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    Air Products produces oxygen, nitrogen, argon, hydrogen and carbon dioxide for sale in gaseous form by pipeline under long-term contracts to major industrial users. Air Products also distributes industrial gases and chemicals, together with ancillary equipment, to the merchant market. The other 50% of the ordinary shares is held by Air Products and Chemicals Incorporated, a USA company.

    Air Products South Africa PROPRIETARY Limited(Air Products)

    Air Products has a September year-end and therefore its results for the 12 months ended 31 March 2016 have been included in Remgro’s results for the period under review. Air Products’ contribution to Remgro’s headline earnings for the period under review increased by 23.9% to R275 million (2015: R222 million).

    Revenue for Air Products’ 12 months ended 31 March 2016 increased by 20.4% to R2 612 million (2015: R2 170 million), while the company’s operating profit for the same period increased by 22.5% to R817 million (2015: R667 million). Demand for large tonnage gases remains subdued and under pressure in the steel and mining sectors. Increased demand in the oil refining and petrochemicals sector resulting in new contracted business has benefited the period under review.

    Air Products is the largest manufacturer of industrial gases in Southern Africa. Air Products also imports and distributes a variety of specialty gases and chemical products that are supplied to a wide range of industries, including steel, chemicals, oil refining, resource minerals, glass, pulp and paper, food packaging as well as general manufacturing, fabrication and welding.

    Bulk liquid volumes were slightly below expectations, negatively impacted by reduced activity in mining and metals extraction processes. Demand for packaged gases remains heavily under pressure as a result of depressed manufacturing activity and reduced scrap steel recovery; whilst some increase in demand in the food processing and laser cutting sectors has been experienced.

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    KTH is an established black economic controlled company with a focus on investment banking services, media and strategic investments. Its major investments include Kagiso Media Limited, MMI Holdings Limited and Servest Group Proprietary Limited.

    Kagiso Tiso Holdings PROPRIETARY Limited (KTH)

    KTH is a leading black-owned investment company with a strong and diversified asset portfolio covering the resources, industrial, media, financial services, healthcare, property and information technology sectors.

    KTH’s contribution to Remgro’s headline earnings for the year under review amounted to a loss of R229 million (2015: R108 million). The increased loss was mainly driven by KTH’s net attributable share of negative fair value adjustments on equity investments in MMI Holdings Limited’s convertible preference shares (R285 million), Exxaro Resources Limited (R167 million) and AECI Limited (R99 million).

    Income from equity accounted investments decreased to R347 million (2015: R454 million), with major contributions from its investments in MMI Holdings Limited, Fidelity Bank (Ghana) Limited, Servest Group Proprietary Limited, Idwala Industrial Holdings Proprietary Limited and Mototolo. Net finance costs increased to R409 million (2015: R374 million) mainly due to the interest charge resulting from the R800 million listed bond KTH issued during the year.

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    Subsidiary of Total (France). Total’s business is the refining and marketing of petroleum and petroleum products in South Africa, as well as distribution to neighbouring countries. The company holds a 36% equity interest in National Petroleum Refiners of South Africa Proprietary Limited (Natref).

    Total South Africa PROPRIETARY Limited (Total)

    Total has a December year-end, but its results for the 12 months to 30 June 2016 have been included in Remgro’s results for the year under review. Total’s contribution to Remgro’s headline earnings for the year under review amounted to R291 million (2015: R133 million).

    The results were impacted by unfavourable stock revaluations of R491 million (2015: R1 597 million), as the international oil price decreased from US$61 per barrel, at 30 June 2015, to US$48 per barrel at 30 June 2016.

    Total’s turnover for the 12 months ended 30 June 2016 decreased by 4% to R48 940 million (2015: R51 168 million). The decrease in turnover is mainly due to volumes lost in the mining and commercial sectors.

    The company is intensifying its investments regarding health, safety, environment and quality constraints in line with increased stringent legislation and group requirements at its depots, mining sites, as well as at its service stations. The key focus areas are environmental compliance, transport and construction contractors compliance. On the Logistical operation great emphasis is being placed on technological risk and the required safety equipment to ensure operational excellence. To meet the increased deliverables the size of the Health, Safety, Environmental and Quality management team has been increased by 50% over the last 12 months.

