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ANNUAL REPORT 2009
Profile
BSi Steel Limited group of companies (“BSi Steel” or “BSi” or “BSI” OR “the Company” or “the Group”), operates in the steel and
associated industries with strategically located operations in South Africa, the Democratic Republic of Congo (DRC), Zimbabwe
and Zambia servicing the southern African markets.


The operations are grouped into four distinct activities:-


    Processing: providing a primary processing service to the BSi operational businesses;

    Stockists: providing a just in time (JIT) service to localized clients;

    Bulk Sales: bulk sales to larger end users; and

    Exports



The South African and Zimbabwean operations focus on the manufacturing and construction industries, whilst the Zambian and
DRC are largely focused towards mining.


The main products that the group sells are:-


    Flat products (hot rolled, cold rolled, galvanized and plate);

    Long products (light, medium and heavy mill sections, tubing) and

    Structural steel sections




 2
Contents
                                                  PAGE


Administration                                     4


Financial Highlights                               5


Directorate                                        6


Chairman‟s Report                                  8


Chief Executive Officer‟s Report                   11


Human Capital Sustainability Report                14


Corporate Governance Report                        17


Remuneration Report                                22


Directors Responsibility and Approval Statement    26


Secretarial Certification                          26


Independent Auditors Report                        27


Directors‟ Report                                  28


Balance Sheets                                     30


Income Statements                                  31


Statements of Changes in Equity                    32


Cash Flow Statements                               34


Notes to the Annual Financial Statements           35


Shareholders Analysis                              82


Notice of Annual General Meeting                   83


Form of Proxy                                      87




 3
Administration


                      Company Secretary and registered office
                                S Hackett, B.Com.
                        46 Eden Park Drive, Murrayfield Park
                         Mkondeni, Pietermaritzburg, 3201
                         PO Box 101096, Scottsville, 3209
                            Telephone: (033) 846 2208
                             Facsimile: (033) 346 0870


                               Transfer Secretaries
                    Computershare Investor Services (Pty) Limited
                       (Registration number 2004/003647/07)
                          Ground Floor, 70 Marshall Street
                                Johannesburg, 2001
                         PO Box 61051, Marshalltown, 2107
                            Telephone: (011) 370 5000
                             Facsimile: (011) 688 5210

                                  Designated Adviser
                                Vunani Corporate Finance
                 Trading as a division of Vunani Capital (Proprietary) Limited
                        (Registration number 1998/001469/07)
                                Vunani House Block C
                     Athol Ridge Office Park, 151 Katherine Street
                               Sandown, Sandton, 2196
                           PO Box 652419, Benmore, 2010
                              Telephone: (011) 263 9500
                              Facsimile: (011) 784 1989


                                        Attorneys
                                Venn Nemeth & Hart Inc.
                         (Registration number 1994/003593/21)
                              281 Pietermaritzburg Street,
                                 Pietermaritzburg, 3201
                          PO Box 600, Pietermaritzburg, 3200
                              Telephone: (033) 355 3100
                               Facsimile: (033) 394 1947


                         Auditors and reporting accountants
                                 Deloitte and Touche
                              (Practice Number 901482)
                              81 Hoosen Haffejee Street,
                                Pietermaritzburg, 3201
                          PO Box 365, Pietermaritzburg, 3200
                              Telephone: (033) 345 0271
                              Facsimile: (033) 345 0285


                                  Commercial Banker
                                     Nedbank Limited
                         (Registration number 1951/000009/06)
                         90 Braam Fischer Road, Durban, 4001
                          PO Box 10267, Marine Parade, 4000
                              Telephone: (031) 364 1111
                               Facsimile: (031) 364 2479




4
 Financial Highlights

                 EBITDA                                     REVENUE




              0.1%                                       29.7%
        EARNINGS PER SHARE                    HEADLINE EARNINGS PER SHARE




              7.1%                                        6.2%

The group’s revenue has grown from R1 432 million in 2008 to R1 857 million in 2009




 5
Directorate
William Battershill – Executive Director: Group Chairman (48)


William left school aged 17 and commenced his working career with his father, John Battershill, at his manufacturing and

agricultural supply company in Zimbabwe. He immigrated to RSA in 1981 and worked for Way Industries, a manufacturing

company in Qwa Qwa, where he was appointed as a Director at the age of 23. In May 1985, William resigned from Way Industries

and started Discount Steel. This was the founding company from which BSi was spawned. William‟s strengths are his broad based

understanding of business and his ability to recognize and convert business opportunities.




Grant Mackenzie – (MBChB) Executive Director: Group CEO (44)


Grant started his working career at a subsidiary of Anglovaal in 1994, after a 5 year stint as a medical doctor (UCT 1989). In 1995

he moved to Lusaka, Zambia, where he was instrumental in starting Discount Steel Zambia in 1997. He returned to South Africa in

2006 as the Managing Director of the Exports Division, and continued to expand the exports operations into overland Africa. Grant

was appointed as the Chief Operating Officer of BSi in May 2007, Joint CEO in April 2008 and Group CEO in April 2009.



James Waller – (BCompt Hons) Executive Director: Group CFO (45)


James completed his articles with KPMG Inc. before moving into commerce. He worked as Financial Director of Positron, Purdon

Murdock and Waller, ATM (Pty) Limited and Terrafin Management Services (Pty) Limited. In 2001 he was appointed as Financial

Director at BSi. James comes with a wealth of experience gained in the industry and has been instrumental in managing the

group‟s growth.



