Dear Shareholder

The Board has pleasure in reporting on the activities and financial results for the year under review.

NATURE OF ACTIVITIES

The Company is an investment holding company. Cash income is derived mainly from dividends and interest. The consolidated annual financial statements of the Company and its subsidiaries also incorporate the equity accounted attributable income of associated companies and joint ventures. The Group’s interests consist mainly of investments in food, liquor and home care; banking; healthcare; insurance; industrial; infrastructure as well as media and sport.

Results

INVESTMENT ACTIVITIES

The most important investment activities during the year under review were as follows:

RCL Foods Limited (RCL Foods)

During the previous financial year RCL Foods acquired an effective 64.2% interest in New Foodcorp Holdings Proprietary Limited (Foodcorp). During the year under review RCL Foods acquired the remaining 35.8% interest in Foodcorp in two separate transactions from Foodcorp management and Capitau Investment Advisors Proprietary Limited for a total cash consideration of R520.7 million.

During January 2014 RCL Foods also acquired 100% of the shares in TSB Sugar RSA Proprietary Limited and TSB International Proprietary Limited (collectively referred to as TSB) from Remgro for a total purchase consideration of R4.0 billion. The purchase consideration was settled on 17 January 2014 through the issue of 230.9 million new RCL Foods shares to Remgro at a price of R17.32 per share.

As part of the announcement referred to above RCL Foods also announced its intention to restructure its existing BEE notional vendor financed shareholding, as well as implement TSB’s BEE scheme at the RCL Foods shareholding level. RCL Foods further also proposed a capital raising in the amount of R2.5 billion through a combination of a pro rata offer to existing minority shareholders (excluding Remgro and RCL Foods’ existing BEE parties) and a specific issue of new shares via a placement to qualifying investors.

RCL Foods’ shareholders approved the BEE transactions and capital raising referred to above on 16 January 2014. The results of the pro rata offer was announced on 5 February 2014, indicating that R790 million was raised. On 19 February 2014 RCL Foods announced that the placement of new shares to raise the balance of the R2.5 billion referred to above has been delayed, subject to market conditions, its cash/gearing situation as well as the anticipated timing of investment cash flows.

The TSB BEE transaction and the restructuring of RCL Foods’ existing BEE shareholding were implemented on 3 April 2014 and 26 May 2014 respectively. As part of these transactions RCL Foods issued an additional 19.6 million new RCL Foods shares.

On 30 June 2014, Remgro’s effective interest in RCL Foods was 77.7% (2013: 75.9%).

PG Group of Companies (PGSI)

PGSI is the foreign holding company of the Plate Glass group. During the year under review, in participation of two rights offers, Remgro invested a further R47.1 million in PGSI.

During June 2009 Remgro invested R129.6 million in PGSI cumulative, redeemable preference shares. The preference shares had a term of five years. Together with its investment in the PGSI preference shares, Remgro also acquired the right to use the proceeds on redemption to subscribe for new ordinary shares in PGSI. During June 2014 the preference shares were redeemed and Remgro used the proceeds to subscribe for 8.3 million new ordinary shares in PGSI.

The above transactions increased Remgro’s interest in PGSI to 37.7% (2013: 25.3%).

Grindrod Limited (Grindrod)

During May 2014 Grindrod issued 96 million new Grindrod shares through an accelerated bookbuild offering to quali­fying investors, thereby raising an additional R2.4 billion of capital. As part of this process, Remgro acquired a further 26.1 million shares in Grindrod for a total amount of R652 million, or R25.00 per share.

After the completion of the Grindrod bookbuild, Remgro and Grindrod Investments Proprietary Limited, who was also allocated Grindrod shares in terms of the bookbuild, offered qualifying Grindrod shareholders the opportunity to participate in a clawback offer, also at a price of R25.00 per Grindrod share. In terms of the clawback offer Remgro disposed of 4.0 million of the shares acquired in terms of the bookbuild for a total consideration of R101.1 million.

During June 2014 Grindrod issued a further 64 million shares to a consortium of strategic black investors. This issue of shares, as well as the bookbuild offering referred to above, reduced Remgro’s effective interest in Grindrod to 22.6% (2013: 25.0%).

The CIV group

Previously Remgro’s interests in the CIV group consisted of its investments in Dark Fibre Africa Proprietary Limited (Dark Fibre Africa), CIV Fibre Network Solutions Proprietary Limited (CIV FNS), CIE Telecommunica-tions Proprietary Limited (CIE Telecommunications), CIV Power Proprietary Limited (CIV Power), as well as Central Lake Trading No. 77 Proprietary Limited (Central Lake).

On 1 April 2014 the CIV group was restructured in order to simplify its holding structure from multiple entry points to a single entry point in order to align the interests of all shareholders. Consequently Remgro exchanged its interests in Dark Fibre Africa, CIV FNS, CIE Telecommunications, CIV Power and Central Lake for a direct investment in Community Investment Ventures Holdings Proprietary Limited (CIVH). The restructuring did not change Remgro’s interest in Dark Fibre Africa materially and accordingly the earnings contribution of CIVH in the future will be comparable with that of the combined contribution of the investee companies prior to the restructuring.

