20/10/97: Annual report for the 17 months until 31 August 1997

Corpgro Limited Administration Company registration number 83/11384/06 Business address and registered office 100 Forest Road, Bramley 2090 Telephone +27-11-887- 8650 Telefax +27- 11 -887-6655 e-mail: [email protected] Internet address: http:l/www.corpgro.com Postal address PO Box 2551, Bramley 2018 Bankers First National Bank of Southern Africa Limited Company secretary Corpgro Management Services (Pty) Limited Auditors Fisher Hoffman Sithole 15 Girton Road, Parictown 2193 Telephone +27-11-480-2300 Telefax +27- 11 -484- 1721 Transfer secretaries Mercantile Registrars Limited 6th Floor, 94 President Street Johannesburg 2001 Telephone +27- 11 -333-8181 Telefax +27-11-337-5522

Corpgro Limited CorpGro is a holding company quoted in the "Industrial—Industrial Holdings" sector of the Johannesburg Stock Exchange, which acquires and invests in business opportunities which offer shareholders above-average long-term sustainable growth in value. These opportunities are measured against strict parameters, which include people, industry, the businesses themselves and financial criteria. Corporate History 1986 Listed as South East Rand Gold Holdings Limited ("Southgo") in the "Gold—Witwatersrand & Others" sector of the Johannesburg Stock Exchange. January 1996 Distributed major portion of its shares in West Witwatersrand Gold Holdings Limited, Benoni Gold Holdings Limited and Witwatersrand Nigel Limited in an unbundling and sold the balance with effect from 29 January 1996. Consequently constituted as a cash shell and listing transferred to the "Cash Companies" sector.

May 1996 The company, to be renamed Corpgro Limited, Consolidated Mining Corporation Limited and a consortium (comprising The Opportunity Trust, Citizens Coup (Pty) Limited, Global Capital Limited, Global Equities (Pty) Limited and CBH Investments Limited) entered into an agreement regarding the change of control of CorpGro. October 1996 Clawback offer of 751,5 million shares at 2,8 cents per share, in the ratio of 100 shares for every 100 shares held, implemented to raise cash for acquisitions. Listing transferred to the "Industrial—Stores" sector. June 1997 Listing transferred to the "lndustrial—Industrial Holdings" sector. August 199 7 Consolidation, on the basis of nine for one, of the ordinary shares of CorpGro. October 1997 Corp Capital established. Acquisitions Corp Build The businesses of Benoni Builders Supplies CC and Benoni Builders Supplies (Veal) CC with effect from I March 1996. 100% of Lowveld Building Supplies (Pty) Limited with effect from I July 1996. The business of F&F Building Supplies CC with effect from 4 July 1996. The business of B&B Hardware Distributors (Pty) Limited, 65% of B&B Hardware Distributors (Cape) (Pty) Limited and 100% of B&B Hardware Distributors (Natal) (Pty) Limited with effect from I September 1996. The business of Hazyview Hardware and Building Supplies CC with effect from I November 1997. The businesses of General Builders Centre (Clayville) (Pty) Limited and J J Roof Sheeting CC with effect from 3 November 1997. Corp Food 100% of Insulated Structures (1989) (Pty) Limited and Matador Refrigeration (Pty) Limited, and the business of Colcab Manufacturing (Pty) Limited with effect from I July 1996. Corp Com Interests in the Rent-a-Sign group of companies, the Inter-Africa group of companies, Sayer and Associates (Pty) Limited and Supersigns Polska Sp.z.o.o. with effect from I April 1997. The business of Nameplate Centre (Pty) Limited with effect from I June 1997. The business of Reliance Trading (Pty) Limited with effect from I September 1997. The business of Tricor Marketing (Pty) Limited, 100% of Tricor Marketing (Botswana) (Pty) Limited and 95% of Tricor Marketing (Zimbabwe) (Pty) Limited with effect from I September 1997. The businesses of Day-Night Outdoor (Pty) Limited and Site Acquisitions CC with effect from I November 1997. Financial Highlights Information is presented for the 17 months from I April 1996 to 31 August 1997, and for the 12 months from I September 1996 to 31 August 1997 in order to provide meaningful annual results for analysis and future comparison. 17 months 12 months 1997 1997

Group summary (R000) Turnover 400 051 345 809 Operating income 46 279 41 839 Income before taxation 49 361 44 935 Headline earnings 35 390 32 513 Share performance (cents per share) Headline earnings 22,42 19,04 Dividends 5,27 5,27 Net asset value - equity 59,29 59,29 -tangible assets 40,24 40,24 Closing share price 250 250 Total shares in issue and to be issued (000) 209 968 209 968 Market capitalisation (R000) 524 920 524 920 Financial statistics Return on equity (%) 38,6 40,2 Return on assets managed (%) 58,1 62,9 Interest cover (times) 15,51 18,27 Dividend cover (times) 3,27 3,00

31 August 199731 August 1996 Balance sheet information Total assets (R000) 284 198 98 436 Net operating assets (R000) 101 573 31 565 Financial gearing ratio 0,07 0,21