Ross Teichmann – Executive Director: BSi STEEL Gauteng (44)


Ross started a fencing business in Pietermaritzburg in 1987. In 1990 he joined McNaughtans where he ran the Empangeni branch

for 18 months and then moved back to Durban as the Sales Manager for the region. Ross joined Discount Steel in 1991 as a Sales

Representative and was responsible for the Durban region for 3 years. He relocated to Johannesburg in 1995 to start Garrison

Steel. Ross has been with BSi for the last 18 years and has contributed to the success of the steel business through his extensive

experience of the steel industry. Ross was appointed as the Executive Director of the SA based BSi Steel Stockists in April 2008.



Craig Parry – Executive Director: BSi STEEL Bulk Sales (40)


Craig commenced his working career at Nampak Limited as the Production Planner for laminated and coated products. Craig

joined Discount Steel in 1992 taking responsibility of the trading division of the group. He has now been with the group for 16 years

and has a wealth of experience in the steel industry. Craig was appointed as the Executive Director of BSi Steel Bulk Sales in April

2008.



 6
Directorate               (continued)

Nigel Payne – (B.Com (Hons), CA (SA), MBL) Independent Non-Executive Director (49)


Joined the board in 2007. Nigel is an experienced independent non-executive director who currently serves on the boards of a

number of other listed companies, namely the JSE Limited, the Bidvest Group Limited, the Mr Price Group Limited and Glenrand

MIB Limited, where he generally chairs the audit and/or risk committees. He also serves on the boards of some significant non-

listed entities. Nigel is a member of the King Committee on Corporate Governance.



Dr Richard Lewis – (B.A., LL.B., MBA., D.JURIS) Alternate Non-Executive Director (50)


Appointed 12 May 2008. Richard is the principal associate of Richard Lewis, Smith & Associates CC, a firm specialising in

strategic planning, human resources, and leadership development. Richard completed his BA, LLB degrees at the University of

Natal where after he became an advisor with the Natal Chamber of Industries for two years. He then went to live in Germany to

lecture at the Euro-Akademie, Cologne. Whilst there, he completed an MBA degree and a Doctorate in Law. Primarily a strategist,

Richard is also specialised in corporate governance. He is a member of the SA Board of Personnel Practitioners, and was also

past „Director: South Africa‟, of the German SA Trade Organization. He is a member of the SA Society for Labour Law and the Vice

Chairperson of the Wildlife Society of SA with the Strategy and Corporate Governance portfolio responsibility. Richard is a non-

executive Director of Wynleigh International (a quality compliance management systems company) and of The Evolution

Consulting Group.



Butana Khoza –(B.Com, PGDA, CA(SA)) Independent Non-Executive Director (42)


Appointed 13 June 2008. Butana qualified as chartered accountant in 1994 and has worked in various capacities in the financial

services sector over the last 13 years, first within the Southern Life group and subsequently with African Harvest. He was one of

the founding members of African Harvest‟s investment banking subsidiary and a member of the team that led to a management

buyout of African Harvest Limited‟s operating businesses that culminated in the establishment of the diversified financial services

group Vunani Limited. He is an executive director of Vunani Limited, responsible for the group asset management cluster.



Mark Anderson - (B.Com (Hons),CA (SA)) Alternate Independent Non-Executive Director (48)


Appointed 13 May 2008. Mark has been involved in corporate finance activities since 1991. Mark joined African Harvest Capital in

1998 and was involved in a management buyout in 2004 which led to the formation of Vunani. He has headed up Vunani‟s

investment activities since 2004. Mark is a Director of Vunani Limited, a company listed on the JSE‟s AltX.




 7
Chairman’s Report
Performance Overview

Revenue                      -        Up        29.7%

Attributable earnings        -        Up        1.0% to R100. 3m

Earnings per share           -        Down      7.1%

HEPS                         -        Down      6.2%

Net tangible asset value     -        Up        41.0% to R397. 7m


The last 12 months ending March 2009 are recognised as the most volatile period in the history of the steel industry; from
extraordinary demand and unprecedented profits from April to August 2008, the world saw a dramatic slump in volumes and
pricing, causing massive losses by steel mills and distributors alike.

BSi Steel managed these difficult times by cutting back on inventories, reducing costs and focusing on ex-stock trade. Our stock
replenishment program was aimed at „same month sales‟, thereby ameliorating inventory losses on the back of ongoing steel price
drops. Nevertheless, the H2 was characterised by severe stock losses and low trade volumes. Given the extraordinary
circumstances, I feel that BSi posted an acceptable profit for the period.


International Steel Industry Outlook

The only certainty at this juncture is uncertainty; volatility will prevail in world markets for at least 12 months. The period will be
punctuated by a few false-starts, where pricing will increase, only to slump back within 2 to 5 weeks. Severe production cut backs
have already begun to take effect – up to 75% in some regions. Prices seem to have stabilised towards the middle of May, with
some products edging up a few percentage points. It is likely that there will be some short-term shortages in certain
sectors/products as mills try to balance production with demand. An ongoing reduction in price seems unlikely at this stage, as
most mills are losing money and would sooner cut production than sell at a loss.


Prospects for the year ahead

Despite the prevailing sense of gloom and doom, we believe these tough times present BSi with some excellent opportunities. Our
new Klipriver operation now provides us with a much needed platform to grow the business for many years, with relatively low
future CAPEX requirements.


Our 5-point growth program remains unchanged, albeit with a shift of emphasis from last year:



1. Organic Growth:

     Remains central to our growth program.
     Relative to other growth initiatives, it provides us with the lowest risk and highest return.


