure, defect or hazard in any goods, or inadequate instructions or warnings provided to the consumer pertaining to any hazard arising from or associated with the use of any goods, irrespective of whether the harm resulted from any negligence on the part of the producer, importer, distributor or retailer, as the case may be.

There is also specific regulation of franchise agreements in section 7 of the CPA, which is particularly relevant insofar as Khuseti Holdings is concerned. Amongst other things, section 7 provides that a franchisee may cancel a franchise agreement without cost or penalty within 10 business days after signing such agreement, by giving written notice to the franchisor.

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Competition law

The Competition Act regulates competition and uncompetitive behaviour in South Africa. Broadly speaking, the Competition Act deals with both prohibited practices and merger control. Prohibited practices include anti-competitive agreements and practices between competitors, as well as decisions by associations of competitors, such as price fixing. Dominant firms are also prohibited from abusing their positions of dominance in terms of the Competition Act.

With regard to merger control, qualifying mergers and acquisitions must be approved by the relevant competition authorities. Any future merger or acquisition by Mvelaserve is likely to require approval by the relevant competition authorities.

Labour related legislation

Employment and labour relations are regulated in South Africa by legislation, including the Labour Relations Act, No. 66 of 1995, as amended, the Basic Conditions of Employment Act, No. 75 of 1997, as amended, the Employment Equity Act, the Skills Development Act, No. 97 of 1998, as amended, the Skills Development Levies Act, No. 9 of 1999, as amended, the Unemployment Insurance Act, No. 63 of 2001, as amended, the Unemployment Insurance Contributions Act, No. 4 of 2002, as amended, the Occupational Health and Safety Act, No. 85 of 1993, as amended, and the Compensation for Occupational Injuries and Diseases Act, No. 130 of 1993, as amended.

Black Economic Empowerment

In 1994, the South African Government introduced its BEE policy, designed to promote transformation in the South African economy and redress the country’s history of racial disparities.

In April 2004, the BBBEE Act came into effect. The BBBEE Act obligates organs of state and public entities to take into account and to apply, as far as reasonably possible, the Codes (discussed below) issued in terms thereof, when doing certain specified activities including determining qualification criteria for the issuing of licenses, concessions or other authorisations in terms of any law, and determining qualification criteria for the sale of state owned enterprises. The BBBEE Act establishes the legislative framework for the promotion of BEE, and in particular, what it refers to as “broad based” BEE. Broad - based BEE involves the economic empowerment of all black people, including women, youth, people with disabilities and people living in rural areas through strategies which seek to, amongst other things, increase the number of black people that manage, own and control enterprises and productive assets.

The Codes specify empowerment measurement and targets consistent with the objectives of the BBBEE Act, and the periods within which those targets must be achieved. Whilst the private sector is not obliged to comply with BEE requirements, organs of state and public bodies must take into account and, as far as is reasonably possible, apply the Codes when issuing licenses or concessions, developing and implementing a preferential procurement policy, determining qualification criteria for the sale of state owned enterprises and developing criteria for entering into partnerships with the private sector. The Codes set out the requirements for and measurement of BEE for businesses in South Africa in general, and provide a generic scorecard with weightings for the various elements of BEE which are used to measure the level of compliance with the targets set out in the Codes by an enterprise.

Environmental laws

Environmental laws which Mvelaserve has to comply with are, the National Environmental Management Act, No. 107 of 1998, as amended, which Act regulates the enforcement and administration of environmental law and the principles to be applied in matters pertaining to environmental law; the National Water Act, No. 36 of 1998, which aims to protect and conserve water resources in South Africa; and the Atmospheric Pollution Prevention Act, No. 45 of 1965, as amended, which provides for the prevention of atmospheric pollution. These laws are applicable in particular to Mvelaserve’s catering, healthcare and industrial cleaning businesses.

The New Companies Act

Mvelaserve is incorporated in terms of the Companies Act. The “New Companies Act” has been promulgated and will eventually replace the Companies Act in its entirety. While the New Companies Act has not yet come into force, it is expected to come into force during the first quarter of 2011. The New Companies Act is expected to undergo substantial correction and amendment before coming into force.

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Existing companies incorporated and registered under the Companies Act will continue in existence as if they have been incorporated and registered under the New Companies Act. Public companies under the New Companies Act are largely comparable to public companies under the Companies Act. Mvelaserve will retain its corporate name and registration number. The Listings Requirements will need to be amended to some extent to reflect the changeover to the New Companies Act, and Mvelaserve may have to make some adjustments in order to comply with any amended Listings Requirements.

The New Companies Act has been designed to introduce fundamental changes to South African company law. In reforming South Africa’s company laws, the Government’s stated objectives were to simplify the existing regime; increase flexibility; ensure corporate efficiency; provide transparency and accountability as well predictable regulation.

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PART B: MANAGEMENT AND CORPORATE GOVERNANCE

17. DIRECTORS AND MANAGEMENT

Details of the directors of Mvelaserve as at the Listing Date are set out below:

Name, age and nationality Business address Occupation/ Function Term of office

M S M Xayiya, (4 9), South African 1st Floor Executive Chairman Fixed* 30 Melrose Boulevard Melrose Arch Johannesburg, 2076

J M S Ferreira, (52), South African 28 Eddington Crescent Chief Executive Officer Fixed Highveld Technopark Centurion, 0169

G E Röth, (53), South African 1st Floor Chief Financial Officer Fixed 30 Melrose Boulevard Melrose Arch Johannesburg, 2076

O A Mabandla (47), South African 7 Sweetgum Crescent Lead Independent Not fixed Fourways Gardens Non-executive Director (rotation every Fourways, 2055 three years)*

S Masinga (43), South African 38 Centre Road Independent Non-executive Not fixed 14 Crystal Court Director (rotation every Morningside, 2057 three years)*

N Mbalula (32), South African 1 Medborn Street Independent Non-executive Not fixed Midstream Estate Director (rotation every Midstream, 1685 three years)*

F N Mantashe (49), South African 9 Steenveld Road Independent Non-executive Not fixed Freeway Park Director (rotation every Boksburg, 1459 three years)*

G D Harlow (53), South African 6 Cowie Road Independent Non-executive Not fixed Forest Town Director (rotation every Johannesburg, 2193 three years)*

* Appointed as Director of Mvelaserve with effect from the Listing Date.

As at the Li sting Da te, the Board will comprise three Executive Directors and five Non- executive Directors of which all are independent. In accordance with the Listings Requirements, five of the Directors have been appointed on a rotational basis, and are obliged to retire and are eligible for re-election by Mvelaserve Ordinary Shareholders at least once every three years in accordance with the Articles of Association. The Board recognises that having an Executive Chairman is not in compliance with the recommendations of the King Code. To address this, the Board has appointed O A Mabandla as the Lead Independent Non-executive Director of the Board. All the Directors are South African citizens.

The profiles of the Directors and senior management team are set out below:

EXECUTIVE DIRECTORS

Mikki Sivuyile Macmillan Xayiya – Executive Chairman

Mikki has served in various capacities in the African National Congress since 1977. In 1995 he was appointed as a Policy Adviser – Office of the Premier, Gauteng Provincial Government. He subsequently left public office and joined Mawenzi Asset Managers as Managing Director. In 1998 he co-founded Mvelaphanda Holdings. He was appointed as Executive Chairman of Mvela Group in 2009. He holds a BA (Unisa), Cert of Defence Management (Wits) and Emerging Market Leadership Program (University of Pennsylvania).

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Jorge Manuel Soares De Alberga Ferreira – Group Chief Executive Officer

Jorge founded Protea Security Services in 1982 where he retained the position of Managing Director and later Chief Executive Officer during the control changes of Protea Security Services, firstly into Molope Group in 1996 and then into Rebserve Limited in 1998. Protea Security Services and Coin Security Group were merged in 2007 and Jorge was appointed as Chief Executive Officer of the Protea Coin Group. During this time he completed an executive development programme at the University of the Witwatersrand. He was appointed as Chief Operating Officer of Mvelaserve early in 2009 and subsequently appointed as Chief Executive Officer of Mvelaserve in July 2009.

Gilbert Ernst Röth – Chief Financial Officer

Ernst will be appointed as the Chief Financial Officer of Mvelaserve on the Listing Date. Ernst has been Chief Financial Officer of Mvela Group since 5 September 2007 and was appointed to the board of directors of Mvela Group on 11 November 2007. Prior to joining Mvela Group he held various positions with companies in the banking, financial services/consulting and biochemical industries and also worked in the office of the Auditor General of South Africa. He is a qualified CA(SA) and has a Post-graduate Certificate in Advance Tax (Unisa).

NON-EXECUTIVE DIRECTORS

Oyama Andrew Mabandla – Lead Independent Non-executive Director

Oyama is the immediate past chairman of Vodacom Group Limited, is a member of the JP Morgan Advisory Board and Executive Chairman of Langa Lokulunga Investment Holdings (Proprietary) Limited, an investment holding company. He has held various positions within legal and investment banking profession and was previously Deputy Chief Executive Officer of South African Airways. He holds a BA degree from the University of California and a Juris Doctor from Columbia University.

Sibongile Masinga – Independent Non-executive Director

Bongi is the Chief Executive Officer and one of the founding members of the Afropulse Group. Prior to this she was the Chief Operating Officer and head of Corporate Advisory at Africa Vukani Investments. She has held various executive positions in financial services, from consulting, corporate advisory and research, including as a financial specialist at Development Bank of South Africa and has held research analyst positions with Gensec Securities and Real Africa Durolink. She also gained merchant banking experience with Hill Samuel in London. Bongi has a Bachelor of Commerce degree with majors in accounting and financial management and she has completed the USA-SA Leadership and Entrepreneurship Programme at the Wharton School of Business.

Nozuko Mbalula – Independent Non-executive Director

Nozuko joined FCB Johnson in 2003 from where she joined the South African Broadcasting Corporation in 2004. She has been with the Jupiter Drawing Room since 2007. She holds a diploma in Human Resources Management and a Higher Diploma in Integrated Marketing Communications specialising in brand management.

Flora Nolwandle Mantashe – Independent Non-executive Director

Nolwandle started her career at Goldfields and moved to Pretoria Portland Cement Limited in 2008 where she currently serves as the Transformation Executive. She has a BA (Hons) in Industrial Sociology and completed a Business Management Programme at the Wits Business School.

Gary David Harlow – Independent Non-executive Director

Gary forged his career in merchant banking and was the advisor to the finance department of the African National Congress in the early 1990 s regarding developing BEE policy. In 1992 he played an instrumental role in the creation of Thebe Investment Corporation and also served as joint Chief Executive Officer of Msele Corporate and Merchant Bank. Gary joined Unihold Limited as Chief Executive Officer in 1996. He has served on numerous private and public company boards and serves as chairman on the Investment and Transformation Committee and as a member of the Audit and Risk Committee of Blue Label Telecoms Limited. Gary qualified as a Fellow Chartered Management Accountant (UK) in 1996 , is a qualified CA(SA), and an Associate of the Chartered Institute of Management Accountants (UK).

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SENIOR MANAGEMENT

In addition to M S M Xayiya, J M S Ferreira and G E Röth, the following individuals comprise the senior management of Mvelaserve:

Martin Jaap Schermers (47) – Business Development Executive

Martin has 12 years’ experience in the mining industry. He was Financial Director at JIC Mining Services from 1996 until 2002, Financial Director at Petrex until 2004 and was appointed Managing Director of Bema Gold South Africa until the end of 2006 when he was appointed as Chief Financial Officer of Pamodzi Gold, a position he held until mid 2008. He was appointed as Financial Director of Mvelaserve in July 2009. Martin will resign as Financial Director of Mvelaserve on the Listing Date and will be appointed as the Business Development Executive of the Group. Martin has completed his articles and holds a BCompt degree from UNISA.

Bruce Ewart Spence (56) – Chief Executive Officer, TFMC

Bruce has 22 years’ experience as a business executive with extensive board management and executive leadership experience in listed companies, with strategic management experience in executive and general management including financial and operational performance, business development, business re-engineering, competitive analysis and corporate governance. Previously, Bruce was the Managing Director of a subsidiary of The Bidvest Group Limited, a JSE-listed company, which subsidiary supplies integrated building management and technology solutions to various industries. Among other senior roles Bruce has had in his career, he was previously executive director of operations for Gunnebo AG, a listed Swedish company manufacturing and supplying integrated technology and engineering solutions, as well as a Country Chief Executive Officer/Project Director for Compass Group plc, a listed international facilities engineering, procurement, construction and project management entity. Bruce was appointed to his current role in April 2010 .

Petrus Albertus van Niekerk (41) – Chief Executive Officer, Protea Coin

Petrus took over the reins as Chief Executive Officer for Protea Coin Group on 25 March 2009. He has been involved in the security industry for almost 15 years, 13 of which were in an executive capacity. While completing his articles , he achieved a BCompt degree at the beginning of 1994. His career as an accountant and financial manager in the corporate environment began at Protea Security in April 1994. He was appointed Chief Operating Officer for Protea Coin Group in June 2007, which in turn, led to his current portfolio as Chief Executive Officer.

Tseliso Daniel Pitikoe (37) – Chief Executive Officer, Royalserve

Tseliso joined the Rebserve Cleaning Services as General Manager of the Berco Speciality Commercial Brand in 2007, bringing with him a wealth of experience in industries as diverse as fast moving consumer goods, transportation and waste management. Within less than a year Tseliso took up reigns of Mvelaserve Cleaning and was appointed to his current role in October 2009. Tseliso holds a National Diploma in Mechanical Engineering and an MBA from Thames Valley University.

Christopher Robert Waterson (55) – Chief Executive Officer, Khuseti

Chris has been the Chief Executive Officer of Khuseti for one year. Before this, Chris was the Chief Executive Officer of Contract Forwarding for 13 years. Chris’ former career in the freight industry spans some 30 years.

Chris is also the Chief Executive Officer of FFSI which is a Hong Kong headquartered global association of international freight forwarders comprising more than 90 member companies in over 65 countries worldwide. This role is undertaken on a part-time basis.

The freight industry is arguably one of the most service-driven industries, requiring enormous attention to partner and customer relationships in order to be successful. The same principles apply to Khuseti’s business where ongoing support and communication with franchisees and clients are key to maintaining successful business relationships.

Dorothy Kynaston (50) – Acting Chief Executive Officer, Contract Forwarding

Dorothy hails from the United Kingdom and immigrated to South Africa in 1982. She has 28 years ’ experience in the freight industry, 25 of which were with Contract Forwarding. She began her career at Contract Forwarding as an export clerk and continued to grow through the ranks in a number of departments, to her current position as acting Chief Executive Officer in November 2009. This acting position will be reviewed by the Remuneration and Nomination Committee early in 2011.

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Maketse Hosea Malope (41) – Chief Executive Officer, Zonke

Hosea’s previous working experience includes being head of the IT department at the Commission for Conciliation, Mediation and Arbitration (CCMA), and a business analyst at Monyaka Gaming Machines Supply. He was appointed Chief Executive Officer of Zonke in 2007.

18. APPOINTMENT, QUALIFICATION, REMUNERATION AND BORROWING POWERS OF DIRECTORS

18.1 The relevant provisions of the Articles of Association relating to the qualification, remuneration, borrowing powers and appointment of the Directors are set out in Annexure 12 to this Pre-listing Statement.

18.2 None of the Directors have ever:

• been convicted of an offence resulting from dishonesty, fraud or embezzlement;• been adjudged bankrupt or sequestrated in any jurisdiction;• at any time assigned their estate, suspended payment or compounded with their creditors;• been found guilty in disciplinary proceedings, by an employer or regulatory body, due to dishonest activities;• been barred from entry into any profession or occupation; and/or• been convicted in any jurisdiction of any criminal offence, or an offence under legislation relating to the

Companies Act.

18.3 An extract from the Articles of Association regarding the Directors’ voting on material contracts where they have an interest is set out in Annexure 12.

18.4 The borrowing powers of the Directors have not been exceeded in the preceding three year period prior to the date of this Pre-listing Statement.

18.5 Remuneration of the Directors

The total remuneration and benefits paid and payable to the executive and non-executive Directors for the year ended 30 June 2010 are set out below:

(Rand) Executive Non-Executive Total

Salaries 4 260 156 – 4 260 156Fees – – –Benefits 428 288 – 428 288Bonuses 2 100 000 – 2 100 000Pension Scheme benefits 235 166 – 235 166Medical aid contributions 68 118 – 68 1 18

Total Directors’ remuneration 7 091 728 – 7 091 728

During 2008 the Mvela Group Remuneration Committee resolved to commence a process to motivate and retain key management at Mvelaserve. As a result of the separate listing of Mvelaserve, the Mvela Group Remuneration Committee approved the payment of cash bonuses to various executives involved in Mvelaserve, subject to the successful listing on the JSE, and subject to the after tax cash being used to acquire Mvelaserve Ordinary Shares on the JSE with a lock-in period of 2 years. The quantum of the cash payment, which will be used to acquire Mvelaserve Ordinary Shares on the JSE, is calculated with reference to the increase in Mvelaserve’s intrinsic NAV from 30 June 2009 (R1 039 million) to 30 June 2010 (R1 723 million).

The following Mvelaserve Di rectors will receive cash payments as set out in the table below :

Cash value to be used to acquire Mvelaserve shares net of tax* (R’million)

M S M Xayiya 3.750 J M S Ferreira 10.260 G E Röth 3.750 Other Senior managers of Mvelaserve 9.234

Total R 26.994

* Amount net of tax assumed to be at marginal tax rate of 40%

Further details of the Directors’ remuneration and service agreements are set out in Annexure 6 to this Pre-listing Statement. Except for the remuneration as detailed above, the remuneration payable to the Directors will not be varied in consequence of the Listing.

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19. DIRECTORS’ INTERESTS IN THE SHARE CAPITAL OF MVELASERVE

The Directors held the following direct and indirect beneficial interests in Mvela Group as at the Last Practicable Date:

Beneficial % of issued Directors Direct Indirect Total share capital

ExecutiveM S M Xayiya 32 3 340 824 3 340 856 2.4J M S Ferreira – – – –G E Röth – – – –

Non-ExecutiveO A Mabandla – 125 807 125 807 1

S Masinga – – – –N Mbalula – – – –F N Mantashe – – – –G D Harlow – – – –

Total 32 3 466 631 3 466 663 2.4

Note :

1. Less than 0.1%.

Other than as already mentioned above, there has been no material change in the interests of the Directors in the share capital of Mvelaserve between the end of the preceding financial year (30 June 2010) and the date of this Pre-listing Statement.

20. DIRECTORS’ INTERESTS IN TRANSACTIONS

No Director had any interest in transactions effected by Mvelaserve, either during the current or immediately preceding three financial years, or in an earlier financial year and which remain in any respect outstanding or unperformed.

No Director has been paid any monies to induce him/her to become a Director in the three years preceding the date of this Pre-listing Statement; nor were any amounts paid or agreed to be paid within the three years preceding the date of this Pre-listing Statement to any Director or to any company in which he is beneficially interested, directly or indirectly, or of which he is a director (“the associate company”), or to any partnership, syndicate or other association of which he/she is a member (“the associate entity”), in cash or securities or otherwise, by any person either to induce him to become or to qualify him as a Director, or otherwise for services rendered by him or by the associate company or the associate entity in connection with the promotion or formation of Mvelaserve.

No loans have been made by Mvelaserve to any Director.

21. MANAGEMENT LOCK-IN

The Mvela Group remuneration committee approved the payment of cash bonuses to various executives involved in Mvelaserve subject to the successful listing on the JSE, and subject to the after tax cash being used to acquire Mvelaserve Ordinary Shares on the JSE with a lock-in period of 2 years. Please refer to paragraph 18 for a detailed summary of this arrangement.

22. CORPORATE GOVERNANCE

Commitment and approach

The Mvelaserve Group and Board confirm their commitment to and subscribe to the principles of transparency, integrity and accountability. They further confirm their commitment to an open corporate governance process through which its shareholders and other stakeholders may derive assurance that, in protecting and adding value to the Mvelaserve Group financial and human investment, the Group is being managed ethically, according to prudently determined risk parameters and in compliance with good corporate governance practices.

Fundamental to the fulfilment of corporate responsibilities and the achievement of financial objectives is, an effective system of corporate governance which is entrenched in the Group’s systems of internal control and by its procedures and its profiles governing corporate conduct, with particular emphasis being placed on the importance of the qualitative aspects of corporate governance. In discharging this responsibility, the intention is to comply with the requirements of the King Code in both letter and spirit. Mvelaserve strives to integrate corporate governance into all aspects of its business.

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The Directors have pro-actively taken all the necessary steps to ensure full compliance with the recommendations incorporated in the King Code. The Board is of the opinion that Mvelaserve is compliant with the Listings Requirements and with the King Code in nearly all material respects , except that the Board will be chaired by M S M Xayiya, an Executive Director. This is discussed in the section relating to the “Board” on page 38.

The Board has adopted a board charter which covers, inter alia, the following:

• the role and function of the Board;

• the Board structure;

• meeting procedures;

• monitoring of investment and operational performance;

• risk management and internal control; and

• code of conduct.

The Mvelaserve Board recognises and acknowledges its responsibility for the Group’s systems of internal, financial and operational control. The Mvelaserve Group policy on business conduct, which covers ethical behaviour, compliance with legislation and sound accounting practice, underpins the Group’s internal control processes.

The control systems include written Policies and Procedures, clearly defined lines of accountability and delegation of authority and make provision for comprehensive reporting and analysis against approved standards and budgets and the responsibility for their accuracy, delegated to the Executive Directors and key management who are required to confirm that they regularly review the effectiveness thereof.

The Board is committed to providing, timely, relevant and meaningful reporting to all stakeholders.

Code of Conduct

The Board strives to ensure that the Group conducts its business with the utmost integrity towards all its stakeholders, including its shareholders, employees, customers, suppliers and society at large. The Group has a documented Code of Conduct for employees designed to provide guidance as to the ethical conduct of employees in all areas, appropriate policies in respect of the safeguarding of assets and information, and the appropriate corrective measures to enforce these policies. The Group provides, monitors and audits a safe system for employees to report any unethical behaviour by fellow employees, directors or shareholders of the Group.

The Code of Conduct must be adhered to by all those who work for, act on behalf of or represent the Group. This includes employees, managers, directors and other officers, contractors, consultants and other third parties when acting on behalf of or representing the Group.

The Code of Conduct reaffirms the high standards of business conduct required of all employees of the Group and has been created as part of the Group’s continuing commitment to ensure that it complies with all applicable laws, to ensure that it has an effective programme to prevent and detect violations of law and for the education and training of employees.

Adherence to the Code of Conduct will help to maintain the highest ethical standards in dealings by each employee with all stakeholders.

The Code of Conduct is a common reference point for defining how each employee is expected to act when conducting Group business. The Code of Conduct does not remove the need for all employees to exercise good judgement; it makes it easier. Each employee still has the responsibility to work with integrity and good judgement, as well as within the law. All employees must act in a fashion that will ensure that the Group continues to have the reputation of being:

• transparent and frank in its dealing with and disclosures to all stakeholders;

• socially and environmentally responsible;

• beyond reproach in the quality of its services;

• outstanding in its integrity and credibility;

• consistent in honouring its legal and moral obligations;

• aware of the need to foster loyalty and fidelity in long enduring relationships; and

• applies best practices in Corporate Governance.

Chairperson and Chief Executive Officer

On the Listing Date, the Board will be chaired by M S M Xayiya, an Executive Director. The Chairperson is responsible for providing leadership to the Board, overseeing its efficient operation and has been tasked with ensuring effective corporate governance practices.

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The Chief Executive Officer, J M S Ferreira, is responsible for formulating, implementing and maintaining the strategic direction of Mvelaserve, as well as ensuring that the day-to-day affairs of the Group are appropriately supervised and controlled.

Board

As at the Listing Date, the Board will comprise a majority of Non-executive Directors, with all of the five Non-executive Di rectors being independent. The Board recognises that having an Executive Chairman is not in compliance with the recommendations of the King Code. To address this, the Board has appointed O A Mabandla as the Lead Independent Non-executive Director on the Board, effective on the Listing Date.

The Board will retain full and effective control over the business of the Group. The Board has defined levels of materiality through a written delegation of authority, which sets out decisions the Board wishes to reserve for itself. The delegation will be regularly reviewed and monitored.

Non-executive Directors will bring an independent view to the Board’s decision -making. As a group, they will enjoy significant influence at the meetings.

The Executive Directors have fixed terms of appointment and, in accordance with Mvelaserve’s Articles of Association, all the Non-executive Directors are subject, by rotation, to retirement and re-election by shareholders at least every three years.

Generally, the Directors have been and will be nominated based on their calibre, credibility, knowledge, experience, impact they are expected to have and time and attention they can devote to the role. The Remuneration and Nomination Committee is responsible for vetting the individuals proposed for Directorship and making recommendations to the full Board for approval. Before nomination, appropriate background checks are performed on proposed new Directors. New Directors are taken through a formal induction programme and are provided with all the necessary background information to familiari se them with issues affecting the Board.

The Board intends to meet at least four times a year with additional meetings called if necessary or desirable. Information relevant to a meeting is supplied on a timely basis to the Board ensuring Directors can make reasoned decisions. The Directors have unrestricted access to information and management in relation to the Group, and where appropriate, may seek the advice of independent professionals on matters concerning the affairs of the Group, at the expense of Mvelaserve.

Independence of the Board

The Board’s independence from the team responsible for the daily management of Mvelaserve will be maintained by:

• keeping separate the roles of the Chairperson and the Chief Executive Officer ;

• functioning Board committees comprised mainly Non-executive Directors;

• the Non-executive Directors not holding fixed term service contracts;

• all Directors, with prior permission of the Board, being entitled to seek independent professional advice regarding the affairs of the Group at the Company’s expense;

• all Directors having access to the advice and services of the Company Secretary; and

• the appointment or dismissal of the Company Secretary being decided by the Board as a whole and not by one individual Director.

Self governance

The Board is accountable to shareholders but undertakes to manage itself. This includes but is not limited to:

• appointing and maintaining a Chairperson;

• regularly monitoring and appraising its own performance;

• maintaining transparency and accurate records of its decisions; and

• aiming to educate and update itself as a Board continuously on matters affecting the future of the Group .

Board actions

The Board discharges its responsibilities through a number of its actions, including:

• determining the Group’s Code of Conduct and conducting its own affairs in a professional manner, upholding the core values of integrity, transparency and enterprise;

• ev aluating, determining and ensuring the implementation of corporate strategy and policy;

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• determining compensation, development, education and other relevant policies for Mvelaserve employees; and

• developing and setting disclosure and reporting practices at a minimum, as required by applicable law to best serve the needs of its shareholders.

Strategy formulation and execution

The Board defines the strategic policy intent and objectives of the Group as a business enterprise as well as its values. It executes them through the Chief Executive Officer and his management team and, except in exceptional circumstances, does not get involved in the day -to -day management of the Group.

The Board requires a formal strategic planning system that reviews and approves or updates strategic plans presented by management annually and monitors the Group’s performance against those plans.

Additional roles and responsibilities

Without limitation, the Board is further responsible for :

• monitoring the performance of the Group in all respects, including, inter alia:

• performance of the operations;

• financial reporting accuracy and integrity;

• management performance;

• risk exposures and controls;

• comparative performance against peers; and

• shareholder satisfaction ;

• authorising and controlling capital expenditure and reviewing investment capital and funding proposals ;

• setting the capital structure of the Group ;

• seeking to ensure ethical behaviour and compliance with relevant laws, regulations, audit and accounting principles/practices, the Group’s own governing documents and Code of Conduct ;

• the overall system of risk management system including setting management expenditure authori sation and exposure limit guidelines. Management is accountable to the Board for designing, implementing and monitoring the process of risk management and integrating it into operations ;

• reviewing succession planning for the management team and endorsing senior executives’ appointments, organisational changes and general remuneration policy ; and

• providing counsel and advice to the Chief Executive Officer and his team on all critical and sensitive matters.

Board committees

Several committees have been established to assist the Board in carrying out its duties. The Board has delegated to the committees specific roles of responsibility and these are set out in the respective committee charters. There is full disclosure and transparency from the committees to the Board. Each Board committee has its own charter which defines its purpose, authority and responsibility. The Board annually reviews the effective performance of each of its committees.

A. Audit and Risk Committee

On the Listing Date, this committee will consist of three Non-executive Directors, all of whom are independent. The members of th is committee will be:

• G D Harlow (Chairman);

• O M Mabandla ; and

• S Masinga.

The Audit and Risk Committee is responsible for assisting the Board in fulfilling its responsibilities in respect of financial reporting issues, internal and external audit management, ensuring compliance with laws and regulations, risk management and development/maintenance of an effective internal control system. The Audit and Risk Committee will, on an annual basis, consider and satisfy itself of the appropriateness of the expertise and experience of the Chief Financial Officer of the Group. As at the Listing Date, the Audit and Risk Committee has satisfied itself of the appropriateness of the expertise and experience of the Chief Financial Officer, Mr G E Röth. It is intended that the Audit and Risk Committee will meet at least twice a year.

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The Audit and Risk Committee members have unrestricted access to information and management of the Group and, where appropriate, may seek the advice of independent professionals on matters concerning the affairs of the Group, at the expense of Mvelaserve.

The Audit and Risk Committee sets the principles for recommending the use of the external auditors for non-audit purposes, which include:

• tax services, including advice on tax planning and transfer pricing issues;

• corporate restructuring;

• merger and acquisition advice; and

• training.

B. Remuneration and Nomination Committee

On the Listing Date, the committee will consist of three Non- executive Directors, all of whom are independent. The members of this committee will be:

• F N Mantashe (Chairman);

• N Mbalula ; and

• G D Harlow.

Th is committee will meet at least twice a year and is responsible for assisting the Board in fulfilling its responsibilities in respect of maintaining an appropriate remuneration strategy, ensuring Directors and senior executives are fairly rewarded, providing for succession planning, assessing the effectiveness of the composition of the Board and evaluating the Board and individual Director’s performances.

The remuneration strategy is aimed at ensuring that levels of remuneration are sufficient to attract, retain and motivate executives and, where appropriate, aimed at aligning the executives’ interests with that of the shareholders. Consequently, an element of the strategy is aimed at ensuring that the performance-related elements of the executive’s remuneration should constitute a growing portion of total remuneration. The remuneration package will mainly have two elements: a market-related base pay and incentive pay comprising an annual cash bonus. A portion of the remuneration package shall be subject to certain pre-defined performance targets being met.

In setting and approving remuneration levels and structures, the co mmittee will make comparisons to remuneration paid by other companies in the same industry or similar industries, taking into account differing levels of responsibility, performance and complexity. In discharging its responsibilities, the committee may also get advice from specialist remuneration consultants as and when needed and consider remuneration levels for other executives and employees in the Group.

C. Executive Committee

This committee comprises the Executive Chairman, the Chief Executive Officer, the Chief Financial Officer and certain senior management of the Group. It is responsible for the operational activities of the Group, developing strategy and policy proposals for consideration by the Board and implementing the Board’s directives. Other responsibilities of the Executive Committee include:

• providing leadership to the senior management and staff of the Group;

• developing the annual budget and business plans for approval by the Board; and

• developing, implementing and monitoring policies and procedures, internal controls, governance, risk management, ethics and authority levels.

Company Secretary

All Directors have access to the advice and services of the Company Secretary, whose appointment is in accordance with the Companies Act, and who is responsible to the Board for ensuring the proper administration of Board proceedings. The Company Secretary also provides 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 Ordinary Shares during restricted periods, should be discharged.

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Share dealings

On Listing, Mvelaserve will adopt a share dealing policy requiring all Directors, senior executives and the Company Secretary to obtain prior written clearance from either the Chairman of the Board or Chief Executive Officer to deal in Mvelaserve Ordinary Shares. The Chairman of the Board would require prior written clearance from the Chairman of the Audit and Risk Committee. Closed periods, as defined in the Listings Requirements, shall be observed as required by the Listings Requirements. During these periods, the Directors, executives and inside employees would not be permitted to deal in Mvelaserve Ordinary Shares. Additional closed periods would be enforced should Mvelaserve be subject to any corporate activity where a cautionary announcement, as defined in the Listings Requirements, is published. In addition, all share dealings by the Directors, the Company Secretary and any of their associates, as defined in the Listings Requirements, will be reported to the market in accordance with the requirements of the JSE.

Internal control systems

To meet the Group’s responsibility to provide reliable financial information, the Group maintains financial and operational systems of internal control. These controls are designed to provide reasonable assurance that transactions are concluded in accordance with management’s authority, that the assets are adequately protected against material losses and unauthorised acquisition, use or disposal, and that all transactions are properly authorised and recorded.

The Group monitors the operation of the internal control systems in order to determine if there are deficiencies. Corrective actions are taken to address control deficiencies as they are identified. The Board, operating through the Audit and Risk Committee, oversees the financial reporting process and internal control systems.

There are inherent limitations on the effectiveness of any system of internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, an effective internal control system can provide only reasonable assurance with respect to financial statement preparation and the safeguarding of assets.

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PART C: FINANCIAL INFORMATION – HISTORICAL FINANCIAL INFORMATION, PRO FORMA FINANCIAL INFORMATION AND DIVIDEND POLICY

23. HISTORICAL FINANCIAL INFORMATION

The historical consolidated financial information of the Mvelaserve Group and its subsidiaries for the three financial years ended 30 June 2010, 2009 and 2008 is set out in Annexure 2 to this Pre-listing Statement, the preparation of which is the responsibility of the Directors . The information set out below should be read in conjunction with such historical financial information and PKF’s report set out in Annexures 2 and 3 to this Pre-listing Statement.

Summarised statement of comprehensive income

Set out below is the summary consolidated statement of comprehensive income of Mvelaserve, which ha s been extracted from the financial information of the Mvelaserve Group for the years presented:

12 months ended 30 June 2010 2009 2008(R’000) (Audited) (Reviewed)1 (Reviewed)1

IFRS IFRS IFRS

Revenue 4 061 998 3 601 257 3 463 275Cost of sales (3 103 298) (2 703 969) (2 616 880)

Gross profit 958 700 897 288 846 395Other income 32 671 49 344 57 584Operating expenses (700 084)) (756 04 0) (794 665)

Operating profit 291 287 190 59 2 109 314Interest received 3rd party 14 888 25 433 16 536Interest paid 3rd party (77 943) (110 492) (30 341)Interest treasury 2 561 (7 324) (1 467)Dividend income – 99 –Fair value adjustment and net loss from investments (2 726) (40 663) (15 663)Share of profit from associates 6 075 3 463 624

Profit before taxation 234 14 2 61 108 79 00 3Taxation (80 282) (72 753) (67 564)

Profit/( Loss) for the year from continuing operations 153 86 0 (11 645) 11 439Discontinued operationsProfit for the year from discontinued operations 1 155 1 533 –

Total comprehensive income for the year 155 015 (10 112) 11 439

Total comprehensive income attributable to:Ordinary shareholders 151 798 (12 473) 12 566Minority shareholders 3 217 2 361 (1 127)

155 015 (10 112) 11 439

Weighted average number of ordinary shares in issue 100 100 100Earnings per ordinary share (R’000) 1 518 (125) 114Headline earnings per ordinary share (R’000) 1 51 4 (143) 98

1. Audited as part of Mvelaphanda Group Consolidation.

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Summarised statement of financial position

Set out below is summary consolidated statement of financial position of the Mvelaserve Group, which ha s been extracted from the financial information of the Mvelaserve Group for the years presented:

12 months ended 30 June 2010 2009 2008(R’000) (Audited) (Reviewed) (Reviewed) IFRS IFRS IFRS

ASSETS

Non- current assets 975 10 5 928 440 887 857

Property, plant and equipment 387 619 312 602 266 258Goodwill 412 704 414 164 406 827Intangible assets 132 63 1 129 83 6 127 7 90 Other non-current assets 42 152 71 838 8 4 296

Current assets 1 753 501 1 417 826 1 191 9 38

Trade and other receivables 763 87 6 705 467 579 46 7Trade and other receivables – Mvela Group 97 878 97 878 105 950Cash and cash equivalents 374 809 210 251 219 150Other current assets 516 938 404 230 287 371

Assets in disposal group held for sale 5 045 – 280 295

Total assets 2 733 651 2 346 266 2 3 57 304


Capital and reserves 233 30 0 78 89 8 90 054

Shareholder’s equity 227 817 76 019 88 492Minority interest 5 483 2 879 1 562

Non-current liabilities 1 367 15 8 1 179 327 981 8 49

Interest bearing liabilities – preference share funding 482 438 482 438 –Non interest bearing liabilities – Mvela Group 722 117 566 362 848 870Other non-current liabilities 162 60 3 130 527 129 979

Current liabilities 1 133 19 3 1 088 04 1 1 099 405

Trade and other payables 793 73 6 748 00 2 712 965Interest bearing liabilities – Mvela Group 100 478 93 560 74 397Other current liabilities 238 979 246 479 312 043

Liabilities in disposal group held for sale – – 176 895

Total equity and liabilities 2 733 651 2 346 266 2 357 304

Net number of ordinary shares in issue 100 100 100Net asset value per ordinary share (R’000) 2 278 760 855Net tangible assets per ordinary share (R’000) (3 350) (5 010) (4 746)

Note:

The notes to the historical consolidated financial information have been fully disclosed in Annexure 2 to this Pre-listing Statement.