Chairman's Statement The progress of Corpgro Limited since it was formed in July 1996 has been highly encouraging and fully justifies the strategic vision of the company's founders. It will be recalled that a consortium of investors (many of whom are members of the current board of directors) announced on 3 July 1997, its intention of creating a group focused on identifying opportunities in business sectors which offer above-average long-term sustainable real growth. The founding shareholders identified a number of megatrends in the South African socio- economic environment which would enable CorpGro to develop and flourish. These were: • Democratisation • Economic empowerment • Globalisation • Reconsolidation of giant groups. We saw that these factors were not.We saw that these factors were not only changing the rules by which business would be conducted, but would continue to create unique opportunities for niched businesses as the economy was restructured and grew. We realised that the true hidden assets of the new South Africa are the enormous number of entrepreneurs, little known despite their outstanding abilities, in the middle levels of the economy. CorpGro's concept was to identify such entrepreneurs. and through imaginative regroupings to achieve market dominance in their sectors, ensuring sustainable superior returns. At the same time, we saw in Jeff Liebesman somebody with the talents and ability to seize these opportunities .We recognised that, guided by the experience, skill and expertise of the CorpGro Board, he had a unique ability to: • Identify attractive market niches • Identify the leading entrepreneurs in those niches • Lead the teams into a changed business environment • Create and maintain significant value. These are exactly the qualities needed to secure the desired growth of the South African economy. The CorpGro strategy has been to build growth around strong entrepreneurial management with high levels of trading skills and excellent customer relations .The function of the small CorpGro management services team (named CorpServ) has been to add value by evaluating organic and acquisition opportunities against strict financial parameters, and allocating resources accordingly. This has been achieved by aligning the strategic visions of management and the corporate team, investing in expansion, adding similar businesses to achieve industry dominance, exploiting synergies, and providing realistic financial goals and tight financial management. To give effect to this vision, the consortium took control of your company, at the time called Southgo cash shell listed on the Johannesburg Stock Exchange. Since then your company's name has changed to CorpGro, and the board of directors has been reconstituted. The listing has now been transferred to the "lndustrial—Industrial Holdings" sector. Headline earnings per share were 22,42 cents for the 17 months to 31 August 1997 and 19,04 cents for the 12 months to 31 August 1997. Group turnover was R400 million for the 17 months, with group operating income of R46,3 million. Group turnover for the 12 months to 31 August 1997 was R345,8 million, and operating income was R41,8 million. A commendable return on assets managed of 62,9% and return on equity of 40,2% for the 12 months was achieved, while for the 17 months the returns were 58,1 % and 38,6%, respectively. Net cash generated and raised in the 17 months was R42,6 million after reducing long-term interest-bearing debt by R3,3 million to R6 million. The group has a market capitalisation in excess of R520 million and its divisions employ more than 1 300 people. This highly commendable performance was well ahead of budgets, especially in view of the fact that the results do not include a full year of operations for some businesses—including CorpCom—as acquisitions were made at various times during the year. The management teams in the group's divisions have fully justified the strict criteria which were applied in their selection. CorpCom, CorpFood, and CorpBuild are all rapidly gaining recognition as market leaders in their sectors while all units are demonstrating a capacity for rapid and sustained growth. Shareholders can look forward to further substantial real growth in earnings as a result of organic growth of the business units, further acquisitions, careful cash and asset management, a commitment to excellent service and mounting synergies in an expanding group. In concluding these brief comments on CorpGro's remarkably successful first year of operation, l extend to the Chief Executive Officer, Jeff Liebesman, his small executive team and our partners in the divisions, the warm congratulations and thanks of the directors. NJ Frangos 20 October 1997 Chief Executive Officer's Report All divisions established during the period under review performed in line with or ahead of budget. This performance is noteworthy as the group was only formed in July 1996 and extremely challenging and demanding targets were set. The foundations of these businesses have been laid on a solid bedrock of strategy and management excellence. Each division has a clear vision as to how to achieve above-average sustainable growth in its own niche market. Results In view of the change in year-end and change of control which was advised on 22 June 1996, figures for both the 17-month and the 12-month periods ended 31 August 1997, are provided. It is extremely pleasing that in the short time since the establishment of CorpGro as an investment holding company, it has succeeded in achieving a return on assets managed of 62,9% and a return on equity of 40,2% for the 12-month period. The returns for the 17-month period were 58,1 % and 38,6% respectively. Headline earnings per share were 19,04 cents for the 12 months and 22,4 cents for the 17-month period. Group turnover for the 12 months, was R345,8 million and for the 17 months R400 million. Group operating income for the periods was R41,8 million and R46,3 million respectively. The group is underpinned by an extremely strong balance sheet as a result of stringent asset management and use of equity funding for acquisitions. This, together with strong operational cash flows will enable CorpGro to supplement healthy organic growth with strategic acquisitions. Business philosophy CorpGro's management philosophy is grounded in the recognition that sustainable above-average long-term growth can be achieved only by nurturing entrepreneurs in an atmosphere where they feel free to pursue their goals, which are aligned with CorpGro's strategy. The corporate environment (CorpServ) adds value by evaluating organic and acquisitive opportunities against strict parameters, and allocating resources accordingly. These parameters include criteria in respect of the people, the industry, the business itself and its financial performance. Generally, acquisitions will be made only if: •The businesses are run by successful entrepreneurs who - have a vision for the future have the ability to implement the vision - have a high degree of integrity - have an outstanding track record in their industry - The industry, or sector within it, is at the start of or in a vigorous growth phase and is fragmented -Businesses are either dominant in their high growth niches, or have the potential to be dominant - They satisfy strict financial parameters - There are no artificial or external controls or incentives that might have a short to medium term distorting effect on the sustainable performance of the company. CorpGro works in partnership with these teams of entrepreneurs, ensuring that their commitment is totally aligned to that of the shareholders by significant equity interests, performance based incentives and share incentive grants after executives have demonstrated a proven track record. The outcome is an entrepreneurial ethos with absolute commitment to service excellence, in which operations flourish in a financially disciplined environment. It is expressed through divisions, managed by industry champions, which are fast becoming dominant in selected product niche markets within geographical growth areas. Executives within the divisions have bonded well with each other to maximise synergy and co-operation at all levels in their respective businesses. The aim is for the executive teams to operate completely independently on a day-to-day basis, referring to CorpGro only for strategic or corporate counselling. CorpGro continues to monitor performance on a regular formal and informal basis .We believe that it will take from three to four years for these strategies to be fully integrated into the divisions. It is CorpGro's stated objective to explore ways of expressing the value created when the businesses have reached desired levels of maturity. Group prospects The synergies emerging from the various enterprises in the divisions are becoming more powerful as the group expands organically and by the addition of complementary businesses. In addition, there is a strong partnering between the operational experience at the coalface and strategic vision at the centre. This philosophy is proving to be most successful in ensuring sustainable earnings growth at well above-average levels. CorpGro has established a financial services arm, CorpCapital, which will focus on providing value added financial services, initially leveraging off CorpGro's existing client and product base. In the medium term it is expected to make a significant contribution to group earnings. Since the year-end, results have been encouraging from all divisions, and it is anticipated that this trend will continue for the rest of the year. Read together with Prospects in Review of Operations, it is apparent that growth in earnings per share is expected to substantially exceed the long-term stated objective of 15% above inflation. This growth, together with the commendable return on assets managed, will allow the group's businesses to further enhance their market share as well as position themselves into the future. Acknowledgements I wish to thank the board of directors for tinier guidance, counsel and support; the CorpServ team, the executives and management teams of the divisions who have become personal friends and members of the CorpGro family; together with our professional advisers. I would like to congratulate Martin Sacks, who has been a member of the CorpGro team since its inception, on his appointment to the board. They have all made invaluable contributions to the successful launching of what I am convinced will become a group which lives up to its ethos of "Growth through Excellence". JM Liebesman 20 October 1997