2. New Products and Services:

     Are extensions of organic growth.
     Adding new products to our marketing platform is relatively easy to do. This includes ongoing growth in structural sections
     and plate, with the addition of corrugated roofing, slit strip and blanks this year.
     The processing plant bears special mention; as we intend to increase our value proposition through increasing the capacity
     and variety of our processing equipment. We have now installed our RBI cut-to-length line, the refurbished slitting line and
     batch blanking line.




 8
Chairman’s Report                            (continued)


Our 3 new roofing lines will be installed in June/July, followed by our new 2000 x 6mm cut-to-length line in Sept/Oct 2009. This
additional capacity and new processes will give us the tools to support an ongoing growth campaign, both in existing and new
lines.


3. Geographic:

     We continue to drive geographic growth, aiming at increasing our US Dollar based earnings.
     Our new office in Mauritius offers us a platform to grow our USD balance sheet.
                                                  st
     We opened an operation in Zimbabwe on 1 May and will continue to increase our direct export trading markets.


4. Acquisitions:

     The climate for successful acquisitions is upon us and is likely to prevail for at least 12 months.
     Price expectations will be moderated significantly from previous unrealistic highs.
     We will target companies offering us geographic diversity, a synergistic fit, good management and a proven profit record.
     We will pay special attention to how such companies have performed in the tough conditions.


5. BBBEE:

     Opportunities will kick in this year, now we are officially compliant (level 7).
     It is our intention to improve our rating over the next 3 to 4 years.


     This growth drive will be for new business, where we were previously unable to quote BBBEE sensitive buyers and markets.



Directorate

The following changes were made to the Board:



              Name                                                              Change



 W L Battershill                      01 April 2009: Steps down as Joint CEO, remains as Group Chairman



 G D G Mackenzie                      01 April 2009: Takes over as Group CEO, was Joint CEO



The remaining Board members retain their positions.



Note of appreciation

It is in tough times that the true mettle of a man is tested; I can say without reservation that the Directors and staff of BSi have
resolutely stuck to their posts whilst the business world as we know it deteriorated before our eyes.

I convey my heartfelt and sincere appreciation to each and every one of you for your unstinting efforts; you are an inspiration to me
and pleasure to work with.

To our clients; I thank you for your support, especially during our move, where service levels were not up to our desired standards.
We remain committed to improving our service and quality to ensure we remain your supplier of choice.




 9
Chairman’s Report                       (continued)


To the shareholders, a special thanks for standing by us through these turbulent times. We have promised you long-term growth
and we will deliver; be assured of this. Your investment remains in the hands of a capable, dedicated and ambitious team.


We remain committed to building a centre of excellence in the steel industry. These tough times will not dull our blade, merely
reinforce our will and serve to hone our skills.


Mine‟s a Hansa,

Love Will




W L Battershill
CHAIRMAN




10
Chief Executive Officer’s Report

Introduction

BSI Steel Limited is a distributor of primary steel products within South Africa and the Southern African region. We play a buying,
importing, coil processing, stocking, distribution, financing and exporting role within the value chain.



Our business is divided into three segments:

1.   Bulk sales

2.   RSA Stockists

3.   Exports




These segments are under-pinned by our growing investment in the primary processing of steel coils . This value-added service
allows us to access more customers and therefore more volume.




Bulk Sales

This division based in Pietermaritzburg acts as a wholesaler and volume trader of steel to larger end-users right across South
Africa. Material is procured from both local and international sources and offers an alternative to mill supply to our customers.




RSA Stockists

This division comprises two stocking operations, BSI Gauteng based in Klipriver (south of Johannesburg) and BSI KZN in
Pietermaritzburg in Kwazulu Natal. These merchants typically offer a just-in-time service to our customers delivering same or next
day, with our own fleet of trucks. Emphasis is on high service levels and customer loyalty. Product diversification is an important
theme of our growth strategy for these businesses, particularly borne out of our increasing capacity from our processing division.




Exports

We divide this segment into stockists and export trading:

 The stockists are based in Zambia (Lusaka and Kitwe) and the Democratic Republic of Congo, (Lubumbashi and Kolwezi), and
recently in Zimbabwe (Harare and Bulawayo). These businesses provide a JIT service to their customers and source from SA and
regional mills and occasionally from blue-water imports. Their customer mix is both cash sale walk-in trade as well corporate
customers requiring credit. The DRC and Kitwe customer base is predominantly mining, while Lusaka is construction,
manufacturing and agribusiness. BSI Klipriver provides the logistics service in getting the steel consolidated and shipped to the
African operations.

The export trading division handles bulk sales of steel for the larger users within overland Africa, including Namibia, Botswana,
Zimbabwe, Zambia, DRC, Malawi and Mozambique. They complement the stocking operations and typically have a different client
mix and handle a much wider range of products. Each region has specialist traders concentrating on those markets and regular
trips into Africa are made by these traders to maintain customer loyalty and keep abreast of developments. The new office in
Mauritius plays a sourcing role for our African operations, buying from South Africa, regional African mills as well as blue-water
imports. It will also look for export opportunities into the Indian Ocean Island markets in due course.




11
Chief Executive Officer’s Report                                         (continued)

The year in review

The year April 2008 to March 2009 can be divided into 2 markedly different trading environments. The first half was characterised
by unprecedented steel price increases and a huge surge in apparent demand. This demand was not able to be met by the mills
resulting in significant rationing of product by the steel mills.