As part of the restructuring Remgro invested R67.3 million in CIVH and on 30 June 2014 Remgro’s effective interest in CIVH was 50.7% (2013: effective interest in the CIV group of 43.8%). For accounting purposes the investment in CIVH is classified as a joint venture.

Distell Group Limited (Distell)

As part of the restructuring of its BEE transaction and in order to maintain its current BEE rating, Distell issued 15.0 million new ordinary shares to BEE shareholders during January 2014. This issue of shares resulted in Remgro’s total interest in Distell, which includes the indirect interest held through Capevin Holdings, to dilute from 33.4% to 31.0%.

ElementOne Limited (ElementOne)

On 29 November 2013, a consortium led by Rand Merchant Bank and Remgro, through a new special purpose vehicle (Main Street 1132 Proprietary Limited, or Bidco) made a firm offer to acquire 100% of ElementOne. As consideration for their shares in the company, ElementOne shareholders were offered R22.507 per ElementOne share, to be settled through the payment of a combination of cash and shares in Caxton and CTP Publishers and Printers Limited (Caxton).

On 7 February 2014 it was announced that all conditions precedent applicable to the transaction were fulfilled and on 25 February 2014 the transaction was implemented. Remgro did not provide any funding for the transaction,but following the transaction and the broader restructuring of the Caxton control structure, it has effectively exchanged its 1.8% direct interest for a 6.1% indirect interest in Caxton.

Milestone China Opportunities Fund III (Milestone III)

During the year under review Remgro invested a further $25.2 million in Milestone III, thereby increasing its cumulative investment to $53.4 million. As at 30 June 2014 the remaining commitment to Milestone III amounted to $46.6 million.

Other smaller investments, amounting to R77 million, were made during the year under review in, inter alia, Milestone China Opportunities Fund II and Premier Team Holdings Limited.

There were no significant transactions subsequent to 30 June 2014.

On 30 June 2014, approximately 40% (R425 million) of the available offshore cash at the centre was invested in money market funds which are not classified as cash and cash equivalents on the statement of financial position. Refer to note 14 to the annual financial statements for further details.

Cash resources at the centre

The Company’s cash resources at 30 June 2014 were as follows:

GROUP FINANCIAL REVIEW

Changes in accounting policy

With effect from 1 July 2013 Remgro adopted IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrange­ments and the revised IAS 19: Employee Benefits. These accounting standards have to be applied retrospectively in terms of their transitional provisions and accordingly the reported results of the comparative year presented were restated, with the cumulative effect as at 1 July 2012 being accounted for as an adjustment to opening equity.

IFRS 10 and IFRS 11

These new accounting standards broaden the definition of “control” and consequently “joint control” and accordingly all rights in relation to investee companies must be considered in order to determine whether the investment should be classified as a subsidiary, associate or joint venture.

Remgro reclassified its investments in Distell and the CIV group as joint ventures, while previously they were accounted for as associates. The change in classi­fication had no impact on the Group’s measurement of the investments as the equity method is used to account for both associates and joint ventures. In the case of TSB Sugar Holdings Proprietary Limited (TSB) certain of its investee companies that were previously classified as joint ventures (and accordingly equity accounted) were reclassified as subsidiaries. Kagiso Tiso Holdings Proprietary Limited also reclassified certain of its investments previously accounted for at fair value, as associates. These include the investment in MMI Holdings Limited that was previously accounted for at fair value through profit and loss.

IAS 19

The revised IAS 19 introduced significant changes in the accounting treatment for defined benefit post retirement plans. The most significant change of the amended IAS 19 relates to the elimination of the option to defer the recognition of past service costs and actuarial gains and losses. These remeasurements are now required to be accounted for in full in the income statement and in other comprehensive income, respectively, in the period in which they arise. The accounting standard also replaced interest cost and expected return on plan assets with a net interest amount that is equal to the discount rate used for determining retirement benefit obligations.

The application of the revised IAS 19 affected Remgro and its subsidiaries, RCL Foods and TSB, as well as certain significant associates like FirstRand Limited, RMB Holdings Limited and Mediclinic International Limited (Mediclinic).

Refer to note 11 for full detail on the restatement of comparative numbers.

Statement of financial position

The analysis of ”Equity employed” and of ”Source of headline earnings” below reflects the sectors into which the Group’s investments have been classified. No adjustment has been made where investments are active mainly in one sector but also have interests in other sectors.

Income statement

SHARE SCHEMES

Remgro currently has one long-term incentive plan, i.e. the Remgro Equity Settled Share Appreciation Right Scheme (the SAR Scheme). In terms of the SAR Scheme, participants are offered Remgro ordinary shares to the value of the appreciation of their rights to a specified number of Remgro ordinary shares that can be exercised at different intervals but before the expiry of seven years from date of grant.