Unaudited pro forma financial information

The unaudited pro forma consolidated statement of comprehensive income and the statement of financial position of Mvelaserve and its subsidiaries for the year end ed 30 June 2010, adjusted for the Restructuring, are set out below.

The unaudited pro forma financial information below has been extracted from the pro forma financial information presented in Annexure 4 to this Pre-listing Statement. This information should be read in conjunction with such financial statements and financial information and the related notes in Annexure 4.

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Summarised pro forma statement of comprehensive income

Set out below is the summarised pro forma statement of comprehensive income of the Mvelaserve Group , which has been extracted from the pro forma financial information of the Mvelaserve Group as presented in Annexure 4:

Zonke Debt Listing and 30 June 2010 Before acquisition Restructure Unbundling After R’000 R’000 R’000 R’000 R’000

Revenue 4 061 998 49 950 4 111 948

Profit from operations 291 287 19 858 ( 50 985 ) 260 160 Interest income – 3rd party 14 888 5 (13 946) 947Interest treasury 2 561 (2 561)Interest expense – 3rd party (77 943) (1) (22 453) (100 397)Share of profit from associates 6 075 6 075Net fair value adjustments and profit/(loss) from investments (2 726) (2 726)

Profit before taxation 234 142 19 862 (36 399) ( 53 546 ) 164 059Taxation expense (80 282) (6 137) 15 603 13 314 (5 7 502 )

Profit for the year from continuing operations 153,860 13 725 (20 796) ( 40 232) 106 557Profit for the year from discontinued operations 1 155 1 155

Total comprehensive incomefor the year 155 015 13 725 (20 796) ( 40 232) 107 712

Earnings per ordinary share (R) 1 517 980 0.71Headline earnings per ordinary share (R) 1 514 127 0.71 Diluted earnings per ordinary share (R) 1 517 980 0.71Diluted headline earnings per ordinary share (R) 1 514 127 0.71

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Summarised pro forma statement of financial position

Set out below is the summary pro forma statement of financial position of the Mvelaserve Group, which ha s been extracted from the pro forma financial information of the Mvelaserve Group as presented in Annexure 4:

Zonke Debt Listing and 30 June 2010 Before acquisition Restructure Unbundling After R’000 R’000 R’000 R’000 R’000

ASSETS

Non-current assets 975 10 5 36 021 1 011 12 6

Property, plant and equipment 387 619 822 388 44 0Intangible assets 545 33 5 35 014 580 3 49 Other non-current assets 42 151 186 42 337

Current assets 1 753 501 5 785 (133 492) (4 90 048) 1 135 746

Trade and other receivables 763 87 6 763 87 6Trade and other receivables – Mvela Group 97 87 8 (97 878)Cash and cash equivalents 374 809 256 (133 492) 67 607 3 09 180 Other current assets 516 938 5 529 (459 777) 63 690

Assets in disposal group held for sale 5 045 5 045

Total assets 2 733 651 41 806 (133 492) (4 90 048 ) 2 151 917


Capital and reserves 233 30 0 37 707 455 804 726 811

Shareholder’s equity 227 817 31 120 455 804 714 741 Minority interest 5 483 6 587 – 12 070

Non-current liabilities 1 367 158 (55 470) (722 117) 589 571

Interest bearing liabilities – preference share funding 482 438 (482 438)Interest bearing liabilities – Nedbank 550 000 550 000Non-interest bearing liabilities Mvela Group 722 117 (722 117)Other long-term liabilities 162 603 (123 032) 39 571

Current liabilities 1 133 192 4 099 (78 022) (219 690) 835 53 5

Trade and other payables 793 735 4 099 5 955 803 7 90 Interest bearing liabilities – Mvela Group 100 478 (100 478)Other current liabilities 238 979 (78 022) (129 212) 31 745

Total equity and liabilities 2 733 651 41 806 (133 492) ( 490 048 ) 2 151 917

Net asset value per ordinary share (R) 2 278 170 5.05Net tangible asset value per ordinary share (R) ( 3 350 380) 0. 82

Note:

The key assumptions and notes to the pro forma financial information have been fully disclosed in Annexure 4 to this Pre-listing Statement.

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24. LOAN CAPITAL AND MATERIAL LOANS

Details of the material loans to Mvelaserve as at the Last Practicable Date are set out in Annexure 10 to this Pre-listing Statement. No debentures have ever been issued by Mvelaserve. Mvelaserve d id not have any material loans receivable outstanding as at 30 June 2010.

25. DIVIDENDS AND DIVIDEND POLICY

The Board intends to adopt a competitive dividend policy, which will reflect the growth, long-term earnings and cash flows of the Group, while maintaining an appropriate dividend cover. A target dividend cover of approximately 2.5 times will be adopted. There is, however, no assurance that a dividend will be paid out and any dividend proposed by the Board in respect of any financial period will be dependent upon the operating results, financial position, investment strategy, capital requirements and other factors. It is currently anticipated that most of the cash available and cash generated by the business will be invested in the continued growth of its activities.

It is anticipated that interim dividends will, if declared, be paid in March and final dividends will be paid in September of each year, in the approximate proportion of one-third and two-thirds of the annual dividend, respectively.

If a dividend is unclaimed for three years after the payment date, it may be declared forfeited by the Directors for the benefit of Mvelaserve. There is no fixed date on which entitlement to dividends arises and the date of payment will be determined by the Directors or shareholders at the time of declaration, subject to the Listings Requirements. Relevant extracts of the Articles of Association relating to dividends are set out in Annexure 12 to this Pre-listing Statement.

26. MATERIAL CHANGES

The material changes in the assets, liabilities and trading position of the Group that have taken place between 30 June 2010 and the Last Practicable Date, including those relat ing to the Restructuring, as detailed in Annexure 1, are as follows:

• Debt Restructure;

• disposal of Stamford Sales to Mvela Group;

• Mvelaserve’s agreement to acquire the 75% of the issued share capital of Zonke from Mvela Group in terms of the Zonke acquisition; and

• settlement of inter-company loans between Mvela Group and Mvelaserve.

27. WORKING CAPITAL STATEMENT

The Directors are of the opinion that, in order to meet Mvelaserve Group’s present requirements, that is for at least a period of 12 months from the date of this Pre-listing Statement:

• Mvelaserve Group will be able, in the ordinary course of business, to pay its debts;

• the assets of Mvelaserve Group will be in excess of the liabilities of Mvelaserve Group. For this purpose the assets and liabilities will be recognised and measured in accordance with the accounting policies used by Mvelaserve in its latest audited annual Group financial statements;

• the ordinary share capital and reserves of Mvelaserve Group will be adequate for ordinary business purposes; and

• the working capital of Mvelaserve Group will be adequate for ordinary business purposes.

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PART D: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

A brief discussion, per statement of comprehensive income and statement of financial position caption as detailed below, of the performance of Mvelaserve for the current and previous financial years ended 30 June 2010 and 30 June 2009..

The following discussion and analysis should be read together with the rest of the Pre-listing Statement, including the historical financial information in Annexure 2 and the pro forma financial information included in Annexure 4 to this Pre-listing Statement. The Group has presented pro forma financial information to 30 June 2010, which takes into account the Debt Restructuring and the Restructuring , and the settling of the inter-company loans between Mvela Group and Mvelaserve Group. All transactions are assumed to have been concluded in the financial year ended 30 June 2010, and have been included in the financial results for a full year.

Mvelaserve Group

On a comparable basis (including Zonke), Mvelaserve exceeded expectations in the financial year ended 30 June 2010 with revenue increasing by 15% to R4,11 2 million from R 3,509 million the previous year. EBITDA increased from R 371 million to R4 48 million .


The performance of TFMC for the year exceeded the previous year’s results. The Customised Solutions pipeline is full of opportunities, a positive sign to diversify from reliance on the Telkom agreement. The extension of the Telkom agreement to 31 March 2016 was signed on 12 August 2010. It is expected that the new agreement will have a 20% to 25% negative impact on the profitability of TFMC.

Security

Protea Coin revenue for the year ended 30 June 2010 showed a strong improvement on the previous year. The improvement was principally due to a strong performance by the Assets-in-Transit and guarding divisions. This improvement is expected to continue under the current market conditions.

Catering and Cleaning

In 2010, the cleaning and catering division performed below the previous year. During the year the businesses were consolidated under one management and administrative team and the name was changed to Royalserve Catering and Royalserve Cleaning. The divisional restructuring has been finalised and the economies of scale will result in an improvement of the profitability of the combined business in the current financial year (2010/11).


In 2010, the Diversified Services business unit performed below the previous year principally due to lower volume in the import/export markets affecting Contract Forwarding. Khuseti showed a strong improvement from the 2009. The franchise business, with in -store numbers in the region of 310 King Pie stores remained flat during the year. Zonke will continue with its current growth and the number of LPM’s are increasing in line with expectations.

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28. REVENUE

Years ended (R’000) Unaudited Audited Reviewed 30 June 2010 30 June 2010 30 June 2009 pro forma

Revenue 4 111 948 4 061 998 3 601 257Year -on -year growth +12.8%

Revenue for the year ended 30 June 2010 increased by 13% or R461 million to R4 062 million (2009: R3 601 million). The pro forma results include R50 million revenue from Zonke.

29. OPERATING COSTS


Operating costs 7 67 625 700 084 756 04 0Year -on -year growth –7. 9%

Operating expenses decreased at a rate below inflation. The pro forma operating costs include bonuses payable to Directors and senior managers of Mvelaserve , listing expenses and operating expenses in relation to Zonke.

30. OPERATING PROFIT


Operating profit 260 160 291 287 190 59 2Year -on -year growth +52.83%

The improvement in operating profit is due to the increase in revenue and reduction in operating costs. The pro forma operating profit decreased because of the listing expenses and the bonuses payable as described above, and increased as a result of the operational profits of Zonke.

31. DEPRECIATION


Depreciation 104 465 103 916 105 717Year -on -year growth –1,7%

Depreciation remained relatively flat year -on -year.

32. EMPLOYEE COSTS


Employee costs 1 986 075 1 932 548 1 641 300Year -on -year growth +17,7%

Employee expenses increased as a result of the higher revenue generated by more employees appointed to generate the revenue and increases in salary expenses. The pro forma employee costs include the bonuses as described above and employee expenses for Zonke.

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33. FINANCE COSTS


Finance costs 100 397 77 943 110 492Year -on -year growth –29.5%

Finance costs were lower as a result of the decrease in the average interest rate of 4% from 2009 to 2010. The pro forma finance costs increased by R22 million in terms of the Restructuring and the Debt Restructure.

34. TAXATION


Taxation 57 502 80 282 72 753Year -on -year growth 10.3%

Taxation increased as a result of increased profits and the reduction of available tax losses. The pro forma taxation decrease d as a result of the additional taxable expenses incurred.

35. CASH FLOW ANALYSIS

Cash flow for the year showed an increase in line with the overall improvement of the Group.

36. ANALYSIS OF STATEMENT OF FINANCIAL POSITION

36.1 Assets

36.1.1 Property, plant and equipment

The R192 million additions were mainly as a result of the growth in Protea Coin. 75 % of the additions were for expansion of new business and the remainder for the replacement of assets.

36.1.2 Net working capital

Trade and other receivables increased by 7% to R764 million from the previous year which is in line with the increase in revenue. Inventories remained flat in the region of R42 million. Cash improved by R164 million to R375 million as at 30 June 2010. Trade and other payables increased 6% to R794 million from the previous year.

36.2 Liabilities

The preference share funding remained constant in 2010. The total asset finance increased by 34% due to the acquisition of property, plant and equipment as a result of the expansion of the business in the 2010. The preference share funding will be replaced with new debt from Nedbank Limited in terms of the Debt Restructure.

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PART E: RISK FACTORS

Investing in the Mvelaserve Ordinary Shares involves risk. Accordingly, before investing in Mvelaserve Ordinary Shares, Prospective Investors should carefully consider the risks described below in addition to the other information in this Pre-listing Statement. Although information has been provided in this Pre-listing Statement in relation to the Mvelaserve Ordinary Shares, a Prospective Investor should use his or her own judgement and seek advice from an independent financial adviser as to the appropriate value of the Mvelaserve Ordinary Shares.

Mvelaserve’s business, financial position, results of operations, growth, strategies and dividend policy could be materially adversely affected by a number of risks, including those set out below. These risks could also have an adverse effect on the trading price of Mvelaserve Ordinary Shares. The risks described below are not the only risks faced by Mvelaserve. Additional risks not presently known to Mvelaserve or that the Directors currently deem immaterial may also adversely affect the Group’s business, financial position, results of operations, growth, strategies and dividend policy.

This Pre-listing Statement contains “forward-looking” statements that involve risks and uncertainties. Mvelaserve Group’s actual results may differ significantly from the results discussed in such forward-looking statements. Factors that might cause such differences include those discussed below.

37. RISKS RELATED TO MVELASERVE’S BUSINESS

Mvelaserve Group’s business is dependent on general economic conditions.

Although Mvelaserve Group’s products, services, clients and industry are designed to limit the Group ’s exposure to economic downturns, localised downturns in markets where it has operations, including any downturns in the various industries within which it operates, could reduce demand for its products and services and negatively impact its revenues and profitability. Any of the foregoing economic events could negatively affect Mvelaserve Group’s industry or the industries in which its clients operate, which may cause the demand for Mvelaserv e Group’s products and services to decline and therefore harm its revenues and profitability.

Failure to retain and attract key personnel and qualified employees could impede Mvelaserve Group’s ability to execute its business plan and growth strategy, and lead to a loss of clients.

The Group’s performance depends to a large extent on the efforts and abilities of its key personnel and employees. The Group believes that its success will continue to depend, in part, upon its ability to continue to attract, retain and motivate the necessary personnel, including executive officers and certain other key employees. Between them, the key executives of Mvelaserve Group have years of experience in facilities management, security, cleaning and catering industries. These executives, along with other key personnel, have a knowledge and understanding of Mvelaserve Group and its industry that cannot be readily duplicated in the short-term. They generally have substantial experience and expertise in their fields of operations and have made significant contributions to the growth of Mvelaserve Group as a whole. The competition for qualified personnel in the industry is strong and there can be no assurance that Mvelaserve Group will be successful in retaining such personnel or attracting replacement personnel. Failure to attract and retain such personnel, including any member of Mvelaserve Group’s senior management team, could have a material adverse effect on Mvelaserve Group’s business by impairing its ability to execute its business plan and growth strategy, causing it to lose clients and reduce its revenues.

Mvelaserve Group’s business largely involves contracting with clients, and if these agreements result in unrecoverable amounts and/or create disputes, then this will negatively affect profitability.

The Group is exposed to risks relating to its entrance into large contracts with key clients. These risks include, among other things, material contract failure and inadequate contract variation management. In the case of material contract failure, Mvelaserve Group is exposed to the risk that disputes may arise with third parties and the outstanding balances due to Mvelaserve Group under the agreements, which in some instances may include material amounts, may not be recoverable on time or at all. The inability to recover amounts owed under large client contracts in a timely manner may affect Mvelaserve Group’s cash flow positions, and may otherwise have a material adverse effect on its results of operations and financial conditions. Material contract failures may be caused by internal factors, including inadequate service and legal risk assessment, lack of clarity in the scope of work, poor labour productivity or insufficient project management resources (e.g. skills and expertise). Contract failures may be caused by external factors as well, such as problematic clients or changes in general economic conditions, resulting in unrecoverable costs and forfeited profit margins and ultimately having an adverse effect on its financial condition or results of operations.

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Mvelaserve Group conducts its business in South Africa which is subject to certain political, social and economic conditions.

The Mvelaserve Group is incorporated in and has its head office, operations, customers and investors located in South Africa. Accordingly, the country’s political, social and economic conditions are relevant to investors in assessing a proposed investment in Mvelaserve Ordinary Shares. In general, South Africa faces many challenges in overcoming substantial inequalities in levels of social and economic development among its people. The South African Government has taken a number of significant steps towards addressing the social and economic problems in South Africa, although certain problems still exist. While South Africa features a highly developed financial and legal infrastructure at the core of its economy, it has high levels of unemployment, poverty and crime. Particular considerations include how the South African Government will ultimately address such tensions and problems, to what extent its efforts will be successful, the political, social and economic consequences of such efforts and the effect on South African businesses of the continuing integration of the South African economy with the economies of the rest of the world. The economic direction of South Africa may be influenced by the extent to which the South African Government, organised labour and business are able to agree upon common goals and the means of achieving them. While Mvelaserve Group believes that the economic sentiment is positive for the future, these social and economic problems may have a negative impact on the South African economy and in turn may have an adverse effect on Mvelaserve Group’s South African operations and on its business and financial performance as a whole.

As discussed in paragraph 10 of this Pre-listing Statement headed “The Business of Mvelaserve Limited – Black Economic Empowerment”, BEE is a central part of the South African Government’s economic transformation strategy.

A portion of Mvelaserve Group’s revenues are dependent on payments from Government, and reductions or delays in these payments or the implementation of other measures to reduce reimbursements from Government may reduce Mvelaserve Group’s revenues.

The Group has a number of contacts with various national, provincial and local Government departments, particularly through the security, cleaning and catering businesses. Many companies in South Africa contracted with the Government, including Mvelaserve have experienced and may continue to experience significant delays in receiving payments from some of the government departments. In addition, Government departments may be unable to pay for services in the event of budget deficits or failure to receive funding from the national Government. Recently, various Government departments have cancelled a number of service contracts, citing budget cuts, “fruitless” and “irregular” expenditure as the reason. Any delays or failures by Government to reimburse Mvelaserve Group for services rendered may have a material adverse effect on Mvelaserve’s business, prospects, financial condition or results of operations.

A decrease in the quality of services provided by Mvelaserve Group may negatively impact Mvelaserve Group’s reputation.

Mvelaserve’s business model is dependent on Mvelaserve Group providing quality services and products. If the various businesses of Mvelaserve are unable to continue providing quality services to clients, or fail to maintain their high standards of client satisfaction, Mvelaserve Group’s business could be adversely impacted. In addition, any failure of Mvelaserve employees to maintain high quality service standards, could adversely affect Mvelaserve Group’s reputation or subject Mvelaserve Group to liability.

The fixed-term nature of significant contracts could impair business continuity in some of Mvelaserve Group’s businesses.

Mvelaserve has entered into limited fixed-term agreements with Telkom and the N GB, for TFMC and Zonke, respectively. Non-renewal or cancellation of these contracts at the end of the term could result in a significant decrease in the revenue and profitability o f Mvelaserve Group. The Directors are confident that the risk of contract cancellation by the clients is low due to the high quality service provided by TFMC and Zonke. Furthermore, the Directors are equally confident that the clients are likely to extend the contracts beyond their current term.

Strikes or other industrial action could impair Mvelaserve Group’s ability to provide services to clients.

As at 30 June 2010, Mvelaserve Group had a total employee workforce of approximately 30 000, of which approximately 60% were members of trade unions. Mvelaserve Group businesses have in the past and may in future be subject to strike or industrial action. Any such strikes or industrial action in the future may have a material adverse effect on Mvelaserve Group’s business, prospects, financial condition or results of operations.

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Mvelaserve Group’s operations could be adversely affected by a failure of Mvelaserve Group’s information systems.

Any system failure that causes an interruption in service or availability of Mvelaserve Group’s systems could adversely affect operations or delay the collection of revenues. Although reasonable measures are in place to safeguard Mvelaserve’s servers, they are vulnerable to computer viruses, break-ins and similar disruptions from unauthorised tampering. The occurrence of any of these events could result in interruptions, delays, the loss or corruption of data, the unauthorised release of confidential data or cessations in the availability of systems, all of which could have a material, adverse effect on Mvelaserve Group’s business, prospects, financial condition or results of operations.

Mvelaserve Group may in the future be subject to competition or anti-trust laws which may adversely affect its business, operations or financial condition.

Mvelaserve Group is subject to competition and anti-trust laws in South Africa. The Competition Amendment Bill, if approved in its current form, will introduce significant reforms to the Competition Act, including criminalisation provisions and provisions relating to regulation of so called “complex monopolies”, which do not require an agreement, arrangement or understanding between firms in order to hold two or more firms liable for market characteristics that indicate co-ordinated conduct between the firms. If Mvelaserve Group is subject to any investigation by or sanctions from the competition authorities in South Africa under the current or any future competition legislation, or investigation by or sanctions from the competition authorities in other jurisdictions, Mvelaserve Group’s business, prospects, financial condition or results of operations may be materially adversely affected.

Strict liability introduced by the CPA exposes suppliers and service providers to a much wider net of potential liability.

Section 61 of the CPA establishes a form of “modified strict liability” of producers, importers, distributors or retailers in respect of harm caused by, or as a result of, the supply of any unsafe goods, product failures, defects or hazards in any goods, or inadequate instructions or warnings provided to the consumer, and pertaining to any hazard arising from or associated with the use of any goods, irrespective of whether the harm resulted from any negligence on the part of the producer, importer, distributor or retailer. This is a significant departure from the existing common law in terms of which a consumer generally has to prove fault (negligence) on the part of the manufacturer, producer or supplier as the case may be, in order to be successful with a claim for damages.

Certain of Mvelaserve Group’s businesses operate in highly regulated industries.

Certain of Mvelaserve Group’s businesses operate in highly regulated industries, particularly Protea Coin as it relates to the security industry regulations and firearm licensing requirements, and Zonke as it relates to the gambling regulations. No assurance can be given that the South African Government and/or industry regulatory bodies will not implement new regulations or amend existing regulations, or otherwise take actions which could have a material adverse effect on Mvelaserve Group’s business, financial conditions, results of operations and on prospects.

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PART F: SHARE CAPITAL

38. SHARE CAPITAL

The authorised and issued share capital of Mvelaserve on the Listing Date will be as follows:

(R)

Authorised share capital

500 000 000 no par value ordinary shares –

Issued share capital

141 561 673 no par value ordinary shares –

Total issued stated capital –

No Mvelaserve subsidiary holds any of the issued share capital as treasury shares.

No Mvelaserve Ordinary Shares will be listed on any securities exchange other than the JSE. Mvelaserve has not issued any debentures.

The unissued Mvelaserve Ordinary Shares are under the control of the Directors, subject to the provisions of sections 221 and 222 of the Companies Act and the Listings Requirements.

There are no founders’ or deferred shares. Other than the Mvelaserve Ordinary Shares which are expected to be listed on the JSE, no securities have been issued by Mvelaserve nor listed on any other stock exchange.

There are no preferential conversion and/or exchange rights attached to any Mvelaserve securities

In terms of the Articles of Association, any variation of the rights attaching to the Mvelaserve Ordinary Shares will either require the consent of the Mvelaserve Ordinary Shareholders holding at least three-fourths of the Mvelaserve Ordinary Shares or with a sanction of a resolution passed in the manner prescribed in the Companies Act or the passing of a special resolution in a general meeting of the Mvelaserve Ordinary Shareholders. Provided that, to every such general meeting, all the provisions of the Articles of Association relating to general meetings shall mutatis mutandis apply except that the quorum shall be not less than 3 (three) persons holding or representing by proxy not less than 51 % (fifty -one percent) of the Mvelaserve Ordinary Shares, provided further that if at any adjourned meeting, such quorum is not present, the shareholders present shall form a quorum

In accordance with the Articles of Association, at a general meeting of the shareholders of Mvelaserve every shareholder present in person or by proxy (or, if a body corporate, duly represented by an authorised representative), shall have one vote on a show of hands, and on a poll every shareholder present in person or by proxy shall be entitled to that proportion of the total votes in Mvelaserve which the aggregate amount of the nominal value of the Ordinary Shares held bears to the aggregate amount of the nominal value of all the Ordinary Shares issued by Mvelaserve. Accordingly, for so long as all the Ordinary Shares issued by Mvelaserve have the same nominal value, a Mvelaserve Ordinary Shareholder will have one vote for each Mvelaserve Ordinary Share of which that person is the registered holder. No special voting powers are reserved to any founder, vendor, Director or other person.

All authorised and issued Mvelaserve Ordinary Shares will be of the same class and will rank pari passu in every respect. Set out in Annexure 12 to this Pre-listing Statement are extracts from the Articles of Association dealing with the rights of holders of Mvelaserve Ordinary Shares to dividends, profits and/or capital, including rights on liquidation and distribution of capital assets.

In terms of the Articles of Association, a dividend which remains unclaimed after a period of three years from the payment date may be declared forfeited by the Directors for the benefit of Mvelaserve

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39. ALTERATIONS TO SHARE CAPITAL IN THE PAST THREE YEARS

Set out below are the alterations to the ordinary share capital of Mvelaserve which have occurred during the past three years:

• On or about 7 October 2010 , Mvelaserve altered each share in the entire authorised capital of R1 000, consisting of 1 000 ordinary shares of R1 each, and the issued ordinary share capital of R100, consisting of 100 ordinary share of R1 each, by implementing a share split of each share of R1 each into 794 560 Ordinary Shares of R0.00012585581957 each, thus increasing the authorised number of shares to capital of R1 000, consisting of 794 560 000 ordinary shares of R0.00012585581957 each each, and the issued ordinary share capital of R100, consisting of 79 456 000 ordinary share of R0.00012585581957 each;

• On or about 7 October 2010 , Mvelaserve cancelled 294 560 000 ordinary shares from the authorised share capital of Mvelaserve, such that the total authorised share capital consisted of 500 000 000 Ordinary Shares of R0.00012585581957 each;

• On or about 7 October 2010 , Mvelaserve converted its entire authorised and issued share capital from ordinary shares with a par value of R0.00012585581957 each, to ordinary shares with no par value;

• On or about 7 October 2010 , 6 850 937 Mvelaserve Ordinary Shares were issued as consideration for the Zonke acquisition, to the value of R81 000 000. The total value of the premium was R80 999 138; and

• On or about 7 October 2010 , 55 254 736 Mvelaserve Ordinary Shares were issued to Mvela Group at a subscription price of R653 287 804 which was applied by Mvelaserve in the net settlement of the inter-company loans between Mvelaserve and Mvela Group.

For the past three years prior to the date of this Pre-listing Statement, no share premium has been paid in respect of any Mvelaserve Ordinary Shares and Mvelaserve has not repurchased any Mvelaserve Ordinary Shares.

40. ORDINARY SHARES ISSUED OTHERWISE THAN FOR CASH

Save as set out in the preceding paragraph, no Mvelaserve Ordinary Shares were, within the three years preceding the date of this Pre-listing Statement, issued, or agreed to be issued, by Mvelaserve or any of its Subsidiaries to any person, other than for cash.

As part of the Restructuring, 62 105 673 Mvelaserve Ordinary Shares of no par value were issued to Mvela Group, as illustrated below:

Number of Ordinary Value ofShareholder Shares held transaction R

Zonke acquisition 6 850 937 81 000 000Net settlement of inter-company loans 55 254 736 653 287 804

Total 62 105 673 734 287 804

Set out in Annexure 1 to this Pre-listing Statement, are further salient details relating to the Zonke acquisition.

41. OPTIONS OR PREFERENTIAL RIGHTS IN RESPECT OF SHARES

Neither Mvelaserve nor any of its Subsidiaries are party to any contract or arrangement (or proposed contract or arrangement), whereby an option or preferential right of any kind is (or is proposed to be) given to any person to subscribe for any Mvelaserve Ordinary Shares.

42. PREVIOUS OFFERS

There have been no bona fide offers for sale or sale of any Mvelaserve Ordinary Shares or any of its Subsidiaries which have been acceptable to the board of Mvela Group during the three years prior to the date of issue of this Pre-listing Statement, other than the Ordinary Shares issued by Mvelaserve as already mentioned in this Pre-listing Statement.

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PART G: PARTICULARS OF THE LISTING

43. LISTING OF MVELASERVE ORDINARY SHARES ON THE JSE

Subject to the fulfilment of the conditions precedent set out in the “Salient Information” section of this Pre-listing Statement, the JSE has approved the Listing of all the Mvelaserve Ordinary Shares in the “Business Support Services” sector of the JSE lists under the abbreviated name “Mvelasv”, symbol “MVS” and ISIN : “ZAE000151353 ”. Following the Listing, Mvela Group will distribute 100% of the Ordinary Shares it holds in Mvelaserve, to its Ordinary Shareholders. This will ensure that the spread requirements detailed in the Listings Requirements are fulfilled.

44. EXCHANGE CONTROL REGULATIONS

Currency and shares are not freely transferable from South Africa to any jurisdiction falling outside the geographical borders of South Africa, other than jurisdictions falling within the Common Monetary Area and must be dealt with in terms of the Exchange Control Regulations of the South African Reserve Bank as described more fully in Part H of this Pre-listing Statement. The Exchange Control Regulations also regulate the acquisition by former residents and non-residents of Mvelaserve Ordinary Shares. Prospective Investors who are resident outside the Common Monetary Area should seek advice as to whether any governmental and/or other legal consent is required and/or whether any other formality must be observed to enable investing in the Mvelaserve Ordinary Shares.

45. DEMATERIALISATION OF MVELASERVE ORDINARY SHARES

Once listed, the Mvelaserve Ordinary Shares will be available to Prospective Investors in Dematerialised form only. Accordingly, all Prospective Investors must appoint a CSDP, directly or through a broker, to receive and hold the Ordinary Shares in Dematerialised form on their behalf. Should a shareholder require a physical share certificate for its Mvelaserve Ordinary Shares, it will have to materialise its Mvelaserve Ordinary Shares by contacting and informing its CSDP to do so. It is noted that there are risks associated with holding shares in certificated form, including the risk of loss or tainted script, which are no longer covered by the JSE Guarantee Fund. All Mvelaserve Ordinary Shareholders who elect to convert their Ordinary Shares from Dematerialised form into Certificated form will have to Dematerialise their Mvelaserve Ordinary Shares should they wish to trade them under the terms of Strate (see paragraph 46 below headed “Strate “ in this Pre-listing Statement).

46. STRATE

Ordinary Shares may only be traded on the JSE in electronic form (Dematerialised Ordinary Shares) and will be trading for electronic settlement in terms of Strate immediately following the Listing.

Strate is a system of “paperless” transfer of securities. If you have any doubt as to the mechanics of Strate please consult your broker, Participants or other appropriate adviser and you are referred to the Strate website at http://www.strate.co.za

Some of the principal features of Strate are as follows:

• electronic records of ownership replace share certificates and physical delivery of certificates;

• trades executed on the JSE must be settled within five Business Days;

• all investors owning Dematerialised Ordinary Shares or wishing to trade their securities on the JSE are required to appoint either a broker or a Participant to act on their behalf and to handle their settlement requirements; and

• unless investors owning Dematerialised Ordinary Shares specifically request their Participant to register them as an “own name” shareholder (which entails a fee), their Participant’s or broker’s nominee company, holding shares on their behalf, will be the shareholder (member) of the relevant company and not the investor. Subject to the agreement between the investor and the Participant or broker (or the Participant’s or broker’s nominee company), generally in terms of the rules of Strate, the investor is entitled to instruct the Participant or broker (or the Participant’s or broker’s nominee company), as to how it wishes to exercise the rights attaching to the Ordinary Shares and/or to attend and vote at meetings of Mvelaserve Or dinary Shareholders.

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PART H: TAX AND EXCHANGE CONTROL

47. TAXATION ISSUES

The following summary describes certain tax consequences of the purchase, ownership and disposition of the Ordinary Shares. It is not an exhaustive description of all the possible tax consequences of any purchase, ownership or disposition. This summary is based on the laws as in force and as applied in practice on the date of this Pre-listing Statement and is subject to changes to those laws and practices subsequent to the date of this Pre-listing Statement. In the case of persons who are non-residents of South Africa for fiscal purposes, it should be read in conjunction with the provisions of any applicable double tax convention between South Africa and their country of tax residence. Investors should consult their own advisers as to the tax consequences of the purchase, ownership and disposal of Ordinary Shares in light of their particular circumstances, including, in particular, the effect of any state, regional, local or other tax laws.

47.1 Residence based system of taxation

Since 1 January 2001 South Africa has moved from a largely source based to a residence based system of taxation.

Residents of South Africa are taxed on their world-wide income and capital gains, whereas non-residents are taxed only on income and certain capital gains sourced in South Africa or deemed to be from a source in South Africa.

47.1.1 Individuals

An individual will be a resident of South Africa for tax purposes if:

– such individual is ordinarily resident in South Africa. This term is not defined in the Income Tax Act, and therefore its meaning is determined according to guidelines established by the courts. Generally, a person’s ordinary residence will be, “the country to which he would naturally and as a matter of course return from his wandering; as contrasted with other lands it might be called his usual or principal residence and it would be described more aptly than other countries as his real home” (Cohen v CIR 13 SATC 362); or

– the requirements of the physical presence test are met. This is determined with reference to the number of days spent by the individual in South Africa during a six-year period. A natural person would meet the physical presence test if he is physically present in South Africa:

• for a period or periods exceeding 91 days in aggregate during the relevant year of assessment, as well as for a period or periods exceeding 91 days in aggregate during each of the five years of assessment preceding such year of assessment; and

• for a period or periods exceed 915 days in aggregate during those five preceding years of assessment. Should a person meet both tests, he will be deemed to be a resident from a tax perspective with effect from the first day of the relevant year of assessment in which the two tests have been met. A day includes a part of day, but excludes any day that the person is in transit through South Africa between two places outside South Africa and such person has not formally entered South Africa.

47.1.2 Legal persons (company, close corporation and trust)

As regards legal persons, a resident is defined in the Income Tax Act as any person which is incorporated, established or formed in South Africa or which has its place of effective management in South Africa. Reference can be made to ‘Income Tax Interpretation Note 6 – Resident: Place of Effective Management’ – issued on 26 March 2002 which details the approach adopted by the South African Revenue Service. The South African Revenue Authorities have indicated that the place of effective management is the place where the company is managed on a regular or day -to -day basis by the directors or senior managers of the company, irrespective of where the overriding control is exercised, or where the board of directors meets. If the management functions are executed at a single location, the location will be the place of effective management. It has been indicated that the following facts and circumstances must be considered to determine the effective management of a company:

– where the centre of top-level management is located;

– location of and functions performed at the headquarters;

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– where the business operations are actually conducted;

– where controlling shareholders make key management and commercial decisions in relation to the company;

– legal factors such as the place of incorporation, formation or establishment, the location of the registered office and public officer ;

– where the directors or senior managers reside;

– the frequency of the meetings of the company’s directors or senior managers and where they take place;

– the experience and skills of the directors and managers;

– the actual activities and physical location of senior employees;

– the scale of onshore as opposed to offshore operations; and

– the nature of powers conferred upon representations of the entity.