Review of Operations Barry Sayer Managing Director 17 months 12 months Statistics* 1997 1997 Turnover (R000) 48 897 48 897 Operating income (R000) 8 701 8 701 Operating margin (%) 17,8 17,8 Return on assets managed (%) 78,3 78,3 Net operating assets (R000) 32 287 32 387 *5 months effective I April 1997 In CorpGro's search for high-growth sectors offering above-average and sustainable returns, the outdoor media sector was evaluated and various megatrends identified. International experience is that outdoor advertising is a particularly favoured medium for branded product manufacturers and distributors in emerging and developing markets. It was noteworthy that outdoor adspend in the emerging market of South Africa is relatively low compared with that of other developing and even developed markets. This appears to be attributable, in the main, to a fragmented industry in which the purchaser cannot be confident of a reliable service to provide a national campaign. CorpGro saw an opportunity to consolidate the industry and build a dominant business in outdoor advertising in South Africa and other emerging and developing markets. CorpCom's vision and strategy is to become a fully integrated media and communications group. The division, which employs more than 400 people, will concentrate on areas offering above-average sustainable growth and will achieve substantial market share by focusing on and servicing its customer needs with absolute dedication and commitment. CorpCom Outdoor, a division of CorpCom, is tightly focused around providing brand building opportunities for and delivering messages about products and services. It is able to add value by becoming an integral part of its clients' communication needs. On I April 1997, the following businesses with dominant positions in the outdoor industry in South Africa, ten African countries and Poland were acquired to form the basis of CorpCom Outdoor: • Rent-a-Sign (including Airport Advertising,Supersigns, Rent-a-Sign Outdoor, Moving Media and Three Apple Print), South Africa's largest outdoor media group • Inter-Africa • Supersigns Polska • Sayer & Associates. In the five-month period from 1 April 1997, to 31 August 1997, CorpCom's turnover was R48,9 million. The operating margin was 17,8% and operating income R8,7 million. Total assets less cash and interest-free liabilities at yearend were R32,3 million resulting in a return on assets managed of 78,3% for the period. It is interesting to note that since CorpCom has been established, in a matter of four months the percentage of outdoor adspend in South Africa in relation to overall adspend has climbed to 3,6% from 2,96%. A very important ratio in evaluating the operating performance of outdoor media businesses is the ratio of operating profit before interest and depreciation to turnover, expressed as a percentage. CorpCom's ratio for the five months was a pleasing 20,9%. Although one must take into account the fact that the Rent-a-Sign acquisition is in turnaround mode, this result indicates that the turnaround is in fact happening and it is expected that CorpCom will achieve the medium-term objective of a ratio of 34%, growing to 45 % With an eye to the future, and in order to reach the full potential for growth in this industry while restoring CorpCom Outdoor's profitability to superior levels, offering the customer outstanding service customer outstanding service and in the process achieving niche dominance, the division is in the process of: • Building a strong management team to take Outdoor into the new millennium • Taking special measures to ascertain and understand its clients' needs • Re-establishing credibility and integrity with customers and suppliers through excellence at every level • Re-engineering the group into its core areas of competency • Improving sales through better servicing, utilisation and site development • Improving the overall efficiency of the organisation at every level • Finding appropriate value-added acquisitions • Increasing penetration into emerging and developing countries Significant capital was expended during the year in building signs for the Airports and Supersigns businesses. Considerable growth was also achieved in traditional paper billboards where a concentrated campaign was launched to sell existing stock to a growing body of clients which include SA Breweries, Unilever, SABC and Ellerines. Although the advertising market has tightened, CorpCom has been able to fill much of its media space and important contracts have been secured in other areas. This promises prospects for improved performance in the year ahead. CorpCom Outdoor has won a joint contract for the All Africa Games, for which new supersigns will be built from January 1998 through to 1999. In addition, several tenders have been won from the airports Company and continual investment is being made into Inter-Africa for expansion into the rest of Africa. Further acquisitions since year-end include Reliance Signs (focusing on airport signage), Day-Night Outdoor (supersigns), Site Acquisitions (highway murals and supersigns) and Tricor Marketing (grassroots product education and promotion). During the year, CorpCom acquired Nameplate Centre which manufactures road traffic signs and a variety of other signage for municipalities, the Department of Transport, provincial governments, and construction and commercial companies. The company is also a major supplier of chromadelc galvanised steel sheeting in a variety of different colours and sizes as supplied by Iscor. Nameplate Centre offers infrastructural and strategic synergies with CorpCom, CorpBuild and CorpFood. It also offers major opportunities for growth in both the sign manufacturing and chromates merchanting businesses Demand for all types of roadsigns will increase as new roads are constructed and others are refurbished with the upgrading of the infrastructure in line with the RDP Outlook Outdoor advertising has consistently shown above average growth world-wide, capturing an increasingly larger share of adspend. In South Africa this form of advertising has lagged It is however expected to catch up with world trends as there is greater emphasis on service, the economy grows, there is greater exposure to global markets, and more people—many with low levels of access to other forms of media due to affordability and geographical factors—enter the consumer market place. CorpCom has positioned itself to take advantage of this expected upturn. Its operations together make up a powerful and fully integrated outdoor media group with more than 20 000 sites in South Africa ranging from standard outdoor billboards to the top end of the market "supersigns" on exceptionally high visibility sites positioned along motorways or at busy intersections. The group's servicing, sales and site acquisition network spans the entire South African urban and rural marketing area In addition, with operations in ten African countries it is the only Al outdoor company able to provide a service to South African African and multinational companies wishing to expand their reach on the continent. Similarly, the Polish operation has the potential to expand into other East European countries. Resources, estimated at R12 million,will be allocated over the next financial year to support development into new sites in South Africa and the rest of Africa. In line with the re- engineering process, a significant investment in IT will also occur. CorpCom is in a high growth phase which is expected to continue in the medium term. A large component Of the division was the Rent-a-Sign group, presently in turnaround. It is therefore expected that CorpCom's contribution will be well above the growth expected from the other divisions for the year ahead. Finally, the repositioning and rebranding of the companies comprising CorpCom Outdoor, coupled with extensive management changes, have been welcomed by advertising agencies, their principals and clients. They are enthusiastic about the greatly improved service levels and infrastructure and there are good prospects for a strong upturn in business. 17 months 12 months Statistics 1997 1997 Turnover (R000) 129 864 111 258 Operating income (R000) 18 544 17 019 Operating margin (%) 14,3 15,3 Return on assets managed (%) 62,4 65,6 Net operating assets (R000) 32 215 32 215