The second half sparked by the global financial crisis saw steel prices collapse and apparent demand drop severely as a result of
aggressive de-stocking right through the steel supply chain. Sectors most severely affected were automotive, mining, white goods,
housing and certain sub-sectors within manufacturing. Only those manufacturers exposed to the government infrastructural spend
continued relatively unaffected.

While BSI Steel endeavoured to maximise the favourable trading conditions between April and August 2008, the severe supply
constraints from the mills prevented us from meeting customer demand to our satisfaction. While this was mitigated by imports and
regional buying, this did result in some lost opportunity. Nevertheless we did manage to post a record after tax profit for the period
                 th
to September 30 of R127m.

When world steel prices started decreasing in September 2008, the local mills started cutting prices in unison and this continued
for the remainder of our financial year until March 2009. This resulted in BSI incurring significant and successive stock write downs
in the second half of the financial year. In addition due to severe industry-wide de-stocking, our margins came under pressure as
the stockists competed with one another to dump depreciating stock. Stock in fact became a liability – the more stock one carried
at month-end, the more one wrote down. The de-stocking exercise took longer than projected due to the lag in the mill pipeline and
this hit us and our competitors further, the material arriving at historically high prices further aggravating the write-downs and
depressing margins.

We have thus had a very interesting and challenging year from a trading point of view! We remain, however, a company committed
to sustainable growth, and are continually looking to improve our product offering and our geographic footprint.

During the frenetic trading activity of F2009, we managed three significant projects that will give us the platform to continue
growing sustainably in South Africa and Africa.



1.   We relocated all our Gauteng-based operations to a purpose-built 23 ha site in the south of Johannesburg. This comprises a
     new office block for all our employees, 20,000 square metres of warehousing, housing both our stock and our expanding
     processing facility

2.   We moved our cut to length & blanking line and installed our refurbished slitting line within the new facility. We are now
     gearing up to install our second CTL line in August 2009.

3.   We did a full new ERP implementation across the group which will give us the business intelligence to properly manage our
     business and drive our growth strategy. In addition, all our African operations are being linked to our single instance via VSAT
     allowing greater control, rationalising staff functions and costs and improving synergies with the rest of the group.



The distracting nature of these projects cannot be under-estimated and we probably lost opportunity and some efficiencies as a
result. However, they are now completed and we can now look forward to the competitive edge they will give us.




Broad Based Black Economic Empowerment

We remain fully committed to BBBEE and see it as an important mechanism for creating opportunity for the previously
disadvantaged sectors of our society. We also see it as an opportunity and we will endeavour to improve on our level 7 score,
targeting level 4 within 4 years.




12
Chief Executive Officer’s Report                                           (continued)

Health and safety

With our move to our purpose-built processing and distribution centre in Klipriver, we have a world class facility that is staff-friendly,
ergonomic and has huge potential for expansion. It also allows us to expand on our vision of excellence, quality and safety.

Health and safety in particular is an absolute priority at BSI Steel at all our branches and sites.




Word of thanks

I‟d like to thank the staff of BSI for the way you have remained positive in what have been very difficult times both from a business
point of view, but also I am sure, in your own personal situations. Recessions are like winter – they are harsh and severe and
tough to live through; but there is also a sense of renewal that comes from the die-off, the old leaves making way for the new. All
things in life are cyclical and economies are no different. Things will get better and we need to prepare ourselves for the next
growth cycle.

Thank you to our shareholders who have also been through very challenging times. Your support has been much appreciated and
I can assure you that BSI Steel remains a driving force within the SA and SADC steel fraternity. Your executive and management
team remain committed to growing this business sustainably and profitably.

Lastly, thank you to our customers. We have had a very volatile year with much change and thankfully the big projects are behind
us. We will continue to expand our product offering and strive to exceed your expectations of service and quality.



Yours,




G D G Mackenzie
GROUP CEO




13
Human Capital Sustainability Report
Introduction

BSi Steel has the vision to build our reputation with all our key stakeholders as being the “employer of choice” within the steel
industry. It‟s with this vision in mind that we have contextualised the unique, unprecedented challenges that have been faced by
the company in recent times and the impact these changes are having on the performance and sustainability of our human capital.

On the local front the steel market has moved from an artificially buoyant position of high demand and high profit down to a
sluggish trading market in under six months. This sudden change in operating condition has resulted in immediate action being
taken to boost staff morale and provide secure, inspirational leadership in these changing times. The positive attitude and
proactive behaviour of our people is as important to the business in these difficult trading conditions as prudently managing our
stock levels and cash flow.

Our steadfast commitment to continue undeterred with transformation and B-BBEE initiatives, company culture unification, skills
transfer and development, talent sourcing and retention, diligent performance management, health and safety awareness and
employee well being programs have given us the competitive edge over the rest of the market to face these operational pressures
head on at full speed with a supportive team behind us.


BSi Steel Culture

At the forefront of our human capital intervention is to ensure that the True North principals contained in our Vision, Mission and
Behaviour Code are positively reinforced on a regular basis across the Group. It‟s through this approach that we have continued
to build a proactive, empowered, positive and synergistic team spirit within BSi Steel, despite tough trading conditions.

All our new staff go through Covey‟s “personal effectiveness” training during their induction to make sure that the way we operate
throughout each division of the business is centered on teamwork values and principles.


Our feedback and communication with staff is frequent and informal, allowing them insight into future plans for the organisation so
that a sense of belonging is fostered within our work teams. Our company magazine, “Steel Talking”, is published to all staff with
the intention of making sure that everyone feels involved and informed with regard to company performance and that they build a
sense of community spirit across all our regions, both on the local and export markets.