The approach adopted by the South African Revenue Authorities may differ from the interpretation attached to this concept by the OECD, in the sense that the OECD has indicated that one should consider the place where key management and commercial decisions are taken as opposed to the operational execution of decisions.

47.1.3 General proviso regarding treaty resident persons

The Income Tax Act excludes from the definition of resident all persons (legal or natural) that are deemed to be exclusively resident in another country in terms of a double tax convention for the avoidance of double taxation to which South Africa has concluded.

47.2 Dividend income

Currently, any amounts distributed by a company and funded out of profits or reserves to its shareholders, including amounts distributed by a company to acquire, cancel or redeem its own shares, are generally considered to be dividends, except to the extent that the distribution represents a reduction in the share premium or share capital account of the company and such amounts do not comprise of any amounts transferred from profits. A distribution of share premium or share capital in these circumstances can, however, be deemed to be a distribution of profits to shareholders of a particular class to the extent that the share capital and share premium so reduced exceeds the share capital and share premium contributed by that class of shareholders.

In general, dividends paid by the Group to South African Ordinary Shareholders and non-South African Ordinary Shareholders will be exempt from South African income tax in their hands.

47.3 Secondary Tax on Companies

Under current law, the Group will be subject to a tax known as STC on the net amount of any dividends declared by it. The STC rate is currently 10%.

47.4 Proposed Dividends Tax

The STC regime is set to be replaced with a new Dividends Tax Legislation, which will constitute a withholding tax imposed at a shareholder level. The new Dividends Tax Legislation has been enacted, but will only become effective from a date to be determined by the Minister of Finance by notice in the Gazette, which date must be at least three months after the date of such notice. This date has not yet been determined, but is expected to be around late 2011.

Dividends Tax will be imposed in respect of any dividend paid by a company on or after the effective date referred to above, and will be levied at a rate of 10%. This rate may be reduced to as low as 5% under the provisions of certain double tax conventions. In addition, the Dividends Tax Legislation includes a number of exemptions, including exemptions for onshore inter-company dividends and dividends paid to certain exempt entities.

Once effective, the new definition of “dividend” will be any amount transferred or applied by a company for the benefit of any shareholder by virtue of any share held by that shareholder in that company, whether by way of a distribution, or as consideration for the acquisition of any share in that company.

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The new “dividend” definition will contain four exclusions. First, amounts resulting in a reduction of contributed tax capital (“CTC”) (as described below) will not constitute a dividend. Second, dividends will not include capitalisation awards. Third, an open market purchase by a listed company of its own shares on the exchange operated by the JSE will not constitute a dividend. Lastly, dividends will not include redemptions of a participatory interest in a foreign collective investment scheme.

CTC, in its basic form, will comprise amounts received or accrued by a company as consideration for the issue of its shares. This would therefore typically be share capital and share premium (excluding any portion thereof which comprises capitalised reserves).

47.5 Distributions of share premium

A distribution by a company of share premium (or CTC in terms of the new Dividends Tax Legislation) does not/will not constitute a dividend for STC/Dividend Tax purposes. Instead, such amount will constitute a part disposal and thus “proceeds” in the South African shareholders’ hands for CGT purposes, if the shares are held on capital account. The South African shareholder will be treated as having partly disposed of their shares in these circumstances. A pro rata portion of the South African shareholders’ base cost for their shares will be deducted against such deemed “proceeds”, with the net amount being subject to CGT. The portion of the base cost to be deducted in this regard is the same ratio thereof as the market value of the distribution bears to the market value of the shares prior to the distribution.

47.6 Capital Gains Tax

South African resident shareholders – Individuals

A disposal of shares by an individual shareholder who is resident in South Africa for tax purposes will give rise to a gain (or loss) for the purposes of CGT. The capital gain (or loss) on disposal of the shares is equal to the difference between the disposal proceeds and the base cost. A shareholder’s base cost in the shares will generally be the consideration paid for those shares, and costs directly incurred in the buying or selling thereof such as securities transfer tax, transfer costs brokerage or legal adviser’s fees. The base cost in the shares may be increased by one-third of any interest incurred to finance the cost of acquiring the shares, if the shares are listed on the JSE, to the extent that such amounts are not otherwise allowable for deduction in the determination of taxable income. A gain on a disposal of shares, together with other capital gains, less allowable capital losses in a year of assessment, is subject to tax at the individual’s marginal tax rate (maximum 40%) to the extent that it exceeds the annual exclusion (R17 500 for the years of assessment ended ending 28 February 2011). Only 25% of the net capital gain is included in taxable income, resulting in a maximum effective tax rate on capital gains of 10%. On the death of a taxpayer, there is a deemed disposal of the shares at market value, unless the shares are bequeathed to, or in favour of, a surviving spouse. Deemed disposals to a surviving spouse, who is a South African resident, are treated, in practical effect, as taking place at no gain or loss. The annual exclusion where death occurs during the year of assessment ending 28 February 2011 is R120 000. Where a taxpayer emigrates (i.e. gives up South African tax residence) there will also be a deemed disposal of the shares at market value and this will trigger CGT.

South African resident shareholders – Corporates

A disposal of shares by a South African resident corporate shareholder may give rise to a capital gain (or loss) for the purposes of taxation of capital gains. The capital gain (or loss) on disposal of the shares is equal to the difference between the disposal proceeds and the base cost. A shareholder’s base cost in the shares will generally be the consideration paid for the shares, and costs directly incurred in the buying or selling thereof such as securities transfer tax, transfer costs brokerage or legal adviser’s fees. The base cost in the shares may be increased by one-third of any interest incurred to finance the cost of acquiring the shares, if the shares are listed on the JSE, to the extent that such amounts are not otherwise allowable for deduction in the determination of taxable income. A capital gain on a disposal of shares by a corporate shareholder, together with other capital gains, less allowable losses in a year of assessment, is subject to tax at the normal tax rate for companies (currently 28%). Only 50% of the net capital gain is included in taxable income, resulting in a maximum effective tax rate on capital gains of 14%.

Non -South African resident shareholders – individuals and corporates

A disposal of shares by a non -South African resident would give rise to a gain (or loss) for the purposes of CGT to the extent that the gains are realised pursuant to the disposal of any interest in immovable property situated in South Africa. An interest in immovable property situated in South Africa includes shares if:

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• 80% or more of the market value of the shares, at the time of disposal, is attributed directly or indirectly to immovable property held otherwise than as trading stock; and

• the shareholder (alone or together with any connected person in relation to that shareholder), directly or indirectly holds at least 20% of the shares.

Currently not more than 80% of the market value of the shares of the Group is attributable to immovable property and consequently the part disposal of the Mvela serve Ordinary Shares will not fall within the ambit of the South African Capital Gains Tax legislation.

Deemed capital gain

The proceeds from the disposal of shares may be on capital or revenue account. The nature of the proceeds will depend on the intention of the shareholder. The proceeds will be deemed to be on capital account if the shareholder had been the owner of the shares for a continuous period of at least three years.

47.7 Estate duty

Where a person who is ordinarily resident in South Africa holds shares at the date of his or her death, the market value of such shares will be included in the estate. Estate duty is levied at a flat rate of 20% on the dutiable amount of the deceased estate to the extent that it exceeds R3.5 million per estate. In determining the dutiable amount of an estate, deductions are, inter alia, allowed for the value of bequests and property left to a surviving spouse, and estate liabilities, including Capital Gains Tax paid on the deemed disposal of the shares on date of death.

47.8 Securities transfer tax

Securities transfer tax (“STT”) of 0.25% of the applicable taxable amount is payable in respect of every “transfer” of securities issued by a company incorporated in South Africa. “Transfer” includes any cancellation or redemption of a security, but does not include the issue of a security or any event that does not result in a change in beneficial ownership of a security. A purchase of shares from or through the agency of a JSE -registered broker is subject to STT of 0.25% of the purchase consideration. The STT is payable by the broker, which may recover it from the transferee. Where Shares are not purchased from or through the agency of a broker, but the change in beneficial ownership is effected by a Participant, STT of 0.25% of the greater of the declared purchase consideration or the JSE closing price of shares on the date of the transaction is payable by the Participant, which may recover it from the transferee.

In any other case of a change in beneficial ownership of shares, STT of 0 .25% of the greater of the declared purchase consideration or the JSE closing price of Shares is payable by the transferee through the broker or Participant, which holds the shares in custody.

47.9 Corporate tax

The corporate tax rate is 28% of taxable income.

47.10 Value-Added Tax

The transfer of shares is not subject to value-added tax as it constitutes a financial service which is an exempt supply.

48. EXCHANGE CONTROL

Currency and shares are not freely transferable from South Africa to any jurisdiction falling outside the geographical borders of South Africa, other than jurisdictions falling within the Common Monetary Area, and must be dealt with in terms of the South African Exchange Control Regulations as described below. The South African Exchange Control Regulations also regulate the acquisition of shares by former residents and non-residents.

Prospective Investors who are resident outside the Common Monetary Area should seek advice as to whether any governmental and/or other legal consent is required and/or whether any other formality must be observed to enable an investment in listed Mvelaserve Ordinary Shares.

The following summary is intended as a guide and is therefore not comprehensive. If shareholders are in any doubt regarding South African Exchange Control Regulations, they should please consult their professional adviser.

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48.1 Emigrants from the Co mmon Monetary Ar ea

• A former resident of the Common Monetary Area who has emigrated from South Africa may use blocked Rand accounts to acquire Mvelaserve Ordinary Shares.

• Share certificates issued in respect of Mvelaserve Ordinary Shares acquired with blocked Rand will be endorsed “emigrant” in accordance with the South African Exchange Control Regulations. Share certificates will be placed under the control of the authorised dealer through whom the payment was made.

• Mvelaserve Ordinary Shares issued to a Dematerialised shareholder whose registration as a shareholder has been marked as being an “emigrant”, will be similarly marked as being held by an “emigrant”.

48.2 Shareholders resident outside the Co mmon Monetary Area

• A person who is not resident in the Common Monetary Area, including an immigrant not using blocked Rand , should obtain advice as to whether any governmental and/or other legal consent is required and/or whether any other formality must be observed in order to buy Mvelaserve Ordinary Shares.

• All share certificates issued to non-residents of South Africa will be endorsed “non-resident” in accordance with the South African Exchange Control Regulations.

• All Mvelaserve Ordinary Shares issued to Dematerialised shareholders, whose registration has been so endorsed will be endorsed “non-resident” in accordance with the South African Exchange Control Regulations. The CSDP or broker through whom the shareholders have Dematerialised their shares will ensure that they adhere to the South African Exchange Control Regulations.

49. UNBUNDLING

Foreign Shareholders

49.1 General

The Unbundling is governed by the laws of South Africa and is subject to all applicable laws and regulations, including Exchange Control Regulations.

Having regard to prevailing laws in their relevant jurisdictions, foreign shareholders may be affected by the Unbundling. Such foreign shareholders should inform themselves about and observe any applicable legal requirements of such jurisdictions in relation to all aspects of this Pre-listing Statement that may affect them, including the Unbundling. Foreign shareholders may be prohibited from beneficially holding any of the Mvelaserve Ordinary Shares unbundled and distributed to them.

It is the responsibility of each foreign shareholder to satisfy itself as to the full observation of the laws and regulatory requirements of the relevant foreign jurisdiction in connection with the Unbundling, including the obtaining of any governmental, exchange or other consents or the making of any filings which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes or other requisite payments due in such jurisdiction.

Any foreign shareholder who is in doubt as to his position with respect to the Unbundling in any jurisdiction, including, without limitation, its tax status, should consult an appropriate professional advis er in the relevant jurisdiction without delay. In particular, foreign shareholders must take their own advice on whether they are entitled to beneficially hold any Mvelaserve Ordinary Shares unbundled and distributed to them and take the appropriate action in accordance with that advice.

49.2 Ineligible Foreign Shareholders

Foreign shareholders in certain jurisdictions outside of South Africa may not be entitled to take transfer any of Mvelaserve Ordinary Shares unbundled by Mvela Group.

The Mvelaserve Board recommends the following mechanism for distribution of any of the Mvelaserve Ordinary Shares to ineligible foreign shareholders. In the case of any of such Ordinary Shares which an ineligible foreign shareholder is taking transfer of, such shares are to be lodged on behalf of the ineligible foreign shareholders with a trust company to be nominated by the Mvelaserve Board in its sole discretion and to be held by the said company on behalf of the ineligible foreign shareholders, to be disposed of by them for the benefit of the ineligible foreign shareholders so as to comply with the regulatory restraints of such jurisdictions.

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Subject to the above, the trust company will be requested to coordinate the disposal of any the Mvelaserve Ordinary Shares on behalf of such ineligible foreign shareholders for cash in South Africa and distribute the cash proceeds therefrom (net of applicable fees, expenses, taxes and charges) to ineligible foreign shareholders, in proportion to such ineligible foreign shareholders’ entitlement to unbundled Mvelaserve Ordinary Shares. There can be no assurance as to what price such ineligible foreign shareholders will receive from the disposal of such unbundled Mvelaserve Ordinary Shares or the timing or exchange rate conversion of such receipt.

Excluded foreign Mvelaserve Ordinary Shareholders will, in respect of their entitlement to the unbundled Mvelaserve Ordinary Shares, receive the average consideration per unbundled Mvelaserve Ordinary Share (net of transaction and currency conversion costs). The average consideration per unbundled Mvelaserve Ordinary Share due to each excluded foreign Mvelaserve Ordinary Shareholder will only be paid once all such unbundled Mvelaserve Ordinary Shares have been disposed of.

49.3 Procedure and Implementation of the Unbundling

Subject to the fulfilment of all the conditions precedent as set out in the Pre-listing Statement and subject to an ordinary or special resolution being passed by the requisite majority of Mvela Group shareholders entitled to vote thereon, approving of the distribution and unbundling of Mvela Group’s entire shareholding in Mvelaserve in proportion to their respective shareholding, Mvela Group shall unbundle to all Mvela Group Ordinary Shareholders, registered at the close of business on the Record Date its entire shareholding in Mvelaserve in proportion to their shareholding, firstly out of existing share premium. Should the share premium prove to be insufficient, reserves will be applied to the extent necessary. The Unbundling will be effected on or about 6 December 2010.

The Unbundling will amount to a payment in terms of section 90 of the Companies Act and be in accordance with Article 13E of the articles of association of Mvela Group and section 46 of the Income Tax Act.

Certificated Mvela Group Ordinary Shareholders recorded in the register on the Record Date for the Unbundling will receive a share certificate for the Mvelaserve Ordinary Shares distributed to them, in proportion to their respective shareholding, sent to their registered postal address by registered mail on or about 6 December 2010, at their risk. Certificated shareholders will be required to Dematerialise such share certificate in order to sell such Mvelaserve Ordinary Shares on the JSE.

Dematerialised shareholders recorded on the register on the Record Date will have their accounts at their CSDP or broker credited with the Mvelaserve Ordinary Shares due to them on 6 December 2010 .

Ineligible foreign shareholders in certain jurisdictions outside of South Africa may not be entitled to take transfer of the unbundled Mvelaserve Ordinary Shares in terms of the Unbundling. Such shareholders are referred to paragraph 4 8.2 of this Pre-listing Statement for the procedure thereon.

50. TAX CONSEQUENCES IN RESPECT OF THE UNBUNDLING

Set out below is a guide only and is not intended to be a complete analysis of the tax implications of the proposed settlement incorporating the Unbundling. It is not intended to be, nor should it be considered to be, legal or tax advice. Shareholders should therefore, consult their own tax advis ers on the tax consequences of the proposed settlement in both South Africa and their jurisdiction of residence, for which neither Mvelaserve, Mvela Group nor their advis ers will be held responsible.

The Mvelaserve Ordinary Shares held by Mvela Group will be distributed to Mvela Group Ordinary Shareholders in terms of an unbundling transaction as envisaged in section 46 of the Income Tax Act. Corporate roll-over relief is afforded to Mvela Group and the Mvela Group Ordinary Shareholders to the extent that one meets the relevant requirements as set out in section 46 of the Income Tax Act. Effectively, Mvela Group will distribute its entire shareholding of Mvelaserve Ordinary Shares to the Mvela Group Ordinary Shareholders in accordance with the effective interest of the Mvela Group Ordinary Shareholders in Mvela Group. Because the shares in Mvelaserve will be listed on the JSE before the Unbundling, the requirement is that the unbundled shares in Mvelaserve must constitute more than 25 % shares in Mvela Group in the case where no other shareholder holds an equal or greater amount of equity shares in the unbundled company. Given the fact that the Mvelaserve Ordinary Shares to be distributed by Mvela Group to the Mvela Group Ordinary Shareholders will constitute 100 % of the entire issued shares in the share capital of Mvelaserve, the relevant requirements of the unbundling provisions will thus be met.

Pursuant to the unbundling provisions contained in section 46 of the Income Tax Act:

• Mvela Group must disregard the distribution of the Mvelaserve Ordinary Shares for purposes of determining its taxable income or assessed loss;

• the distribution by Mvela Group will not be deemed to be a dividend for STC purposes; and

• the Mvelaserve Ordinary Shares are deemed to have been distributed first from the share premium account of Mvela Group.

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Attention is drawn to the fact that the Unbundling provisions do not apply if, immediately after the distribution of the Mvelaserve Ordinary Shares, 20% or more of the Ordinary Shares in Mvelaserve are held by a so-called disqualified persons either alone or together with any connected person in relation to the disqualified person. A disqualified person is amongst others defined as a non-resident or certain exempt entities.

The unbundling provisions will apply automatically and it is not necessary to make any specific election to such effect. The transfer of the Mvelaserve Ordinary Shares will also not be subject to securities transfer tax in terms of section 8(1)(a) of the Securities Transfer Tax Act, No. 25 of 2007, as amended, given the fact that the public officer of Mvela Group will make a sworn affidavit that the transfer of the Mvelaserve Ordinary Shares complies with the provisions of section 46 of the Income Tax Act.

Pursuant to the Unbundling, Mvela Group Ordinary Shareholders must determine a new base cost for the Mvela Group Ordinary Shares as well as the Mvelaserve Ordinary Shares received in terms of the Unbundling process. Effectively, the new base cost is determined in accordance with the ratio that the market value of the unbundled Mvelaserve Ordinary Shares, as at the end of the day after the distribution, bears to the sum of the market value, as at the end of that day, of the Mvela Group shares as well as the Mvelaserve Ordinary Shares.

Mvela Group has not attempted to qualify the Unbundling as a tax-free transaction to shareholders in terms of the rule of any jurisdiction other than South Africa. Accordingly, the Unbundling may constitute a taxable transaction in any other such jurisdiction. Mvela Group Ordinary Shareholders, who are non-resident for tax purposes in South Africa, are advised to consult their professional advis ers as regards the tax treatment of the Unbundling in light of the tax laws in their respective jurisdictions and double tax conventions between South Africa and their countries of tax residence.

The concessions provided for in section 46 are outlined below:

50.1 Disposal of Mvelaserve shares by Mvela Group

The distribution of Mvelaserve Ordinary Shares by Mvela Group, in terms of the Unbundling, will be disregarded by Mvela Group in determining its taxable income or assessed loss in the tax year that the unbundling takes place and the Mvelaserve Ordinary Shares are deemed to have been distributed first from the share premium account of Mvela Group and thereafter from reserves.

50.2 STC

The distribution of the Mvelaserve Ordinary Shares to Mvela Group Ordinary Shareholders, in terms of the Unbundling, will be deemed not to be a dividend declared by Mvela Group or a dividend received by an Mvela Group Ordinary Shareholder who is a company in determining their respective STC liabilities. Consequently, no STC credits will be available to Mvela Group Ordinary Shareholders as a result of the Unbundling.

50.3 Mvela Group Ordinary Shares held as trading stock

Any Mvela Group Ordinary Shareholder holding Mvela Group Ordinary Shares as trading stock will be deemed to acquire the unbundled Mvelaserve Ordinary Shares as trading stock. The combined expenditure of such Mvela Group Ordinary Shares and Mvelaserve shares will be the amount originally taken into account by the shareholder in respect of the original Mvela Group Ordinary Shares held by that shareholder, as contemplated in section 11(a), section 22(1) or section 22(2) of the Income Tax Act.

An Mvela Group Ordinary Shareholder must determine the portion of the combined expenditure, as above, attributable to the Mvelaserve Ordinary Shares, as follows:

A = B x [ C / (C + D) ]

where:

A = the expenditure of the Mvelaserve Ordinary Shares, to be determined;

B = the combined expenditure, as contemplated above;

C = the market value of the Mvelaserve Ordinary Shares received pursuant to the Unbundling as at the close of the day of the Unbundling date; and

D = the market value of the Mvela Group Ordinary Shares, in respect of which the Mvelaserve Ordinary Shares in C were received, as at the close of the day of the Unbundling .

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An Mvela Group Ordinary Shareholder must determine the portion of the combined expenditure attributable to the Mvela Group ordinary shares contemplated in D above, as follows:

E = B – A

where:

E = the revised expenditure of the Mvela Group Shares, to be determined;

B = the combined expenditure, as contemplated above; and

A = the expenditure of the Mvelaserve Ordinary Shares, as determined above.

The expenditure to be allocated to the unbundled Mvelaserve Ordinary Shares will be determined by applying a specified ratio to the cost of the Mvela Group Shares. Mvela Group will advise Mvela Group Ordinary Shareholders of the specified ratio, being the result of [ C / (C + D) ], as above, by way of an announcement to be released on SENS on or about Wednesday, 1 December 2010.

Any expenditure allocated to the Mvelaserve Ordinary Shares must be deemed to have been incurred on the date that the expenditure was incurred in respect for the Mvela Group Shares.

50.4 New base cost

Pursuant to the unbundling, Mvela Group Ordinary Shareholders must determine a new base cost for CGT purposes for the Mvela Group Shares as well as the Mvelaserve Ordinary Shares received in terms of the unbundling process. Effectively, the new base cost is determined in accordance with the ratio that the market value of the unbundled Mvelaserve Ordinary Shares, as at the end of the day after the distribution, bears to the sum of the market value, as at the end of that day, of the Mvela Group Ordinary Shares and the Mvelaserve Ordinary Shares.

50.5 Mvela Group Ordinary Shares held as capital assets

Any Mvela Group Ordinary Shareholder holding Mvela Group Shares as capital assets will be deemed to acquire the unbundled Mvelaserve Ordinary Shares as capital assets. The original expenditure incurred in respect of the Mvela Group Ordinary Shares, in terms of paragraph 20 of the Eighth Schedule, and (where applicable), the CGT valuation of the Mvela Group Shares, as contemplated in paragraph 29 of the Eighth Schedule, will be apportioned between the Mvelaserve Ordinary Shares and the Mvela Group Shares, as follows:

A = B x [ C / (C + D) ]

where:

A = the deemed expenditure and, where applicable, deemed CGT valuation of the Mvelaserve Ordinary Shares, to be determined;

B = each of the original expenditure incurred and, where applicable, CGT valuation of the Mvela Group Shares, in respect of which the Mvelaserve Ordinary Shares in C were received prior to Unbundling;

C = the market value of the Mvelaserve Ordinary Shares received pursuant to the Unbundling as at the close of the day after the Unbundling date; and

D = t he market value of the Mvela Group Shares, in respect of which the Mvelaserve Ordinary Shares in C were received, as at the close of the day after the Unbundling date.

A Mvela Group Ordinary Shareholder must determine the portion of the original expenditure incurred in respect of the Mvela Group Shares and (where applicable) the CGT valuation of the Mvela Group Shares attributable to the Mvela Group Shares contemplated in D above, as follows:

E = B – A

where:

E = the revised expenditure and, where applicable, the revised CGT valuation of the Mvela Group Shares, to be determined;

B = each of the original expenditure incurred and, where applicable, CGT valuation of the Mvela Group Ordinary Shares, in respect of which the Mvelaserve Ordinary Shares in “C” above were received; and

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A = the deemed expenditure and, where applicable, deemed CGT valuation of the Mvelaserve Ordinary Shares, as determined above.

Mvela Group will advise Mvela Group Ordinary Shareholders of the specified ratio, being the result of [C/(C + D)], as above, by way of an announcement to be released on SENS on or about Wednesday, 1 December 2010. The base cost to be allocated to the unbundled Mvelaserve Ordinary Shares will be determined by applying a specified ratio to the base cost of the Mvela Group Shares.

The base cost so allocated to the unbundled Mvelaserve ordinary shares will reduce the base cost of the Mvela Group Shares held, thus allocating the base cost between the Mvela Group Shares and the unbundled Mvelaserve Ordinary Shares.

Mvela Group Ordinary Shareholders will be deemed to have acquired the unbundled Mvelaserve Ordinary Shares on the date on which the Mvela Group Shares were originally acquired.

Any expenditure allocated to the Mvelaserve Ordinary Shares must be deemed to have been incurred on the date that the expenditure was incurred in respect for the Mvela Group Shares.

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PART I: ADDITIONAL INFORMATION

51. RESTRUCTURING

Details of the Restructuring which will take place prior to the Listing of Mvelaserve Ordinary Shares are set out in Annexure 1 to this Prelisting Statement.

52. INFORMATION ON SUBSIDIARIES

Details of Mvelaserve’s Subsidiaries are set out in Annexure 7 to this Pre-listing Statement.

53. PRINCIPAL IMMOVABLE PROPERTY OWNED OR LEASED

Details of the principal immovable properties owned or leased by Mvelaserve Group are set out in Annexure 8 to this Pre-listing Statement. None of the Directors have any material interest in any of the immovable properties owned or leased by Mvelaserve Group.

54. PROPERTY AND SUBSIDIARIES ACQUIRED OR TO BE ACQUIRED AND VENDORS

Set out in Annexure 9 to this Pre-listing Statement are details of the material acquisitions in the three years preceding the date of this Pre-listing Statement.

None of the Directors or the promoters have a material beneficial interest in any of the securities in, or the business undertakings of, any other company or business enterprise or any immovable properties or other property in the nature of fixed assets acquired by Mvelaserve Group.

As at the date of this Pre-listing Statement, there are no proposed acquisitions by Mvelaserve Group of any property, and there are no options to acquire any such property.

55. DISPOSAL OF PROPERTY

As at the date of this Pre-listing Statement, there are no disposals of any material properties by Mvelaserve Group nor were there any proposed disposals of material properties, in the three year period preceding the date of this Pre-listing Statement.

56. INTERESTS OF ADVISERS AND PROMOTERS, AND AMOUNTS PAID OR PAYABLE TO PROMOTERS

None of the advisers, as set out in the “Corporate Information” section on page 1 of this Pre-listing Statement, hold any Mvelaserve Ordinary Shares, whether directly or indirectly .

Mvelaserve Group has not paid any amount (whether in cash or in securities), nor given any benefit to any promoters or any partnership, syndicate or other association of which the promoter was a member, not being a Director during the three years preceding the date of this Pre-listing Statement. No promoters have any material beneficial interest in the promotion of Mvelaserve.

57. MATERIAL CONTRACTS

Annexure 11 to this Pre-listing Statement sets out material contracts that have been entered into by Mvelaserve or its subsidiaries during the two years preceding the date of this Pre-listing Statement, other than in the ordinary course of business.

Material contracts concluded during the two years preceding the date of this Pre-listing Statement are:

• the acquisition of 75% of the issued share capital of Zonke by Mvelaserve from Mvela Group; and

• particulars of existing contracts and proposed contracts, either written or orally, relating to Directors’ and managers’ remuneration, secretarial and technical fees payable by Mvelaserve Group (refer to Annexure 6 for details).

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Other than as set out above, there are no:

• material contracts that have been entered into by Mvelaserve or its Subsidiaries during the two years preceding the date of this Pre-listing Statement, other than in the ordinary course of business ;

• contracts entered into at any time prior to the two years preceding the date of this Pre-listing Statement other than in the ordinary course of business that contain obligations or settlements material to Mvelaserve or its Su bsidiaries as at the date of this Pre-listing Statement ;

• existing or proposed contracts relating to royalties or, secretarial or technical fees payable by Mvelaserve Group.

58. MATERIAL CAPITAL COMMITMENTS

There were no material capital commitments as at the Last Practicable Date.

59. CONTINGENT LIABILITIES

There were no material contingent liabilities as at the Last Practicable Date.

60. LEASE PAYMENTS

Mvelaserve Group has various operating lease agreements for vehicles, machinery, offices, office equipment and other facilities. The future minimum lease payments under non-cancellable operating leases as at 30 June 2010 in respect of periods in excess of four years was R40 million.

61. LOAN CAPITAL AND MATERIAL LOANS

Details of the material borrowings of Mvelaserve as at the Last Practicable Date are set out in Annexure 10 to this Pre-listing Statement.

Mvelaserve Group has no debentures in issue as at the date of this Pre-listing Statement.

Mvelaserve does not have any material loans receivable outstanding as at the date of this Pre-listing Statement.

No loans have been made or security furnished by Mvelaserve to or for the benefit of any Director or manager as at the date of this Pre-listing Statement.

The inter-company loans of Mvelaserve as at 30 June 2010 are set out in Annexure 10 to this Pre-listing Statement.

62. LITIGATION STATEMENT

There are pending arbitration proceedings between Royalserve Catering and Mr Louis Martin Jones (“Mr Jones”). Mr Jones was initially employed by Royalserve Catering (then still known as RoyalSechaba Holdings (Proprietary) Limited) as a business development executive, with effect from August 2006. During his employment, Mr Jones became entitled to the payment of certain sales commissions on new business brought by him to, and his extension of existing business of, Royalserve Catering. Further, Mr Jones became entitled to a certain operating incentive for managing the newly established Project Support Services Division of Royalserve Catering. In about July 2009, disputes arose between Royalserve Catering and Mr Jones about, inter alia, the manner in which these commissions had been calculated. The disputes were then referred to arbitration before senior counsel. Mr Jones’ claim can be broken down into three parts:

(i) a claim for commission amounting to approximately R3 million;

(ii) damages in an additional sum of approximately R147 million, which Mr Jones allegedly suffered as a result of the cancellation of the employment contract between him and Royalserve Catering; and

(iii) compensation in the sum of approximately R12 million as a result of his alleged constructive dismissal by Royalserve Catering.

Royalserve Catering has, in turn, instituted a counterclaim for repayment by Mr Jones of an amount of approximately R14 million, on the basis that this amount represents the amount by which Mr Jones was overpaid during his employment.

Mvelaserve has been advised by the attorneys representing Royalserve Catering in this dispute that although Mr Jones may be successful in his claim with regards to the commissions, the quantum of such claim will be substantially smaller than the amount he is claiming and that such commissions are more than offset by the amounts by which he had been overpaid during his employment by Royalserve Catering. Further, Mvelaserve has been advised that Mr Jones is unlikely

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to succeed in his damages and constructive dismissal claims. The Mvelaserve Board has considered and accepted the attorneys’ advice with regards to Mr Jones’ prospects of success in the pending arbitration proceedings. The Mvelaserve Board is of the opinion that any successful claim for commissions will be offset by the amounts with which Mr Jones have been overpaid by Royalserve Catering and that his prospects of succeeding with the damages and constructive dismissal claims are remote.

Other than indicated above, no other legal or arbitration proceedings have been instituted that may have or have had in the last 12 months, a material effect on the Group’s financial position nor is the Group aware of any such proceedings that are pending or threatened.

63. EXPENSES

Mvelaserve Group has not incurred any preliminary expenses (within the meaning of the Listings Requirements) over the last three financial years.

The expenses of the Listing, estimated to be in the sum of approximately R 6 million, shall be paid by the Group.

The table below sets out the total estimated expenses (excluding VAT) of the Listing to be borne by Mvelaserve :

Details Payable to R’000

Investment banking and sponsor fees1 Investec 3 000Legal adviser fees Cliffe Dekker Hofmeyr 2 000Reporting accountant and auditors’ fees PKF 200JSE listing and inspection fees JSE 270Printing and communication costs Various 400Transfer secretaries Computershare 25

Total expenses and fees 5 955

Note:

1. The investment banking fees and sponsor fees are in terms of a single mandate.

64. COMMISSIONS PAID OR PAYABLE IN RESPECT OF UNDERWRITING

Save for the fees as disclosed in this Pre-listing Statement, none of the advisers have any equity interest in Mvelaserve. No commissions, discounts, brokerage or other special terms were granted during the three years preceding the date of this Pre-listing Statement in connection with the issue of any securities, stock or debentures in the capital of the Group.

65. CONSENTS

Each of the investment bank and sponsor, legal advisers, reporting accountants and auditors, and transfer secretaries have consented in writing to act in the capacities stated and to their names being included in this Pre-listing Statement and have not withdrawn their consent prior to the publication of this Pre-listing Statement. The reporting accountants and auditors have consented to the inclusion of their reports in the form and context in which they appear and have not withdrawn such consent prior to the publication of this Pre-listing Statement.

66. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at Mvelaserve’s registered office and the sponsor’s offices set out in the “Corporate Information” section during normal business hours (Saturdays, Sundays and official South African public holidays excepted) from the date of issue of this Pre-listing Statement until 3 December 2010, or such later date as may be announced:

• a signed copy of this Pre-listing Statement (available in English only) .

• a signed copy of the Mvela Group circular .

• the Memorandum of Association and Articles of Association of Mvelaserve and the memorand a and articles of association of the Subsidiaries of Mvelaserve .

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• the reporting accounts and auditors’ reports dated 27 October 2010 , which are included as Annexures 3 and Annexure 5, respectively, to this Pre-listing Statement;

• written consents of the investment bank and sponsor, legal advisers, reporting accountants and auditors, and transfer secretaries named in this Pre-listing Statement to act in those capacities ;

• the consolidated audited annual financial statements of Mvelaserve and its Su bsidiaries for the three financial years ended 30 June 2010 ;

• copies of the material contracts referred to in “Additional Information : Material Contracts” section to this Pre-listing Statement ; and

• the service agreements with Directors and senior managers entered into during the last three years, referred to in Annexure 6 to this Pre-listing Statement .

67. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors, whose names are provided on page 1 of this Pre-listing Statement, collectively and individually, accept full responsibility for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this Pre-listing Statement contains all the information required by law and the Listings Requirements.

SIGNED AT JOHANNESBURG ON 27 OCTOBER 2010 BY OR ON BEHALF OF THE DIRECTORS OF MVELASERVE LIMITED.

J M S FerreiraChief Executive Officer

27 October 2010

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ANNEXURE 1

THE RESTRUCTURING

1. GROUP STRUCTURE BEFORE THE RESTRUCTURING

The Mvelaserve Group structure, as at 30 June 2010 is illustrated below:

40% 75%


Services*

StamfordSales

100%

100%

100% 100% 100% 100% 100%

Note:

1. Mvela Group’s holding in 75% of Zonke is indirectly held through Mvelaphanda Strategic Investments (Proprietary) Limited (“MSI”), a wholly-owned subsidiary of Mvela Group.

2. OVERVIEW OF THE RESTRUCTURING

Mvelaserve has restructured its operations and holdings prior to the Listing in order to bring Zonke under its direct ownership by acquiring Mvela Group’s indirect 75% shareholding in Zonke, and also to establish Mvelaserve’s independence from Mvela Group.

The Restructuring has been completed as at the L isting Date.

Step 1: Disposal of Stamford Sales to Mvela Group (not to be included in Mvelaserve Group)

• Mvelaserve’s and Mvelaphanda Management Services’ jointly-held 40% interest in Stamford Sales was sold to Mvela Group at a value of R26 982 820 on loan account.