The world trend in food retailing is moving toward closer-to- fresh product merchandising, which means that retailers will have to allocate more retail space to the display and merchandising of fresh product. This trend will also create a need for increased cold storage facilities. In South Africa, the rapidly increasing electrification of the areas serving the mass consumer market will increase the demand for perishable goods (closer to-fresh product) and have a particularly beneficial effect on growth prospects for CorpFood which serves this market. CorpFood is South Africa's leading supplier of polyurethane insulated panels for coldroom and industrial applications, refrigerated display cabinets for supermarkets and related contracting .The division employs more than 500 people and operates six facilities. CorpFood's vision is to develop into an integrated supplier of equipment associated with the food industry. These products are essential in the production, storage, wholesaling and retailing of perishable foods and beverages Businesses acquired during the year were: • Insulated Structures • Colcab • Matador Refrigeration. CorpFood's turnover for the 12 months to 31 August 1997 was R1 1 1,3 million and R 129,9 million for 17 months to that date, while operating income for the periods was R17 million and R18,5 million respectively. Total assets less cash and interest-free liabilities at the year- end amounted to R32,2 million, resulting in a return on assets managed of 62,4%. The division's performance was in line with the business plan which allowed for output of some 15% more than the previous year and a contribution to earnings more than 50% up on an unchanged asset base. The cash flow generated by the division provides a good springboard for the year ahead. CorpFood's marketing strategy is driven by the need to Provide the market with a choice of supplier and product. Its customers include the major retail and wholesale groups, pharmaceutical companies and a wide variety of industrial organisations requiring refrigeration or clean/cold rooms. Marketing and operational issues arising from the fiercely competitive cultures of the companies brought together had to be resolved, and there has been some rationalisation in the manufacture of polyurethane panels, while separate product and marketing identities have been maintained. The refrigerated display cabinet businesses will continue to operate independently and each will supply the market with world- class products which are also differentiated. At the same time, the contracting division, which is the largest in Africa, is fast assuming a separate identity from the other companies in the division. After a slow start to the decade, there has been a steady pick- up in the industry since the country's democratisation in 1994. This, combined with the necessity for stores to be refurbished to revitalise sales should result in continued market growth. As already stated, the most important factor ensuring future growth in this industry is expected to arise from the rapidly increasing electrification of the areas serving the mass consumer market in line with the RDP and the need for more retail outlets. CorpFood's output from existing business is budgeted to increase by some 40% in the year ahead and contribution to group earnings is budgeted to exceed volume growth. As part of an ongoing drive within all businesses, unit manufacturing costs are targeted to be reduced by 20% to allow real market prices to be lowered. Capital expenditure is expected to be in the region of R2 million (on a depreciated fixed asset base of R 10 million). Most will be allocated to IT upgrading while the balance will be expended on automating processes. The increasing globalisation of business has made it easier for local companies to access international technology and at the same time it has resulted in intensified competition. Licensing agreements held by group companies with overseas leaders in technology will be more aggressively exploited and therefore ensure that CorpFood continues to be well placed in the market. New product ranges offering the latest aesthetics and operational advantages together with manufacturing efficiencies promises to be well received. CorpFood's highly experienced and well motivated management team with its considerable technical expertise, will continue to grow the division's resources to enable it to expand into related markets. 17 months 12 months Statistics 1997 1997 Turnover (R000) 221 290 185 654 Operating income (R000) 19 034 16 1 19 Operating margin (%) 8,6 8,7 Return on assets managed (%) 56,5 57,9 Net operating assets (R000) 29 732 29 732 The strategy driving the activities of CorpBuild is based on the realisation that infrastructural development will have to be accelerated to cater for the needs of society as a result of the socio- political changes in South Africa. Development has in the past catered for only some 4 million people instead of 40 million and there is an enormous backlog in basic facilities such as houses, schools and other facilities. To meet the cost of catching up, there will have to be industrial expansion, which in turn needs infrastructure upgrading. Another consequence of the socio-political changes is that South Africa has been accepted back into the family of nations. As a result, it has now re-emerged as a tourist destination and international tourism is expected to grow exponentially in the future. At the same time, the increasing disposable income of South Africans will ensure the growth of local tourism. South Africa is accepted as the engine of growth for sub Saharan Africa and it follows that other countries in this region will experience the same economic changes and imperatives, albeit in a delayed time frame All these factors augur well for businesses focusing on the supply and distribution of a narrow range of products to service the needs arising from these changes. CorpBuild has focused its strategy on the business opportunities arising from this background. Corp Build, which currently employs in excess of 350 people, services the wholesale and retail building, construction and allied markets. This is an industry which has strong prospects for future growth based on the socio-economic scenario set out above. The division focuses on niches within these markets which are expected to show above-average growth, such as leisure and tourism, low-cost housing and infrastructural projects. Geographically, it concentrates on regions which will benefit from the growth opportunities presented by a roll- out of RDP projects. This strategic business unit has two divisions— wholesaling of timber and allied products and ironmongery and allied products. There is a high degree of synergy between the divisions although they benefit from different sectors —the former from the RDP the latter from large construction projects and leisure and tourism During the period under review, it has been extremely pleasing to see the high degree of co operation between executives of the various acquisitions which has allowed Corpgro to leverage efficiencies and customer service. The net result of the cohesion within the division coupled with its extremely strong executive .well skilled in every aspect of their business, can be seen from the above average return on assets managed of 56,5%, which substantially exceeds the returns achieved by other businesses in the sector, positioning it well for future growth into its markets. CorpBuild recorded a turnover of R185,7 million for the 12 months and R22 1,3 million for 17 months. The division achieved an operating margin of 8,7%, resulting in operating income of R16,1 million for the 12 months and R19,0 million for the 17 months. Total assets excluding cash and interest-free liabilities at the year-end amounted to R29,7 million. Businesses acquired during this financial year and which are now the core of the division were: • Benoni Builders Supplies • Benoni Builders Supplies (Vaal) • F&F Building Supplies • B&B Hardware Distributors • B&B Hardware Distributors (Natal) • B&B Hardware Distributors (Cape) • Lowveld Building Supplies. Businesses in CorpBuild have established, individually and collectively, strong market shares of certain services, products and technologies which are essential to its targeted sectors. These include: • Specialised ironmongery such as mastered key locks and door furniture, door controls including door closers, floor springs and electronic hotel safes • Hotel electronic lock and security card systems • Wholesale to retail stores • Sanitaryware • Roof trusses • Retail hardware • Building material supplies. Considerable emphasis was placed on expanding the grid organically and by acquisition, with the result that businesses in this SBU now operate in Gauteng,Mpumalanga, Northern Province, KwaZulu/Natal and the Cape. Value added by CorpServ can be seen from the reengineering undertaken to maximise efficiencies in certain of the SBU's businesses. Overall, we are delighted with the rapid expansion of CorpBuild. New management continues to be brought in by our operating partners to cope with the rapid growth and CorpGro will continue to evaluate new opportunities to expand the grid nationally and into sub-Saharan Africa. Budgets have been set at least 30% higher than last year. Capital expenditure is anticipated to be low although a significant investment will be made into IT upgrade. Further planned expansion is envisaged in the new year. Since year-end,J J J Roof Sheeting in Nelspruit, Hazyview Hardware and Building Supplies and General Builders Centre in Midrand have been acquired in line with CorpGro's growth strategy, while new markets and products are continuously being evaluated. Group Statistics 17 months 12 months 1997 1997 Share performance (cents per share) Headline earnings 22,42 19,04 Dividend 5,27 5,27 Net asset value equity 59,29 59,29 -tangible assets 40,24 40,24 Returns (%) Return on equity 38,6 40,2 Return on assets managed 58,1 62,9 Operating margin 11,6 12,1 Interest and dividend cover (times) Interest cover 15,51 18,27 Dividend cover 3,27 3,00 Employee information Number of employees 1 365 1 365 31 August 199731 August 1996 Balance sheet (R000) Ordinary shareholders' equity 124 494 37 323 Outside shareholders' interest 330 Interest-bearing debt 8 667 7 758 Interest-free loans 26 589 Deferred taxation 251 557 Total capital employed 160 331 45 638 Fixed assets 46 875 16 793 Trade names and trademarks 40 000 Investments 1 463 Current assets 150 204 67 570 Cash resources 45 656 14 073 Total assets 284 198 98 436 Interest-free current liabilities 123 867 52 798 Employment of capital 160 331 45 638 Net operating assets 101 573 31 565 Solvency and liquidity ratios Financial gearing 0,07 0,21 Current 1,54 1,55 Quick 1,08 0,80

17 months 12 months 1997 1997 Income statement (R000) Turnover 400 051 345 809 Operating income 46 279 41 839 Net interest received 3 082 3 096 Income before taxation 49 361 44 935 Taxation 14 065 12 516 Income after taxation 35 296 32 419 Equity accounted earnings 104 104 Outside shareholders (10) (10) Headline earnings 35 390 32 513 17 months 1997 Cash flow statement (R000) Cash generated from operations 39 327 Interest received 6 483 Financing costs (3 401) Taxation paid (5 780) Net cash generated 36 629 Investing activities Investment to maintain operations (332) Investment to expand operations (148 173) Additions to fixed assets (5 731) Purchase of businesses (142 442) Net cash utilised (111 876) Financing activities Reduction of long-term debt (3 330) Share issues 156 441 Advances by outside shareholders 94 Repayment of loans receivable 1 245 Net cash generated and raised 42 574 Opening cash resources 3 082 Closing cash resources 45 656 DEFINITIONS Headline earnings per share Headline earnings divided by the weighted average number of shares in issue, and to be issued, during the year Net asset value—equity Ordinary shareholders' equity divided by the number of shares in issue, and to be issued. at year-end Net asset value—tangible assets Ordinary shareholders, equity less intangible assets divided by the number of shares in issue. and to be issued. at year-end. Return on equity Headline earnings expressed as a percentage of average ordinary shareholders, equity (annual). Return on assets managed Operating income expressed as a percentage of average total assets. excluding cash, less interest-free liabilities (annual). Operating margin Operating income expressed as a percentage of turnover. Interest cover Operating income plus interest received divided by financing costs. Dividend cover Headline earnings less equity accounted retained earnings divided by capitalisation award/dividend. Net operating assets Total assets, excluding cash, less interest-free liabilities. Financial gearing ratio Interest-bearing debt divided by ordinary shareholders, equity. Current ratio Current assets divided by current liabilities. Quick ratio Current assets less inventories divided by current liabilities.