Annual perception surveys are run by the HR Team to gauge exactly how engaged staff are within the various teams and to help
identify any weak areas, which are then actively targeted for improvement by corrective action plans.


Talent sourcing and retention

BSi Steel is critically aware that the competition for talent is of primary importance to our future success. It‟s imperative that we
bring the best people into the organisation and make sure that we retain them in a fiercely competitive market.

The company prides itself on a rigorous recruitment process wherein every attempt is made to match potential recruits to the job
function as well as to the culture of the business. Much success has been achieved by making use of referral based recruitment
and other more creative recruitment strategies.

 We have recently introduced a graduate development programme, where young talent is brought into the business to gain
valuable work experience and at the same time for the company to have the ideal opportunity to select those graduates with the
most potential to fill any vacancies. This is a win-win initiative for both parties and ensures that we build our leadership and priority
skills pipeline today so that we have no shortfall in the future.

Retention of talent is as complex and difficult as sourcing the talent and as such we have put in place mechanisms such as career
paths, regular performance measurement and feedback, incentives, recognition bonuses and aggressive development plans to
ensure that we retain our talent and don‟t have them leave to join other employers.




14
Human Capital Sustainability Report                                                  (continued)


Leadership development

In order for our staff to have a meaningful, fulfilling experience working at BSi Steel we need to ensure that staff have the best
leaders possible. All our leaders from middle management level and above have a uniquely tailored Personal Development Plan,
are mentored regularly by a personal coach and are continually evaluated on the impact of their leadership effectiveness through
our strong focus on leadership in our performance management system.


Succession planning

At BSi Steel we believe in preparing for the future today and as such we have recently undertaken to introduce a comprehensive
Succession Plan for each position in the Group on a middle management and above level.

All key performance area, itemised per position, is outlined in this plan with a breakdown of which other person within the business
is capable of assuming this function in time to come. The exact timeline is then plotted out in terms of when the successor will be
ready to fill the role so that we can co-ordinate the urgency of such placements to coincide with when these people are
operationally needed to take over the reins.

Training and Development plans are geared around this information to ensure alignment to group strategy and if a gap is identified
where no candidate is seen as a possibility from within the company relevant recruitment measures are indentified and projected
according to time frame to make certain of no manpower planning shortfalls in any key position throughout our operations.


Employment equity

As an organisation we subscribe to the unique, dynamic richness of a diverse workforce equitably representative of the national
demographic profiles of the countries we operate in. We believe in employing the best person for the job, irrespective of race,
gender, age, or any other classification. Our behavior code guides us in selecting people with a positive attitude and strength of
personal character that elevate them above the masses out there on the job market. Strong target areas that we would like to
improve on will be to recruit and develop African Female and Disabled employees across all levels.

We have an Employment Equity Committee, which sits once a quarter to give feedback to top management on the progress made
towards the EE Plan targets, as well as to discuss any attitudes/perceptions in the workplace to do with employment equity. A
mutually beneficial relationship with our Trade Union, NUMSA, is utilised to embark on meaningful conversations on how to ensure
that there is no discrimination in any policy or practice within the business. Our current Employment Equity Plan runs through to
October of 2010, at which time the next 5 year plan and equity targets will be established by the committee.


Transformation and Broad Based Black Economic Empowerment

A stable, demographically representative economic market in South Africa is fundamental to the sustainability of the business and
our future growth on the local market. BSi Steel has embraced transformation within the organisation and we are proud to have
been independently rated by EMEX as a LEVEL 7 B-BBEE contributor as at April 2009.

Most important to us is that Transformation is not a stand-alone strategy/committee and therefore we have woven our
Transformation and B-BBEE strategic plan into our overall Company Strategy so that the alignment of the two strategies is
guaranteed to make business sense at all times.

It is our intention to work toward achieving a LEVEL 6 rating in our next assessment at the end of the 2010 fiscal. In order to
achieve this improved rating we will be prioritising skills development initiatives (learnerships, internships, experiential learning and
disabled training) and undertaking more synergistic enterprise development initiatives that feed directly into the business
synergies. With our commitment to Employment Equity and Skills Development our objective is to improve our management
control scorecard element over time and continue to look at economically sound B-BBEE ownership measures.

Our preferential procurement practices will continue to focus on developing business links with black owned and black SMME
suppliers and further to this we hope to see Arcelor Mittal coming through with a B-BBEE rating before our next rating is concluded
mid 2010.




15
Human Capital Sustainability Report                                                 (continued)

BSi Steel is a community focused business and we have always contributed extensively to non-profit organisations across our
operating regions. Beneficiaries include Hospice, Reach out with Love, PMB Community Chest, Icare, Little Eden, the Starfish
Foundation and many more.

It‟s our intention to continue helping those in need over the coming year, however in addition for the coming year we are going to
be awarding bursaries to under privileged students and making sure that such bursary awards feed sustainably into our graduate
development programme wherever possible.


Skills development and training

In order to remain competitive, stay abreast with current technology and be seen as an employer of choice, BSi has recognised the
utmost importance of strategically aligned skills development and training for all our staff. Of primary focus within our training and
development strategy is to ensure that we facilitate the advancement of staff to reach their own personal stretch goals of
developing within the company over a long term career.

Much of our training budget is spent on the training of interns and learners, on leadership development, ERP systems and on staff
in the lower echelons of the business who need basic education skills training (ABET) in order to improve their quality of life. Our
Skills Development Committee ensures that all training is approved by line management and our trade union representatives in
order to offer meaningful training to uplift all levels of the organisation.