Step 2: Zonke acquisition

• Mvelaserve acquired Mvela Group’s indirect 75% interest in Zonke, in terms of corporate restructuring, at a value of R81 000 000. Mvelaserve issued 6 850 937 new Mvelaserve Ordinary Shares at R11.82 per share to Mvela Group as consideration for the acquisition.

Step 3: Settlement of inter-company loans between Mvelaserve Group and Mvela Group

• As at 30 June 2010, there were a number of inter-company loans between Mvelaserve Group, and Mvela Group and its Subsidiaries.

• The inter-company loans have been settled through cash flows, set-offs, cessions of loans and net-off journals, with R653 287 804 due from Mvelaserve Group to Mvela Group being settled through the issue of 55 254 736 new Mvelaserve Ordinary Shares (after the Mvelaserve share split of 794 559 new Mvelaserve Ordinary Shares for every 1 Mvelaserve Ordinary Share) at a premium of R653 280 849 to Mvela Group and the utilisation by Mvelaserve of the subscription price in re spect of the aforesaid shares to settle the loan.

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Step 4: Mvela Group unbundle Mvelaserve Ordinary Shares to its shareholders (“Unbundling”)

• Following the Restructuring of Mvelaserve, Mvela Group holds 100% of the share capital of Mvelaserve.

• In terms of the Unbundling, Mvela Group will distribute all the Mvelaserve Ordinary Shares it holds to its shareholders (the Unbundling) in a ratio of 25 Mvelaserve Ordinary Shares for every 100 Mvela Group Shares held. The entitlement ratio will be confirmed or revised, as the case may be, in the finalisation announcement, which is expected to be released on SENS on or about Friday, 19 November 2010.

The resultant Mvelaserve Group structure post the Restructuring and Listing, is illustrated below:


Services*

100%

100%

75%100% 100% 100% 100% 100%

Current Mvela GroupOrdinary Shareholders

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ANNEXURE 2

THE AUDITED AND REVIEWED CONSOLIDATED FINANCIAL INFORMATION OF MVELASERVE AND ITS SUBSIDIARIES FOR THE YEAR ENDED 30 JUNE 2010 AND THE YEARS ENDED 30 JUNE 2009 AND 30 JUNE 2008, RESPECTIVELY

OPERATING SEGMENTAL REPORT

GROUP 2010: BALANCE SHEET INFORMATION

Facilities Security Cleaning Diversified Management Services & Catering Services Total R’000 R’000 R’000 R’000 R’000

AssetsProperty, plant and equipment 22 085 247 340 59 796 58 399 387 619Goodwill 271 375 20 189 108 364 12 776 412 704Other intangible assets 5 539 50 000 1 25 2 75 840 132 63 1Other investments – 8 340 1 40 7 6 615 16 362Investments in associates 8 269 – – – 8 269Deferred taxation 1 509 5 366 9 715 9 30 17 520Current investments – 4 593 – 1 860 6 453Other current assets 183 169 311 344 201 318 118 753 814 584Other current assets – Mvela Group 97 878 97 078Treasury debtors 416 419 – – 43 35 8 459 777Cash and cash equivalents 140 844 128 558 15 447 89 960 374 809Assets in disposal group held for sale – 5 045 – – 5 045

Total assets 1 049 20 9 780 775 397 299 506 36 8 2 7 33 651

LiabilitiesNon-current interest bearing liabilities – 99 898 8 111 497 461 605 470Non-current non-interest bearing liabilities – – – 722 117 722 117Financial liabilities – – – 36 900 36 900Deferred taxation – 1 204 – 1 466 2 670Current interest bearing liabilities – 64 497 6 696 10 7 308 178 501 Treasury creditors – 96 233 32 980 – 129 212 Other current liabilities 311 770 269 113 169 282 75 315 825 480

Total liabilities 311 770 53 0 944 217 06 8 1 44 0 569 2 50 0 351

Net assets 737 439 24 9 831 18 0 321 (9 34 201) 233 300

GROUP 2010: INCOME STATEMENT INFORMATION


Revenue¹ 1 105 578 1 577 567 1 087 882 290 971 4 06 1 998

Profit from operations 166 740 110 534 14 896 272 292 44 2Net interest expensed 23 777 (16 395) (4 176) (63 700) (60 494)Fair value adjustments and net Loss from investments – – (1 812) (914) (2 726)Share of profit from associates 6 075 – – – 6 075

Net profit/(loss) before taxation 196 593 94 139 8 908 (64 342) 235 297Taxation expense (46 758) (25 245) (1 784) (6 495) (80 282)

Net profit/(loss) for the year 149 834 68 893 7 124 (70 837) 155 015

¹ Revenue is revenue received from external customers. Inter-segment revenue represents 0,003% of total revenue

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GROUP 2010: CASH FLOW STATEMENT INFORMATION


Cash flow from operating activities 158 855 211 407 (30 950) (74 128) 265 184Cash flow from investing activities (15 256) (143 193) (14 339) (3 091) (175 879)Cash flow from financing activities (120 558) 11 483 33 928 150 400 75 253

Net movement in cash and cash equivalents 23 041 79 697 (11 361) 73 181 164 558



Assets

Property, plant and equipment 20 248 164 811 68 000 59 54 3 312 602Goodwill 271 375 21 649 108 364 12 776 414 164Other intangible assets 3 660 50 000 33 6 75 840 129 83 6Other investments – 18 633 6 680 7 240 32 553Investments in associates 6 301 – – – 6 301Deferred taxation 5 948 13 195 11 110 2 731 32 984Current investments – – – 2 310 2 310Other current assets 181 159 324 368 141 553 107 242 75 4 322Other current assets – Mvela Group 97 878 97 87 8Treasury debtors 296 87 4 – 23 341 32 850 353 065Cash and cash equivalents 117 803 48 861 26 808 16 779 210 251

Total assets 903 369 641 516 386 190 415 1 89 2 346 266

Liabilities

Non-current interest bearing liabilities – 56 740 10 644 501 768 569 152 Non-current non-interest bearing liabilities – – – 566 362 566 362Financial liability – – – 34 199 34 199Deferred taxation 3 684 2 419 1 320 2 191 9 614Current interest bearing liabilities – 51 025 6 332 99 854 157 211 Treasury creditors – 143 611 16 386 – 159 997 Other current liabilities 292 557 207 211 1 69 490 101 575 770 833

Total liabilities 296 241 461 006 204 17 2 1 305 94 9 2 267 36 8

Net assets 607 12 7 180 51 1 182 0 20 (890 760) 78 898

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Revenue¹ 1 108 013 1 263 044 756 058 474 142 3 601 257

Profit from operations 165 079 54 388 24 79 6 (52 138) 192 12 5Net interest income/(expense ) 24 217 (19 515) (4 36 3) (92 722) (92 383)Dividend income – – – 99 99Fair value adjustments and net Loss from investments – (528) (367) (39 768) (40 663)Share of profit/(loss) from associates 4 426 – – (962) 3 463

Net profit/(loss) before taxation 193 7 21 34 345 20 06 6 (185 49 1) 62 64 1Taxation expense (44 14 2) (8 122) (6 278) (14 211) (72 753)

Net profit/(loss) for the year 149 579 26 223 13 788 (199 70 2) (10 112)

¹ Revenue is revenue received from external customers. Inter-segment revenue represents 0,003% of total revenue.



Cash flow from operating activities 128 759 11 013 7 923 (51 242) 96 454Cash flow from investing activities (19 163) (54 010) (40 285) 16 023 (97 436)Cash flow from financing activities (104 058) 75 215 20 758 168 (7 917)

Net movement in cash and cash equivalents 5 538 32 218 (11 604) (35 051) (8 899)

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Assets

Property, plant and equipment 18 384 133 176 53 552 61 146 266 258Goodwill 271 375 21 644 101 031 12 7767 406 827Other intangible assets 8 345 50 000 – 69 44 5 127 7 90Other investments – 31 174 2 129 10 19 4 43 49 7Investments in associates 3 137 8 316 – 78 5 12 238 Deferred taxation 5 157 16 119 7 15 6 29 28 461Current investments – 16 328 – – 16 328Other current assets 174 942 200 703 106 13 7 139 010 620 79 2Other current assets – Mvela Group 105 950 105 950Treasury debtors 192 47 1 – 19 201 18 046 229 718Cash and cash equivalents 112 265 53 288 38 41 1 15 186 219 150Assets in disposal group held for sale – – – 280 295 280 295

Total assets 786 07 6 530 748 327 61 7 712 86 3 2 357 304

Liabilities

Non-current interest bearing liabilities – 53 154 11 339 62 491 126 984 Non-current non-interest bearing liabilities – – – 848 870 848 870 Deferred taxation – 4 642 – 1 353 5 995Current interest bearing liabilities – 34 905 4 129 133 865 172 899 Treasury creditors – 123 749 13 944 66 491 204 184 Other current liabilities 309 347 163 545 127 989 1 30 542 722 322Liability in disposal group held for sale 176 895 176 895

Total liabilities 309 347 379 995 157 401 1 420 507 2 2 67 250

Net assets 476 7 29 150 753 170 216 (707 644) 90 054



Revenue¹ 1 044 182 1 092 189 655 553 671 350 3 463 275

Profit from operations 48 167 19 687 19 005 22 455 109 314Net interest expensed 20 904 (14 397) (1 488) (20 291) (15 272) Fair value adjustments and net Loss from investments – (12 63 1) – (3 032) (15 663)Share of profit/(loss) from associates 975 514 – (865) 624

Net profit/(loss) before taxation 70 046 (6 82 7) 17 517 (1 733) 79 00 3Taxation expense (48 632) (466) (6 337) (12 129) (67 564)

Net profit/(loss) for the year 21 414 (7 294) 11 180 (13 862) 11 439

¹ Revenue is revenue received from external customers. Inter-segment revenue represents 0,003% of total revenue.

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Cash flow from operating activities 55 215 (32 501) 44 386 61 956 129 057Cash flow from investing activities (3 664) (56 045) (35 442) (198 746) (293 896)Cash flow from financing activities (59 297) 111 717 (7 716) 116 535 161 238

Net movement in cash and cash equivalents (7 746) 23 171 1 228 (20 255) (3 603)

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GROUP FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Group Notes 2010 2009 2008at 30 June R’000 R’000 R’000

ASSETS


Property, plant and equipment 7 387 619 312 602 266 258Goodwill 8 412 704 414 164 406 827Intangible assets 9 132 63 1 129 83 6 127 7 90Investments in associates 10 8 269 6 301 12 238Other investments 11 16 362 32 553 4 0 255Financial asset 12 – – 3 242Deferred taxation 20 17 520 32 984 28 461

Current assets 1 753 501 1 417 82 6 1 191 93 8

Other investments 11 15 553 11 254 20 117Inventories 13 41 608 39 911 37 536Trade and other receivables 14 763 87 6 705 467 579 46 7Trade and other receivables – Mvela Group 97 878 97 878 105 950Cash and cash equivalents 15 374 809 210 251 219 150Treasury receivable 459 777 353 065 229 718

Assets in disposal group held for sale 1 6 5 045 – 280 295

Total assets 2 733 651 2 346 266 2 357 304


Capital and reserves 233 300 78 898 90 054

Share capital – – –Distributable reserve 227 817 76 019 88 492 ��

Total attributable to ordinary equity holders 227 817 76 019 88 492Minority interests 5 483 2 879 1 562

Non-current liabilities 1 367 158 1 179 327 981 849

Interest bearing liabilities – preference share funding 1 8 482 438 482 438 –Asset finance 1 8 123 032 86 714 126 984Non-interest bearing liabilities – Mvela Group 1 9 722 117 566 362 848 870Financial liability 12 36 900 34 199 –Deferred taxation 20 2 671 9 614 5 995

Current liabilities 1 133 193 1 088 041 1 108 506

Trade and other payables 21 793 736 748 00 2 722 066Interest bearing liabilities – Mvela Group 18 100 478 93 560 74 397Asset finance 18 78 022 63 651 98 502Non-interest bearing liabilities 19 18 136 22 324 1 401Taxation liabilities 13 609 507 7 956Treasury creditors 129 212 159 997 204 184

Liabilities in disposal group held for sale 16 – – 176 895

Total equity and liabilities 2 733 651 2 346 266 2 357 304

Net number of ordinary shares in issue 100 100 100Net asset value per ordinary share (R’000) 2 278 7 60 885Net tangible assets per ordinary share (R’000) (3 350) ( 5 010) (4 746)

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Group Notes 2010 2009 2008for the year ended 30 June R’000 R’000 R’000

Continued operations

Revenue 22 4 061 998 3 601 257 3 463 275Cost of sales (3 103 298) (2 703 969) (2 616 880)

Gross profit 958 700 897 288 846 395Other operating profit 32 671 49 344 57 584Operating expenses (700 084) (756 040) (794 665)

Profit from operations 23 291 287 190 592 109 314Interest received 3rd party 14 888 25 433 16 536Interest paid 3rd party 2 4 (77 943) (110 492) (30 341)Interest treasury 2 561 (7 324) (1 467)Dividend income – 99 –Fair value adjustments and net profit/(loss) from investments 25 (2 726) (40 663) (15 663)Share of profit from associates 26 6 075 3 463 624

Net profit before taxation 234 142 61 108 79 003Taxation expense 27 (80 282) (72 753) (67 564)

Profit/( Loss) for the year from continuing operations 153 860 (11 645) 11 439

Discontinued operationsProfit for the year from discontinued operations 1 6 1 155 1 533 –

Total comprehensive income/(loss) for the year 155 015 (10 112) 11 439

Total comprehensive income attributable to:Owners of the parent 151 798 (12 473) 12 566 Minority shareholders 3 217 2 361 (1 127)

Weighted average number of ordinary shares in issue 100 100 100Earnings per ordinary share (R’000) 1 518 (125) 114Headline earnings per ordinary share (R’000) 1 51 4 (143) 98

STATEMENT OF CHANGES IN EQUITY

Total Capital Share Distributable attributable to Minority and capital reserves equity holders interests reserves R’000¹ R’000 R’000 R’000 R’000

GROUP

Balance at 30 June 2007 – 75 926 75 926 3 549 79 475

Acquisitions of subsidiaries – – – 456 456Net (profit)/loss for the period – 12 566 12 566 (1 127) 11 439Distributions/ Dividends paid – – – (1 316) (1 316)

Balance at 30 June 2008 – 88 492 88 492 1 562 90 054

Disposals of subsidiaries – – – (427) (427)Net profit/(loss) for the period – (12 473) (12 473) 2 361 (10 112)Dividends paid – – – (617) (617)

Balance at 30 June 2009 – 76 019 76 019 2 879 78 898

Net profit for the period – 151 798 151 798 3 217 155 015Dividends paid – – – (613) (613)

Balance at 30 June 2010 – 227 817 227 817 5 483 233 300

1. Value less than R1 000.

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STATEMENT OF CASH FLOWS

Group Notes 2010 2009 2008for the year ended 30 June R’000 R’000 R’000

Cash flows from operating activities 265 184 96 454 129 057

Cash received from customers 2 8 4 0 67 249 3 538 809 3 270 759Cash paid to suppliers and employees 2 9 (3 687 020 ) (3 269 97 7) (3 070 009) ��

Cash generated from operations 30 380 229 268 832 200 750Net interest paid (60 494) (92 383) (16 614)Investment income 4 108 1 363 50Taxation paid 3 2 (58 659) (81 359) (55 129)

Cash flows from investing activities (175 879) (97 436) (293 896)

Disposals/( Acquisitions) of subsidiaries 3 3 – 87 357 (15 693)Additions to property, plant and equipment and other intangible assets (196 005) (217 86 5) (308 603)Proceeds from disposal of property, plant and equipment 6 415 7 549 21 439Proceeds from disposal of investments 1 787 2 000 772Decrease in investments 11 924 23 523 8 189

Cash flows from financing activities 75 253 (8 984) 161 238

Increase in non-current liabilities 192 073 225 19 0 67 729Increase/( Decrease) in current liabilities 21 289 (66 023) 8 089 Decrease in minority interest (613) (617) (1 316) Increase in treasury debtor (106 712) (123 347) –(Decrease)/ Increase in treasury creditor (30 784) (44 187) 86 736

Net increase/(decrease) in cash and cash equivalents 164 558 (9 966) (3 601)Cash and cash equivalents at the beginning of the year 210 251 220 217 223 818

Cash and cash equivalents at the end of the year 15 374 809 210 251 220 217

1. GENERAL INFORMATION

Mvelaserve Limited is incorporated in the Republic of South Africa. The financial statements incorporate the following principal accounting policies, which are, except where otherwise disclosed, consistent with those applied in the previous year.

2. STATEMENT OF COMPLIANCE

The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), AC 500 series of interpretations as issued by the Accounting Practices Board or its successor, the JSE Listings Requirements and the South African Companies Act of 1973, as amended.

3. BASIS OF PREPARATION

The financial statements are prepared on the historical cost convention, modified by the restatement of financial instruments to fair value where applicable.

4. PRINCIPAL ACCOUNTING POLICIES

4.1 Basis of consolidation

4.1.1 Investments in subsidiaries

The Group financial statements incorporate the assets, liabilities and results of the operations of the Group and its subsidiaries. Subsidiaries are all entities, including special purpose entities, controlled by the Group. Control exists when the Group, directly or indirectly, has an interest of more than one -half of

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the voting rights or otherwise has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired and disposed of during a financial year are included from the date on which control is transferred to the Group and deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any minority shareholders in the acquiree either at fair value or at the minority shareholders’ proportionate share of the acquiree’s net assets.

The excess of the consideration transferred and the amount of any minority shareholders in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill in accordance with accounting policy note 4.2. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the Statement of Comprehensive Income.

The Group applies a policy of treating transactions with minority shareholders as transactions with equity owners of the Group. Disposals to minority shareholders result in gains and losses for the Group which is recorded in equity. For purchases from minority shareholders, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of a subsidiary is recorded in equity.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

4.1.2 Investments in associates

An associate is an entity over whose financial and operating policies the Group has the ability to exercise significant influence, but not control, and is neither a subsidiary nor a jointly controlled entity of the Group. Investments in associates are accounted for using the equity method of accounting, except for investments that are managed and whose performances are evaluated on a fair value basis in accordance with the Group’s investment strategy, in which case it is accounted for as designated as at fair value through profit and loss in accordance with IAS 39 of the International Financial Reporting Standards, as per accounting policy note 4.13.2.

Equity accounting involves recognising, in the Statement of Comprehensive Income, the Group’s share of the associates’ earnings for the year. The results of associate companies acquired and disposed of during the year are included from the effective dates of acquisition to the effective dates of disposal. Where the fair value of the consideration paid exceeds the fair value of the identifiable assets acquired and liabilities and contingent liabilities assumed, the difference is recorded as goodwill and is included as part of the carrying value of the investment in associates.

The Group’s interest in associates is carried in the Statement of Financial Position at an amount that reflects its share of the net assets of the associate and goodwill identified on acquisition of the associate, net of accumulated impairment loss. The total carrying amount of associates is evaluated annually for impairment.

The most recent financial information of associates is used. Adjustments are made to the associate’s financial results for material transactions and events in the intervening period. Losses of associates in excess of the Group’s interest are not recognised unless there is a binding obligation to contribute to the losses.

4.1.3 Investments in jointly controlled entities

Jointly controlled entities are those entities over which the Group exercises joint control in terms of a contractual agreement.

Investments in jointly controlled entities are accounted for by way of the proportionate consolidation method whereby the Group’s proportional share of the assets, liabilities, revenue and expenses of jointly controlled entities are combined on a line-by-line basis, with similar items in the financial statements of the

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Group. The results of jointly controlled entities are included from the effective dates when joint control commences to the effective dates when joint control ceases. Any goodwill arising on the acquisition of the Group’s interest in a jointly controlled entity is accounted for in terms of accounting policy note 4.2.

4.1.4 Transactions eliminated on consolidation

Intra- Group balances and transactions, and unrealised gains arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains resulting from the transactions with associates and jointly controlled entities are eliminated to the extent of the Group’s interest in the entity.

Unrealised gains resulting from transactions with associates are eliminated against the investment in associates. Unrealised losses on transactions with associates are eliminated in the same way as unrealised gains, except that they are only eliminated to the extent that there is no evidence of impairment.

4.2 Goodwill

Goodwill represents amounts arising on acquisition of subsidiaries and joint ventures. All business combinations are accounted for by applying the acquisition method.

Goodwill arising from a business combination for which the agreement date is prior to 31 March 2004, is included in the Statement of Financial Position at its deemed cost, being its cost less accumulated up to 31 March 2004, as previously recorded under SA GAAP.

Goodwill arising from a business combination, for which the agreement date is on or after 31 March 2004, is not amortised but is carried at cost less accumulated impairment losses.

Goodwill is tested at least annually for impairment. For the purpose of impairment testing, goodwill is allocated to the cash-generating unit(s) expected to benefit from the business combination in which the goodwill arose. An impairment loss is recognised if the carrying amount of the cash-generating unit, including the associated goodwill, exceeds its recoverable amount.

On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

4.3 Intangible assets

Intangible assets, other than goodwill (refer to policy note 4.2) are recognised if it is probable that future economic benefits will flow to the entity from the intangible assets and the costs of the intangible assets can be reliably measured.

4.3.1 Trademarks

Internally generated trademarks are classified as indefinite useful life intangible assets as they are inherent to the continuous operation of the businesses to which they relate, and are stated at cost less accumulated impairment losses. No perceived end to the economic benefits to be derived from the assets. Trademarks are tested for impairment at least annually.

4.3.2 Computer software

Direct software development costs that enhance the benefits of computer software programs and are clearly associated with an identifiable and unique software system, which will be controlled by the Group and has a probable benefit exceeding one year, are recognised as intangible assets. Computer software, including software development costs recognised as intangible assets, is amortised on the straight-line basis over the expected useful lives of the assets, being between three and five years. Capitalised computer software is carried at cost less accumulated and impairment losses. Computer software is tested annually for impairment or changes in estimated future benefits.

4.3.3 Manufacturing and distribution rights

Acquired manufacturing and distribution rights are classified as indefinite useful life intangible assets as they are inherent to the continuous operation of the business to which they relate, and are stated at cost less accumulated impairment losses. No perceived end to the economic benefits to be derived from the assets. Manufacturing and distribution rights are tested at least annually for impairment.

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4.4 Property, plant and equipment

Furniture, fittings, computer equipment, plant and equipment, improvements to leasehold premises, office equipment and motor vehicles are stated at cost less accumulated depreciation and impairment calculated on the component method, and on a straight-line basis, at the rates set out below, which rates are considered appropriate to write off the cost of the asset to the estimated residual value over the estimated useful life of the asset thereof. The estimated useful lives and residual values are reviewed at each financial year end. The current rates used are:

Plant and equipment 15% – 20%

Office equipment 15%

Computer equipment 33%

Furniture and fittings 15%

Motor vehicles – passenger 20%

Motor vehicles – commercial 25%

Improvements to leasehold premises period of lease

Land and buildings owned and occupied by Group companies are classified as own use property. Land is carried at cost. Buildings are carried at cost less depreciation calculated on a straight-line basis, at rates considered appropriate to write off the cost thereof to the estimated residual value over the estimated useful life of the buildings.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between sales proceeds and the carrying amount of the asset and is recognised in the Statement of Comprehensive Income.

Property, plant and equipment are tested annually for impairment.

4.5 Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined on a first-in, first-out basis. The cost of finished goods includes direct expenditure and production overheads. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Any write downs to inventory and reversals to prior years write down are accounted for in cost of sales. Reversals to prior year inventory write downs are limited to the cost of the inventory written down. Inventory comprises of finished goods, work in progress and raw materials.

4.6 Trade and other receivables

Trade and other receivables are recognised initially at fair value and are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Indicators that trade receivables may be impaired are significant financial difficulty experienced by the debtor, the probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the Statement of Comprehensive Income. 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 to the Statement of Comprehensive Income.

4.7 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate ruling on the transaction dates. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the end of each reporting period. Translation differences are recognised in the Statement of Comprehensive Income.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to South African rand at foreign exchange rates ruling at the dates that the fair value was determined. Exchange differences are taken to profit and loss in the year in which they arise.

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4.8 Taxation

The taxation expense represents the sum of the current taxation payable (local and international), deferred taxation and secondary taxation on companies.

The current taxation currently payable is based on the taxable income for the year. Taxable income differs from net income as reported in the Statement of Comprehensive Income where it includes items of income and expense that are taxable or deductible in other periods and it further excludes items that are not taxable or deductible. The Group’s liability for current taxation uses the current substantially enacted taxation rates.

Deferred taxation is accounted for using the comprehensive liability method in respect of temporary differences which arise from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding taxation basis used in the computation of taxable income. Deferred taxation liabilities are recognised for all taxable temporary differences and deferred taxation assets are recognised to the extent that it is probable that taxable income will be available against which deductible temporary differences can be utilised. The carrying value of deferred taxation assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow part of the asset to be recovered. Current substantially enacted taxation rates are used to determine deferred income taxation. The principal temporary differences arise from depreciation on property, plant and equipment, various provisions, fair value adjustments on strategic investments and taxation losses carried forward.

Secondary taxation on companies is recognised as part of the taxation charge in the Statement of Comprehensive Income when the related dividend is declared.

4.9 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits held on call with banks, other current highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are included as part of current liabilities on the Statement of Financial Position. Cash and cash equivalents are carried on the Statement of Financial Position at fair value.

4.10 Trade and other payables

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

4.11 Revenue

Revenue, which excludes value-added tax, comprises the net amounts invoiced to customers, after trade discounts, for goods supplied and services rendered. Under certain service contracts the Group manages customer expenditure and is obliged to purchase goods and services from third-party contractors and recharge them to the customer at cost. These “flow through” amounts charged by contractors and recharged to customers at cost are excluded from turnover and cost of sales. Debtor and creditor balances relating to these transactions are recorded in the Statement of Financial Position.

4.11.1 Revenue recognition

Revenue from service-based activities is recognised when the service is completed.

Revenue from the sale of merchandise and finished goods is brought to account when the risk in the goods passes to the customer.

Interest earned is accrued on a time proportion basis using the effective interest rate method.

Dividends are recognised when the right to receive payment is established.

4.12 Leased assets

Lease contracts, where the Group has substantially all the risks and rewards of ownership of the leased assets, are classified as finance leases. Assets held under finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased asset or the present value of the minimum lease payments, and are depreciated over the shorter of the useful life of the asset, on the same basis as owned assets, or the lease term.

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The corresponding rental obligations, net of finance charges, are classified as finance lease liabilities. Each lease payment is allocated between capital and finance charges. Finance charges are expensed using the effective interest method.

Leases of assets, where a significant portion of the risks and rewards of ownership are retained by the lessor, are classified as operating leases. Payments made under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the period of the lease.

4.13 Investments

4.13.1 Investments in subsidiaries, associates and jointly controlled entities

Investments in subsidiaries, associates and jointly controlled entities are recognised at cost less accumulated impairment losses in the Company’s separate financial statements.

4.14 Financial instruments

Financial instruments include all financial assets, financial liabilities and equity instruments including derivative instruments. Financial instruments carried on the Statement of Financial Position include cash and cash equivalents (as defined), current liabilities, strategic investments, trade and other receivables, trade and other payables, interest bearing liabilities and derivative financial instruments. The particular recognition methods adopted are disclosed in the individual policy statements or notes associated with each item.

4.14.1 Financial assets

The Group classifies its financial assets in the following categories; at fair value through profit or loss or loans and receivables. The classification depends on the nature and purpose of the financial instrument and is determined at the time of initial recognition.

Financial assets at fair value through profit and loss are financial assets held for trading or those designated as fair value through profit and loss on initial recognition. These assets are reflected in current and non-current assets, respectively, and mainly include strategic investments. Derivatives are classified as held for trading unless they are designated as hedges.

Financial assets carried at fair value through profit and loss are initially recognised at fair value and subsequently carried at fair value. Gains and losses arising from changes in the fair value of the financial assets at fair value through profit and loss category are presented in the Statement of Comprehensive Income in the period in which they arise. The method for estimation of fair value is described within the disclosure on judgements and estimates. Where the effect of the time value of money is not considered to be material, financial assets carried at amortised cost using the effective interest rate method are not discounted as their carrying values approximate fair value.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of each reporting period. These are classified as non-current assets. Loans and receivables include trade and other receivables and cash and cash equivalents in the Statement of Financial Position. Loans and receivables are initially recognised at fair value, plus transaction costs, and subsequently carried at amortised cost using the effective interest method.

The Group derecognises a financial asset only when the contractual right to the cash flows from the asset expires, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

4.14.2 Financial liabilities

The Group classifies its financial liabilities as either financial liabilities at fair value through profit or loss or other financial liabilities.

Where the effect of the time value of money is not considered to be material, financial liabilities carried amortised cost using the effective interest rate method are not discounted as their carrying values approximate fair value.

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Other financial liabilities include trade payables, loans and liabilities (interest bearing and non-interest bearing) and other payables that are not held for trading purposes and have fixed or determinable payments that are not quoted in an active market. Other financial liabilities are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.

4.15 Impairment of assets

Except for goodwill, indefinite useful life intangible assets, and intangible assets not yet available for use, the recoverable amounts of the Group’s assets are assessed for indications of impairment at least annually. If there is an indication that an asset may be impaired, its recoverable amount is estimated.

The recoverable amount of an asset is calculated as the higher of its fair value less cost to sell and its value in use. In assessing the value in use, the expected future cash flows from the asset are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss is recognised in the Statement of Comprehensive Income whenever the carrying amount of an asset exceeds its recoverable amount. A previously recognised impairment loss, except for an impairment in respect to goodwill which is never reversed, is reversed in the Statement of Comprehensive Income, if the recoverable amount of the asset increases as a result of a change in the estimates used to determine the recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Impairments to CGU’s are first applied to goodwill and then to other assets in the CGU on a proportionate basis.

4.16 Provisions

A provision is recognised when, and only when, the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at the end of each reporting period and adjusted to reflect current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

4.17 Segment reporting

Operating segments have been determined on a basis consistent with the internal reports reviewed by the Executive committee ( “E xco”) when making strategic decisions for the Group. Exco considers the business based on the sectors in which they operate.

4.18 Employee benefits

The Group provides for retirement benefits for the majority of employees by payments to independently administered defined-contribution pension and provident funds. Current contributions are charged against income as incurred.

4.19 Dividends declared

Dividends, and the related tax thereon, are recognised when the dividends are declared by the board of directors.

4.20 Share capital

4.20.1 Ordinary shares

Ordinary shares are classified as equity. Issued share capital is stated at the amount of the proceeds received less directly attributable issue costs.

4.20.2 Preference shares

Preference shares issued which are convertible at the instance of the holder into other equity instruments, or if not convertible are redeemable at the instance of the issuer, are classified as equity. Distributions to the holders of preference shares which are classified as equity are shown in the statement of changes in equity as part of transactions with equity holders. Preference shares which do not meet the definition of an equity instrument are classified as liabilities. Distributions to the holders of preference shares which are classified as liabilities are included in finance costs in the Statement of Comprehensive Income.

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4.21 Non-current assets (or disposal group) held for sale

Non-current assets (or disposal groups) are classified as assets held for sale and stated at the lower of carrying amount and fair value less costs to sell if their carrying amount is recovered principally through a sale transaction rather than through continued use.

4.22 Related party transactions

All subsidiaries, joint ventures and associated companies of the Group are related parties. A list of the major subsidiaries, joint ventures and associated companies are included in the annual report. All transactions entered into with subsidiaries and associated companies were under terms no more favourable than those with third parties and have been eliminated in the consolidated Group accounts. Directors’ emoluments as well as transactions with other related parties are set out in note s 22.5 and 34. There were no other material contracts with related parties.

4.23 Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant and recognised in profit or loss on a straight-line basis over the vesting period based on the estimated number of shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions. Fair value is measured using a trinomial-based option pricing model.

Share appreciation rights granted to employees for the services rendered or to be rendered are raised as a liability and recognised in profit and loss immediately or, if vesting requirements are applicable, over the vesting period. The liability is measured annually until settled and any changes in value are recognised in profit and loss. Fair value is measured using the trinomial-based option model.

In a BEE transaction, the share-based payment is measured as the difference between the fair value of the equity instruments granted and the fair value of the cash and other assets received (e.g. the BEE equity credentials) and are recognised in profit and loss at the grant date unless there are service conditions in which case it is recognised over the relevant period of the service conditions.

4.24 Borrowing costs

Borrowing cost is recognised as an expense in the period in which it is incurred.

4.25 Government grants

The carrying amounts of the assets to which the government grants/assistance relate to, have been reduced by the amount of the government grants given.

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period, based on management’s best knowledge of current events and actions and anticipated future events. The accounting estimates may, by definition, differ from the ultimate actual results. Estimates are continually evaluated and are based on historical experiences and other factors, including expectations of future events, which are considered to be reasonable in the circumstances.

5.1 Fair value methods and assumptions

The best evidence of the fair value of a financial instrument on initial recognition is the transaction price, i.e. the fair value of the consideration paid or received, unless the fair value is evidenced by comparison with other observable current market transactions in the same instrument, without modification or repackaging, or based on discounted cash flow models and option-pricing valuation techniques whose variables include only data from observable markets.

When such valuation models, with only observable market data as input, indicate that the fair value differs from the transaction price, this initial difference, commonly referred to as day one profit or loss, is recognised in the Statement of Comprehensive Income immediately. If non-observable market data is used as part of the input to the valuation models, any resulting difference between the transaction price and the model value is deferred.

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The timing of recognition of deferred day one profit or loss is determined individually. It is either amortised over the life of the transaction, deferred until the instrument’s fair value can be determined using market observable inputs, or realised through settlement, depending on the nature of the instrument and availability of market observable inputs.

Subsequent to initial recognition, the fair values of financial assets and liabilities are based on quoted market prices or dealer price quotations for financial instruments traded in active markets. In situations where an investment vehicle is established to house the investment, the Group determines fair values of its investments through valuation of the underlying assets in the respective investment companies.

If the market for a financial asset is not active or the instrument is an unlisted instrument, the fair value is determined using applicable valuation techniques such as price : earnings multiple, EBITDA multiple, net asset value and discounted cash flow methods.

Where earnings multiple or discounted cash flow analyses are used, estimated multiples and future cash flows are based on management’s best estimates and market-related discount rates at the end of each reporting period for a financial asset with similar terms and conditions. Management follows a conservative approach when determining estimates of earnings and multiples used for valuation purposes.

Where pricing models are used, inputs are based on observable market indicators at the end of each reporting period and profits or losses are only recognised to the extent that they relate to changes in factors that market participants will consider in setting a price.

5.2 Estimates regarding the impairment of goodwill

The recoverable amount of the cash-generating unit(s) is determined using appropriate EBITDA multiples, net asset value and discounted cash flow valuation methodologies. EBITDA multiple valuations are based on, inter alia, the EBITDA achieved by a cash-generating unit for the year under review and budgets and forecasts prepared by management. The EBITDA multiples used are determined with reference to the EBITDA multiples of comparable listed companies (both locally and overseas) and are adjusted for industry and other specific factors affecting the cash-generating unit. Net asset value-based valuations are calculated based on the audited net asset value of the cash-generating unit at the end of the current year. Discounted cash flow valuations are based on cash flow budgets and forecasts prepared by management.

5.3 Estimates regarding the impairment of intangible assets other than goodwill

The recoverable amount of the trademarks is calculated using an appropriate trademark royalty rate and revenue budgets and forecasts prepared by management. The recoverable amounts of the manufacturing and distribution rights are calculated based on revenue budgets and forecasts prepared by management.