Analysis of Shareholders at 31 August 1997

Shareholders % Shares (000) % Directors 6 0,1 29 666 14,5 Individuals 6 583 93,7 21 864 10,6 Institutions,nominee companies and trusts 175 2,5 57 107 27,9 Other corporate 262 3,7 96 385 47,0 Total 7 026 100,0 205 022 100,0 1 - 999 4416 62,9 1 273 0,6 1 000 - 9 999 2 152 30,6 5 900 2,9 10 000 - 99 999 373 5,3 8 566 4,2 100 000 and over 85 1,2 189 283 92,3 Total 7 026 100,0 205 022 100,0 An analysis of directors' shareholdings is set out on page 31. Except for directors, the following are the only shareholders holding 5% or more of the listed ordinary shares in the company at 31 August 1997: % Global Capital Limited 12,6 CBH Investments Limited 11,6

Johannesburg Stock Exchange Performances 7 October 1996* to 3 1 August 1997 Market price(cents) - Closing (last sale) 250 - High 459 - Low 216 Closing market capitalisation (R000) 524 920 Closing price/ 12-month earnings (times) 13 Closing number of shares in issue and to be issued (000) 209 968 - Shares in issue (000) 205 022 - Shares to be issued (000) 4 946 Volume of shares traded (000) 73 969 Total value of transactions (R000) 220 032 Average price per share (cents) 297 Volume traded to weighted number of shares (%) 43 *Listed under the name Corpgro Limited Value Added Statement for the 17 months ended 31 August 1997 R000 Turnover 400 051 Cost of materials and services 279 555 Value added from trading operations 120 496 Interest received 6 483 Wealth created 126 979 Applied as follows: Employees 67 977 Salaries, wages and benefits Providers of finance and capital 14 204 Financing costs 3 401 Capitalisation award and dividend 10 803 Government 15 480 Taxation, assessment rates, regional services council levies, customs and excise duties and deferred taxation Replacement of assets 4 835 Depreciation Expansion and growth 24 483 Retained earnings, excluding equity accounted retained earnings 126 979

Corporate Governance CorpGro subscribes to, and in all material respects complies with, the Code of Corporate Practices and Conduct as set out in the King Report on Corporate Governance.The directors endorse the objective of conducting the affairs of the group with integrity and in accordance with the highest standards of corporate practice. Board of directors The board of directors of CorpGro comprises two executive and four non-executive directors and meets at least quarterly. CorpGro's chairman is elected annually, and the office is separate from that of the group chief executive. The board is responsible to the shareholders for the proper management of CorpGro, and as such is involved in all decisions that are material to the group. All directors have access to the advice and services of the company secretary and are entitled, at the company's expense, to seek professional advice about the affairs of the group. The directors believe that the group has adequate resources to continue as a going concern in the year ahead and the financial statements have therefore been prepared on this basis. Audit committee The audit committee, comprising two non-executive directors, meets three times a year with the group's external auditors and CorpGro's executive management to review accounting, auditing, financial reporting and internal control matters. Remuneration committee The remuneration committee, comprising two non-executive directors, is responsible for determining the remuneration and terms of employment of the company's directors and senior management. Management reporting The group has established comprehensive management reporting disciplines which include the preparation of annual budgets by all operating units. Monthly results and the financial position and cash flows of operating units are reported against approved budgets and compared to the prior year. Profit and cash flow forecasts are reviewed regularly, and working capital levels are monitored on an ongoing basis. Internal controls The group maintains internal controls and systems designed to provide reasonable assurance as to the integrity and reliability of the financial statements and to adequately safeguard and maintain accountability for assets. The ongoing development of an internal audit function serves the board of directors by performing evaluations of the above systems independently from operating management. The external auditors, through the audit work they perform, confirm that the controls and systems are being effectively applied. Code of conduct Directors and employees are required to maintain the highest ethical standards to ensure that business practices are conducted in a manner which is beyond reproach. (Annual Financial Statements Directors' Directors' Responsibility for Financial Reporting The directors of CorpGro are responsible for the preparation and integrity of the financial statements and other financial information included in this annual report. CorpGro is committed to achieving comprehensive and responsible reporting in order to facilitate the measurement of the group's performance in relation to the risks inherent in the industries in which it operates and to comparable entities. In line with this policy, in preparing the financial statements, generally accepted accounting practice and Johannesburg Stock Exchange requirements have been followed, suitable accounting policies have been used, and reasonable and prudent estimates have been made where required. To help meet its responsibility with respect to financial information, the group maintains a system of internal controls designed to provide reasonable assurance that assets are safeguarded and transactions and events properly recorded. The financial statements for the seventeen months ended 31 August 1997 which are set out on pages 29 to 44 were approved by the board on 20 October 1997 and have been signed on its behalf by: NJ Frangos Chairman JM Liebesman Chief Executive Officer Report of the Independent Auditors: To the members of Corpgro Limited We have audited the annual financial statements and group annual financial statements set out on pages 29 to 44 .These financial statements are the responsibility of the company's directors. Our responsibility is to report on these financial statements. We conducted our audit in accordance with generally accepted auditing standards .These standards require that we plan and perform the audit to obtain reasonable assurance that, in all material respects, fair presentation is achieved in the financial statements. An audit includes an evaluation of the appropriateness of the accounting policies, an examination, on a test basis, of evidence supporting the amounts and disclosures included in the financial statements, an assessment of the reasonableness of significant estimates and a consideration of the appropriateness of the overall financial statement presentation. We consider that our audit procedures were appropriate in the circumstances to express our opinion presented below. In our opinion these financial statements fairly present the financial position of the company and the group at 31 August 1997 and the results of their operations and cash flow information for the financial year then ended in conformity with generally accepted accounting practice and in the manner required by the Companies Act. Fisher Hoffman Sithole Chartered Accountants (SA) Registered Accountants and Auditors Johannesburg 20 October 1997