Our challenge for the coming year is the introduction of internally created training interventions for every position in the
organisation to increase efficiency and knowledge base at core level within the company without having to rely exclusively on
generic external training programs. Our vision is to be a centre of excellence and in order to do so we need to have a system of
continual evaluation and improvement with appropriate learning interventions that maximise the transfer of skills and
competencies.


Safety, health and the environment

Working with steel products and heavy machinery requires that we put safety first at all times. Our safety procedures have
recently been fully audited and our documentation updated to reflect current best practice that is being rolled out to all staff via our
health and safety committees on each base.

In addition we take care of employee well being by offering wellness campaign free medical testing, stress management,
counseling, HIV and AIDS awareness and give advice on matters of personal finance.


New HR information system

Over the course of the last year BSi Steel has invested in developing, testing and installing a new HR Information System – VIP
Genesis. This new system will automate and standardise HR reporting and at the same time give line managers direct access to
staff information in order to make quick, empowered decisions with regard to their Human Capital.

BSi Steel has had a challenging 2009 year with many peaks and troughs, but one thing that has remained constant throughout this
last year and will remain unchanged as we look forward into the coming year is that our people make BSi Steel what it is and what
we invest into our people is the level of success we can expect to see from our results.

A very simple concept, but then again one of our main Behaviour Code elements at BSi Steel is to KEEP IT SIMPLE!



Chantal Lombaard
GROUP HR EXECUTIVE




16
Corporate Governance Report
Introduction

The Board of directors subscribe to the principles of good corporate governance including discipline, independence, accountability
and responsibility as set out in the 2002 King Report on Corporate Governance for South Africa (King II). BSI has complied in all
material respects with the recommendations contained in King II and the requirements for corporate governance of the JSE
Limited.


Board of directors

The Board operates in terms of a formally approved charter which sets out its role and responsibilities including:

    retain full and effective control of the company
    give strategic direction to the company
    ensuring that an adequate and effective process of corporate governance is established and maintained
    identify and regularly monitor key risk areas and key performance indicators of the business
    ensure that the group communicates with shareowners and relevant stakeholders openly and promptly
    regularly review processes and procedures to ensure effectiveness of internal systems of control and accept responsibility for
     the total process of risk management
    assessing the performance of the Board, its committees and its individual members on a regular basis
    appointments to and removals from the Board including the appointment of the chairman, chief executive officer, executive
     directors and non-executive directors, and the approval of nominations of alternate directors
    the formulation if recommended of policies in relation to equal opportunity employment, black empowerment, environment,
     health and safety

As at 1 April 2009 Mr. WL Battershill relinquished the role of joint of Joint CEO, and Mr. G D G Mackenzie was appointed CEO.

There have been no other changes to the Board.

The Board has a unitary structure, and at the time of publishing this report, comprised an executive chairman, W L Battershill, four
executive directors, G D G Mackenzie (CEO), C Parry, W R Teichmann, and J R Waller (CFO), and two independent non-
executive directors, N G Payne (alternate R G Lewis) and B M Khoza (alternate N M Anderson). All directors have attended the
AltX Directors Induction programme. King II recommends that the majority of a Board of directors should consist of non-executive
directors; however the Board considers the BSI structure to be appropriate for a company of this size and nature. A brief CV of
each director can be found on page 6 and 7 of this report.


The non-executive directors hold shares directly and indirectly in the company, and receive no benefits from the company other
than director‟s fees. They are high calibre individuals with a wealth of knowledge and experience, and are fully independent of
management.

A clear division of responsibility is maintained across the Board, precluding any one director from exercising unfettered powers of
decision making.

 Current executive director‟s service contracts are for a period of 5 years and non-executives for two years. In terms of the articles
of association of the company, Messrs G D G Mackenzie, N G Payne and C Parry retire by rotation at the annual general meeting,
but being eligible will offer themselves for re-election.

The Board meets quarterly, and where considered necessary ad-hoc meetings are convened. The Designated Adviser attends
Board meetings.




17
Corporate Governance Report                                        (continued)


The following is a schedule of Board and Board committee meetings held and attended by the directors during the year ended 31
March 2009. The number in brackets denotes the number of meetings attended.



       Directors                  Board                  Audit                   Risk             Remuneration

                                                     Committee               Committee              Committee

 W L Battershill                   5 (5)                 4 (4) ^                 3 (3)                   5 (4)

 G D G Mackenzie                   5 (5)                 4 (4)^                  3 (3)                   5 (5)

 J R Waller                        5 (5)                 4 (4)^                  3 (3)                   5 (4)

 W R Teichmann                     5 (5)                 1 (1)^

 C Parry                           5 (5)                 1 (1)^

 N G Payne*#                       5 (5)                  4 (4)                  3 (3)

 N M Anderson* (alt)               1(1)                   1 (1)

 B M Khoza*                        4 (4)                  3 (3)

 R G Lewis*@ (alt)                 5(5)                  1 (1)^                                          5 (5)



*Non-executive
# Chairman Audit and Risk Committees
@ Chairman Remuneration Committee
^ Invitee to committee meetings


Board Processes

Board Appointments

The Board from time to time assesses the skills and experience within the Board and when deemed necessary may wish to
appoint new Board members.

The Chairman in consultation with the non-executive directors identifies suitable candidates and makes recommendations to the
Board. All new Board members that have not already done so are required to attend the AltX Directors Induction programme.


Share dealings

Directors are required to obtain clearance from the Chairman before trading in the company‟s shares. The company secretary
together with the Designated Adviser ensures that these trades are published on SENS as required by the JSE Listing
Requirements.