5.4 Estimates regarding the impairment of associates

The recoverable amount of the investment in associates is based on value in use.

6. ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS

During the current financial year, the following accounting standards, interpretations and amendments to published accounting standards were adopted:

Accounting standard/interpretation Type Description

IAS 1 – Presentation of Amendment The principal change is that an entity must present all non-Financial Statements owner changes in equity in a statement of comprehensive

income. All owner changes in equity are recognised in a statement of changes in equity. In addition the amendment introduced changes to terminology including revised titles for the financial statements, the Group has adopted these revised terminology changes. This amendment had no effect on the Group’s results or net assets.

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IAS 8 – Accounting Policies, Amendment The amendment changed the status of the implementationChanges in Accounting guidance. The amendment had no effect on the Group orEstimates and Errors Company to date.

IAS 10 – Events after the Amendment The amendment clarified that a dividend declared after theReporting Period end of the reporting period is an adjusting event. This

amendment had no effect on the Group’s results or net assets.

IAS 16 – Property, Amendment The amendment resulted in changes to the recoverablePlant and Equipment amount definitions and accounting for sale of assets held

for rental. The amendment has no effect on the Group or Company.

IAS 18 – Revenue Amendment The amendment relates to costs of originating a loan.

IAS 19 – Employee Benefits Amendment The amendment relates to curtailments and negative past service cost, plan administration costs, replacement of the term “fall due” and additional guidance on contingent liabilities. The amendment had no effect on the Group or Company to date.

IAS 20 – Accounting for Amendment The amendment relates to government loans with aGovernment Grants and below-market rate of interest and terminology changes toDisclosure of Government be consistent with other IFRSs. The amendment had noAssistance effect on the Group or Company to date.

IAS 23 – Borrowing Costs Amendment The amendment requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. The amendment had no effect on the Group or Company to date.

IAS 27 – Consolidated and Amendment The amendment requires the effects of all transactionsSeparate Financial Statements with non-controlling interests to be recorded in equity if

there is no change in control and these transactions will no longer result in goodwill or gains and losses. When control is lost any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in profit or loss. The amendment had no effect on the Group or Company to date.

IAS 28 – Investments Amendment The amendment requires disclosures when investmentsin Associates in associates are accounted for at fair value through profit

or loss. The amendment had no effect on the Group or Company to date.

IAS 32 and IAS 1 – Financial Amendment The amended standards require entities to classify puttableInstruments Presentation financial instruments and instruments, or components ofFinancial Statements – Puttable instruments that impose on the entity an obligation toFinancial Instruments and deliver to another party a pro rata share of the net assetsObligations Arising on Liquidation of the entity only on liquidation as equity, provided the

financial instruments have particular features and meet specific conditions. The amendment had no effect on the Group or Company to date.

IFRS 2 – Share Based Amendment The amendment clarifies that vesting conditions are servicePayments – Vesting Conditions conditions and performance conditions only. Theand Cancellations amendment had no effect on the Group or Company

to date.

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IFRS 3 – Business Combinations Amendment The revised standard continues to apply the acquisition method to business combinations, some of the significant changes are, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the Statement of Comprehensive Income. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition related costs should be expensed. The revision had no effect on the Group or Company to date.

IFRS 5 – Non-current Assets Amendment The amendment provides clarification that IFRS 5 specifiesHeld for Sale and the disclosures required in respect of non-current assetsDiscontinued Operations (or disposal groups) classified as held for sale or

discontinued operations. It also clarifies that the general requirements of IAS 1 still apply. The amendment had no effect on the Group or Company to date.

IFRS 8 – Operating Segments New Statement The new standard requires a ‘management approach’, under which segment information is presented on the same basis as that used for internal reporting purposes. This has resulted in an increase in the number of reportable segments presented. In addition, the segments are reported in a manner that is more consistent with the internal reporting provided to the chief operating decision-maker. The new standard has had little impact on the Group’s reportable segments, as the Group’s segments reported on are consistent with the internal reporting provided to the chief operating decision-maker (Exco).

IFRIC 9 – Reassessment of Amendment The amendment requires an entity to assess whether anEmbedded Derivatives embedded derivative is to be separated from a host

contract when the entity reclassifies a hybrid financial asset out of the fair value through profit or loss category. The amendment had no effect on the Group or Company to date.

IFRIC 9 and IAS 39 – New Re-assessment of embedded derivatives. The newEmbedded Derivatives Interpretation interpretation had no effect on the Group or Company

to date.

IFRIC 16 – Hedges of a Amendment The amendment states that, in a hedge of a net investment Net Investment in a in a foreign operation, qualifying hedging instruments mayForeign Operation be held by any entity or entities within the group, including

the foreign operation itself, as long as the designation, documentation and effectiveness requirements of IAS 39 that relate to a net investment hedge are satisfied. The amendment had no effect on the Group or Company to date.

IFRIC 15 – Agreements for New The interpretation clarifies whether IAS 18, ‘Revenue’, orthe Construction of Real Estate Interpretation IAS 11, ‘Construction Contracts’, should be applied

to particular transactions. IFRIC 15 is not relevant to the Group’s operations as all revenue transactions are accounted for under IAS 18 and not IAS 11.

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IFRIC 17 – Distributions of New This interpretation provides guidance on accounting forNon-cash Assets to Owners Interpretation arrangements whereby an entity distributes non-cash

assets to shareholders either as a distribution of reserves or as dividends. IFRS 5 has also been amended to require that assets are classified as held for distribution only when they are available for distribution in their present condition and the distribution is highly probable. The amendment had no effect on the Group or Company to date.

IFRIC 18 – Transfers of New This interpretation provides guidance on how to accountAssets from Customers Interpretation for items of property, plant and equipment received from

customers or cash that is received and used to acquire or construct specific assets. This interpretation is only applicable to such assets that are used to connect the customer to a network or to provide ongoing access to a supply of goods or services or both. The amendment had no effect on the Group or Company to date.

IAS 38 – Intangible Assets Amendment A prepayment may only be recognised in the event that payment has been made in advance of obtaining right of access to goods or receipt of services. The amendment had no effect on the Group or Company to date.

IAS 39 – Financial Instruments: Amendment This amendment clarifies that it is possible for there to beRecognition and Measurement movements into and out of the fair value through profit orEligible Hedged Items loss category where a derivative commences or ceases

to qualify as a hedging instrument in cash flow or net investment hedge and that a financial asset or liability that is part of a portfolio of financial instruments managed together with evidence of an actual recent pattern of short-term profit taking is included in such a portfolio on initial recognition. The amendment had no effect on the Group or Company to date.

AC 504 – IAS 19(AC 116) New The new interpretation guidance on the application ofThe Limit on a Defined Interpretation IFRIC 14 – IAS 19 The Limit on the Defined BenefitBenefit Asset, Minimum Funding Asset, Minimum Funding Requirements and theirRequirements and Their Interaction in South Africa in relation to the defined benefitInteraction in The South African pension obligations. The interpretation had no effect onPension Fund Environment the Group or Company to date.

IFRS 1 – First-Time Adoption Amendment The amended standard allows first-time adopters to useof International Financial a deemed cost of either fair value or the carrying amountReporting Standards – under previous accounting practice to measure the initialIAS 27 – Consolidated and cost of investments in subsidiaries, jointly controlled entitiesSeparate Financial Statements and associates in the separate financial statements. TheCost of an Investment in a amendment also removes the definition of the cost methodSubsidiary, Jointly Controlled from IAS 27 and replaces it with a requirement to presentEntity or Associate dividends as income in the separate financial statements of

the investor. The amendment is not relevant to the Group as the Group has adopted IFRS.

IFRS 7 – Financial Instruments Amendment The amendment requires enhanced disclosures about fair Disclosures Improving value measurement and liquidity risk. In particular, theDisclosures about Financial amendment requires disclosure of fair value measurementsInstruments by level of a fair value measurement hierarchy. As the

change in accounting policy only results in additional disclosures, there is no impact on earnings per share. See note 34.4 to the financial statements

At the date of issue of these financials, the following accounting standards, interpretations and amendments to published accounting standards were in issue but not yet effective:

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Accounting standard/interpretation Type Effective date

IAS 1 – Presentation of Amendment Financial years commencing on or after 1 January 2010Financial Statements – Classification of Convertible Instruments as Either non- Current or Current

IAS 1 – Presentation of Amendment Financial years commencing on or after 1 January 2011Financial Statements – Clarification of Statement of Changes in Equity

IAS 7 – Statement of Cash Flows Amendment Financial years commencing on or after 1 January 2010

IAS 17 – Leases Amendment Financial years commencing on or after 1 January 2010

IAS 18 – Revenue Amendment Financial years commencing on or after 1 January 2010

IFRS 2 – Share -Based Amendment Financial years commencing on or after 1 January 2010Payments – Group Cash-settled Share-based Payment Transactions

IFRS 3 – Business Combinations Amendment Financial years commencing on or after 1 January 2011

IFRS 5 – Non-current Assets Amendment Financial years commencing on or after 1 January 2010Held for Sale and Discontinued Operations

IFRS 7 – Financial Instruments Amendment Financial years commencing on or after 1 January 2010

IFRS 8 – Operating Segments – Amendment Financial years commencing on or after 1 January 2010Disclosure of information regarding Profit and Loss, Assets and Liabilities

IFRS 9 – Financial Instruments – New standard Financial years commencing on or after 1 January 2013Classification and Measurement

IAS 27 – Consolidated and Amendment Financial years commencing on or after 1 January 2011Separate Financial Statements

IAS 24 – Related Party Disclosures Amendment Financial years commencing on or after 1 January 2011

IAS 32 – Financial Instruments – Amendment Financial years commencing on or after 1 February 2010Presentation and Disclosure

IAS 36 – Impairment of Assets Amendment Financial years commencing on or after 1 January 2010

IAS 39 – Financial Instruments: Amendment Financial years commencing on or after 1 January 2010Recognition and Measurement Improvements Projects Improvements to IFRS’s FinancialScope Exemption for Business years commencing on or after 1 January 2010 Combination Contracts and Cash Flow Hedge Accounting

The directors have not yet determined what the impact of these new standards and interpretations on the Company will be.

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NOTES TO THE FINANCIAL STATEMENTS

7. PROPERTY, PLANT AND EQUIPMENT

GROUP: 2010

Accumulated depreciation Net and book Cost impairment value R’000 R’000 R’000

Land and buildings 6 21 6 – 6 21 6Plant and equipment 278 90 8 (145 478) 133 429Office equipment 18 457 (15 613) 2 844Computer equipment 103 23 1 (83 654) 19 57 7Furniture and fittings 33 710 (26 185) 7 525Motor vehicles 364 0 58 (159 697) 204 36 1Improvements to leasehold premises 34 08 9 (20 422) 13 66 7

838 66 9 (451 0 50) 387 619

Reconciliation of net book value

Reclassified to disposal Net book group Net book value classified Depreciation value 30 June as held Reclas- Government and 30 June 2009 for sale sification grants Additions Disposals¹ impairment 2010 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Land and buildings 4 962 – – – 1 367 (113) – 6 21 6Plant and equipment 136 6 97 (3 381) (5 631) (1 180) 49 379 (4 926) (37 529) 133 429Office equipment 3 252 – 276 – 595 (1 279) 2 84 4Computer equipment 18 6 40 – 193 – 8 528 852 (8 636) 19 57 7Furniture and fittings 6 108 – 441 – 4 913 (25 2) (3 685) 7 525Motor vehicles 132 57 3 – 65 (252) 123 06 4 (1 570) (49 519) 204 361Improvements to leasehold premises 10 3 70 – 4 094 (569) 8 69 5 113 (9 036) 13 667

312 602 (3 381) (562) (2 001) 196 542 (5 89 6) (109 68 4) 387 619

Analysis of additionsReplacement of assets 52 235Expansion of business 144 306

196 541

GROUP: 2009

Accumulated depreciation Net and book Cost impairment value R’000 R’000 R’000

Land and buildings 4 962 – 4 962Plant and equipment 264 737 (128 040) 136 6 97Office equipment 17 626 (14 374) 3 252Computer equipment 96 50 3 (77 863) 18 6 40Furniture and fittings 29 377 (23 269) 6 108Motor vehicles 253 80 0 (121 227) 132 57 3Improvements to leasehold premises 21 86 9 (11 499) 10 3 70

688 874 (376 272) 312 602

92


Net book Net book value Depreciation value 30 June and 30 June 2008 Additions Disposals¹ impairment 2009 R’000 R’000 R’000 R’000 R’000

Land and buildings 4 96 2 – – – 4 962Plant and equipment 114 67 5 117 831 (44 214) (51 595) 136 6 97Office equipment 4 791 849 (491) (1 897) 3 252Computer equipment 15 495 12 23 8 191 (9 284) 18 6 40Furniture and fittings 6 806 2 557 (80 7) (2 448) 6 108Motor vehicles 107 853 68 1 99 (5 699) (37 700) 132 57 3Improvements to leasehold premises 11 676 2 2 71 (848) (2 729) 10 3 70

266 258 20 3 865 (5 1 868) (105 653) 312 602


203 865

¹ Excluded from disposal is R154 006 000 in property, plant and equipment re-classified in the prior period now disposed off with the disposal of Trollope Mining Services (Pty) Ltd. Refer to Note 1 6.

GROUP: 2008

Accumulated depreciation Reclassified Net and as held for book Cost impairment sale value R’000 R’000 R’000 R’000

Land and buildings 4 96 2 – – 4 96 2Plant and equipment 465 68 6 (202 963) (148 048) 114 67 5Office equipment 17 542 (12 751) – 4 791Computer equipment 86 470 (70 692) (283) 15 495Furniture and fittings 29 920 (21 721) (1 393) 6 806Motor vehicles 223 003 (110 868) (4 282) 107 853Improvements to leasehold premises 20 784 (9 108) – 11 676

848 36 7 (428 103) (154 006) 266 258


Net book Net book value Depreciation Reclassified value 30 June and as held for 30 June 2007 Additions Disposals impairment sale 2008 R’000 R’000 R’000 R’000 R’000 R’000

Land and buildings 4 951 11 – – – 4 962Plant and equipment 250 983 176 897 (21 1 71) (143 986) (148 048) 114 67 5Office equipment 6 447 1 287 (25) (2 918) – 4 791Computer equipment 17 656 8 814 (72 7) (9 965) (283) 15 495Furniture and fittings 7 327 4 380 (290) (3 218) (1 393) 6 806Motor vehicles 95 615 57 906 (7 027) (34 359) (4 282) 107 853Improvements to leasehold premises 5 324 9 437 (814) (2 271) – 11 676

388 302 258 732 (30 05 4) (196 71 7) (154 006) 266 258


258 732

93

Property, plant and equipment re-classified to disposal group classified as held for sale amounts to R154 006 000 and relates to assets which belonged to Trollope Mining Services (part of the consumer segment). Trollope Mining Services has been disposed off on 1 October 2008.

Land and buildings comprise portion 135, Farm Waterval 273, Pretoria. The useful life of the buildings is estimated to be 50 years. No depreciation was provided for on land and buildings as the estimated residual values equals to or exceeds the carrying value. certain of the Group’s assets are encumbered by instalment sale agreements and capitalised finance leases as described in note 1 8.

8. GOODWILL

Group 2010 2009 2008 R’000 R’000 R’000

Deemed cost 431 637 441 290 433 953Accumulated impairments (18 933) (27 126) (27 126)

412 704 414 164 406 827

Reconciliation of net book valueNet book value at the beginning of the year 414 164 406 827 401 691Acquisitions of subsidiaries – 7 337 27 126Disposals of subsidiaries – – (10 504)Impairment losses (1 460) – (11 486)

412 704 414 164 406 827

The impairment testing on goodwill is documented as part of note 5.2 estimates and judgements.

9. INTANGIBLE ASSETS

GROUP: 2010

Accumulated amortisation Net and book Cost impairment value R’000 R’000 R’000

Trademarks 61 53 9 (526) 61 013Computer software 47 4 27 (40 638) 6 7 89Manufacturing and distribution rights 64 82 9 – 64 829

173 795 (41 164) 132 631


Net book Net book value Amortisation value 30 June and 30 June 2009 Additions Disposals¹ impairment 2010 R’000 R’000 R’000 R’000 R’000

Trademarks 61 013 – – – 61 013Computer software 3 994 6 299 562 (4 066) 6 7 89Manufacturing and distribution rights 64 829 – – – 64 829

129 836 6 299 562 (4 066) 132 6 31

94

GROUP: 2009

Accumulated amortisation and Net book Cost impairment value R’000 R’000 R’000

Trademarks 61 539 (526) 61 013Computer software 37 584 (33 590) 3 99 4Manufacturing and distribution rights 64 829 – 64 829

163 952 (34 116) 129 83 6


Net book Net book value Amortisation value 30 June and 30 June 2008 Additions impairment 2009 R’000 R’000 R’000 R’000

Trademarks 61 539 – (526) 61 013Computer software 8 344 7 030 (11 380) 3 99 4Manufacturing and distribution rights 57 907 6 922 – 64 829

127 789 13 952 (11 906) 129 83 6

GROUP: 2008

Accumulated amortisation and Net book Cost impairment value R’000 R’000 R’000

Trademarks 61 539 – 61 539Computer software 30 554 (22 210) 8 344Manufacturing and distribution rights 57 907 – 57 907

150 000 (22 210) 127 7 90


Net book Net book value Amortisation value 30 June and 30 June 2007 Additions impairment 2008 R’000 R’000 R’000 R’000

Trademarks 61 539 – – 61 539Computer software 19 549 – (11 204) 8 344Manufacturing and distribution rights – 57 905 – 57 907

81 088 57 905 (11 204) 127 789

Trademarks comprise the trademarks used by Coin Security, King Pie and Blacksteer. During the 2009 financial year trademark to the value of R526 000 used by Blacksteer was impaired.

95

10. INVESTMENTS IN ASSOCIATES

Group 2010 2009 2008 R’000 R’000 R’000

Tangible assets – 1 827 3 6 50Goodwill 2 2 1 005

Shares at cost 2 1 829 4 655Group’s share of post-acquisition reserves 8 26 7 6 299 5 758Loan receivables – – 2 690Accumulated impairment of investments in associates – (1 827) (865)

8 269 6 301 12 238

Reconciliation of the carrying value of investments in associatesCarrying value at the beginning of the year 6 301 12 238 11 215Share of net attributable profit of associated companies¹ 1 968 3 162 1 439Net acquisitions/(disposals) of investments in associates – (5 353) 1 649Net decrease in loan receivables – (2 784) (1 200)Impairment of investment in associated companies – (962) (865)

Carrying value at the end of the year 8 269 6 301 12 238

Directors’ valuation of shares²Unlisted shares 8 269 6 301 12 238

¹ Share of profit is after tax and minority interest in associates.

² Directors’ valuation of shares is an indicative of the fair value of Group’s investment in associates.

% interest Country of held incorporation Assets Liabilities Revenues Profit/( Loss)Name of associated company R’000 R’000 R’000 R’000

2010Ilembe Airport Construction 20 RSA 91 581 71 953 2 512 214 8 620Experience Delivery Company (Proprietary) Limited 48,0 RSA 21 479 14 639 35 392 4 241

113 060 86 592 2 547 606 12 861


2009Experience Delivery Company (Proprietary) Limited 48,0 RSA 25 693 17 153 30 980 2 003

25 693 17 153 30 980 2 003


2008Telesafe (Proprietary) Limited 49 RSA 16 194 12 229 62 662 (72)Resolution Insurance Copmany (Proprietary) Limited 40 RSA 20 981 14 504 19 480 1 337Experience Delivery Company (Proprietary) Limited 48,0 RSA – – – –Al Jaber Coin LLC 49 UAE – – – –

37 175 26 733 82 142 1 265

96

11. OTHER INVESTMENTS

Group 2010 2009 2008 R’000 R’000 R’000

Loan receivables 80 183 90 263 1 06 856Accumulated net fair value losses arising on revaluation of strategic investments (48 268) (46 456) (46 484)

31 915 43 807 6 0 372

ComprisingNon-current investments 16 362 32 553 40 255Current investments 15 553 11 254 20 117

31 915 43 807 6 0 372

Reconciliation of the carrying value of other investmentsCarrying value at the beginning of the year 43 807 63 614 8 3 056Net acquisitions of subsidiaries and other businesses – 1 200 1 497 Investments disposed (10 080) (21 035) (19 567)Net fair value gains/(losses) arising on revaluation of strategic investments (1 812) 28 (4 614)

31 915 43 807 6 0 372

Directors’ valuation of sharesUnlisted investments 31 915 43 807 6 0 372

12. FINANCIAL ASSETS AND LIABILITIES

Group 2010 2009 2008 Financial Financial Financial Financial Financial Financial asset liability asset liability asset liability R’000 R’000 R’000 R’000 R’000 R’000

Derivative financia l instrument classified as held for trading with fair value through profit and loss – 36 900 – 34 199 3 242 –

– 36 900 – 34 199 3 242 –

On 20 June 2008 the Group entered into a “Zero Premium Knock-in-Swap” with Absa Capital on a notional amount of R330 000 000. The cap or floor rate is at 12,53% and the barrier level is at 11,05%. The floating rate is based on three -month JIBAR with reset dates on 30 March, June, September and December. The Knock-in event occurs when on any reset date the floating rate is equal to or lower than the barrier level.

13. INVENTORIES

Group 2010 2009 2008 R’000 R’000 R’000

Raw materials 12 189 12 274 12 475Work in progress 4 622 2 834 711Consumables 14 479 7 797 10 819Merchandise and finished goods 10 318 17 006 14 272Reclassified to assets in disposal group held for sale – – (741)

41 608 39 911 37 536

97

14. TRADE AND OTHER RECEIVABLES

Group 2010 2009 2008 R’000 R’000 R’000

Trade receivables 583 281 502 580 546 360Less: Provision for impairment of trade receivables (54 569) (44 103) (50 596)

528 71 2 458 477 495 764

Prepayments 37 301 36 764 28 625Other receivables 197 863 210 226 179 5 59Reclassified to assets in disposal group held for sale – – (124 481)

763 87 6 705 467 579 46 7

15. CASH AND CASH EQUIVALENTS

Bank balances 368 551 204 352 215 300Term deposits 6 235 5 897 4 914Liquid investments 23 2 3Reclassified to assets in disposal group held for sale – – (1 067)

374 809 210 251 219 150

16. DISPOSAL GROUP HELD FOR SALE

The disposal group includes the following assets:Property, plant and equipment 3 381 – 154 006Inventories – – 741Goodwill 1 460 –Trade and other receivables 204 – 124 481Cash and cash equivalents – – 1 067

Assets in disposal group held for sale 5 045 – 280 295

The disposal group includes the following liabilities:Non-current interest bearing liabilities – – 44 165Deferred taxation – – 12 966Trade and other payables – – 68 632Current interest bearing liabilities – – 48 934Tax liabilities – – 2 198

Liabilities in disposal group held for sale – – 176 895

Analysis of the result of discontinued operations is as follows:

Revenue 63 657 63 636 –Operating expenses (62 502) (62 103) –

Profit before tax from discontinued operations 1 155 1 533 –

98

17. SHARE CAPITAL

Group 2010 2009 2008 R’000 R’000 R’000

Authorised100 ordinary shares of R1.00 each¹ – – –

Issued100 ordinary shares of R1.00 each¹ – – –

¹ The issued and authorised ordinary share capital of the Company is R100.

18. INTEREST BEARING LIABILITIES

Asset-based financeSecured

Capitalised finance leases 118 424 83 017 78 027

Total amount owing 193 299 144 059 125 522Current portion included in current liabilities (74 875) (61 042) (47 495)

Secured by property, plant and equipment with a net book value of R201 291 000 (2009: R156 562 000) (2008: R114 864 000). The liabilities bear interest at rates linked to the prime overdraft rate ranging between 9% and 12% per annum, and are repayable in equal monthly instalments of R6 482 000 (2009: R6 477 000) (2008: R4 948 000).

Reconciliation to present value of finance lease liabilities:

Gross finance lease liabilities minimum lease payments: 225 324 163 672 153 027

No later than 1 year 88 010 72 070 60 910Later than 1 year and no later than 5 years 137 314 91 602 91 571Later than 5 years – – 546

Finance charges: (32 025) (19 613) (27 505)

No later than 1 year (13 135) (11 028) (13 415)Later than 1 year and no later than 5 years (18 890) (8 585) (14 086)Later than 5 years – – (4)

Present value of future lease payments: 193 299 144 059 125 522

No later than 1 year 74 875 61 042 47 495Later than 1 year and no later than 5 years 118 424 83 017 77 485Later than 5 years – – 542

99

Group 2010 2009 2008 R’000 R’000 R’000

Instalment sales agreement 4 608 3 697 48 961


Secured by property, plant and equipment with a net book value of R7 631 000 (2009: R5 937 000) (2008: R146 521 000). The liabilities bear interest at rates linked to the prime overdraft rate ranging between 9% and 11% per annum, and are repayable in equal monthly instalments of R271 000 (2009: R271 000) (2008: R239 000).

Other liabilities borrowed

Unsecured

Preference shares 482 438 482 438 –

Total amount owing 482 438 482 438 –Current portion included in current liabilities – – –

Mvelaphanda Treasury and Financial Services (Pty) Ltd – – –


Interest bearing liabilities 783 971 726 363 299 883

19. NON-INTEREST BEARING LIABILITIES

Unsecured

Term loan 722 117 566 362 848 870

Total amount owing 722 117 566 362 848 870Current portion included in current liabilities – – –

The loan was interest free and unsecured and repayable on demand.

Other loans 18 136 22 324 1 401

Total amount owing 18 136 22 324 1 401Current portion included in current liabilities – – –

The loans are interest free, unsecured and have no fixed repayment terms.

100

20. DEFERRED TAXATION

Group 2010 2009 2008 R’000 R’000 R’000

Balance at the beginning of the year (23 370) (9 11 5) ( 35 785)

Wear and tear 9 986 23 269 13 317Doubtful debts (5 88 1) (6 315) (3 012)Prepayments 5 99 4 2 536 3 660Special taxation allowances 17 475 15 168 13 417Revaluation of investments 33 454 –Estimated assessed tax losses (24 068) (29 385) ( 49 149)Provisions and accruals (11 004) – –Operating lease accrued (222) – –Revenue received in advance/deferred revenue (11) – –Other (15 673) (14 842) (14 018)

Prior year over/(under) provision (233) 395 –

Wear and tear – 212 –Doubtful debts (219) (45) –Prepayments – 187 –Estimated assessed loss – 47 –Provisions and accruals (14) – –Other – – –

Adjustment due to rate change – – ( 382)

Wear and tear – – (459)Doubtful debts – – 104Prepayments – – (126)Special taxation allowances – – (463)Revaluation of investments – – (138)Estimated assessed loss – – 1 072Other – – 392

Acquisition/(disposals) of subsidiaries – (15 561) 2 078

Wear and tear – (17 303) 3Doubtful debts – – 56Prepayments – (123) –Special taxation allowances – – (94)Estimated assessed loss – 6 294 2 070Provisions and accruals – (3 609) –Other – (820) 43

Charged to the income statement 8 755 474 10 85 9

Wear and tear 1 420 3 808 10 40 8Doubtful debts 1 012 479 (3 463)Prepayments (2 700) 3 394 (998)Special taxation allowances 2 307 2 307 2 307Revaluation of investments – (421) 454Estimated assessed loss /(tax losses) 6 696 (1 023) 3 480Provisions and accruals 788 (7 389) –Operating lease accrued (177) (222) –Revenue received in advance/deferred revenue 1 729 – –Other (2 320) (11) (1 329)

101

Group 2010 2009 2008 R’000 R’000 R’000

Balance at the end of the year (14 8 49 ) (23 37 0) ( 22 466)

Wear and tear 11 406 9 986 23 26 8Doubtful debts (5 087 ) (5 88 1) (6 315)Prepayments 3 293 5 99 4 2 536Special taxation allowances 19 782 17 475 15 168Revaluation of investments 33 33 316Estimated assessed tax losses ( 17 372) (24 06 7) ( 42 527)Provisions and accruals ( 10 230) (11 004) –Operating lease accrued ( 399) (222) –Revenue received in advance/deferred revenue 1 718 (11) –Other ( 17 993) (15 673) (14 8 912)

Comprising

Deferred tax assets (17 52 0) (32 984) (28 461)Deferred tax liabilities 2 671 9 614 5 995

(14 8 49) (23 370) (22 466)

21. TRADE AND OTHER PAYABLES

Trade and other payables 733 656 672 48 5 648 910Accruals 29 773 49 292 40 826Deferred revenue 30 307 26 225 32 330

793 736 748 00 2 722 066

22. REVENUE

Revenue for the period 4 125 655 3 664 893 3 463 275Less: Revenue from discontinued operation (63 657) (63 636) –

4 061 998 3 601 257 3 463 275

23. PROFIT FROM OPERATIONS

23.1 Auditors’ remuneration

Audit fees 444 7 004 5 030

Current year 485 6 448 4 795Underprovision prior years (41) 556 235

Other services (145) 785 122

299 7 789 5 152

102

Group 2010 2009 2008 R’000 R’000 R’000

23.2 Depreciation and impairment

Plant and equipment 37 529 51 595 82 781Office equipment 1 279 1 897 2 920Computer equipment 8 636 9 284 9 983Furniture and fittings 3 685 2 448 2 609Motor vehicles 49 519 37 700 34 339Improvements to leasehold premises 9 036 2 729 2 272

109 684 105 653 134 904

23.3 Computer software (11 189) 11 266 11 204

(11 189) 11 266 11 204

23.4 Employee costs

Salaries and bonuses 1 782 339 1 515 085 1 430 371Fringe benefits 35 074 33 037 35 813Pension/ Provident/ Medical Fund contributions 117 688 93 177 83 602

1 935 101 1 641 299 1 549 786

23.5 Directors’ emoluments

Salaries and bonuses 5 414 – –Fringe benefits 371 – –Pension/ Provident/ Medical Fund contributions 95 – –

5 880 – –

23.6 Rentals under operating leases

Land and buildings 20 540 51 153 48 197Equipment 2 396 3 791 5 527Motor vehicles 41 47 137Other 162 – –

23 139 54 991 53 861

23.7 Foreign currency losses 2 242 276 595

23.8 Loss on disposal of property, plant and equipment 258 252 2 708

23.9 Foreign currency gains 2 065 9 166 1 899

23.10 Profit on disposal of property, plant and equipment 820 2 267 5 477

23.11 Administration fees received 1 696 198 1 849

24. INTEREST PAID

Interest expense 21 851 12 62 4 15 574Preference dividends paid 40 569 77 110 –Finance charges 15 523 20 758 14 767

77 943 110 492 30 341

103

25. FAIR VALUE ADJUSTMENTS AND PROFIT/(LOSS) FROM INVESTMENTS

2010 2009 2008 R’000 R’000 R’000

Net fair value adjustment on financial instruments designated through profit and loss (1 812) 28 (4 614)Derivate financial instrument held for trading with fair value through profit and loss (2 701) (40 091) 3 241Net realised loss on disposal of investments 1 787 (600) (14 29 0)

(2 726) (40 663) (15 663)

26. SHARE OF LOSS FROM ASSOCIATES

Group’s share of retained income 1 968 3 16 1 1 439Dividend income 4 107 1 264 50Impairment of investments in associates – (962) (865)

6 075 3 463 624

27. TAXATION EXPENSE

South African normal tax 67 372 63 308 55 402

Current year 68 524 – 55 511Prior year (over)/under provision (1 152) 72 (109)

Deferred tax 8 521 870 11 241

Normal tax 8 754 475 10 405Capital Gains Tax – – 454Prior year (over)/under provision (233) 395 –Adjustment due to rate change – – 382

Capital Gains Tax 1 341 222Secondary Tax on Companies 2 236 7 835 317Foreign tax 2 152 39 8 382

80 282 72 753 67 564

104

2010 2009 2008 R’000 R’000 R’000

Reconciliation of taxation amount

South African normal tax amount 65 560 17 110 22 120

Adjusted for : 10 333 47 068 43 686

Disallowable expenditure 297 26 795 27 383Income from associates (551) (885) (1 826)Impairment losses on goodwill (1 767) 98 4 559Exempt income and exceptional items (6 505) (355) (35 692)Investment and other special allowances (16) 16 278 (588)Prior year (over)/under provision (1 715) 467 –Utilisation of previously unrecognised assessed losses – (42) –Assessed losses 20 529 16 308 24 674Effect of deferred tax balance due to rate change – – –Other 61 (11 596) 25 176

Total normal tax 75 893 64 178 65 806Change in income tax rate – – 382Capital Gains Tax – 342 677Secondary Tax on Companies 2 237 7 835 317Foreign tax 2 152 399 382

Effective taxation 80 282 72 753 67 564

Estimated taxation lossesNet estimated normal tax losses available for utilisation against future taxable income 325 723 242 150 157 775

Potential taxation relief at current taxation rates 91 202 67 802 44 177

28. CASH RECEIVED FROM CUSTOMERS

Revenue 4 1 26 655 3 664 893 3 463 275Movement in trade and other receivables (58 406) (126 084) (192 516)

4 0 67 249 3 538 809 3 270 759

29. CASH PAID TO SUPPLIERS AND EMPLOYEES

Revenue 4 1 25 655 3 664 893 3 463 275Profit from operations (29 1 287) (192 124) (1 09 314)

3 8 34 368 3 472 769 3 353 961Depreciation and impairment (109 683) (105 653) (1 34 906)of intangible assets (562) (11 906) ( 92 627)Net profit on disposal of property, plant and equipment 517 1 810 47 486Movement in inventories (656) 2 395 4 609Movement in trade and other payables (36 965) (89 438) (108 514)

3 687 020 3 269 977 3 070 009

105

30. CASH GENERATED FROM OPERATIONS

2010 2009 2008 R’000 R’000 R’000

Profit from operations 291 287 192 124 109 314Depreciation and impairment 109 68 2 105 653 134 906of intangible assets 562 11 906 92 627Net profit on disposal of property, plant and equipment (517) (1 810) (47 485)Working capital changes (20 78 5) (39 041) (88 612)

380 229 268 832 200 750

31. WORKING CAPITAL CHANGES

Inventories 656 (2 395) (4 609)Trade and other receivables (58 406) (126 084) (192 516)Trade and other payables 36 965 89 4 38 108 514

(2 1 9 41) (39 04 1) (88 611)

32. TAXATION PAID

Unpaid at the beginning of the year and on acquisitions of subsidiaries 507 8 243 8 960Charged to the income statement 71 761 73 623 56 323Unpaid at the end of the year (13 609) (507) (10 154)

58 659 81 359 55 129

33. NET ACQUISITION/(DISPOSAL) OF SUBSIDIARIES

Property, plant and equipment 1 120 (200 188) (3 310)Investments in subsidiaries – – –Other investments – 1 200 1 497Inventory 2 352 (761) (1 482)Trade and other receivables – (133 222) (23 980)Cash and cash equivalents – (6 729) (626)Trade and other payables (654) 109 811 30 957Non-current interest bearing liabilities – 109 696 2 152Deferred taxation – 15 561 (3 024)Normal taxation – 1 911 (721)

Net assets acquired 2 818 (102 721) 1 463Minority interest – 427 (445)Goodwill – 7 337 16 622Loss on disposal – 872 12 632

2 818 (94 085) 30 272

Satisfied by:Cash – (94 086) 15 067Loans 2 818 1 15 205

2 818 (94 085) 30 272

Net cash effect – 87 357 15 693

106

Subsidiaries and businesses acquired during the 2009 financial year relate mainly to the acquisition of the remaining 22,5% interest in RoyalSechaba Food Services (Proprietary) Limited by RoyalSechaba.

