Directors' report

The directors have pleasure in presenting the annual financial statements of the company and the group for the 18 months ended 30 June 2007.

Holding company

At the date of this report, the company has no majority shareholder. The largest minority shareholders are Daun & Cie AG (37,1%) and Steinhoff Africa Holdings (Pty) Limited (24,4%). Steinhoff holds a pre-emptive right to acquire Daun & Cie's entire interest in the company.

Nature of business

The group comprises an industrial and a consumer segment. The activities of these segments include fresh and processed meat, maize milling, automotive and leather products, footwear, speciality fibres, bottle resin, automotive components and towelling products. Their activities are dealt with more fully in the annual report.

Financial results

Commentary on the financial results is included in the chairman’s and chief executive officer's report accompanying the annual financial statements.

Capital distribution

The board has declared a final distribution of 3 cents per share, bringing the total distribution for the 18-month period to 17 cents (2005: 12 cents). The distribution cover is approximately 3 times (2005: 3,8 times). The policy of the group is to declare distributions annually after the year-end results have been finalised.

Share capital and share premium

The authorised share capital of the company remained unchanged at 1 200 000 000 ordinary shares of R0,20 each.

1,2 million new ordinary shares of R0,20 each were issued as partial consideration for the acquisition of Caravelle Automotive Holdings (Pty) Ltd.

The unissued shares are under the control of the directors. This resolution is subject to renewal by ordinary resolution at the following annual general meeting.

Directorate

The directors of the company for the period ended 30 June 2007 and at the date of the report are set out below:

Name	Position
C E Daun	Non-executive chairman
P C T Schouten	Chief executive officer
J P Haveman	Chief financial officer
M J Jooste	Non-executive director
D M van der Merwe	Non-executive director
F Möller	Non-executive director
J B Magwaza	Independent, non-executive director
I N Mkhari	Independent, non-executive director
S H Nomvete	Independent, non-executive director

Directors retiring by rotation are Messrs P C T Schouten, J B Magwaza and S H Nomvete as well as Ms I N Mkhari. These directors are all eligible and offer themselves for re-election. Details of each of the retiring directors are set out in this annual report.

Company secretary

M Balladon

The company secretary's business and postal address is set out inside the back cover of this annual report.

Directors' shareholding

At 30 June 2007, the present directors of the company held direct and indirect interests in 189 276 547 shares or 44,6% (2005: 228 061 576 shares or 54,0%) of the company's issued ordinary shares. Further details are set out in note 33 to the financial statements.

No contracts were entered into during the year, other than already disclosed in this annual report, in which directors and officers of the company had an interest and which significantly affected the affairs and business of the company or any of its subsidiaries.

Corporate governance

The group complies with the JSE Limited Listings Requirements and in all material respects with the Code of Corporate Practice and Conduct published in the King II Report on Corporate Governance. For more information, please refer to the corporate governance report.

Subsidiary companies and joint ventures

The principal subsidiaries and joint ventures of the group are reflected in notes 5 and 6. The aggregate net profits of consolidated subsidiaries amount to R276,1 million (2005: R234,0 million). The aggregate net losses amount to R20,4 million (2005: R2,6 million).

Borrowing facilities and limits

The group's borrowing facilities and usage thereof are set out in note 14. In terms of the articles of association of the company and its subsidiaries, there is no limitation of borrowing powers.

Special resolutions

During the period, a special resolution was passed to amend the articles of association to allow for a reduction of share premium by the directors or in general meeting, which will be used to make distributions to shareholders in future. No material special resolutions were passed by subsidiaries during the year.

Subsequent events

No material change has taken place in the affairs of the group between the end of the financial period and the date of this report.

Responsibility of directors

The directors are responsible for the preparation and integrity of the annual financial statements of the company and group, as well as the other information included in this report. The external auditors, Deloitte & Touche, are responsible for independently auditing and reporting on the financial statements.

The directors, supported by the audit committee, are of the opinion, based on the information and explanations given by management, that the group's internal accounting controls are adequate, and the financial records may be relied upon for preparing the financial statements and maintaining accountability for assets and liabilities.

The internal controls are designed to provide an acceptable, but not absolute, level of assurance that assets are safeguarded and that transactions are executed and recorded in accordance with generally accepted business practices and the group's policies and procedures. These controls are implemented by trained and skilled personnel with appropriate segregation of duties, and are monitored by management. Nothing has come to the attention of the directors to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the period under review.

The financial statements set out in this report have been prepared by management in accordance with IFRS and incorporate responsible disclosure based on appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

The directors have a reasonable expectation that the group has adequate resources to continue in operation for the foreseeable future and the annual financial statements have therefore been prepared on a going concern basis.

Approval of annual financial statements

The annual financial statements for the period ended 30 June 2007,  were approved by the board of directors and are signed on its behalf by

C E Daun Non-executive chairman	P C T Schouten Chief executive officer

7 September 2007