Directors, and management and staff with access to financial information and other price sensitive information, may not trade in
the company‟s shares during a closed period. The company secretary informs directors and staff via email when these periods are
in effect.


Self-evaluation

The Board has conducted its first self-evaluation exercise reviewing its performance and strategic planning, board composition,
relationship with management and other stakeholders, and succession planning. Areas requiring improvement have been
identified, and these are receiving attention.




18
Corporate Governance Report                                         (continued)


Company Secretary

The duties and responsibilities of the company secretary are set out in Section 238G of the Companies Act. The Board has
appropriately empowered the company secretary to fulfill these duties. Where necessary, the company secretary will involve the
Designated Adviser and other experts in this regard.

All directors have access to the advice and services of the company secretary. All directors are entitled to obtain independent
professional advice regarding the company‟s affairs at the expense of the company.


Board Committees

1. Risk Committee

The risk committee comprises the Chairman, CEO, CFO, Company Secretary and is chaired by independent non-executive
director N G Payne. This risk committee meets three times per annum.

The terms of reference of the Risk Committee include the following:

    to assist the Board in setting risk strategy policies in liaison with management and in the discharge of its duties relating to
     corporate accountability and associated risk in terms of management assurance and reporting
    to review and assess the quality, integrity and effectiveness of the risk management systems and ensure that the risk policies
     and strategies are effectively managed
    to ensure that the company has implemented an effective ongoing process to identify risk, to measure its potential impact
     against a broad set of assumptions and then to activate what is necessary to pro-actively manage these risks, and to decide
     the company‟s appetite or tolerance for risk
    to oversee formal reviews of activities associated with the effectiveness of risk management and internal control processes. A
     comprehensive system of control should be established to ensure that risks are mitigated and that the company‟s objectives
     are attained
    to review processes and procedures to ensure the effectiveness of internal systems control so that decision-making capability
     and accuracy of reporting and financial results are always maintained at an optimal level


A risk matrix recording significant risks, the probability of occurrence, potential impact on the company and steps taken to mitigate
these risks is maintained on an ongoing basis. The risk committee reports to the Board.


2. Audit Committee

The Audit Committee comprises the two independent non-executive directors and the Designated Adviser and is chaired by N G
Payne. The committee meets four times per annum and ad-hoc meetings are called when deemed necessary. The Chairman of
the Board, CEO and CFO are invited to attend audit committee meetings.

The terms of reference of the Audit committee include the following:

    assist the Board in discharging its duties relating to the safeguarding of assets, the operation of adequate systems, control
     procedures, and the preparation of accurate financial reporting and statements in compliance withal legal requirements and
     accounting standards
    recommend to the Board which firm should be appointed as external auditors
    evaluate the independence and effectiveness of the external auditors and consider any non- audit services rendered by such
     auditors as to whether this substantially impairs their independence, and to pre-approve any such services




19
Corporate Governance Report                                           (continued)


    review the interim and annual financial statements, as well as any announcement of results
    ensure that financial statements are prepared on appropriate accounting policies consistently applied and supported by
     reasonable and prudent judgments and estimates
    review the accounting policies and procedure adopted by the company and any changes made or contemplated thereto
    review the effectiveness of management information, the annual audit, the internal audit function and other systems of internal
     control

The audit committee members have unrestricted access to all information and reports necessary to discharge their duties.

The audit committee has considered the appropriateness and is satisfied with the expertise and experience of the financial
director.

The external auditors have unrestricted access to the audit committee and the chairman, and are given opportunities for discussion
with the audit committee without executives present.

A qualified CA (SA) internal auditor has recently been appointed. He reports to the audit committee and is responsible to the CFO
on day to day matters.

The audit committee reports to the Board.


3. Remuneration Committee

See Remuneration report on page 22 of this report.


Auditing and Accounting

1. External Audit

The audit committee recommends the appointment of external auditors to the Board. It considers the independence of the external
auditors and is required to pre-approve the use of the external auditors for non-audit services.

The external auditors provide an independent assessment of internal financial controls, and are responsible for reporting whether
the financial statements are fairly presented in accordance with IFRS. The preparation of the financial statements is the
responsibility of the directors.

Subject to shareholder approval, Deloitte and Touche (Partner – C Sagar) have been re-appointed as external auditors for the year
ending 31 March 2010


2. Internal Audit

The Board has decided to implement an internal audit function.

A qualified CA (SA) internal auditor has recently been appointed. He reports to the audit committee and is responsible to the CFO
on day to day matters.

An internal audit charter is to be drawn up and will define the responsibility, scope and authority of the internal audit function.


3. Internal Control

The Board is responsible for the company‟s systems of financial and operating controls and monitoring their effectiveness. These
systems are designed to provide reasonable, but not absolute assurance as to the integrity of the financial statements, and to
safeguard the company‟s assets.

During the year under review, nothing has come to the attention of management to indicate any material failure of the internal
control systems.


20
Corporate Governance Report                                        (continued)


4. Going Concern

The Board has every reason to believe that the company has adequate resources in place to continue in operation for
the foreseeable future, and accordingly the financial statements were prepared on the going concern basis.


5. Stakeholder Communication

The company is committed to open and timely communication with all stakeholders. Company results and announcements are
published on SENS and are available on the company‟s website, and there have been a number of presentations of the company‟s
results and strategy to investors.


6. Code of Ethics

The Group is committed to a policy of fair dealing and integrity in the conduct of its business. This commitment, which is endorsed
by the Board, is based on the fundamental belief that business should be conducted honestly, fairly and legally. The company
expects all employees to share its commitment to high moral, ethical and legal standards.