Subsidiaries and businesses sold during the 2010 financial year related to a disposal by the Protea Coin Group.

Subsidiaries and businesses sold during the 2009 financial year relate mainly to the sale of a 100% interest in Trollope Mining Services (Proprietary) Limited.

34. RELATED-PARTY TRANSACTIONS

34.1 Parent company

Mvela Group Limited is the controlling company of Mvelaserve Limited.

All transactions between Mvelaserve Group and Mvela Group are concluded at arm’s length. The following assets and liabilities are in respect of the Mvel a Group:

2010 2009 2008 R’000 R’000 R’000

AssetsTrade and other receivables 97 878 97 878 105 950Treasury debtors 459 777 353 065 229 718

557 655 450 943 335 668

LiabilitiesNon-interest bearing liabilities 722 117 566 362 848 870Interest bearing liabilities 100 478 93 560 74 397Treasury creditors 129 212 159 997 204 184

951 807 819 919 1 127 451

34.2 Subsidiary companies

Details of principal subsidiary companies at 30 June 2010

Nature of Issued business Holding capital (refer to notes) Loans % R’000 R’000

Khuseti Holdings (Pty) Limited 100 # 1 29 474Mvelaserve Cleaning (Pty) Limited 100 # 2 91 282Protea Coin (Armed reaction and Assets-in-transit) (Pty) Limited 100 # 3 190 375Protea Coin (Physical and Technical Security) (Pty) Limited 100 # 3 37 612Rebhold Freight Services (2000) (Pty) Limited 100 # 4 124 146 Mvelaserve Catering (Pty) Limited 100 # 5 78 380TFMC Holdings (Pty) Limited 100 # 6 –

551 269

Notes:

Details are given in respect of interests in subsidiaries, where material. A full list of subsidiaries has been provided in Annexure 7 to this Pre-listing Statement.

All principal subsidiaries are incorporated in South Africa.

Loans are non-interest bearing with no fixed repayment terms.

# less than R1 000.

107

Nature of businesses1. Franchise and manufacturing

2. Cleaning services

3. Security services

4. Security services

5. Freight forwarding services

6. Catering services

7. Facilities management

All transactions between Mvelaserve Group and/or subsidiary companies are concluded at arm’s length. On consolidation, inter-company transactions are eliminated.

34.3 Associated companies

Details of investments in associated companies are disclosed in note 10.

All transactions between Mvelaserve Group and/or its subsidiary companies, and the associated companies are concluded at arm’s length.

34.4 Directors

– The names of the directors of Mvelaserve Group are set out in paragraph 17 to this Pre-listing Statement.

– Details of directors’ emoluments are set out in paragraph 18 of this Pre-listing Statement .

34.5 Shareholders

– Mvelaphanda Group Limited owns 100% of the Group’s issued share capital

35. CAPITAL COMMITMENTS

2010 2009 2008 R’000 R’000 R’000

Capital expenditureCommitments in respect of capital expenditure approved by the directors:

Contracted for 16 354 11 798 30 538Not contracted for 9 770 18 589 13 075

26 124 30 387 43 613

The above commitments are to be financed from cash and cash equivalents, and existing bank facilities.

Operating leasesThe minimum commitments are:Land and buildings 111 737 51 153 48 197Equipment 4 913 3 791 5 527Motor vehicles 325 47 137

Total operating lease commitments 116 975 54 991 53 861

Less: Amounts accrued as a result of accounting for operating leases on the straight -line basis (1 191) (226) (93)

Net operating lease commitments not provided for 115 784 54 765 53 768

Analysis of total operating lease commitments:Due in year one 24 080 21 628 19 250Due in year two 18 871 17 324 15 030Due in year three 16 211 7 182 10 273Due in year four 16 680 5 488 3 726Thereafter 39 941 3 143 5 488

115 783 54 765 53 767

108

Material lease commitments relate mainly to immovable property, vehicles and equipment. Specific details and terms of leases vary between different contracts. Renewal options, where these exist, are between 1 and 5 years. Rentals on certain leases escalate annually. The majority of rentals under property lease renewal options are determined with reference to market rentals at the time of renewal. There are no contingent rental payments.

36. CONTINGENT LIABILITIES

36.1 Bank facilities

Bank facilities of certain subsidiaries are secured by a negative pledge over certain assets and a cession of book debts of R28 800 000 (2009: R134 770 000) (2008: R130 977 000).

Loans between certain subsidiary companies have been subordinated in favour of the other creditors of the debtor companies.

36.2 Other guarantees

Group 2010 2009 2008 R’000 R’000 R’000

Bank guarantees to clients 6 736 14 839 32 501Bank guarantees to suppliers 11 585 11 334 –

36.3 Secondary Tax on Companies

STC is levied on dividends distributed at a rate of 10% with effect from 1 October 2007 (previously 12,5%).

Current and deferred tax are measured at the tax rate applicable to undistributed income and therefore only takes STC into account to the extent that dividends have been received or paid.

The Group at present has negative distributable reserves and thus unlikely to distribute dividends.

Credits in respect of secondary tax on companies, available for setoff by the Group against future dividends, amounted to R nil (2008: R nil).

36.4 Outstanding litigation

Protea Aviation Security (Proprietary) Limited has been named as second defendant with KLM Royal Dutch Airlines (as first defendant) in a claim relating to the alleged theft of approximately US$9,65 million foreign currency and valuable cargo during an alleged robbery which took place at Johannesburg International Airport in December 2001. Investigations carried out to date and legal opinion obtained indicates that the Group is unlikely to be held liable for any amounts in respect of this case. Incident was settled in 2009.

37. FINANCIAL INSTRUMENTS

37.1 Financial risk management objective

The Board of Directors is ultimately responsible for the management of risk. In order to discharge this responsibility the Board has put in place various policy and procedure frameworks that are applicable at various levels of the organisation. Compliance with these policies and procedures is monitored through the internal audit function and reported to the Audit Committee and the Board on a regular basis.

In the course of the Group’s business operations it is exposed to financial risk relating to liquidity, credit, foreign currency, price and interest rate risk. Risk management relating to each of this risk is detailed below:

37.2 Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of a gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total interest bearing liabilities less cash and cash equivalents. Total equity is as shown in the consolidated balance sheet.

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37.3 Analysis of financial assets and liabilities

Financial assets

GROUP: 2010

Facilities Security Cleaning Diversified Non-financial Management S ervices & Catering Services Instruments Total R’000 R’000 R’000 R’000 R’000 R’000

Financial asset classes

Other investments – 12 933 – 8 474 – 21 407Trade and other receivables 180 892 281 835 165 141 92 679 – 720 547Trade and other receivables – Mvela Group – – – 97 078 – 97 078Cash and cash equivalents 140 844 128 558 15 447 89 960 – 374 809Treasury debtors 416 419 – – 43 357 – 459 776

Non-financial assets – – – – 1 066 576 1 066 576

738 155 423 326 180 588 331 548 1 066 576 2 740 193

Financial asset categories

Amortised cost

Loans and receivables 738 15 5 423 326 180 588 331 54 8 – 1 673 617

Other investments – 12 933 – 8 474 – 21 407Trade receivables 180 892 281 835 165 141 92 679 – 7 20 547Trade and other receivables – Mvela Group – – – 97 078 – 97 078Cash and cash equivalents 140 844 128 558 15 447 89 960 – 374 809Treasury debtors 416 419 – – 43 357 – 459 776


738 155 423 326 180 588 331 548 1 066 576 2 740 193

Financial assets

GROUP: 2009

Facilities Security Cleaning Diversified Non-financial Management Se rvices & Catering Services Instruments Total R’000 R’000 R’000 R’000 R’000 R’000


Other investments – 27 607 875 9 520 – 38 002Trade and other receivables 178 795 289 581 110 227 78 824 – 657 427Trade and other receivables – Mvela Group – – – 97 078 – 97 078Cash and cash equivalents 117 803 48 861 26 808 16 779 – 210 251Treasury debtors 296 875 – 23 34 0 32 850 – 353 06 5

Non-financial assets 990 443 990 443

593 473 366 049 161 25 1 235 051 990 443 2 346 26 7


Amortised cost

Loans and receivables 593 473 366 049 161 250 235 051 – 1 355 823

Other investments – 27 607 875 9 520 – 38 002Trade receivables 178 795 289 581 110 227 78 824 – 657 427Trade and other receivables – Mvela Group – – – 97 078 – 97 078Cash and cash equivalents 117 803 48 861 26 808 16 779 – 210 251Treasury debtors 296 875 – 23 341 32 850 – 353 066

Non-financial assets – – – – 990 443 990 443

593 473 366 049 161 25 1 235 051 990 443 2 346 26 7

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Financial assets

GROUP: 2008

Facilities Security Cleaning Diversified Non-financial Management Services & Catering Services Instruments Total R’000 R’000 R’000 R’000 R’000 R’000


Other investments – 54 532 2 129 6 953 – 63 614Trade and other receivables 174 117 192 610 87 976 87 877 – 542 580Trade and other receivables – Mvela Group – – – 105 950 – 105 950Cash and cash equivalents 112 265 53 288 38 412 15 185 – 219 150Treasury debtors 192 472 – 19 20 0 18 046 – 229 718


478 854 300 430 147 718 2 34 011 1 196 292 2 3 57 304


Amortised cost

Loans and receivables 478 854 263 785 147 71 7 2 43 011 – 1 152 113

Other investments – 54 532 2 129 6 953 – 63 614Trade and other receivables 174 117 192 610 87 976 87 877 – 542 580Trade and other receivables – Mvela Group – – – 105 950 – 105 950Cash and cash equivalents 112 265 53 288 38 412 15 185 – 21 9 150Treasury debtors 192 472 – 19 20 0 18 046 – 229 719


478 854 300 430 147 71 7 2 34 011 1 196 292 2 3 57 304

Financial liabilities

GROUP: 2010


Capital and reserves – – – – 233 30 0 233 30 0

Non-current and current liabilities

Fair value through profit and loss – – – 36 900 – 36 900

Loans at amortised cost 274 439 374 8 73 128 488 1 367 96 7 20 546 2 166 319

Interest bearing liabilitiesAsset finance – 164 39 4 14 807 21 853 – 201 05 4Other loans – – – 482 506 – 482 506Other loans – Mvela Group – – – 100 478 – 100 478Treasury creditors – 96 23 2 32 980 – – 129 212

Non-interest bearing liabilitiesOther loans – – – – 20 546 20 546Other loans – Mvela Group – – – 722 117 – 722 117Trade and other payables 274 439 114 253 80 701 41 013 – 510 406

Non-financial instruments – – – – 297 132 297 132

274 439 374 879 128 488 1 404 866 55 0 978 2 7 33 651

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GROUP: 2009


Capital and reserves – – – – 78 898 78 898


Fair value through profit and loss – – – 34 199 – 34 199

Loans at amortised cost 257 239 357 584 133 000 1 211 491 263 735 2 223 049

Interest bearing liabilitiesAsset finance – 107 76 5 16 976 25 624 – 150 36 5Other loans – – – 482 438 – 482 438Other loans – Mvela Group – – – 101 959 – 101 959Treasury creditors – 143 611 16 386 – – 159 997

Non-interest bearing liabilitiesOther loans – – – – 22 324 22 324Other loans – Mvela Group – – – 557 963 – 557 963Trade and other payables 257 239 106 208 99 638 43 507 241 411 748 003

Non-financial instruments – – – – 10 12 0 10 12 0

Total 257 239 357 585 133 000 1 245 690 352 754 2 346 26 6


GROUP: 2008


Capital and reserves – – – – 90 054 90 054


Loans at amortised cost 252 390 287 711 117 748 1 246 897 1 401 1 906 143

Interest bearing liabilitiesAsset finance – 82 929 15 468 127 08 9 – 225 48 6Other loans – – – – – –Other loans – Mvela Group – – – 74 397 – 74 397Treasury creditors – 123 749 13 944 66 491 – 204 184

Non-interest bearing liabilitiesOther loans – – – – 1 401 1 401Other loans – Mvela Group – – – 848 870 – 848 870Trade and other payables 252 390 81 033 88 336 130 050 – 551 809

Non-financial instruments – – – – 3 61 103 3 61 103

Total 252 390 2 87 711 117 748 1 246 897 452 558 2 3 57 304

The fair value of the financial assets and liabilities carried at amortised cost is approximately equal to their carrying amounts.

No gain or loss has been recognised in the income statement as a result of a change in the Group’s credit spread. The valuation method utilised is based on the constant credit spread approach. Management has evaluated this assumption and determined that no adjustment is necessary in the current year.

37.4 Credit risk

Credit and counterparty risk refers to the effects on future cash flows and earnings of borrowers defaulting on their obligations. This risk primarily arises through investing activities and trade receivables arising from subsidiaries.

Where a credit exposure arises as part of a strategic equity investment, the exposure is considered to be part of the investment and is initially evaluated and monitored based on the investment as a whole which may incorporate equities, options or other forms of investment.

Significant cash deposits are placed with investment grade banks and the Group’s central treasury monitors the exposure to any one financial institution by adherence to board defined counterparty limits. In addition to the

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concentration risk arising from amounts placed on deposit, the Group also manages the exposure by limiting the duration of the amounts placed on deposit.

Trade receivables in most instances consist of a large number of customers, spread across diverse industries and geographical areas. Each subsidiary is responsible for the evaluation of customers prior to the granting of credit as each subsidiary has a unique customer base and differing levels of exposure. Credit exposures are managed through prudent credit limits and constant evaluation of repayment behaviour. Where the behaviour falls outside of an acceptable range, remedial action is taken to recover the debt. Where services are provided, the continuation of the service is cancelled until full repayment has been received.

The Group very rarely renegotiates the terms of a loan agreement and where this is considered necessary the exposure remains classified as either past, due or impaired.

Analysis of credit quality

GROUP: 2010

Facilities Security Cleaning Diversified Management Se rvices & Catering Services

Credit quality analysis Receivables(high/medium/low) Medium Medium Medium Medium Total R’000 R’000 R’000 R’000 R’000

Financial assets that are neither past due nor impaired 725 827 289 564 119 56 7 299 9 52 1 434 884

Trade and other receivables 168 564 161 007 104 120 166 608 600 298Cash and cash equivalents 140 844 128 558 15 447 89 960 374 809Treasury debtors 416 419 – – 43 357 459 777

Financial assets that are past due but not yet impaired (per age analysis) 11 789 100 976 46 848 22 396 182 011

0 – 30 days – 20 599 16 688 431 37 71931 – 60 days 3 214 12 682 (374) 18 096 33 61861 – 90 days 1 896 11 574 15 685 2 996 32 151> 90 days 6 679 56 121 14 849 873 78 522

Financial assets that would otherwise be impaired whose terms have been renegotiated – 96 – 355 452

Financial assets that are impaired 540 19 756 14 173 395 34 864

Carrying amount 4 396 56 260 28 074 704 89 433Provision for Impairment 3 856 36 504 13 901 309 54 569

Total credit exposure 738 156 410 39 2 180 588 323 071 1 652 210


GROUP: 2009



Financial assets that are neither past due nor impaired 591 426 174 290 90 764 197 711 1 054 191

Trade and other receivables 176 748 125 429 40 615 148 082 490 874Cash and cash equivalents 117 803 48 861 26 808 16 779 210 251Treasury debtors 296 875 – 23 341 32 850 353 066

Financial assets that are past due but not yet impaired (per age analysis) 865 108 516 57 323 23 986 190 6 90

0 – 30 days 369 37 522 46 897 132 84 92031 – 60 days 63 17 705 6 089 13 563 37 42061 – 90 days 19 15 882 2 217 9 357 27 475> 90 days 414 37 407 2 120 934 40 875

Financial assets that would otherwise be impaired whose terms have been renegotiated – 1 599 – 968 2 567

Financial assets that are impaired 1 184 54 038 12 289 2 866 70 377

Carrying amount 9 713 77 513 22 159 5 094 114 479Provision for Impairment (8 529) (23 475) (9 870) (2 228) (44 102)

Total credit exposure 593 475 338 448 160 376 225 531 1 317 82 5

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GROUP: 2008



Financial assets that are neither past due nor impaired 477 780 170 658 84 988 152 197 885 622

Trade and other receivables 173 043 154 015 27 375 91 220 445 653Cash and cash equivalents 112 265 16 643 38 412 42 931 210 251Treasury debtors 192 472 – 19 201 18 046 229 719

Financial assets that are past due but not yet impaired (per age analysis) 808 81 914 47 913 106 842 237 477

0 – 30 days 214 24 351 41 232 48 014 113 81131 – 60 days 279 11 650 4 145 39 201 55 27561 – 90 days – 12 076 1 122 12 792 25 990> 90 days 315 33 837 1 414 6 835 42 401

Financial assets that are impaired 266 11 212 14 817 2 717 29 012

Carrying amount 8 123 39 397 15 996 6 392 69 908Provision for Impairment (7 857) (28 185) (1 179) (3 675) (40 896)

Total credit exposure 478 854 263 784 147 718 261 756 1 152 112

Unless otherwise indicated, the maximum exposure to credit risk is the carrying value of the financial assets. Given the nature of the risk no additional collateral is taken against the credit risk exposures except for credit guarantee insurance, where considered appropriate.

Facilities Security Cleaning Diversified Management Se rvices & Catering Services TotalReconciliation of allowance account R’000 R’000 R’000 R’000 R’000

At 30 June 2007 3 292 10 563 3 010 1 807 18 672Current year charge net of recoveries (1 338) 21 155 541 1 867 22 225

At 30 June 2008 1 95 4 31 718 3 551 3 67 4 40 897Current year charge net of recoveries 6 576 (8 243) 6 320 (698) 3 955 Disposals of subsidiaries – – – (749) (749)

At 30 June 2009 8 530 23 475 9 871 2 227 44 103Current year charge net of recoveries (4 674) 13 029 4 031 (1 919) 10 467Acquisition/ Disposals of subsidiaries – – – – –

At 30 June 2010 3 856 36 504 13 902 308 54 570

37.5 Market risk

Market risk is the potential change in the value of a financial instrument resulting from changes in market conditions or market parameters such as equity prices, exchange rates or interest rates.

The Group is exposed to three primary types of market risk namely equity risk, interest rate risk and currency risk.

The specific risk management objectives, policies and procedures relating to each type of market risk, is described in the sections below.

37.5.1 Interest rate risk management

Interest rate risk refers to the impact on future cash flows and earnings of assets and liabilities of interest rates re-pricing either at different points in time or on a different basis.

The Group itself is not exposed to a significant amount of interest rate risk relative to its exposure to equity risk and therefore the majority of the funding and asset profile is at variable interest rates. This exposure is monitored relative to the investments and where considered necessary management may hedge the exposure to interest rate risk either through fixed rate funding or interest rate derivatives.

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GROUP: 2010

Carrying Index to value which Carrying exposed interest Reasonably Income statement value at to market rate is possible impact year end risk linked change Pre-tax Tax effect R’000 R’000 R’000 % R’000 R’000

Financial assetsCash and cash equivalents 374 809 374 809 Prime 3 11 244 3 148Other Investments 21 407 21 407 Prime 3 642 180

396 216 396 216 11 886 3 328

Financial liabilitiesAsset-based finance 201 054 201 054 Prime 3 6 032 1 689Preference shares issued to United Towers 241 219 241 219 Prime 3 7 237 2 026Preference shares issued to Depfin 241 219 241 219 Prime 3 7 237 2 026Financial liability – derivative financial instrument 36 900 34 199 JIBAR 3 1 026 287

720 392 717 691 21 53 2 6 0 28

GROUP: 2009


Financial assetsCash and cash equivalents 210 251 210 251 Prime 3 6 308 1 766Other Investments 38 002 38 002 Prime 3 1 140 319

248 253 248 253 7 448 2 085

Financial liabilitiesAsset-based finance 150 365 150 365 Prime 3 4 511 1 263Preference shares issued to United Towers 241 219 241 219 Prime 3 7 237 2 026Preference shares issued to Depfin 241 219 241 219 Prime 3 7 237 2 026Financial liability – derivative financial instrument 34 199 34 199 JIBAR 3 1 026 287

667 002 667 002 20 011 5 602

GROUP: 2008


Financial assetsCash and cash equivalents 219 150 219 150 Prime 1 2 192 614Other investments 63 614 63 614 Prime 1 636 178Financial asset 3 242 3 242 JIBAR 1 32 9

286 006 286 006 2 860 801

Financial liabilitiesAsset-based finance 225 486 225 486 Prime 1 2 255 1 624

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37.6 Foreign exchange rate risk management

Foreign exchange rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group has very limited exposure to foreign exchange rate risk. The risk arises in limited circumstances within some of the operating divisions. In most instances the risk is passed directly back to the customer. In the limited instances where the risk cannot be transferred to the customer, foreign exchange contracts may be taken out to hedge the risk. Management determines the need for cover based on a case by case basis after considering factors such as size and duration of exposure. When the risk does arise, management monitors the exposure on an individual basis.

GROUP: 2010

Carrying Index to value which Carrying exposed interest Reasonably Income statement value at to market rate is possible impact year end risk linked change Pre-tax Tax effect % R’000 R’000

Financial assetsCash and cash equivalents 7 763 7 763 USD 10.00 776 217Cash and cash equivalents (R’000) 632 632 Other 10.00 63 18

8 395 8 395 839 235

Financial liabilitiesDeposit received in advance 18 260 18 260 USD 10.00 1 826 511

GROUP: 2009

Carrying Index to value which Carrying exposed interest Reasonably Income statement value at to market rate is possible impact year end risk linked change Pre-tax Tax effect % R’000 R’000

Financial assetsCash and cash equivalents 54 151 54 151 USD 10.00 5 415 1 516Cash and cash equivalents 6 812 6 812 Other 10.00 681 191

60 963 60 963 6 096 1 707

Financial liabilitiesDeposit received in advance 26 144 26 144 USD 10.00 2 614 732

26 144 26 144 2 614 732

For 30 June 2008, there were no financial assets or liabilities that were subject to foreign exchange rate risk.

37.7 Liquidity

Liquidity risk arises in the general funding of the Group’s activities when there are mismatches between the sizes and maturities of assets and liabilities and also in its strategic investments, funds management and trading operations. The liquidity risk refers to the ability of the Group to meet its financial obligations as they fall due.

The Group has a central treasury that is responsible for monitoring the liquidity position and ensuring that the Group is able to meet its’ contractual obligations. The treasury monitors the position through the use of daily, weekly and a rolling monthly liquidity analyses. These cash flow analyses are used to determine the appropriate cash investment strategy.

Each operating division is responsible for the management of short-term cash flows but are incentivised to place excess cash on deposit with the treasury on a daily basis. No division is allowed to invest excess cash for themselves.

The Group has significant cash reserves and therefore rarely uses overdraft facilities except for short-term operational reasons. The Group has access to approved banking facilities of R62 million (2008: R62 million)

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GROUP: 2010

Carrying value at Greater 30 June 0 to 3 4 to 6 7 to 12 1 to 2 2 to 3 than 2010 months months months years years 3 years Total R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Asset-based finance 201 054 20 093 19 803 38 127 58 967 43 765 20 300 201 05 4Investment fundingPreference shares issued to Absa Capital 241 219 – – – 68 303 123 270 125 941 317 51 4Preference shares issued to Nedbank 241 219 – – – 68 303 123 270 125 941 317 514Financial liability – derivative financial instrument 36 900 – – – – – 36 900 36 900

Other liabilitiesTrade and other payables 510 406 510 406 – – – – – 510 406

1 230 798 530 499 19 803 38 127 195 573 290 30 4 309 082 1 383 38 8

GROUP: 2009

Carrying value at Greater 30 June 0 to 3 4 to 6 7 to 12 1 to 2 2 to 3 than 2009 months months months years years 3 years Total R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Asset-based finance 150 365 17 616 17 497 32 701 53 275 24 291 13 361 158 741Investment fundingPreference shares issued to United Towers 241 219 – – – 68 303 123 270 125 941 317 514Preference shares issued to Depfin 241 219 – – – 68 303 123 270 125 941 317 514Financial liability – derivative financial instrument 34 199 – – – – – 34 199 34 199

Other liabilitiesTrade and other payables 748 003 748 003 – – – – – 748 003

1 415 005 765 61 9 17 497 32 701 189 881 270 831 299 442 1 575 971

GROUP: 2008

Carrying value at Greater 30 June 0 to 3 4 to 6 7 to 12 1 to 2 2 to 3 than 200 8 months months months years years 3 years Total R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Asset-based finance 225 486 38 015 36 960 52 509 85 066 33 022 30 291 275 863Other liabilitiesTrade and other payables 551 809 551 809 – – – – – 551 809

777 295 589 824 36 960 52 509 85 066 33 022 30 291 827 672

38. RETIREMENT BENEFITS

Approximately 85% (2009: 80%) of the Group’s employees are members of various pension and provident funds. These funds include the parent to the Group, Mvelaphanda Group Provident Fund, a defined-contribution fund which is governed by the Pension Funds Act, No. 24 of 1956, various independently administered defined-contribution funds of the operating companies, and defined-contribution funds for the industries in which the Group employees work. The Group’s contributions to all retirement funds are charged against income when incurred. The Group contributed R93 278 000 (2008: R72 974 000) to defined-contribution plans during the year.

39. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

There have been no events between 30 June 2010 and the date of these financial statements which necessitate adjustment to the income statement or balance sheet at that date.

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ANNEXURE 3

REPORTING ACCOUNTANTS’ REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF MVELASERVE AND ITS SUBSIDIARIES

The DirectorsMvelaphanda Group Limited1st Floor30 Melrose BoulevardMelrose ArchJohannesburg

2 1 October 2010

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE AUDITED HISTORICAL FINANCIAL INFORMATION OF MVELASERVE LIMITED (“MVELASERVE”) FOR THE YEARS ENDED 30 JUNE 2010, 2009 AND 2008

Introduction

At your request and for the purposes of the Pre-listing Statement to be dated on or about 27 October 2010 (“the Pre-listing Statement”), we present our report on the historical financial information of Mvelaserve for the years ended 30 June 2010, 2009 and 2008 in compliance with the JSE Limited Listings Requirements.

Responsibilities

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation, contents and presentation of the Pre-listing Statement and the fair presentation of the historical financial information in accordance International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Reporting Accountants’ Responsibility

Our responsibility is to express an opinion on the historical financial information of Mvelaserve for the years ended 30 June 2010, 2009 and 2008, included in the Pre-listing Statement, based on our audit of the financial information for the year ended 30 June 2010 and our review of the financial information for the years ended 30 June 2009 and 2008.

Scope of the audit

We conducted our audit of the historical financial information for the year ended 30 June 2010 in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial information. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial information, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial information.

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

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Audit opinion

In our opinion, the historical financial information of Mvelaserve for the year ended 30 June 2010 fairly presents, in all material respects, for the purposes of the Pre-listing Statement, the financial position of Mvelaserve at that date and the results of its operations and cash flows for the period then ended in accordance with International Financial Reporting Standards and in the manner required by the Companies Act, 61 of 1973, and the JSE Limited Listings Requirements.

Scope of the review

We conducted our review of the historical financial information for the years ended 30 June 2009 and 2008 in accordance with the International Standards on Review Engagements 2400, “Engagements to review financial statements”. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the historical financial information is free of material misstatement. A review is limited primarily to enquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit in respect of the years ended 30 June 2009 and 2008 and, accordingly, we do not express an audit opinion in respect of these periods.

Review conclusion

Based on our review nothing has come to our attention that causes us to believe that the historical financial information of Mvelaserve for the years ended 30 June 2009 and 2008 is not fairly presented, in all material respects, for the purposes of the Pre-listing Statement, in accordance with International Financial Reporting Standards and in the manner required by the Companies Act, 61 of 1973, and the JSE Limited Listings Requirements.

Consent

We consent to the inclusion of this report and the reference to our opinion in the circular in the form and context in which it appears.

Yours faithfully

PKF (Jhb) IncPaul BadrickRegistration number 1994/001166/21

Registered AuditorsChartered Accountants (SA)42 Wierda Road WestWierda ValleySandton2196

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ANNEXURE 4

UNAUDITED PRO FORMA STATEMENT OF COMPREHENSIVE INCOME AND STATEMENT OF FINANCIAL POSITION OF MVELASERVE

The unaudited pro forma financial information is the responsibility of the Directors of Mvelaserve and has been prepared for illustrative purposes only. Due to its nature, the unaudited pro forma financial information may not fairly present Mvelaserve’s consolidated financial position, or results of operations . The unaudited pro forma financial information has been prepared to illustrate the impact of the Zonke acquisition , the Debt Restructure, Unbundling and Listing for the financial year ended 30 June 2010 had the Debt Restructure and Unbundling and Listing occurred on 1 July 2009 for statement of comprehensive income purposes and on 30 June 2010 for statement of financial position purposes. No adjustments have been made to the pro forma financial information in respect of post balance sheet events except as provided for in IFRS on Events After Balance Sheet or in respect of the particular corporate action for which the pro forma financial information is presented or in respect of any post balance sheet corporate action where it would be misleading not to make an adjustment.

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MVELASERVE LIMITED

Summarised Group Statement of Comprehensive Income

Share Zonke Debt Listing and30 June 2010 Before split acquisition Restructure Unbundling After (1) (2) (2); (5); (6) (2); (7); (8); (9) (2); (10)

R’000 R’000 R’000 R’000 R’000

Revenue 4 061 998 49 950 4 111 948

Profit from operations 291 287 19 858 ( 58 985 )(10c;d) 260 160 Interest income – third party 14 888 5 (13 946) 947Interest treasury 2 561 (2 561)(10b) –Interest expense – third party (77 943) (1) (22 453) (100 397)Share of profit from associates 6 075 6 075Net fair value adjustments and profit from investments (2 726) (2 726)

Profit before taxation 234 142 19 862 (36 399) ( 53 546 ) 164 059Taxation expense (80 282) (6 137) 15 603 13 314(10b;d) (5 7 502)

Profit for the year from continuing operations 153 860 13 725 (20 796) ( 40 232) 106 557 Profit for the year from discontinued operations 1 155 1 155

Total comprehensive income for the year 155 015 13 725 (20 796) 4 0 232 107 712

Total comprehensive income attributable to:Owners of the parent 151 798 10 294 (20 796) 40 232 101 064Other shareholders 3 217 3 431 6 648

Weighted average net number of ordinary shares in issue 100 79 455 900 6 850 937 55 254 736 141 561 673Diluted weighted average net number of ordinary shares in issue 100 79 455 900(4) 6 850 937(4) 55 254 736(4) 141 561 673Earnings per Ordinary Share 1 517 980 1 .9 0.71 Headline earnings per Ordinary Share 1 514 127 1 .9 0.7 1Diluted earnings per Ordinary Share 1 517 980 1 .9 0.7 1 Diluted headline earnings per Ordinary Share 1 514 127 1.9 0.71

Reconciliation between net profit attributable to ordinary shareholders and headline net profit attributable to ordinary shareholders:

Before After R’000 R’000

Net profit attributable to ordinary shareholders 151 798 101 064Profit on disposal of property, plant and equipment (net of tax) (340) (340)Profit on disposal of intangible assets (46) (46)

Headline net profit attributable to ordinary shareholders 151 413 100 678

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MVELASERVE LIMITED

Summarised Group Statement of Financial Position

Share Zonke Debt Listing and30 June 2010 Before split acquisition Restructure Unbundling After (1) (3) (3); (5); (6) (3); (7) (3); (10)

R’000 R’000 R’000 R’000 R’000

ASSETS


Property, plant and equipment 387 619 821 388 44 0Intangible assets 545 33 5 35 014 580 349 Investments in associates 8 269 8 269Other investments 16 362 16 362Deferred taxation 17 520 186 17 706

Current assets 1 753 501 5 785 (133 492) (49 0 048 ) 1 135 746

Other investments 15 553 5 529 21 082Inventories 41 608 41 608Trade and other receivables 763 87 6 763 87 6Trade and other receivables – Mvela Group 97 87 8 (97 878) –Cash and cash equivalents 374 809 256 (133 492) 67 607 309 180Treasury receivable 459 777 (459 777) –

Assets in disposal group held for sale 5 045 5 045

Total assets 2 733 651 41 806 (133 492) ( 490 048 ) 2 151 917


Capital and reserves 233 30 0 37 707 455 804 726 811

Shareholder’s equity 2 27 817 31 120 455 804 714 741Minority interest 5 483 6 587 – 12 070

Non-current liabilities 1 367 158 (55 470) (722 117) 589 571

Interest bearing liabilities – preference share funding 482 438 (482 438)Interest bearing liabilities – Nedbank debt 550 000 550 000Asset finance 123 032 (123 032)Non-interest bearing liabilities Mvela Group 722 117 (722 117)Financial liabilities 36 900 36 900Deferred taxation 2 671 2 671

Current liabilities 1 133 19 3 4 099 (78 022) (223 735) 835 53 5

Trade and other payables 793 73 6 4 099 5 955 803 7 90 Interest bearing liabilities Mvela Group 100 478 (100 478) –Asset finance 78 022 (78 022) –Non-interest bearing liabilities 18 136 18 136Taxation liabilities 13 609 13 609Treasury creditors 129 212 (129 212) –

Liabilities in disposal group held for sale – –

Total equity and liabilities 2 733 651 41 806 (133 492) (49 0 048 ) 2 1 51 917 (4) (4) (4)

Net number of ordinary shares in issue 100 79 455 900 6 850 937 55 254 736 141 561 673Net asset value per ordinary share 2 278 170 2 .87 5.05Net tangible asset value per ordinary share (3 350 380) (4.22) 0. 82

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Notes and assumptions:

1. The Mvelaserve financial information reflected in the “Before” column has been extracted from the audited annual results of Mvelaserve for the year ended 30 June 2010.

2. The pro forma adjustments to the statement of comprehensive income have been calculated on the assumption that the Zonke acquisition, the Debt Restructure and the Listing and Unbundling were implemented on 1 July 2009.

3. The pro forma adjustments to the statement of financial position have been calculated on the assumption that the Zonke acquisition, the Debt Restructure and the Listing and Unbundling were implemented on 30 June 2010.

4. The following alterations to share capital, which occurred on or about 7 October 2010 , have been assumed to have taken place on 30 June 2010 in the statement of financial position and on 1 July 20 09 in the statement of comprehensive income:

• Mvelaserve altered each share in the entire authorised capital of R1 000, consisting of 1 000 ordinary shares of R1 each, and the issued ordinary share capital of R100, consisting of 100 ordinary share of R1 each, by implementing a share split of each share of R1 each into 794 560 ordinary shares of R0.00012585581957 each, thus increasing the authorised number of shares to capital of R1 000, consisting of 794 560 000 ordinary shares of R0.00012585581957 each, and the issued ordinary share capital of R100, consisting of 79 456 000 ordinary shares of R0.00012585581957 each;

• Mvelaserve cancelled 294 560 000 ordinary shares in the authorised share capital of Mvelaserve, such that the total authorised share capital consisted of 500 000 000 ordinary shares of R0.00012585581957 each;

• Mvelaserve converted its entire authorised and issued share capital from ordinary shares with a par value of R0.00012585581957 each, to ordinary shares with no par value;

• 6 850 937 Mvelaserve Ordinary Shares were issued as consideration for the Zonke acquisition from Mvela Group, to the value of R81 000 000. The total value of the premium was R80 999 138; and

• 55 254 736 Mvelaserve Ordinary Shares were issued to Mvela Group and the subscription price of R653 287 804 therefore was applied by Mvelaserve in the net settlement of the inter-company loans between Mvelaserve and Mvela Group.

5. Mvela Group sold its 75% interest in Zonke for R81 000 0 00 which was settled through the issue of 6 850 937 new Mvelaserve Ordinary Shares to Mvela Group. These new Mvelaserve Ordinary Shares will form part of the Unbundling and have been taken into account when calculating the entitlement ratio.