Accounting Policies The financial statements have been prepared in accordance with the historic cost convention and incorporate the following principal accounting policies, which conform with generally accepted accounting practice in South Africa. Basis of consolidation The group financial statements consolidate the financial statements of the company and its subsidiaries. The results of subsidiaries acquired or disposed of during the year are included from or to the effective dates of acquisition or disposal. The excess of the purchase consideration over the attributable fair value of net assets acquired is recognised as goodwill. Associates An associate is a company in which the group has a long-term interest and over which it has the ability to exercise significant influence. The results of associated companies are included from the date of acquisition using the equity method. Fixed assets and depreciation Properties, which are stated at cost, are regarded as investment properties and are not depreciated. The cost of advertising structures commissioned by the group comprises material and direct costs. All other fixed assets are stated at cost to the group and depreciated on the straight line basis over their estimated useful lives. The annual depreciation rates applied to the various categories of fixed assets are: Advertising structures 10% Plant and equipment 12,5% to 20% Office equipment and furniture 16,7% Computer equipment 33,3% Vehicles 20% to 25% Goodwill, trade names and trademarks Goodwill is set off against the share premium account in the balance sheet. Trade names and trademarks are stated at cost to the group and are not amortised. The directors assess the carrying values of these assets annually, and provision is made for any permanent diminution in value. Inventories Inventories are valued at the lower of cost and net realisable value, with due provision made for slow-moving items. Cost is determined on the following bases: Raw materials and merchandise are valued at cost on the first-in first-out or the average bases. Work in progress and finished goods are valued at raw material cost plus direct costs and a proportion of manufacturing overhead expenses. Foreign currencies Foreign entities Foreign entity financial statements are translated into South African currency as follows: Assets and liabilities at rates of exchange ruling at financial year-end. Income, expenditure and cash flow items at the weighted average rates of exchange during the financial year. Translation differences are taken to non-distributable reserves. Foreign currency transactions and balances Transactions in foreign currencies are converted into South African currency at the exchange rate ruling at the transaction date. Foreign currency assets and liabilities are translated into South African currency using exchange rates ruling at financial year-end. Exchange differences are included in operating income. Finance leases Assets acquired under finance lease agreements are capitalised at equivalent cash cost. Lease payments are allocated between capital and finance cost using the effective interest rate method. Deferred taxation Deferred taxation is the tax attributable to timing differences arising from the recognition of items in taxable income in periods different from those in which they are recognised in accounting income. Deferred taxation is calculated at current rates using the comprehensive basis. Turnover Turnover comprises invoiced amounts for goods supplied and contracting, maintenance and media services rendered. Capitalisation share awards and cash dividends Cash dividends and the full cash equivalent of capitalisation share awards are disclosed as capitalisation award and dividend proposed in the income statement. Pending determination of the exact number of capitalisation shares to be issued, the estimated cash equivalent amount is shown as a share election reserve. Retirement benefits It is the policy of the group to provide for employee retirement benefits by means of payments to pension and provident funds which are independent from the group .The group's portion of contributions to funds is charged against profits when incurred. Directors Report The directors have pleasure in presenting their report for the seventeen months ended 31 August 1997. Nature of business The group's activities are detailed in Group Structure and Nature of Business and Review of Operations. Financial results The results of the group's operations are set out in the financial statements. Commentary thereon is contained in the Chairman's Statement, Chief Executive Offficer's Report and Review of Operations. Change of control Together with the change of control of the company, the company's name was changed from South East Rand Gold Holdings Limited to Corpgro Limited, and the financial year-end was changed from 31 March to 31 August with effect from 31 August 1997. Details were communicated to shareholders in the circular issued on 9 September 1996. Share capital At 31 March 1996 the authorised share capital comprised R2 500 000 divided into 250 000 000 ordinary shares of one cent each, of which 132 318 000 were issued. On I October 1996 the authorised share capital was reconstituted to comprise 11 900 518 000 ordinary shares of 0,01 cent each amounting to R 1 190 052. The number of issued shares was unchanged. On 31 October 1996, 751 506 095 shares were issued at 2,8 cents per share, pursuant to a clawback offer in the ratio of 100 shares for every 100 shares held. Shareholders are referred to the circular issued on 9 September 1996 for full details. 903 116 950 shares were issued to finance acquisitions in the period to 4 August 1997. On 4 August 1997, the company's share capital was consolidated, on the basis of nine for one, resulting in an authorised share capital of 1 322 279 778 ordinary shares of 0,09 cent each and an issued share capital of 198 549 005 ordinary shares of 0,09 cent each. Shareholders are referred to the circular issued on 4 July 1997. 6 472 593 shares were issued to finance acquisitions between the consolidation date and 31 August 1997. At 31 August 1997, there were 4 946 369 shares still to be issued to vendors of businesses acquired by the group. The company's unissued shares have been placed under the control of the directors until the forthcoming annual general meeting. Acquisitions Details of acquisitions made during the financial year are set out in Corporate History. An analysis of assets acquired is shown in note 14.5 to the financial statements. Subsequent events Subsequent to the financial year-end certain acquisitions set out in Corporate History and Review of Operations have come into effect. The aggregate purchase considerations for these businesses is R31 418 000. Share Incentive Trust 2 986 667 shares were acquired by the Corpgro Limited Share Incentive Trust and allocated to employees during the financial year under review. Capitalisation award and dividend proposed The directors have resolved to award capitalisation shares to ordinary shareholders registered in the books of the company at the close of business on Friday, 14 November 1997. Details of the capitalisation award will be announced on or before Friday, 7 November 1997. Shareholders are entitled and will be given the opportunity to decline the award of capitalisation shares in respect of all or any part of their shareholding and may elect to receive a final cash dividend of 5,27 cents per ordinary share. Directors The directors at the date of this report are: NJ Frangos (Chairman),JM Liebesman (Chief Executive Officer), E Ellerine, E Grolman, GB Liebmann and MH Sacks.AII of the current directors were appointed to the board on 25 July 1996, with the exception of MH Sacks who was appointed on I September 1997. PS Moss, who was appointed to the board on 25 July 1996, resigned on I August 1997, and HC Buitendag, ND Lowenthal, GB Rubenstein and CF Turner, who held office at the end of the 1996 financial year, resigned on 3 August 1996. In terms of the articles of association, GB Liebmann and MH Sacks retire at the forthcoming annual general meeting, and being eligible, offer themselves for re-election Directors' shareholdings at 31 August 1997 Indirect E Ellerine 5 899 464 NJ Frangos 11 134 003 E Grolman 3 777 000 JO Liebesman 6 919 024* GB Liebmann 852 992* MH Sacks 1 083 333 Directors' shareholding have increased by 1 322 752 shares between 31 August 1997 and the date of this report. * Non-beneficial Secretary CorpGro Management Services (Pty) Limited have been appointed as company secretary in place of Consolidated Mining Management Services Limited.The company's registered address is reflected on page 1. Subsidiary companies Details of subsidiary companies are set out on page 44. Comparative figures Group comparative figures for the 1996 financial year have not been presented as the business conducted in that year was significantly different from that conducted in the 1997 financial year. Group Income Statement for the 17 months ended 31 August 1997 Note R000 Turnover 400 051 Cost of sales 278 663

Gross margin 121 388 Administration and selling expenses 70 274 Depreciation 1 4 835

Operating income 2 46 279 Interest received 6 483 Financing costs 3 401

Income before taxation 49 361 Taxation 3 14 065

Income after taxation 35 296 Equity accounted retained earnings 104 Attributable to outside shareholders (10)

Headline earnings 35 390 Capitalisation award and dividend proposed 10 803 Retained earnings for the period 6 24 587 Headline earnings per share (cents) 22,42