The earliest intervals at which the share appreciation rights are exercisable are as follows:

• One-third after the third anniversary of the grant date
• Two-thirds after the fourth anniversary of the grant date
• The remainder after the fifth anniversary of the grant date

Refer to note 25 to the annual financial statements for full details on the SAR Scheme.

TREASURY SHARES

At 30 June 2013, 3 433 101 Remgro ordinary shares (0.7%) were held as treasury shares by a wholly owned subsidiary company of Remgro. As previously reported, these shares were acquired for the purpose of hedging Remgro’s share incentive scheme.

During the year under review no Remgro ordinary shares were repurchased, while 472 335 Remgro ordi­nary shares were utilised to settle Remgro’s obligation towards scheme participants who exercised the rights granted to them.

At 30 June 2014, 2 960 766 Remgro ordinary shares (0.6%) were held as treasury shares.

PRINCIPAL SHAREHOLDER

Rembrandt Trust Proprietary Limited (Rembrandt Trust) holds all the issued unlisted B ordinary shares of the Company and is entitled to 42.61% (2013: 42.64%) of the total votes.

An analysis of the shareholders is available here.

SUBSIDIARY COMPANIES AND INVESTMENTS

Particulars of subsidiary companies, equity accounted investments and other investments are disclosed in Annexures A and B.

DIRECTORS

The names of the directors appear here.

Mr  J W Dreyer has retired as an executive director from the Board of Remgro with effect from 31 December 2013.

The Board wishes to thank him for his valuable contribution over many years.

In terms of the provision of the Memorandum of Incorporation, Messrs L Crouse, P K Harris, N P Mageza, P J Moleketi and Dr E de la H Hertzog retire from the Board by rotation. These directors are eligible and offer them­selves for re-election.

DIRECTORS’ INTERESTS

At 30 June 2014, the aggregate of the direct and indirect interests of the directors and their associates in the issued ordinary share capital of the Company amounted to 2.52% (2013: 2.56%).

Mr  J P Rupert is a director of Rembrandt Trust which owns all the issued unlisted B ordinary shares.

An analysis of directors’ interests in the issued capital of the Company click here.

DIRECTORS’ EMOLUMENTS

The total directors’ fees for services rendered as directors during the past financial year amounted to R3.5 million (2013: R3.8 million).

ACQUISITION OF SHARES OF THE COMPANY

It is recommended that a general authority be granted to the Board to acquire, should circumstances warrant it, the Company’s own shares and to approve the acquisition of shares in the Company by any of its subsidiaries, subject to the provisions of the Companies Act (No. 71 of 2008), as amended, and the Listings Require­ments of the JSE Limited.

A special resolution to grant this general authority to the Board is incorporated in the notice of the Annual General Meeting.

SPECIAL RESOLUTIONS

No special resolutions have been passed by the Company’s major subsidiaries, the nature of which might be significant in respect of the state of affairs of the Group.

DIVIDENDS

The final ordinary dividend per share was determined at 233 cents (2013: 201 cents). Total ordinary dividends per share in respect of the year to 30 June 2014 therefore amount to 389 cents (2013: 346 cents).

DECLARATION OF CASH DIVIDEND

Secondary tax on companies (STC) and dividend tax

With effect from 1 April 2012, STC was replaced with a dividend tax. In terms of the new legislation, companies will be allowed to apply their available STC credits against future dividends declared for a period of three years from the effective date of dividend tax.

Declaration of Dividend No. 28

Notice is hereby given that a final gross dividend of 233 cents (2013: 201 cents) per share has been declared out of income reserves in respect of both the ordinary shares of no par value and the unlisted B ordinary shares of no par value, for the year ended 30 June 2014.

The total dividend per share for the year ended 30 June 2014 therefore amounts to 389 cents, compared to 346 cents for the year ended 30 June 2013.

The Company will be utilising STC credits amounting to 233 cents per ordinary share and 233 cents per unlisted B ordinary share. As a result there will be no dividend tax deducted from the final gross dividend for any Remgro shareholder.

The issued share capital at the declaration date is 481 106 370 ordinary shares and 35 506 352 B ordinary shares. The income tax number of the Company is 9500-124-71-5.

Payment

The final dividend is payable on Monday, 17 November 2014, to shareholders of the Company registered at the close of business on Friday, 14 November 2014.

Shareholders may not dematerialise or rematerialise their holdings of ordinary shares between Monday, 10 November 2014, and Friday, 14 November 2014, both days inclusive.

In terms of the Company’s Memorandum of Incorpora­tion, dividends will only be transferred electronically to the bank accounts of shareholders, while dividend cheques will no longer be mailed. If you have in the past received dividend cheques, please contact the Transfer Secretaries to provide them with confirmation of your banking details. In the instance where shareholders do not provide the Transfer Secretaries with their banking details, the dividend will not be forfeited but will be marked as “unclaimed” in the share register until the shareholder provides the Transfer Secretaries with the relevant banking details for pay out.

SECRETARY

The name and address of the Company Secretary appears here.

APPROVAL

The complete annual financial statements, as well as the summary annual financial statements have been approved by the Board.

Signed on behalf of the Board of Directors.