6. No goodwill will arise on the acquisition of Zonke by Mvelaserve from Mvela Group as the acquisition takes place between Group companies. The Zonke financial information has been derived from the audited financial information of Zonke for the financial year ended 30 June 2010.

7. In terms of the Debt Restructure, i t has been assumed that Mvelaserve will draw down on the maximum facility relating to the Nedbank debt, being R550 million. R250 million of which, together with R230 million cash on hand, has been used to repay the preference share funding. R200 million of the Nedbank debt has been applied to settle the Group’s asset-backed borrowings. The remaining balance of R100 million being placed on call. Interest received has not been earned on this excess cash.

8. The dividends paid on the preference shares have been reversed in the statement of comprehensive income.

9. Interest paid on the Nedbank debt has been calculated in accordance with the Nedbank debt agreement. Interest paid on the R250 million facility used to repay the preference shares has not been deducted for taxation purposes.

10. The transactions relating to the Listing and Unbundling involve the following:

a) the net settlement of inter-company loans between Mvelaserve and Mvela Group in the statement of financial position;

b) net interest paid by Mvela Group on inter-company loan accounts with Mvelaserve and Zonke have been reversed in the statement of comprehensive income;

c) transaction costs of R 6 million, as disclosed in paragraph 63, which are non-deductible for income tax purposes have been expensed to the statement of comprehensive income; and

d) a retention bonus as explained in paragraph 1 8 of th is Pre- Li sting Statement, was paid to Directors and senior managers of Mvelaserve and its subsidiaries and is considered deductible for income tax purposes.

11. In the statement of comprehensive income all adjustments are considered to have a continuing effect, except for the adjustments detailed in notes 10(c) and 10(d).

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ANNEXURE 5

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE UNAUDITED PRO FORMA STATEMENT OF COMPREHENSIVE INCOME AND STATEMENT OF FINANCIAL POSITION OF MVELASERVE

The DirectorsMvelaserve Limited28 Eddington CrescentHighveld TechnoparkCenturion0169

2 1 October 2010

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANTS’ LIMITED ASSURANCE REPORT ON THE PRO FORMA FINANCIAL INFORMATION OF MVELASERVE LIMITED (“MVELASERVE”)

We have performed our limited assurance engagement in respect of the pro forma financial information set out in Annexure 4 to the Pre-listing Statement to shareholders of Mvelaserve to be dated on or about 27 October 2010 (“the Pre-listing Statement”). Terms used herein and defined in the Pre-listing Statement have the meaning assigned to them in the Pre-listing Statement unless otherwise indicated.

The pro forma financial information has been prepared in accordance with the requirements of the JSE Limited (“the JSE”) Listings Requirements, for illustrative purposes only, to provide information about how the corporate actions, being the Zonke acquisition, Debt Restructure, Listing and Unbundling, might have affected the reported historical financial information presented, had the corporate actions been undertaken at the commencement of the period or at the date of the pro forma statement of financial position being reported on.

Directors’ responsibility

The Directors are responsible for the compilation, contents and presentation of the pro forma financial information contained in the Pre-listing Statement and for the financial information from which it has been prepared. Their responsibility includes determining that:

• the pro forma financial information has been properly compiled on the basis stated;

• the basis is consistent with the accounting policies of Mvelaserve;

• the pro forma adjustments are appropriate for the purposes of the pro forma financial information disclosed in terms of the Listings Requirements.

Reporting accountants’ responsibility

Our responsibility is to express our limited assurance conclusion on the pro forma financial information included in the Pre-listing statement to the Mvelaserve shareholders.

We conducted our assurance engagement in accordance with the International Standard on Assurance Engagements applicable to Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and the Guide on Pro Forma Financial Information issued by The South African Institute of Chartered Accountants. This standard requires us to obtain sufficient appropriate evidence on which to base our conclusion.

We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the pro forma financial information, beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

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Sources of information and work performed

Our procedures consisted primarily of comparing the unadjusted financial information with the source documents, considering the pro forma adjustments in light of the accounting policies of Mvelaserve, considering the evidence supporting the pro forma adjustments, and discussing the adjusted pro forma financial information with the Directors and management of the company in respect of the corporate action that is the subject of this Pre-listing Statement.

In arriving at our conclusion, we have relied upon financial information prepared by the Directors and management of Mvelaserve and other information from various public, financial and industry sources.

While our work performed has involved an analysis of the historical published audited financial information, and other information provided to us, our assurance engagement does not constitute an audit or review of any of the underlying financial information conducted in accordance with International Standards on Auditing and accordingly, we do not express an audit or review opinion.

In a limited assurance engagement the evidence-gathering procedures are more limited than for a reasonable assurance engagement and therefore less assurance is obtained than in a reasonable assurance engagement. We believe our evidence obtained is sufficient and appropriate to provide a basis for our conclusion.

Conclusion

Based on our examination of the evidence obtained, nothing has come to our attention, which causes us to believe that in terms of Sections 8.17 and 8.30 of the JSE Listings Requirements:

• the pro forma financial information has not been properly compiled on the basis stated;

• such basis is inconsistent with the accounting policies of Mvelaserve;

• the adjustments are not appropriate for the purposes of the pro forma financial information as disclosed.

Consent

This report on the pro forma financial information is included solely for the information of the Mvelaserve shareholders. We consent to the inclusion of our report on the pro forma financial information and the references thereto, in the form and context in which they appear.

Yours faithfully

PKF (Jhb) IncDuncan ChurchRegistration number 1994/001166/21

Registered AuditorsChartered Accountants (SA)42 Wierda Road WestWierda ValleySandton

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ANNEXURE 6

PARTICULARS AND REMUNERATION OF THE DIRECTORS AND SENIOR MANAGEMENT OF MVELASERVE

OCCUPATIONS AND/OR FUNCTIONS PERFORMED BY DIRECTORS AND SENIOR MANAGEMENT

Directors

Set out below are the details of the Directors of Mvelaserve as at the Listing Date:

Occupation and/orNames and function withinnationality Business address Mvelaserve

M S M Xayiya 1st Floor, 30 Melrose Boulevard, Melrose Arch, Johannesburg, 2076 Executive Chairman *South African

J M S Ferreira 28 Eddington Crescent, Highveld Technopark, Centurion, 0169 Chief Executive OfficerSouth African

G E Röth 1st Floor, 30 Melrose Boulevard, Melrose Arch, Johannesburg, 2076 Chief Financial OfficerSouth African

O A Mabandla 7 Sweetgum Crescent, Fourways Gardens, Fourways, 2055 IndependentSouth African Non-Executive Director *

S Masinga 38 Centre Road, 14 Crystal Court, Morningside, 2057 IndependentSouth African Non-Executive Director *

N Mbalula 21 Medborn Street, Midstream Estate, Midstream, 1685 IndependentSouth African Non-Executive Director *

F N Mantashe 9 Steenveld Road, Freeway Park, Boksburg, 1459 IndependentSouth African Non-Executive Director *

G D Harlow 6 Cowie Road, Forest Town, Johannesburg, 2193 IndependentSouth African Non-Executive Director *

As at the Listing Date, the Audit and Risk Committee has satisfied itself of the appropriateness of the expertise and experience of the Chief Financial Officer, G E Röth.

* Appointed as Directors of Mvelaserve with effect from the Listing date.

Senior management

Set out below are the details of the senior management of Mvelaserve:


M J Schermers 28 Eddington Crescent, Highveld Technopark, Centurion, 0169 Business DevelopmentSouth African Executive

B E Spence The Meersig Building, c orner West and Lenchen Ave nues, Chief Executive Officer –Centurion, 0046 TFMCSouth African

C R Waterson Eastside Corporate Close, 807 Richards Drive, Midrand, 1685 Chief Executive Officer – South African Khuseti

D Kynaston 49 Director Road, Aeroport Park, Spartan Ext 2, Kempton Park, 1620 Acting Chief ExecutiveSouth African Officer – Contract

Forwarding

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M H Malope 3rd Floor, South Wing, 160 Jan Smuts Avenue, Rosebank, 2196 Chief Executive Officer – South African Zonke

P A van Niekerk 22 Witchhazel Avenue, Highveld Technopark, Centurion, 0169 Chief Executive Officer – South African Protea Coin

T D Pitikoe 28 Eddington Crescent, Highveld Technopark, Centurion, 0169 Chief Executive Officer – South African Royalserve

No activities are performed by the senior management of Mvelaserve outside of Mvelaserve that are significant to Mvelaserve.

CONTRACTS RELATING TO DIRECTORS AND MANAGERIAL REMUNERATION

Each of the Executive Directors and the senior management of Mvelaserve have a standard service agreement with Mvelaserve.

The material terms of the service agreements with the Ex ecutive Directors and senior management are set out below:

Date of Notice period appointment service perName Position to current role agreement Restraint

J M S Ferreira Chief Executive Officer 1 July 2009 90 days None

G E Röth Chief Financial Officer Note 1 Note 1 Note 1

M J Schemers2 Business Development Executive 29 July 2009 90 days None

B E Spence Chief Executive Officer – TFMC 1 April 2010 90 days None

C R Waterson Chief Executive Officer – Khuseti 1 November 2009 90 days None

D Kynaston Acting Chief Executive Officer – 21 October 2009 90 days None Contract Forwarding

M H Malope Chief Executive Officer – Zonke 13 December 2007 90 days 12 months 3

P A van Niekerk Chief Executive Officer – Protea Coin 1 March 2009 90 days 18 months 3

T D Pitikoe Chief Executive Officer – Royalserve 1 July 2008 90 days None

Notes:

1. G E Röth, who at the date of this Pre-listing Statement was the Chief Financial Officer of Mvela Group, will become the Chief Financial Officer of Mvelaserve effective upon the Listing. As at the date of this Pre-listing Statement, G E Röth did not have a service agreement with Mvelaserve. Post the Listing, and upon the appointment of G E Röth as the Chief Financial Officer of Mvelaserve, a service agreement will be entered into.

2. M J Schermers was appointed as Financial Director and will resign from this position as at the Listing Date and assume the role of Business Development Executive.

3. No remuneration was paid or is payable in terms of the restraint.

Remuneration for Directors and senior management indicated above as a Group totalled R17 million for the financial year ended 30 June 2010.

The existing remuneration package of the Directors and senior management will be reviewed in line with those of a listed company by the Remuneration and Nomination Committee and adjusted if necessary, if and when required.

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DIRECTORS’ REMUNERATION

The aggregate remuneration for all the Directors for the financial year ended 30 June 2010 is set out in “Management and Corporate Governance – Appointment, Qualification, Remuneration and Borrowing Powers of Directors” section of this Pre-listing Statement . Set out below is a breakdown of the Directors’ fees and remuneration paid to the Directors and former directors of Mvelaserve for the financial year ended 30 June 2010:

Bonuses and per- Contri- Medical formance- Other butions aid Directors’ Basic related material to pension contri-Name fees salary payments benefits schemes butions Total

(Rand )

M S M Xayiya1 – – – – – – –J M S Ferreira – 2 751 966 2 100 000 199 614 19 500 68 118 5 139 228M J Schermers2 – 562 443 – 102 557 75 266 – 740 267P A M Mahlangu-Armstrong2 – 945 717 – 126 116 140 400 – 1 212 233G E Röth – – – – – – –O A Mabandla1 – – – – – – –S Masinga1 – – – – – – –N Mbalula1 – – – – – – –F N Mantashe1 – – – – – – –G D Harlow1 – – – – – – –

Total – 4 260 156 2 100 000 428 288 235 166 68 118 7 091 728

Notes:

1. The appointment to the Board will be effective on the Listing Date. No remuneration was therefore earned for the year ending 30 June 2010.

2. Will resign from the Board with effect from the Listing Date.

The Mvela Group Remuneration Committee approved the payment of cash bonuses to various executives involved in Mvelaserve , subject to the successful listing on the JSE. The total after-tax amount paid to Mr M S M Xayiya, Mr J M S Ferreira and Mr G E Röth was R 17.760 million. Refer to paragraph 1 8 of this Pre-listing Statement for more details.

FEES IN LIEU OF DIRECTORS’ FEES

No fees in lieu of Directors’ fees were paid to any of the Directors by Mvelaserve during the financial year ended 30 June 2010.

OTHER DIRECTORSHIPS AND PARTNERSHIPS HELD BY THE DIRECTORS AND SENIOR MANAGEMENT OF MVELASERVE DURING THE PREVIOUS FIVE YEARS:

Name Directorships Status

Director

M S M Xayiya ABSA Asset Management (Proprietary) Limited Resigned Acinad Productions (Proprietary) Limited Deregistered Afrilex Freight Services (Proprietary) Limited Resigned Avusa Limited Active Bechini Investments 65 (Proprietary) Limited Resigned Bhambatha Management Solutions (Proprietary) Limited Resigned Bizvest 6 (Proprietary) Limited Active Cedar Falls Properties 122 (Proprietary) Limited Active Desta Power Matla Holdings (Proprietary) Limited Resigned Desta Power Matla (Proprietary) Limited Resigned Dikela Investment Holdings (Proprietary) Limited Resigned

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Director

M S M Xayiya Dunrose Investments 30 (Proprietary) Limited Active(continued) Emerald Sky Trading 339 (Proprietary) Limited Deregistered Energy Advancement Research Trust (Proprietary) Limited Resigned Etis Mvelaphanda Engineering (Proprietary) Limited Resigned Foudale Investments (Proprietary) Limited Active Galegant Investments 73 (Proprietary) Limited Active GEM Diamonds Mining Corporation (Proprietary) Limited Resigned Global Village Netword Technology Proprietary) Limited Resigned Great Force Investments 204 (Proprietary) Limited Active Guild Hall No 22 Investment Holding Company (Proprietary) Limited Resigned Hillcrest Toyota (Proprietary) Limited Active Integra Systems (Proprietary) Limited Dissolved Karan Beef (Proprietary) Limited Resigned KBH Consolidated Services (Proprietary) Limited Resigned Kismet Investments 57 (Proprietary) Limited Active Life Healthcare Group Limited Resigned Life Healthcare Group Holdings Limited Resigned Life Impilo (Proprietary) Limited Resigned Linkcorp Rail and Logistics (Proprietary) Limited Deregistered Main Street 207 (Proprietary) Limited Resigned Main Street 208 (Proprietary) Limited Deregistered Malundi Investments Holdings (Proprietary) Limited Resigned Marble Gold 86 (Proprietary) Limited Active Maslex (Proprietary) Limited Resigned Mawenzi Asset Manager (Proprietary) Limited Resigned Mawethu Holdings (Proprietary) Limited Resigned Mvelamasefield (Proprietary) Limited Resigned Mvelaphanda Administration Services (Proprietary) Limited Active Mvelaphanda Capital (Proprietary) Limited Resigned Mvelaphanda Diamonds (Proprietary) Limited Deregistered Mvelaphanda Energy (Proprietary) Limited Deregistered Mvelaphanda Financial Asset 01 (Proprietary) Limited Resigned Mvelaphanda Financial Services (Proprietary) Limited Resigned Mvelaphanda Gold (Proprietary) Limited Resigned Mvelaphanda Group Limited Active Mvelaphanda Holdings (Proprietary) Limited Active Mvelaphanda Logistics (Proprietary) Limited Deregistered Mvelaphanda Private Equity (Proprietary) Limited Resigned Mvelaphanda Property Development Holding Company (Proprietary) Limited Active Mvelaphanda Property Development Management Company (Proprietary) Limited Active Mvelaphanda Property Investments (Proprietary) Limited Resigned Mvelaphanda Resources Limited Active Mvelaphanda Strategic Investments (Proprietary) Limited Resigned Mvelaphanda Treasury and Financial Services (Proprietary) Limited Active Ndowana Exploration (Proprietary) Limited Resigned Ndowana Exploration Two (Proprietary) Limited Resigned Northam Platinum Limited Active Ophyr Energy PLC Active Otterbea International (Proprietary) Limited Resigned Pan Africa Airline Investments (Proprietary) Limited Resigned Pan Africa Airways (Proprietary) Limited Resigned Platinum Mile Resources (Proprietary) Limited Active Retsogile Investments (Proprietary) Limited Deregistered

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Director

M S M Xayiya Sanlam Developing Markets (Proprietary) Limited Resigned(continued) SMG Auto (Cape Town) (Proprietary) Limited Active SMG Auto (Durban) (Proprietary) Limited Active SMG Auto (PMB) (Proprietary) Limited Active Somerset Boulevard Development (Proprietary) Limited Deregistered Spirito Trade 82 (Proprietary) Limited Active Stawelklip Estates (Proprietary) Limited Resigned Stonehurst Development (Proprietary) Limited Active Teta Investments (Proprietary) Limited Resigned Tyger Falls Development (Proprietary) Limited Active Ukwanda Investments (Proprietary) Limited Active Umholi Investments (Proprietary) Limited Resigned Zano Investments (Proprietary) Limited Active Zarara Energy (Proprietary) Limited Resigned

J M S Ferreira Brown Cap Investments (Proprietary) Limited Resigned Cash Axcess Corporation (Proprietary) Limited Resigned JDBK Investments (Proprietary) Limited Active Palanca Investments (Proprietary) Limited Active

G E Röth Abrina 6825 (Proprietary) Limited Resigned Akula Trading 74 (Proprietary) Limited Active Amber Bay Investments 24 (Proprietary) Limited Deregistered Anix Trading 16 (Proprietary) Limited Active Biomedical Life (Proprietary) Limited Resigned Browns Cash and Carry (Proprietary) Limited Active Business Venture Investments No 1128 (Proprietary) Limited Active Ceek Investments (Proprietary) Limited Active Clidet No 603 (Proprietary) Limited Active Clidet No 552 (Proprietary) Limited Active Clidet No 556 (Proprietary) Limited Active Dekrodev (Proprietary) Limited Deregistered Desert Star Trading 564 (Proprietary) Limited Active Divine Inspiration Trading 491 (Proprietary) Limited Active Divine Inspiration Trading 643 (Proprietary) Limited Active Dixonville Investments (Proprietary) Limited Active Dunrose Investment 272 (Proprietary) Limited Resigned Dunrose Investments 188 (Proprietary) Limited Active Dunrose Trading 108 (Proprietary) Limited Active Dunrose Trading 127 (Proprietary) Limited Deregistered E Tax Solutions (Proprietary) Limited Deregistered Edata Secure Storage (Proprietary) Limited Active Greenbay Investments (Proprietary) Limited Active Grey Haven Riches 11 (Proprietary) Limited Resigned Grey Haven Riches 33 (Proprietary) Limited Active Grey Haven Riches 9 (Proprietary) Limited Resigned Health Strategic Investments (Proprietary) Limited Active Indima Media (Proprietary) Limited Active Itakane Trading 219 (Proprietary) Limited Active Just Jasmine Investments 154 (Proprietary) Limited Active Kingspan Investments (Proprietary) Limited Active Kutso Corporation Services (Proprietary) Limited Resigned Kutso Financial Services (Proprietary) Limited Resigned Kutso Holdings (Proprietary) Limited Resigned Kutso Investments (Proprietary) Limited Resigned Kutso Trading (Proprietary) Limited Resigned Lexshell 650 Investments (Proprietary) Limited Active Lexshell 802 Investments (Proprietary) Limited Active

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Director

G E Röth (continued) Main Street 207 (Proprietary) Limited Active Majestic Silver Trading 167 (Proprietary) Limited Resigned Market Demand Trading 333 (Proprietary) Limited Deregistered Market Demand Trading 424 (Proprietary) Limited Deregistered Metriglo (Proprietary) Limited Active Mvelaphanda Capital (Proprietary) Limited Active Mvelaphanda Financial Asset 01 (Proprietary) Limited Active Mvelaphanda Financial Services (Proprietary) Limited Deregistered Mvelaphanda Group Limited Active Mvelaphanda Group Five Power Energy Investments (Proprietary) Limited Active Mvelaphanda Holdings Limited Resigned Mvelaphanda Private Equity (Proprietary) Limited Active Mvelaphanda Strategic Investments (Proprietary) Limited Active Mvelaphanda Treasury and Financial Services (Proprietary) Limited Active National Pride Trading 55 (Proprietary) Limited Deregistered Nkulu 5 Leather Trading (Proprietary) Limited Deregistered Pearl Isle Trading 22 (Proprietary) Limited Active Pearl Isle Trading 23 (Proprietary) Limited Active Platinum Arch Investments 76 (Proprietary) Limited Resigned Realcor Holdings (Proprietary) Limited Resigned Realcor Sundry Operations (Proprietary) Limited Resigned Rebhold Distribution Services (Proprietary) Limited Resigned Rebserve Residential Services (Proprietary) Limited Active Richtrau No 229 (Proprietary) Limited Active Rietbron Investments (Proprietary) Limited Active Rost Peak Wines (Proprietary) Limited Resigned Sheerprops 1052 (Proprietary) Limited Active Solar Spectrum Trading 412 (Proprietary) Limited Resigned Somerset Boulevard Development (Proprietary) Limited Resigned Sovereign Seeker Investments 161 (Proprietary) Limited Active Swissport South Africa (Proprietary) Limited Active Universal Pulse Trading 349 (Proprietary) Limited Resigned Validtrade 132 (Proprietary) Limited Resigned Vox Telecom Limited Active Zevoli 219 (Proprietary) Limited Resigned

O A Mabandla Air Chefs (Proprietary) Limited Resigned Air Chefs International (Proprietary) Limited Active Atraxis Africa (Proprietary) Limited Resigned Bustque 401 (Proprietary) Limited Active Consol Glass (Proprietary) Limited Resigned Consol Holdings Limited Resigned Fedlink (Proprietary) Limited Deregistered Genbel Securities (Proprietary) Limited Resigned Ikhwezi Lomso Resources (Proprietary) Limited Deregistered Kovacs Investments 770 (Proprietary) Limited Resigned Langa Lokulunga Investment Holdings (Proprietary) Limited Active Linrent Services (Proprietary) Limited Resigned Mamawood (Proprietary) Limited Active Mapungubwe Institute for Strategic Reflection (Proprietary) Limited Active Mvelaphanda Group Limited Active Mvelaphanda Resources Limited Resigned Proudafrique Trading 270 (Proprietary) Limited Active Redflex 313 (Proprietary) Limited Deregistered Salamax 1660 (Proprietary) Limited Active Sanlam Capital Markets Limited Resigned

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Director

O A Mabandla South African Airways Limited (Proprietary) Limited Resigned(continued) Vodacom Group Limited Resigned Yonga Investment Consortium (Proprietary) Limited Resigned

S Masinga African Women Co-ordinated Investments (Proprietary) Limited Resigned Afropulse Group (Proprietary) Limited Active Akani Leisure Investment Casino Management (Proprietary) Limited Resigned Akani Leisure Investments (Proprietary) Limited Resigned Akani-Egoli (Proprietary) Limited Active Classic Number Trading 186 (Proprietary) Limited Active Latius Trading (Proprietary) Limited Active Profile Media (Proprietary) Limited Active Prose Investments (Proprietary) Limited Active Rare Holdings Limited Active Regent Insurance Company Limited Active Regent Life Assurance Company Limited Active Strategic Investments Portfolio (Proprietary) Limited Resigned

N Mbalula Chrono Flex South Africa (Proprietary) Limited Resigned Defacto Investments 33 (Proprietary) Limited Resigned Dlondlobala Investments (Proprietary) Limited Active Drusilla Investments (Proprietary) Limited Active Midnight Storm Investments 77 (Proprietary) Limited Active Mikhovhe Enterprises West Dunes Properties 218 (Proprietary) Limited Active Mirror Ball Investments 198 (Proprietary) Limited Active Sovereign Seeker Investments 206 (Proprietary) Limited Active Superior System Trade 84 (Proprietary) Limited Active Tulip Red Investments Holdings (Proprietary) Limited Active

F N Mantashe Distant Sunset Investments 29 (Proprietary) Limited Active Izingaletu Investment Holdings (Proprietary) Limited Active Mthombo Consultants and Contractors (Proprietary) Limited Active PPC Ntsika Fund (Proprietary) Limited Active Siphamba Mining (Proprietary) Limited Active

G D Harlow Allied Production Industries (Proprietary) Limited Resigned Black Ginger 59 (Proprietary) Limited Active Blue Label Call Centre Blue Label Call Centre Active Blue Label Distribution Blue Label Distribution Active Blue Label Telecoms Limited Active Blue Label Trading Company (Proprietary) Limited Active BW Mining (Proprietary) Limited Active Cefurn Investments (Proprietary) Limited Resigned Cellfind (Proprietary) Limited Active Cellfind International (Proprietary) Limited Active Clidet No 390 (Proprietary) Limited Active Copper Sunset Trading 148 (Proprietary) Limited Active Copper Sunset Trading 148 (Proprietary) Limited Resigned Credex Finance (Proprietary) Limited Resigned Datacel Direct (Proprietary) Limited Active Dataforce Trading 240 (Proprietary) Limited Active Duna Properties (Proprietary) Limited Resigned Dupleix Liquid Meters (Proprietary) Limited Active Edusol (Proprietary) Limited Resigned Ellblue Properties (Proprietary) Limited Resigned Emergent Management Company (Proprietary) Limited Resigned Fersoe Property Development (Proprietary) Limited Resigned

132


Director

G D Harlow Flaming Silver Trading 175 (Proprietary) Limited Active(continued) Fluxrab Investments No 125 (Proprietary) Limited Active Friedshelf 657 (Proprietary) Limited Active Friedshelf 756 (Proprietary) Limited Active Hix Technologies (Proprietary) Limited Active ITQ (Proprietary) Limited Resigned Jowima Properties (Proprietary) Limited Resigned K Luff Plumbing Services (Proprietary) Limited Resigned Knowledge Objects (Proprietary) Limited Resigned Legend Gold Stand 251 (Proprietary) Limited Active Legend Golf Stand 243 (Proprietary) Limited Active Leo Financial Management Services (Proprietary) Limited Active Mandla Coal Resources (Proprietary) Limited Resigned Mandla Goal Resources (Proprietary) Limited Active Mashala Hendrina Coal (Proprietary) Limited Active Mashala Resources (Proprietary) Limited Active Maxitrade 106 General Trading (Proprietary) Limited Active Mayfair Speculators (Proprietary) Limited Resigned Metallurgical Processes (Proprietary) Limited Resigned Metermatic (Proprietary) Limited Active Micawaber 428 (Proprietary) Limited Active Mobile at Work (Proprietary) Limited Active Moneyline 311 (Proprietary) Limited Active Mowana Printing Solutions (Proprietary) Limited Active Namib Drilling (Proprietary) Limited Active Newshelf 828 (Proprietary) Limited Active Objectsco (Proprietary) Limited Resigned Penumbra Coal Mining (Proprietary) Limited Active Plot 81 Zeekoeigat (Proprietary) Limited Resigned Policy Property Holdings One (Proprietary) Limited Active Policy Property Holdings Two (Proprietary) Limited Active Primacote Industrial Painting Contractors (Proprietary) Limited Resigned QD Group (Proprietary) Limited Resigned Rely Precision Castings (Proprietary) Limited Resigned Richmark Holdings (Proprietary) Limited Resigned Sanco Leisure (Proprietary) Limited Active Section 5 East End Business Park (Proprietary) Limited Active Sephaku Delmas Properties (Proprietary) Limited Active The Number Plate Shop (Proprietary) Limited Resigned Thebe Financial Services (Proprietary) Limited Voluntary

Liquidation Thembalethu Investment Holdings (Proprietary) Limited Resigned Tomcat Software SA (Proprietary) Limited Resigned TRI-COR Industries (Proprietary) Limited Resigned TRI-COR Sings (Proprietary) Limited Resigned Trillion International (Proprietary) Limited Resigned Ubambo Telecommunications (Proprietary) Limited Active Ubambo Investments Holdings (Proprietary) Limited Active Unihold Limited Active Unihold Armed Response Holdings (Proprietary) Limited Resigned Unihold Business Solutions (Proprietary) Limited Resigned Unihold Communications (Proprietary) Limited Active Unihold Engineering (Proprietary) Limited Resigned Unihold Group (Proprietary) Limited Active Unihold Resources (Proprietary) Limited Active

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Director

G D Harlow Uninex (Proprietary) Limited Resigned(continued) Uvongo Falls No 26 (Proprietary) Limited Active Vespafrica (Proprietary) Limited Resigned Walrind (Proprietary) Limited Resigned Walro Flex (Proprietary) Limited Resigned Wesselton Opencast (Proprietary) Limited Active Wildekrans Wine Estate (Proprietary) Limited Active

Senior management

M J Schermers Consolidated Modderfontein Mines Limited Deregistered Consolidated Modderfontein Mines 1979 (Proprietary) Limited Resigned JIC Mining Services (1979) (Proprietary) Limited Resigned M J F Safety Equipment (Proprietary) Limited Deregistered Modderfontein Seventy-Four (Proprietary) Limited Resigned Nigel Gold Mining Company (Proprietary) Limited Resigned Pamodzi Gold Limited Resigned Pamodzi Gold East Rand (Proprietary) Limited Resigned Pamodzi Gold Orkney (Proprietary) Limited Resigned Pamodzi Gold West Rand (Proprietary) Limited Resigned Pretklerk Gold Mining Company (Proprietary) Limited Resigned Pretklerk Marievale Gold Mining Company (Proprietary) Limited Resigned Pretklerk Springs Daggafontein Gold Mining Company (Proprietary) Limited Resigned Super Laboratory Services (Proprietary) Limited Active Rebhold Distribution Services (Proprietary) Limited Active The Grootvlei Proprietary Mines (Proprietary) Limited Deregistered Tina Du Preez Beleggings (Proprietary) Limited Active

B E Spence Gunnebo South Africa (Proprietary) Limited Resigned Provicom Risk Solutions (Proprietary) Limited Resigned

C R Waterson Erf 873 Glen Erasmia Extention 7 Home Owners Association Active Feta Freight Systems International Limited Active Karabo Logistics (Proprietary) Limited Active Trans Global Freight (Proprietary) Limited Active

P A van Niekerk Brown Cap Investments (Proprietary) Limited Active Cash Axcess Corporation (Proprietary) Limited Resigned Commercial institute of Security Training (Proprietary) Limited Active Praysa Trade 1061 (Proprietary) Limited Deregistered Telesafe (Proprietary) Limited Resigned Vanfour Boerdery (Proprietary) Limited Active Windtalk Holdings (Proprietary) Limited Deregistered

T D Pitikoe Baytree Functions and Events Trading (Proprietary) Limited Active

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ADDITIONAL INFORMATION

None of the Directors or senior management referred to in this Pre-Listing Statement:

• have been declared bankrupt or ha ve entered into an individual voluntary compromise arrangement to surrender his or her estate ;

• are or were directors with an executive function of any company at the time of, or within twelve months preceding, any receivership, compulsory liquidation, creditors’ voluntary liquidation, administration, company voluntary arrangement or any compromise or arrangement with the company’s creditors generally or with any class of its creditors;

• are or have been a partner in a partnership at a time of, or within twelve months preceding, any compulsory sequestration, administration or voluntary arrangement of such partnership;

• are or have been a partner in a partnership at the time of, or within twelve months preceding, a receivership of any assets of such partnership;

• have had any of his or her assets subject to receivership;

• are or have been publicly criticised by any statutory or regulatory authorities, including recognised professional bodies or been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company; and/or

• are or have been convicted of any offence involving dishonesty .

135

ANNEXURE 7

DETAILS OF SUBSIDIARY COMPANIES AND THEIR DIRECTORS

1. OPERATING SUBSIDIARIES

Issued Date ofName and Date and country ordinary Main becomingregistration number of incorporation share capital business subsidiary

Catering

1 Royalserve Catering South Africa 1 000 shares Catering 17 July 1996(Proprietary) Limited 27 July 2000 of R1 each(1994/005030/07)

2 Royal Sechaba Food Service South Africa 1 020 shares Catering 01 June 2000(Proprietary) Limited 26 February 2000 of R1 each(2000/012826/07)

3 Royal Food Correctional South Africa 100 shares Catering 01 June 2005Services (Proprietary) Limited 23 September 1997 of R1 each(1997/015974/07)

4 Royal Food Services South Africa 120 shares Catering 01 June 2005(Limpopo) 10 July 2000 of R1 each(Proprietary) Limited(2000/015444/07)

5 Royal Food Services South Africa 100 shares Catering 01 June 2005North West 24 February 1998 of R1 each(Proprietary) Limited(1998/003317/07)

6 Royal Food Services South Africa 100 shares Catering 01 June 2005Northern Cape 25 November 1997 of R1 each(Proprietary) Limited(1997/020184/07)

7 Ithabeleng Food Services South Africa 100 shares Catering 27 May 2003(Proprietary) Limited 27 May 2003 of R1 each(2003/011842/07)

Cleaning

8 Royalserve Cleaning South Africa 100 shares Cleaning 07 June 2000(Proprietary) Limited 7 June 2000 of R1 each(2000/011155/07)

9 Dinosi Cleaning Services South Africa 100 shares Cleaning 17 March 2003(Proprietary) Limited 17 March 2003 of R1 each(2003/006230/07)

10 Ikhayelihle Mvelaserve South Africa 100 shares Cleaning 11 SeptemberCleaning Services 11 September 2002 of R1 each 2002(Proprietary) Limited(2002/022568/07)

11 Rebserve Namibian Namibia 100 shares Cleaning 27 March 2000Cleaning Services 27 March 2000 of N$1 each(Proprietary) Limited(2000/285)

12 Mediguard WIC Cleaning Lesotho 510 shares Cleaning 14 May 2010Services (Proprietary) Limited 20 November 2009 of R1 each(2009/1424)

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13 TFMC Holdings South Africa 1 000 shares Facilities 25 August 2000(Proprietary) Limited 26 January 2000 of R1 each management(2000/001009/07)

14 Rebserve IT Procurement South Africa 100 shares Facilities 26 August 2000(Proprietary) Limited 25 August 2000 of R1 each management(2000/021547/07)

15 Total Facilities Management South Africa 2 000 shares Facilities 26 August 1999Company (Proprietary) Limited 26 August 1999 of R1 each management(1999/018572/07)

16 Rebserve Facilities Management South Africa 100 shares Facilities 15 March 1999(Proprietary) Limited 15 March 1999 of R1 each management(1999/005381/07)

17 TFMC Maintenance Services South Africa 100 shares Maintenance 07 June 2000(Proprietary) Limited 7 June 2000 of R1 each services(2000/011246/07)

18 TFMC FM Services South Africa 1 000 000 shares Facility 15 January 2007(Proprietary) Limited 29 September 1999 of R1 each management(1998/019278/07) and engineering

19 TFMC Workplace Services South Africa 175 000 shares Facilities 15 January 2007(Proprietary) Limited 16 May 2000 of R1 each management(2000/008903/07)

20 Experience Delivery Company South Africa 100 shares Facilities 02 June 2003(Proprietary) Limited 2 June 2003 of R1 each management(2003/012434/07)

Security

21 Protea Coin Group South Africa 111 shares Security 01 July 1999(Assets in Transit and 22 February 1999 of R1 each servicesArmed Reaction) (Proprietary) Limited (1999/003646/07)

22 Protea Coin Group South Africa 111 shares Security 01 July 1999(Technical and 27 January 1999 of R1 each servicesPhysical Security) (Proprietary) Limited (1999/001641/07)

23 Coin Aviation Security South Africa 100 shares Security 17 June 2004(Proprietary) Limited 17 June 2010 of R1 each services(2004/016588/07)

24 Coin Risk Management South Africa 100 shares Financial 01 April 2003(Proprietary) Limited 1 April 2003 of R1 each and risk(2003/007635/07) management services

25 Smart Solution Holdings South Africa 100 shares Holding 26 September(Proprietary) Limited 26 September 2001 of R1 each company 2001(2001/022917/07)

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Security

26 Cameos Solutions South Africa 100 shares Security 26 September(Proprietary) Limited 26 September 2001 of R1 each services 2001(2001/022909/07)

27 Coin Cameos South Africa 1 000 shares Security 06 December(Proprietary) Limited 6 December 2005 of R1 each services 2005(2005/042799/07)

28 Coin Security International South Africa 100 shares Security 20 January(Proprietary) Limited 20 January 2004 of R1 each services 2004(2004/000943/07)

29 Protea Coin Cargo Protection South Africa 100 shares Security 26 January(Proprietary) Limited 26 January 2006 of R1 each services 2006(2006/002139/07)

30 Protea Aviation South Africa 100 shares Security 01 July 1999(Proprietary) Limited 6 May 1998 of R1 each and aviation(1998/008495/07) services

31 Protea Security (West Rand) South Africa 4 200 shares Security 01 July 1999(Proprietary) Limited 4 January 1995 of R1 each services(1995/000070/07)

32 Protea Security Services South Africa 4 200 shares Security 01 July 1999(Reaction Unit) 4 January 1995 of R1 each services(Proprietary) Limited (1995/000075/07)


33 Rebhold Freight Services (2000) South Africa 100 shares Freight 01 January(Proprietary) Limited 15 September 1983 of R1 each forwarding 2000(1987/000113/07) and customs clearing

34 King Pie Holdings South Africa 101 shares Franchisor 05 June 1997(Proprietary) Limited 5 June 1997 of R1 each of the(1997/008676/07) King Pie brand

35 BMO Food Services South Africa 101 shares Manufacturer 01 February(Proprietary) Limited 13 July 1998 of R1 each of pie 2003(1998/013348/07) products

36 Zonke Monitoring Systems South Africa 1 000 shares Limited 01 July 2004(Proprietary) Limited 31 July 2000 of R1 each payout(1995/000075/07) machine monitoring services

37 Circle ICT Solutions South Africa 100 shares Computer 01 September(Proprietary) Limited 20 June 2000 of R1 each services 2010(2000/012478/07)

Management Company

38 Mvelaphanda Management South Africa 100 shares Management 22 June 2010Services (Pty) Limited 22 June 2000 of R1 each company(2000/012781/07)

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On the Listing Date, all of the above Subsidiaries will be wholly-owned by Mvelaserve, other than the following Subsidiaries and associates:

• Dinosi Cleaning Services (Proprietary) Limited – 55%

• Experience Delivery Company (Proprietary) Limited – 48%

• Ikhayelihle Mvelaserve Cleaning Services (Proprietary) Limited – 49%

• Ithabeleng Food Services (Proprietary) Limited – 85%

• Khanya Rebserve Cleaning Service (Proprietary) Limited – 49%

• Mediguard WIC Cleaning Services (Proprietary) Limited – 51%

• Rebserve IT Procurement (Proprietary) Limited – 60%

• Rebserve Facilities Management (Proprietary) Limited – 80%

• Royal Food Correctional Services (Proprietary) Limited – 75%

• Smart Solutions Holdings (Proprietary) Limited – 84%

• TFMC FM Services (Proprietary) Limited – 90%

• TFMC Workplace Services (Proprietary) Limited – 40%

• Zonke Monitoring Systems (Proprietary) Limited – 75%

No person, other than the shareholders, holds any rights to enable such a person to vary the voting rights held in any Subsidiary.