Dividend per share (cents) 5,27

Weighted average number of shares in issue (000) 157 858

Group Balance Sheet at 31 August 1997

Note R000 Share capital and premium 4 86 104 Share election reserve 9 723 Non-distributable reserves 5 3 633 Retained earnings 6 25 034

Ordinary shareholders' equity 124 494 Outside shareholders' interest 7 330 Deferred taxation 8 251 Long-term interest-bearing debt 9 6 049 Long-term interest-free loans 10 25 589

Capital employed 156 713 Fixed assets 11 46 875 Trade names and trademarks 40 000 Investments 12 1 463 Current assets 195 860

Inventories 13 58 254 Debtors 91 950 Cash resources 45 656

Total assets 284 198 Current liabilities 127 485

Creditors 111 863 Taxation 10 924 Current portion of interest-bearing debt 2 618 Current portion of interest-free loans 1 000 Shareholders for dividend 1 080

Employment of capital 156 713

Cash Flow Statements for the 17 months ended 31 August 1997 Group Company Note R000 R000 Operating activities Cash receipts from customers 432 347 Cash paid to suppliers and employees (393 020) (630)

Cash generated from operations 14.1 39 327 (630) Dividends receivable - 10 803 Interest received 6 483 2 739 Financing costs (3 401) Taxation paid (5 780)

Net cash generated 36 629 12 912

Investing activities Investment to maintain operations (332)

Replacement of fixed assets 14.2 (I 042) Proceeds on disposal of fixed assets 14.3 710

Investment to expand operations (148 173) (157 362)

Additions to fixed assets 14.4 (5 731) Purchase of businesses 14.5 (142 442) Investment In subsidiaries 362) (157 362) Net cash utilised (111 876) (144 450)

Financing activities Reduction of long-term debt (3 330) Share issues 156 441 156 441 Advances by outside shareholders 94 Repayment of loan receivable 1 245 1 245

Net cash generated and raised 42 574 13 236 Opening cash resources 3 082 3 082

Closing cash resources 45 656 16 318

Company Income Statement for the 17 months ended 3 1 August 1997 12 months ended 31 March 1996 Note R000 R000 Interest received 2 739 118 Dividends from subsidiaries 10 803 Recovery of loans written off - I 213 Administration expenses (608) (267)

Income before taxation 12 934 1 064 Taxation 3 881

Income after taxation 12 053 1 064 Capitalisation award and dividend proposed 10 803

Retained earnings for the period 6 1 250 1 064

Company Balance Sheet at 31 August 1997

31 March 1996 Note R000 R000 Share capital and premium 4 86 104 1 323 Share election reserve 9 723 Non-distributable reserves 5 3 499 2 189 Retained earnings 6 1 801 551

Capital employed 101 127 4 063

Investments 12 87 012 1 245 Current assets 16 365 3 082

Debtors 47 Cash resources 16 318 3 082

Total assets 103 377 4 327 Current liabilities 2 250 264

Creditors 289 264 Taxation 881 Shareholders for dividend 1 080

Employment of capital 101 127 4 063

Group Company R000 R000 1. Depreciation 4 835 Advertising structures 1 221 Plant and equipment 1 171 Office equipment and furniture 748 Vehicles 1 695

2. Operating income after charging

Auditors' remuneration 874

Audit fees 833 Other services 16 Expenses 25

Directors' emoluments 1 075 Executive directors - managerial services, paid by subsidiaries Loss on disposal of fixed assets 22 Operating lease charges 5 212

Property 4 889 Other 323 Foreign exchange losses 80 3. Taxation Taxation charge South African normal taxation - current 14 001 746 - deferred (306) Secondary tax on companies 135 135 Foreign taxes 235 14 065 881 The group has estimated tax losses of R 18 000 000 available for set-off against future taxable income. Secondary tax on companies has been provided on the estimated cash portion of the dividend proposed by the company. Reconciliation of rate of taxation % % Standard rate 35,0 35,0 Utilisation of tax losses (6,4) Permanent differences (0,4) Exempt income (0,2) (29,2) Foreign tax rates 0,1 Secondary tax on companies 0,3 1,0 Disallowable items 0,1 Effective rate 28,5 6,8

Group Company R000 R000 4. Share capital and premium Authorised share capital 1 322 279 778 ordinary shares of 0,09 cent 1 190 1 190

Issued share capital 209 967 967 ordinary shares of 0,09 cent 189 189

Ordinary share premium 156 265 156 265

At the beginning of the period Arising on shares issued during the period 160 696 160 696 Share issue and acquisition expenses (4 431) (4 431)

Goodwill set off (70 350) (70 350)

Total share capital and premium 86 104 86 104

Movement in issued share capital (thousand shares) Balance at the beginning of the period 14 702 14 702 Issued to finance acquisitions and raise cash 190 320 190 320

In issue at the end of the period 205 022 205 022 Balance of purchase considerations for acquisitions - to be issued 4 946 4 946 209 968 209 968

5. Non distributable reserves Analysis Investment surplus 2 189 2 189 Reduction in share capital 1 310 1 310 Equity accounted retained earnings 104 Foreign currency translation reserve 30 3 633 3 499 Movement Balance at the beginning of the period 2 189 2 189 Reduction in share capital 1 310 1 310 Equity accounted retained earnings 104 Foreign currency translation reserve 30 Balance at the end of the period 3 633 3 499 Group Company R000 R000 6. Retained earnings At the beginning of the period 551 551 Retained for the period 24 587 1 250 Transfer to non-distributable reserves (104) - Equity accounted retained earnings

At the end of the period 25 034 1 801

7. Outside shareholders' interest Share capital and reserves 75 Loans 255 330 8. Deferred taxation Analysis Excess of capital allowances over depreciation 707 Provisions (520) Other timing differences 64 251 Movement Balance at the beginning of the period Balances of subsidiaries acquired 557 Transferred this period (306) Balance at the end of the period 251

9. Interest-bearing debt Analysis Average closing interest rate (%) Secured 8 667 Suspensive sales 21,25 1 216 Finance leases 21,25 1 974 Mortgage loan 20,25 1 482 Term loans 19,64 3 995

Total amounts outstanding 8 667 Current portion 2 618

Long-term portion 6 049

Group Company R000 R000 9. Interest-bearing debt (continued)

Repayments Repayable during the 12 months to: 31 August 1998 2 618 31 August 1999 1 523 31 August 2000 888 31 August 2001 1 672 31 August 2002 338 Repayable thereafter 1 628 8 667 All amounts are repayable in South African rends.

Encumbered assets Book values of assets encumbered in favour of secured lenders - Property 1 686 - Plant and equipment 4 202 - Office equipment and furniture 120 Vehicles 1 889 — Inventories 2 000 - Debtors 3 500 13 397 10. Interest-free loans Analysis Unsecured Term loan - interest-free for full loan period 11 639 Term loan - interest-free until 29 May 1998, then bearing interest at the BA rate plus 75 points 14 950

Total amount outstanding 26 589 Current portion 1 000

Long-term period 25 589

Repayments Repayable during the 12 months to: 31 August 1998 1 000 31 August 1999 2 250 31 August 2000 3 807 31 August 2001 6 807 31 August 2002 12 725 26 589 All amounts are repayable in South African rends.