    Natref (in which Total has an interest of 36.4%) experienced stable refining margins during the period under review and delivered a consistent refinery operational performance. It also experienced favourable exchange rate movements boosting the good USA dollar-based refinery margins generated.

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    PGSI holds an interest of 90% in PG Group. The PG Group is South Africa’s leading integrated flat glass business that manufactures, distributes and installs high-performance automotive and building glass products.

    PGSI Limited (PGSI)

    PGSI has a December year-end, but its results for the 12 months ended 30 June 2016 have been included in Remgro’s results for the year under review. PGSI’s contribution to Remgro’s headline earnings for the year under review amounted to R36 million (2015: R30 million).

    PGSI’s turnover for the period under review increased by 6% to R3 958 million (2015: R3 733 million). The group’s normalised operating profit, which excludes the impact of asset impairments, increased from R210 million to R223 million.

    The group’s main operating subsidiary in South Africa, PG Group, manufactures and supplies glass for the building and automotive industries. The building glass businesses reported positive growth in revenues driven by increased domestic sales, in spite of competitive market conditions, as well as strong growth into Africa. The weaker rand has assisted the group’s competitive position in the local market and improved export profitability. Furthermore, improved efficiency and streamlined supply chains have added to the group’s enhanced performance in this sector.

    The market conditions in the automotive businesses remain difficult. Domestic new car sales have declined due to the weak economic climate, low consumer confidence, elevated household debt levels and expectations of future interest rate hikes. While there has been positive growth in export vehicle sales which have also benefited from the weaker rand, the margins are compressed with the Original Equipment Manufacturers (“OE”) benchmarking prices with global competitors who have significantly higher economies of scale. The lower sales in the domestic automotive aftermarket sector during the period were further negatively affected by lower volumes of claims from the insurance industry. The group has responded with a range of affordable solutions that targeted both the uninsured and insured markets, in order to secure a better market share. The manufacturing operations >have shown improvements in yields and cost reductions. Improved efficiencies are being achieved through the automotive supply chain.

    The results for the year were positively impacted by a reduction in finance costs of R20 million, as positive cash flows have reduced debt.

    While the economic climate remains challenging, the group has made good progress in the areas of cost reduction, manufacturing quality and efficiencies. This has established a sound strategic base for future growth. The initiatives to review the group’s structure to reduce costs and improve the service to its customers are well progressed and are showing positive results. The strategic input and technical assistance provided by Saint Gobain is building the group’s capacity for sustainable growth.

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    Wispeco’s main business is the manufacturing and distribution of extruded aluminium profiles used mainly in the building, engineering and durable goods sectors.

    Wispeco Holdings PROPRIETARY Limited (Wispeco)

    Wispeco’s turnover for the year ended 30 June 2016 increased by 28% to R2 105 million (2015: R1 649 million). The growth in turnover resulted from sales volume growth as well as higher selling prices caused by raw material cost increases. The acquisition of PDC (Pressure Die Castings) added R200 million to turnover with the balance being from organic growth. Headline earnings for the year under review increased by 38.5% to R144 million (2015: R104 million). Price competition remains fierce against imports and local competitors.

    A number of exciting projects came to fruition in the past year: The ninth extrusion press was installed and commissioned giving Wispeco the flexibility through additional capacity to meet fast changing market demands. The philosophy of having some excess manufacturing capacity combined with flexible shift systems allows Wispeco to adapt quickly to changes in demand patterns without affecting customers negatively with make-to-order lead times. Another development was the installation and commissioning of the first vertical powder coating plant in Africa. The plant’s capacity and quick colour change technology supports Wispeco’s strategy of selling speed, i.e. minimising lead times.

    Wispeco leads the way in terms of product development and software support for its product range. The Crealco product brand signifies novelty and quality and is gaining stature amongst specifiers and fabricators. The Crealco software solutions are widely used and continuously gaining traction. The FPD (Fenestration Performance Declaration) website in particular is seeing increased traffic as compliance assurance against the new building regulations is increasingly being called for. The widely used U-Solve software is Agrément certified and offers certifiable thermal performance values on Crealco aluminium windows and doors.

    The Crealco product range is widely supported and distributed by many official distributors in Southern Africa. Expansion of the stockist (distributor) network remains a growth focus with some cross-border opportunities being investigated. The acquisition of PDC (effective from 1 July 2015) yielded positive results and continues to lead the group along a path of exploration and implementation of high-tech automation technologies in manufacturing.