2. NON-OPERATING AND DORMANT SUBSIDIARIES

Name Registration number

Atreb Consulting Services (Proprietary) Limited 2000/024830/07Atreb Facilities Management (Proprietary) Limited 2000/002481/07Blacksteer Holdings (Proprietary) Limited (under voluntary liquidation) 2004/001439/07Contract Forwarding (Proprietary) Limited 1983/010155/07Ilembe Facilities Management Services (Proprietary) Limited 2007/028125/07Karabo Logistics (Proprietary) Limited 2002/020487/07Majormatic 108 (Proprietary) Limited 2003/023215/07Pacific Breeze Trading 65 (Proprietary) Limited 2005/006348/07Phumelela Coin Promotions (Proprietary) Limited 2003/020571/07Protea Security (Group Holdings) (Proprietary) Limited (under voluntary liquidation) 1992/006393/07Trans Global Freight (Proprietary) Limited 1997/011080/07

On the Listing Date, all of the above Subsidiaries will be wholly-owned by Mvelaserve, other than the following Subsidiaries and associates:

• Phumelela Coin Promotions (Proprietary) Limited – 50%

• Ilembe Facilities Management Services (Proprietary) Limited – 60%

No person, other than the shareholders, holds any rights to enable such a person to vary the voting rights held in any subsidiary.

3. MATERIAL CHANGES TO THE BUSINESSES OF MVELASERVE GROUP COMPANIES

The material changes to the business of Mvelaserve which have taken place since 30 June 2010 relate to the Debt Restructure, Zonke acquisition and the settlement of inter-company loans between Mvela Group and Mvelaserve in terms of the Restructuring.

4. ALTERATIONS TO SHARE CAPITAL OF MVELASERVE GROUP COMPANIES

In the three years prior to the Listing Dat e there have been no material changes to the share capital of Mvelaserve Group companies, save for those mentioned in paragraph 39 of this Pre-listing Statement.

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5. DIRECTORS OF OPERATING SUBSIDIARIES

The directors of Mvelaserve’s operating subsidiaries are set out in the table below:

Company Directors

BMO Food Services (Proprietary) Limited C R Waterson, J Geldenhuys, J J Schoeman, R Bouwer, W Pretorius

Cameos Solutions (Proprietary) Limited E P Grobler

Circle ICT Solutions (Proprietary) Limited D B le Roux, E P Grobler, P A van Niekerk

Coin Aviation Security (Proprietary) Limited E P Grobler, J De Beer, J M S Ferreira, P A van Niekerk

Coin Cameos (Proprietary) Limited E P Grobler, J M S Ferreira, P A van Niekerk

Coin Risk Management (Proprietary) Limited E P Grobler, E Lehmann, J M S Ferreira

Coin Security International (Proprietary) Limited E P Grobler, J M S Ferreira, P A van Niekerk

Dinosi Cleaning Services (Proprietary) Limited G R McGregor, L M Rudlin M Maluleka, M S Malemela, T D Pitikoe

Experience Delivery Company (Proprietary) Limited F Vungwana, J J Mabaso, L F Mahlati, N M Groeneveld

Ikhayelihle Mvelaserve Cleaning Services G V Groenewald, T D Mdluli, T D Pitikoe(Proprietary) Limited

Ithabeleng Food Services (Proprietary) Limited F Mugari, G R McGregor, M F Sekgome, T D Pitikoe, T T Mabila

Khanya Rebserve Cleaning Service (Proprietary) Limited L Hargraves, P Rantsoareng, T D Pitikoe, V Rantsoareng,

King Pie Holdings (Proprietary) Limited C R Waterson, E Ritson, J Geldenhuys, J J Schoeman, P A M Mahlangu-Armstrong, R Bouwer, W Pretorius

Mediguard WIC Cleaning Services (Proprietary) Limited F Mugari, G R McGregor, G V Groenewald, L Khomari, S Seeiso

Protea Aviation (Proprietary) Limited E P Grobler, J M S Ferreira, N Kolisile, P A van Niekerk, P A M Mahlangu, Z Vokwana

Protea Coin Cargo Protection (Proprietary) Limited D J Jordaan, E P Grobler, J M S Ferreira, P A van Niekerk, P A M Mahlangu

Protea Coin Group (Assets in Transit and B S de Waal, D M Moise, E P Grobler, J M S Ferreira, Armed Reaction) (Proprietary) Limited N Kolisile, P A van Niekerk, P A M Mahlangu

Protea Coin Group (Security Services) (Proprietary) Limited B S de Waal, D M Moise, E P Grobler, J De Beer, J M S Ferreira, N Kolisile, P A van Niekerk, S Fernandes, Z Vokwana, P A M Mahlangu

Protea Coin Group (Technical and B S de Waal, D M Moise, E P Grobler, J M S Ferreira, Physical Security) (Proprietary) Limited N Kolisile, P A van Niekerk, Z Vokwana, P A M Mahlangu

Protea Security (West Rand) (Proprietary) Limited P A van Niekerk, J M S Ferreira

Protea Security Services (Reaction Unit) P A van Niekerk, J M S Ferreira(Proprietary) Limited

Rebhold Freight Services (2000) (Proprietary) Limited C R Waterson, D Kynaston, M Conlin, P A M Mahlangu-Armstrong

Rebserve Facilities Management (Proprietary) Limited M E A Maphumulo, N M Groeneveld, R M Lukuko

Rebserve IT Procurement (Proprietary) Limited B E Spence, D T Mahlalela, N M Groeneveld, R M Lukuko

Rebserve Namibian Cleaning Services (Proprietary) Limited C Bolm, TD Pitikoe

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Company Directors

Royalserve Catering (Proprietary) Limited G R McGregor, F Mugari, M J Schermers, T D Pitikoe

Royal Food Correctional Services (Proprietary) Limited G R McGregor, F Mugari, T D Pitikoe, T P Sekhoto

RoyalSechaba Food Service (Proprietary) Limited G R McGregor, F Mugari, T D Pitikoe

Royal Food Services (Limpopo) G R McGregor, F Mugari, T D Pitikoe(Proprietary) Limited

Royal Food Services North West (Proprietary) Limited F Mugari, G R McGregor, T D Pitikoe

Royal Food Services Northern Cape (Proprietary) Limited F Mugari, G R McGregor, T D Pitikoe

Royalserve Cleaning (Proprietary) Limited F Mugari, G R McGregor, M J Schermers, T D Pitikoe

Smart Solution Holdings (Proprietary) Limited E P Grobler

TFMC FM Services (Proprietary) Limited B E Spence, L Van Niekerk, N M Groeneveld, R Redaelli

TFMC Holdings (Proprietary) Limited B E Spence, N M Groeneveld, Y Z Cuba, J M S Ferreira, N M Groeneveld

TFMC Maintenance Services (Proprietary) Limited J J Mabaso, N M Groeneveld, T Molai

TFMC Workplace Services (Proprietary) Limited B E Spence, M S Tshungu, N M Groeneveld

Total Facilities Management Company (Proprietary) Limited B E Spence, J Mostert, J M S Ferreira, M Lukuko, N M Groeneveld, P Van Niekerk, R Redaelli, Y Z Cuba

Zonke Monitoring Systems (Proprietary) Limited D Moodley, K Cloete, M Steyn, M H Malope

Further details of all the Directors and senior managers of Mvelaserve are set out in Annexure 6 to this Pre-listing Statement.

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ANNEXURE 8

DETAILS OF PRINCIPAL IMMOVABLE PROPERTIES LEASED OR OWNED

Details of the principal immovable properties leased and owned by Mvelaserve and its Subsidiaries are as follows:

Principal properties leased

Lessor Lessee Property type Location/area Expiry date Monthly rental

Gensec Property Fund Rebhold Freight Office and Johannesburg, Head Office 30 November R72 000 Services (2000) warehouse 49 Director Road 2010 (Proprietary) Limited Aeroport Industrial Park Spartan

Transit Ads Rebhold Freight Office and Cape Town Branch – 1 February 2012 R22 361(Proprietary) Limited Services (2000) warehouse 9 Dawn Road, Unit 2 (Proprietary) Limited First Floor Montague Gardens

Eris Property Group Rebhold Freight Office and Durban Branch – 20 April 2013 R12 582 Services (2000) warehouse Unit 19 Greenfield’s (Proprietary) Limited Business Centre

1451 North Coast Road Durban

Growth Point TFMC (Proprietary) Limited Office building 269 West Street 30 November 2011 R444 845Securitisation C/o Lenchen Avenue Warehouse Trust Meersig Building Centurion

I-Four, Pangbourne BMO Food Services Office building East side Corporate Close 30 April 2014 R196 156 (Proprietary) Limited and factory 807 Richards Drive Midrand

Robow Investments Royalserve Catering Office building 26 Charles de Gaulle Street 31 March 2011 R255 846(P roprietary) L imited (Proprietary) Limited Highveld, Centurion

Silverdawn Royalserve Catering Factory 63 Adriana Crescent 30 June 2011 R116 143Investments 200 CC (Proprietary) Limited Gateway Industrial Park Centurion

The Racing Royalserve Cleaning Office building Rebserve House 31 December 2010 R147 800Investment Trust (Proprietary) Limited Regent Square Doncaster Road Kenilworth, Cape Town

Sage Wise Protea Coin Group (Assets in Office building 14 Friesland Drive 30 November 2010 R122 361(Proprietary) Limited Transit and Armed Reaction) Longmeadow Business (Proprietary) Limited Estate, Germiston

Portion 8 Erf 1 Mvelaserve Limited Office building Portion 8 Erf1 Highveld 31 October 2014 R115 000Highveld (Proprietary) Limited

Principal properties owned

Owner Description Title deed no.

Protea Security (West Rand) (Proprietary) Limited Land, Portion 135 of the Farm Waterval 273 T141584/2005

Protea Security (West Rand) (Proprietary) Limited Land, Plot 99, Waterval 273 T40862/2010

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ANNEXURE 9

MATERIAL ACQUISITIONS AND DISPOSALS IN THE PRECEDING THREE YEARS

Material acquisitions

Save for the acquisition of Zonke by Mvelaserve described in Annexure 1, no material acquisitions (as contemplated by the Listings Requirements) have been made by Mvelaserve Group within the three years preceding the date of this Pre-listing Statement, nor are there any proposed material acquisitions of any securities in or business undertakings of any other company or business enterprise or immovable property.

Name of company Nature of business Salient financial information Effective date

Zonke Monitoring Systems LPM monitoring services • Value of transaction – R81 million 7 October 2010(75% controlling interest) • Settled through the issue of 6 850 937 Mvelaserve Ordinary Shares

No goodwill arose on the acquisition of Zonke by Mvelaserve from Mvela Group as the acquisition took place between group companies. No loans have been incurred or are to be incurred in order to finance the acquisition of Zonke.

The details of the vendor are as follows:

• Name: Mvela Group

• Address: 1st Floor, 30 Melrose Boulevard, Melrose Arch, Johannesburg, 2076

• Beneficial shareholders: Refer to paragraph 6 of this Pre-listing Statement

Mvela Group has not given any guarantee or warranty in relation to the sale of the assets. Mvela Group has not signed any service agreements with Mvelaserve that preclude them from carrying on business in competition with the vendor.

Zonke has been transferred into the name of Mvelaserve. The asset has not been pledged or ceded in any way.

Material disposals

Mvelaserve has made a number of minor disposals in the past three years, only one which was material to Mvelaserve. The details of the disposal are recorded below:

Name of company Nature of business Salient financial information Effective date

Trollope Mining Services Mining contracting • Value of transaction – 1 October 2008(2000) (Proprietary) Limited services R3 2 million • Fully settled in cash • The value of the net asset s of the

company were R103 million, as at 30 June 2008. (See paragraph 23

of this Pre-listing Statement “ Statement of Financial Position – Assets and liabilities in disposal group held for sale ”)

The details of the acquirors are as follows:

• Name: Trollope Holdings (Proprietary) Limited• Address: The Farm Elandsfontein 412 J.R., Ekurhuleni• Beneficial shareholders: D H C le Roux, J W Trollope and P W Trollope

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ANNEXURE 10

DETAILS OF MATERIAL BORROWINGS AND MATERIAL LOANS

1. Material borrowings of Mvelaserve as at the Last Practicable Date:

How - Amount repayment Nature of outstanding Repayment is intendedLender finance Origination (R’000) Interest rate Security terms to be funded

Nedbank Capitalised To fund certain 193 299 Interest rate Certain fixed Repayable in Operating cashLimited finance lease fixed asset linked to the assets with a monthly flowFirst National agreements purchases prime overdraft book value of instalments Bank, rate ranging R199 .72 million over 36 to The Standard Bank between 9% and 48 months toof South Africa 12% per annum the amount ofLimited R6 .482 million per month

Nedbank Long-term To fund 550 000 Note 1 Note 1 Note 1 Operating cash Limited1 Senior repayment of flow Facilities preference shares in

Mvelaserve

Note 1

Mvelaserve has entered into a Long-term Senior Facilities Agreement with Nedbank Limited (“Nedbank”), acting through its corporate banking division in order to enable Mvelaserve to replace the redeemable preference shares that existed in the Group as at 30 June 2010 (refer to note 1 8 in the historical consolidated financial statements – Annexure 2). This Nedbank debt will be used to settle this redeemable preference shares such that they do not form part of the share capital of the Group on the Listing Date. Set out below are the significant terms of the facility provided:

Borrower: Mvelaserve Limited

Structure: Amortising term loan – R250 million Revolving asset backed financing – R200 million General banking facility – R100 million

Payment period: Amortising term loan – payable quarterly, over five years Revolving asset backed financing – each contract repayable monthly, over five years General banking facility – repayable on demand

Interest rate: Amortising term loan – 3 -month JIBAR plus 2.85% (nacq) Revolving asset backed financing – Nedbank’s prime lending rate minus 1.25% General banking facility – Nedbank’s prime lending rate minus 0.75%

Security: Unlimited cross guarantee between Mvelaserve and all Group companies First ranking cession of debtors by Mvelaserve and all Group companies

Conditions: The Long-term Senior Facilities Agreement and other relevant legal agreements will be signed prior to the Listing Date, subject to the fulfilment of conditions as are standard in agreements of this nature.

Other than that stated above, Mvelaserve did not have any material loans, borrowings or outstanding loan capital at the Last Practicable Date.

2. Material loans receivable balances as at 30 June 2010 .

There were no material loans receivable by Mvelaserve or any of its Subsidiaries as at 30 June 2010.

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3. Material inter-company balances as at 30 June 2010 :

The table below shows all inter-group balances in the Mvelaserve Group as at 30 June 2010:

Loan from Mvelaserve: Amount (R’000)

Mvelaserve Management Services 584 704Protea Coin 118 871Royalserve Cleaning 88 625TFMC Holdings 78 066Other 45 973

Loan from Mvelaserve Management Services: Amount (R’000)

Contract Forwarding 23 669

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ANNEXURE 11

MATERIAL CONTRACTS ENTERED INTO BY MVELASERVE IN THE TWO YEARS PRECEDING THE DATE OF THE PRE-LISTING STATEMENT

The material contracts that have been entered into by Mvelaserve during the two years preceding the date of this Pre-listing Statement, other than in the ordinary course of the business carried on by Mvelaserve, as mentioned in paragraph 57 of this Pre-listing Statement, are as follows:

Acquisition of 75% of Zonke by Mvelaserve from Mvela Group

Mvelaserve has acquired an effective 75% of the share capital of Zonke from Mvela Group. In terms of an asset-for-share agreement Mvelaserve allotted and issued 6 850 937 Mvelaserve Ordinary Shares to Mvela Group in exchange for their shares in Macthyme Investments (Proprietary) Limited which holds a 75% in Zonke. The acquisition was concluded for an aggregate amount of R81 million.

Prior to the Zonke acquisition by Mvelaserve, Mvela Group had been a 75% shareholder of Zonke since incorporation of the company. The remaining 25% of Zonke continues to be collectively held by Route Gaming Solutions (Proprietary) Limited, Motcom (Proprietary) Limited, Mabutho Investments (Proprietary) Limited and Virindra Virjanand Parmanand, none of which are associated with the Mvela Group, the controlling shareholder of Mvelaserve. Mvelaserve only acquired the 75% held by Mvela Group in order to maintain a similar shareholding structure as at incorporation of Zonke, in order to comply with the CEMS licensing agreement with the NGB.

Contracts relating to Directors and managerial remuneration

Refer to Annexure 6 for the disclosure of key terms of the contracts relating to Directors and managerial remuneration.

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ANNEXURE 12

EXTRACTS FROM THE ARTICLES OF ASSOCIATION

Set out below are extracts from the Articles of Association:

DIRECTORS

12. Borrowing powers of Directors

12.1 From time to time the Directors may borrow or raise for the purposes of the Company such sums as they deem fit.

12.2 The Directors may raise or secure the payment or repayment of such moneys in such manner and upon such terms and conditions in all respects as they think fit, whether by creation and issue of Debentures, mortgage or charge upon account or any of the property or assets of the Company, including its uncalled or unpaid Capital.

12.3 The Directors shall cause a proper register to be kept in accordance with the provisions of the Act of all mortgages and charges specifically affecting the property of the Company, and they shall cause to be entered in such register in respect of each mortgage or charge a short description of the property mortgaged or charged, the amount of the charge created, the name of the mortgagee or person entitled to such charge and such further particulars as the provisions of the Act require.

19. Directors

19.1 The number of directors shall not be less than 4 (four).

19.2 The Directors shall have power at any time and from time to time to appoint any person as a Director either to fill a casual vacancy, or as an additional Director. Any person appointed to fill a casual vacancy or as an additional director shall retain office only until the next following annual general meeting and his appointment shall be subject to confirmation at such annual General Meeting.

19.3 The Directors shall not be obliged to hold any shares to qualify them as Directors.

19.4 The remuneration of the Directors shall be such sum as may from time to time be determined by an independent, non-executive committee of the Directors. Such remuneration shall be divided among the Directors in such proportions and manner as the said committee may determine. Executive Directors shall not be entitled to receive Directors’ fees (in addition to the remuneration they may receive as employees of the Company), but shall be entitled to payments under Articles 19.5, 24.2 and 27.3.

19.5 The Directors shall be paid all their travelling and other expenses properly and necessarily incurred by them in and about the business of the Company, and in attending meetings of the Directors or of committees thereof. If any Director shall be required to perform extra service or to go or to reside abroad, or if any Director shall be specially occupied about the Company’s business or perform services which, in the opinion of the Directors, are outside the scope of the ordinary duties of a Director, he may receive such extra remuneration as determined by a disinterested quorum of the Directors and such extra remuneration may be either in addition to or in substitution for the remuneration provided for in Article 19.4.

19.6 The continuing Directors may act notwithstanding any casual vacancy in their body, so long as there remain in office not less than the prescribed minimum number of Directors duly qualified to act; but if the number falls below the minimum prescribed in Article 19.1, the remaining Directors shall not act for any purpose other than calling a General Meeting or to fill the vacancy.

20. Disqualification of Directors

20.1 A Director shall cease to hold office as such :

20.1.1 if he becomes insolvent, or assigns his estate for the benefit of his creditors or suspends payment or files a petition for the liquidation of his affairs, or compounds with his creditors;

20.1.2 if he becomes of unsound mind;

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20.1.3 if he is absent from 4 (four) consecutive meetings of the Directors without leave of the Directors whilst not engaged in an business of the Company which may necessitate such absence and is not represented at any such meetings by an alternate Director, on the basis that special meetings of Directors shall not be counted for the purposes of this Article 20.1.3, and the Directors resolve that the office be vacated, provided that the Directors shall have power to grant any Director leave of absence for any or an indefinite period;

20.1.4 if he is removed under Article 22.2 or Article 22.4;

20.1.5 one month, or, with the permission of the Directors, earlier, after he has given notice in writing of his intention to resign;

20.1.6 if he shall pursuant to the provisions of the Act be disqualified or cease to hold office or be prohibited from acting as Director ; or

20.1.7 if he is or accepts any appointment as a Director or an employee of a company which is a competitor of the Company, whether directly or indirectly.

21. Contracting with Directors

21.1 No Director shall be disqualified by his office from contracting with the Company, whether with regards to such office or as a vendor or purchaser or otherwise, nor shall any such contract, or any contract or arrangement entered into by or on behalf of the Company, in which any Director shall in any way be interested, be or be liable to be avoided; nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason of such Director holding that office, or of the fiduciary relationship thereby established, but the nature of his interest shall be declared by him in accordance with the provisions of the Act.

21.2 Notwithstanding anything contained in the Articles, the Company shall not make any loan to a Director or enter into any guarantee or provide any security in connection with a loan made to a Director by any other person if and so far as any such loan, guarantee or provision of security is at any time prohibited by the Act.

21.3 No Director shall vote as a Director in respect of any contract or arrangement in which he is so interested as aforesaid, and if he does so vote, his vote shall not be counted, provided that these prohibitions shall not apply to :

21.3.1 any contract or dealing with a Company of which the Directors or any one of them may be directors, members, managers, officials or employees or otherwise interested;

21.3.2 he giving of any security or indemnity to a Director in respect of money lent or obligations or other liabilities incurred by him at the request of or for the benefit of the Company or any of its subsidiaries;

21.3.3 any contract to underwrite or sub-underwrite any Shares or obligations of the Company or any Shares in or Debentures or obligations of any Company in which the Company may be in any way interested;

21.3.4 any proposal concerning an offer of Shares or Debentures or other Securities by the Company or any of its subsidiaries for subscription or purchase in which offer a Director is or is to be interested directly or indirectly in the underwriting or sub-underwriting thereof, or any allotment or issue complying with the provisions of section 222 of the Act;

21.3.5 any resolution determining the remuneration of the Directors in terms of Article 19.4 or Article 19.5;

21.3.6 any contract for the payment of commission in respect of the subscription for Shares or obligations of the Company;

21.3.7 the giving of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security;

21.3.8 any proposal concerning the adoption, modification or operation of a superannuation fund or retirement benefits scheme under which a Director may benefit and which has been approved by or is subject to and conditional upon approval by the relevant revenue authorities for taxation purposes.

21.4 The prohibitions contained in Article 21.3 may at any time be suspended or relaxed to any extent by the Company in a General Meeting.

21.5 Any notice given to the Directors by a Director to the effect that he is a member of a specified company or firm shall comply with the provisions of the Act.

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21.6 For the purpose of this Article 2 1, an alternate Director shall not be deemed to be interested in any contract or arrangement merely because the Director for whom he is an alternate is so interested.

21.7 Nothing contained in this Article 21 shall be construed so as to prevent any Director who is also a Member from taking part in and voting upon all questions submitted to a General Meeting whether such Director shall be personally interested or concerned in such question or not.

22. Employment and removal of Directors

22.1 A Director may be employed by or hold any office of profit in the Company or in any subsidiary of or holding company of the Company in conjunction with the office of Director, other than that of auditor of the Company or of any subsidiary company, provided that the terms as to appointment, remuneration and otherwise are fully disclosed to the board and are determined by a disinterested quorum of the directors. Any remuneration so paid may be in addition to the remuneration payable in terms of Article 19.4.

22.2 Subject to the provisions of the Act, the Company may by ordinary resolution remove any Director before the expiration of his period of office and may by ordinary resolution elect another person in his stead. The person so elected shall hold office during such time only as the Director in whose place he is elected would have held office.

22.3 The Company shall keep at the Office a register containing the particulars of its Directors, managers and secretaries and shall furnish the Registrar of Companies with particulars thereof as provided for in the Act.

22.4 A Director may, before the expiration of his period of office, be removed from office by a resolution signed by the majority of the other Directors.

23. Rotation of Directors

23.1 At the annual General Meeting held in each year, one-third of the Directors, or if their number is not a multiple of 3 (three), then, the number nearest to, but not less than one-third, shall retire from office, provided that in determining the number of Directors to retire no account shall be taken of any Director who by reason of the provisions of Article 24.1.2 is not subject to retirement. The Directors so to retire at each annual General Meeting shall be those who have been longest in office since their last election or appointment. As between Directors of equal seniority, the Directors to retire shall, in the absence of agreement, be selected from among them by lot; provided that notwithstanding anything herein contained, if, at the date of any annual General Meeting any Director will have held office for a period of 3 (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 length of time a Director has been in office shall, save in respect of Directors appointed or elected in terms of the provisions of Articles 19.2 and 22.2 be computed from the date of his last election or appointment.

23.2 Retiring Directors shall be eligible for re-election. No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for election to the office of Director at any General Meeting unless, there shall have been given to the Secretary notice in writing:

23.2.1 in respect of the annual General Meeting, within the first 2 (two) months after the Financial Year ; and

23.2.2 in respect of any other meeting, not less than 6 (six) business days before the day appointed for the meeting,

by not less than 10 (ten) Members holding 10 % (ten percent) of the issued Capital of the intention of such Members to propose such person for election and also notice in writing signed by the person to be proposed of his willingness to be elected, it being recorded that it is the intention that the period to be allowed before the date of the General Meeting for the nomination of a new Director must be such to give sufficient time, after the receipt of the notice, for nominations to reach the Office from any part of the Republic.

23.3 Subject to the preceding Article 23.2, the Company in General Meeting may fill the vacated offices by electing a like number of persons to be Directors, and may fill any other vacancies. In electing Directors, the provisions of the Act shall be complied with.

23.4 If at any annual General Meeting at which an election of Directors ought to take place, the place of any retiring Director is not filled, he shall, if willing, continue in office until the dissolution of the annual General Meeting in the next year, and so on from year to year until his place is filled, unless it shall be determined at such meeting not to fill such vacancy.

149

DIVIDENDS AND PAYMENT

30. Dividends

30.1 The Company in a General Meeting or the Directors may from time to time, and in accordance with the provisions of the Act, declare a dividend to be paid to the Members in proportion to the number of Shares held by them in each class as at the date subsequent to the date of declaration or date of confirmation of the dividend, whichever is the later.

30.2 No larger dividend shall be declared by the Company in General Meeting than is recommended by the Directors.

30.3 Dividends shall be declared in the currency of the Republic. The declaration of any dividend may, however, provide that all or any particular Members whose Registered Addresses are outside the Republic or who have given written instructions requesting payment at addresses outside the Republic shall be paid in such other currency or currencies as may be stipulated in the declaration. The declaration may also stipulate the date (hereinafter referred to as “the Currency Conversion Date”) upon which and a provisional rate of exchange at which the currency of the Republic Shall be converted into such other currency or currencies, provided that such Currency Conversion Date shall be a date not earlier than the date of the declaration of the dividend and not later than the date of its payment. If, in the opinion of the Directors, there is no material difference between the rate/s of exchange ruling on the Currency Conversion Date and the provisional rate/s of exchange stipulated in the declaration then the currency of the Republic shall be converted at the latter rate/s; but if in the opinion of the Directors there is a material difference, then the currency of the Republic shall be converted into such other currency or currencies at the rate/s of exchange ruling on the Currency Conversion Date, or at the rate/s of exchange which, in the opinion of the Directors is/are not materially different. Any subsequent rise or fall of rate/s of exchange determined as above shall be disregarded.

30.4 Any dividend so declared may be paid and satisfied either wholly or in part by the distribution of specific assets, and in particular of paid-up Shares or Debentures of any other company, or in cash, or in any one or more of such ways as the Directors may at the time of declaring the dividend determine and direct. Where any difficulty arises in regard to the distribution of such specific assets or any part thereof the Directors may settle the same as they think expedient, and in particular may fix the value for distribution of such specific assets or any part thereof.

30.5 Dividends may be declared either free of or subject to the deduction of income tax and any other tax or duty in respect of which the Company may be chargeable.

30.6 The Directors may, from time to time, pay to the Members on account of the next forthcoming dividend such interim dividend as in their judgment the position of the Company justifies.

30.7 In case several persons are registered as the joint holders of any Shares, any one of such persons may give effectual receipts for all dividends and payments on account of dividends in respect of such Shares.

31. Payment of Dividends

31.1 All dividends, interest or other moneys payable to the registered holder of Shares may be paid by cheque, electronic transfer or otherwise as the Directors may from time to time determine, and may be sent by post to the last Registered Address requested by him, or, in the case of joint holders, to that one of them first named in the Register in respect of such joint holdings; and the payment of such cheque or electronic transfer shall be a good discharge to the Company in respect thereof. For the purpose of this Article 31.1, no notice of change of Registered Address or instructions as to payment being made at any other address which is received by the Company between the Record Date for the dividend or return of Capital and the respective date of payment of the dividend or repayment of Capital, as the case may be (both dates inclusive), and which would have the effect of changing the currency in which such payment would be made, shall become effective until after such date of payment.

31.2 All unclaimed monies payable to a Member, other than a dividend, must be held by the Company in trust indefinitely until lawfully claimed by such member.

31.3 The Company shall not be responsible for the loss in transmission of any cheque, electronic transfer or other document sent through the post either to the Registered Address of any Member or to any other address requested by him.

31.4 All dividends that remain unclaimed for a period of 3 (three) years from the date on which such dividends became payable may be declared forfeited by the Directors for the benefit of the Company.

150

32. Capitalisation

32.1 Subject to the provisions of the Act, the Company in a General Meeting, or the Directors, may at any time and from time to time pass a resolution to capitalise any sum forming part of the undivided profits standing to the credit of the Company’s reserve fund, or any sum in the hands of the Company and available for dividend, or any sum carried to reserve as the result of a sale or revaluation of the assets of the Company or any part thereof, or any sum received by way of premium on the issue of any Shares or Debentures. Such resolution may provide that any such sum or sums shall be set free for distribution and be appropriated to and amongst the Members either with or without deduction for income tax, in accordance with their rights and shareholdings in such manner as the resolution may direct; provided that no such distribution shall be made by the Company unless recommended by the Directors, and the Directors shall, in accordance with such resolution, apply such sum or sums in paying up Shares or Debentures and appropriate such Shares or Debentures to or distribute the same amongst the holders of such Shares in accordance with their shareholding thereof respectively as aforesaid, or shall otherwise deal with such sum or sums as provided for in such resolution.

32.2 Where any difficulty arises in respect of such distribution, the Directors may settle the same as they think expedient, fix the value for distribution of any fully paid Shares, Debentures or Debenture stock, make cash payments to any holders of Shares or assets in trustees upon such trusts for the persons entitled in the appropriation or distribution as may seem just and expedient to the Directors. When deemed requisite, a contract shall be entered into and filed in accordance with the Act, and the Directors may appoint any person to sign such contract on behalf of the persons entitled in the appropriation or distribution, and such appointments shall be effective, and the contract may provide for the acceptance by the holders of the Shares to be allotted to them respectively in satisfaction of their claims in respect of the sum so capitalised.

39. Winding up

39.1 If the Company shall be wound up, whether voluntarily or otherwise, then with the sanction of a special resolution, the liquidators may divide among the Members in specie any part of the assets of the Company and may vest any part of the assets of the Company in trustees for the benefit of the Members upon such trusts as the liquidators shall think fit.

39.2 Assets remaining after payment of the debts and liabilities of the Company and the costs of the liquidation shall, subject to the rights of the holders of Shares (if any) issued upon special conditions, be applied as follows:

39.2.1 to repay the Members the amounts received on issue in respect of the Shares respectively held by each of them; and

39.2.2 the balance (if any) shall be distributed among the Members in proportion to the number of Shares, respectively, held by each of them.

40. Indemnity

40.1 Subject to the provisions of the Act, every Director, manager, Secretary and other officer or servant of the Company shall be indemnified by the Company against all costs, losses and expenses which any such officer or servant may incur, or become liable to, by reason of any contract entered into or act or deed done by him either as such officer or servant, or in any way in the discharge of his duties. It shall be the duty of the Directors to pay any such costs, losses and expenses out of the funds of the Company.

40.2 Subject to the provisions of the Act, no Director, manager, Secretary or other officer or servant of the Company shall be liable for the acts, receipts, neglects or defaults of any other Director or officer or servant, for joining in any receipt or other act of conformity or for loss or expense happening to the Company through the insufficiency or deficiency of title to any property acquired by order of the Directors, any security in or upon which any of the moneys of the Company shall be invested, or for any loss or damage arising from the bankruptcy, insolvency or tortuous acts of any person with whom any moneys, securities or effects shall be deposited or for any loss or damage occasioned by any error of judgment or oversight on his part, or for any other loss, damage or misfortune whatever which shall happen in the execution of the duties of his office, or in relation thereto, unless the same happen through his own negligence or dishonesty.

152 PRINTED BY INCE (PTY) LTD REF. W2CF106 8 3

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