Group Company R000 R000 11. Fixed assets Property 1 686 Cost

Advert/sing structures 28 304

Cost 29 525 Accumulated depreciation 1 221

Plant and equipment 7 900

Cost 9 045 Accumulated depreciation 1 145

Office equipment and furniture 3 209

Cost 3 930 Accumulated depreciation 721

Vehicles 4 405

Cost 5 773 Accumulated depreciation 1 368 Leased vehicles 1 371

Cost 1 600 Accumulated depreciation 229

Net book value 46 875

Total cost 51 559 Total accumulated depreciation 4 684

Net book value 46 875

Movement Balance at the beginning of the period Consolidation of new interests 45 669

- Property 1 686 - Advertising structures 26 607 - Plant and equipment 8 433 - Office equipment and furniture 2 697 - Vehicles 6 246

Additions 6 773 - Advertising structures 2 918 - Plant and equipment 725 - Office equipment and furniture 1 304 - Vehicles 1 826

Disposals 732 - Plant and equipment 87 - Office equipment and furniture 44 - Vehicles 601

Depreciation charge 4 835

Balance at the end of the period 46 875

Property comprises warehouse and offices situated at 9 Basalt Avenue, Amalgam, Johannesburg at cost in 1996.

Group Company R000 R000 12. Investments Associates Shares at cost 1 154 Share of post-acquisition retained earnings 104 1 258 Loans receivable 205 1 463 Directors' valuation of shares 1 500 Subsidiaries Shares at cost I Loans receivable 157 361 Goodwill set off (70 350) 87 012 Details of subsidiaries and associates are set out on page 44. 13. Inventories Raw materials 14 312 Work in progress 3 672 Finished goods 6 849 Merchandise 33 421 58 254 14. Cash flow information 14.1 Reconciliation of income before taxation to cash generated from operations Income before taxation 49 361 12 934 Depreciation 4 835 Dividends receivable - (10 803) Interest received (6 483) (2 739) Financing costs 3 401 Loss on disposal of fixed assets 2 Movement in foreign currency translation reserve 30 Movement in working capital (11 839) (22) Inventories (9 063) Debtors (26 461) (47) Creditors 23 685 25 Cash generated from operations 39 327 (630)

Group Company R000 R000 14. Cash flow information (continued) 14.2 Replacement of fixed assets Plant and equipment (498) Office equipment and furniture (387) Vehicles (157) (1 042) 14.3 Proceeds on disposal of fixed assets Book value of assets disposed of 732 Loss on disposal (22) 710 14.4 Additions to fixed assets Advertising structures (2 918) Plant and equipment (227) Office equipment and furniture (917) Vehicles (I 669) (5 731) 14.5 Purchase of businesses Property, advertising structures, plant, equipment and vehicles (45 669) Trade names and trademarks (40 000) Investments ( I 359) Current assets (114 680) Cash resources (5 389) Long-term debt and loans 38 586 Deferred taxation 557 Creditors 87 914 Taxation payable 2 333

Net assets acquired (77 707) Goodwill (70 350) Outside shareholders' interest 226

Total purchase price (147 831) Cash resources acquired 5 389 Purchase of businesses net of cash resources (142 442)

Group Company R000 R000 15. Borrowing facilities Total facilities, excluding interest-free loans, finance leases and suspensive sales 34 134 207

Utilised 6 533 Available 27 601 207 Borrowings are not limited in terms of the company's, or its subsidiaries', articles of association. 16. Contingent liabilities and guarantees Suretyship for interest-free loans to subsidiaries 26 589 Unlimited suretyship for bank facilities of subsidiaries 28 450 17. Commitments Capital expenditure approved by the directors Contracted for 371 Not contracted for 12 716 13 087 This capital expenditure will be financed from the group's cash resources and existing facilities. Operating leases Property 41 593 Other 533 42 126 Payable during the 12 months to: 31 August 1998 9 860 31 August 1999 8 979 31 August 2000 7 677 31 August 2001 8 218 31 August 2002 5 076 Payable thereafter 2 316 42 126 18. Foreign currencies Uncovered United States dollar foreign liability (rend amount) 3 200 19. Retirement benefit information With the exception of employees required by legislation to contribute to industry funds, approximately 87% of the group's employees are members of various pension and provident funds. The funds, which are subject to the Pension Funds Act, are all defined contribution funds and are not subject to actuarial valuation.

Subsidiaries and Associates Interest of holding company Issued CapitalEffective holding Shares Indebtedness Subsidiaries R % R000 R000 CorpBuild Corpgro Industrial and Building Supplies (Pty) Limited 100 100 0,1 60 464* B&B Hardware Distributors (Cape) (Pty) Limited 100 65 B&B Hardware Distributors (Natal) (Pty) Limited 100 100 Lowveld Building Supplies (Pty) Limited 100 100 International Environmental and Energy Solutions (Pty) Limited 100 51 CorpCom Corpgro Communications (Pty) Limited 100 100 0,1 51 634 CorpCom Outdoor (Pty) Limited 100 100 (formerly Rent-a-Sign (Pty) Limited) Airport Advertising (Pty) Limited 2 100 Media Management (Pty) Limited 100 100 Nathi's Outdoor Advertising (Pty) Limited 100 93 Sayer & Associates (Pty) Limited 2 100 Inter-Africa Outdoor Advertising (Uganda) Limited 455 60 Inter-Africa Outdoor Advertising (Tanzania) Limited 7 584 80 Inter-Africa Outdoor Advertising (South Africa) Limited 2 100 Inter-Africa Outdoor Advertising (Kenya) Limited 3 100 Inter-Africa Outdoor Advertising Limited (Malawi) 1 100 Inter-Africa Outdoor Advertising Zimbabwe (Pty) Limited 787 100 Inter-Africa Outdoor Media Advertising (Pty) Limited (Namibia) 11 100 Inter-Africa Outdoor Advertising (Zambia) Limited 1 100 Companhia Inter-Africa Publicidade (Mocambique) Lda 1 187 100 Inter-Africa Outdoor Advertising Botswana (Pty) Limited 13 170 100 Inter-Africa Publicidade (Angola) Lda 2 820 100 Supersigns Polska Sp.z.o.o. (Poland) 5 529 75 Supersigns (Bahamas) Limited 14 130 100

CorpFood Corpgro Food end allied Industries (Pty) Limited 100 100 0,1 47 985* Colcab (Pty) Limited 100 100 Insulated Structures (1989) (Pty) Limited 25 000 100 Matador Refrigeration (Pty) Limited 3 000 100

CorpServ Corpgro Management Services (Pty) Limited 100 100 0,1 -2 722

Total interest (note 12) 0,4 157 361 Analysis of income from subsidiaries R000 Interest in income after taxation 35 149 Share of losses 1 113

34 036

Group carrying Effective holding amount Associates % R000 CorpCom Contravision (Pty) Limited 30 32 Lebowa Advertising (Pty) Limited 50 412 Rent-a-Sign Lebowa (Pty) Limited 50 291 Rent-a-Sign Transit (Pty) Limited 50 523 Total carrying amount (note 12) 1 258 *Ceded as security for bank facilities of subsidiaries. Countries of incorporation of foreign subsidiaries are shown after their names, where not self- evident. The nature of business of the subsidiaries is detailed in Group Structure and Nature of Business and Review of Operations. Information in respect of subsidiaries is set out for all operating subsidiaries. Information in respect of dormant subsidiaries is available from the company secretary.