A formal Code of Ethics has been adopted by the Board and includes the following:

        Compliance with laws and regulations
        Conflicts of interest
        Anti-competitive behaviour
        Employment equity
        Safety, health and environment
        Social responsibility
        Privacy and confidentiality


All directors and employees are expected to comply with the code. A process to deal with possible contraventions of the code is
included.



Stephen Hackett
COMPANY SECRETARY




21
Remuneration Report

During the past year, the Remuneration Committee, which is an executive committee with approved Terms of Reference, has been
extremely active in ensuring that BSi has been able to secure and retain the right people in order to ensure its continued success.
As in the past, the Committee has continued to maintain that the company‟s directors and senior executives are fairly rewarded for
their individual contributions to the company‟s overall performance, whilst applying its mind to various other issues pertaining to the
annual salary increase, performance incentive schemes and other benefits.

The Remuneration Committee is chaired by Dr. Richard Lewis, a non-executive director, who is a strategy and human resources
specialist.

The current members are:

Dr. Richard Lewis – non-executive director – Chair

Mr. William Battershill – Group Executive Chairman

Mr. Grant Mackenzie – Group CEO

Mr. James Waller – Group CFO

Ms. Chantal Lombaard – Group HR Executive

Mr. Steve Hackett – Committee Secretary – Group Secretary


During this past year, the Committee met five times and applied its mind in particular to the following:

    The determination of the annual staff salary and wage increases
    The assessment of director‟s increases according to national survey benchmark data
    The drawing up and approval of a Remuneration Policy
    The implementation of a flexible discretionary profit share bonus for staff
    The determination of appropriate elements of evaluation for the Director‟s profit share
    The development and approval of a Key Staff Retention Scheme
    The implementation of a Warehouse bonus scheme – based on a scorecard of both personal and company performance to
     pay out a target related bonus each quarter
    The review of the earnings of all staff as compared to the market median.
    The approval of a new Travel Policy, and travel rates were reviewed
    The introduction of a new BSI Share Appreciation Rights Scheme and a new MTIP/LTIP executive director incentive scheme
     to replace the old long term “BSI Share Incentive” scheme.


At listing, BSI initiated a long term incentive scheme that senior managers participated in. The long term scheme was a “share
purchase scheme” administered by a share trust and trustees, and essentially allowed the participant to buy shares at the current
share price, on extended credit of three years, with interest.

On discussion with Price Waterhouse Coopers our tax advisers as well as independent legal opinion and specialist advice, Remco
discovered significant anomalies that made the scheme unworkable, particularly in the context of a recent change in JSE rules with
respect to share schemes. In addition it was found to be tax-inefficient and proved very complex to administrate.

It was therefore felt that this scheme would not serve its original intentions, which were principally to retain senior staff by providing
a long-term investment in the company and to allow new „rising stars‟ to make a significant long-term contribution to the company.

The Remuneration Committee recognises its responsibility for ensuring due compliance with the King Code of Corporate Practice
and Conduct in respect of remuneration and related matters, and for reporting thereon to the Board.




22
Remuneration Report                               (continued)


Remuneration Policy and Philosophy


The remuneration philosophy of BSI Steel is to attract, develop and retain high performing individuals while also reinforcing,
encouraging and promoting superior performance. Remuneration policies are aligned with the strategic direction and operational
objectives of the business.

The objective is to establish a level of guaranteed remuneration that is competitive, short-term incentives that reward directors and
management for achieving profit targets and medium and long-term share incentive schemes that serve as a retention and
motivational mechanism for directors and senior management, and align them with shareholders‟ interests.

The most important challenge facing BSI Steel is how to attract and RETAIN quality employees that will grow with the company
and stick with the team. The world is becoming more fluid and mobile, and people (especially the younger generation) are more
inclined to leave jobs on a whim. We therefore need sound retention mechanisms that give people the upside of an appreciating
share price to give them long term value and share ownership in return for their service.


Senior Executive Incentive and Retention Performance Plans

Four executive directors, Grant Mackenzie (CEO), James Waller (CFO), Ross Teichmann and Craig Parry qualify.


Objectives of the performance plans

1.     The objectives of these plans are - to encourage, recognise and reward entrepreneurial flair, to more closely align the
       interests of the executive with those of shareholders in the medium and long term, and as part of the company‟s risk
       management retention strategy to retain a highly competent and motivated team at the helm of the company‟s operations
       on an ongoing basis.
                                                                st
2.     Two incentive plans were introduced with effect from 1 April 2008 recommended by Remco and approved by the board, to
       be referred to respectively as the Medium Term Incentive Plan and the Long Term Incentive Plan.


The Medium Term Incentive Plan (MTIP)

Equity growth units („equity units‟) are allocated annually by the Board on the first day of each financial year to senior executives as
defined who are in the employ of the company on that date. Determination of „share price‟ for allocation purposes will always be at
the volume weighted average price (VWAP) for the month of March (the last month of the financial year).

Allocations are made in respect of a calculated grant value of equity units equal to an approved multiple, being a nominated ratio of
equity unit value to guaranteed pay for each position.

The equity units will have a value per unit during the holding period which is equal to the share price ruling from day to day.

The grantee is entitled to a cash bonus on a future date equal to the escalation in value of the equity units in to the extent that this
exceeds the movement in the Consumer Price Index over the holding period.

For these purposes, the future date will be deemed to be -


        1.            the end of a period of three years from the date of allocation, provided that the grantee remains in
                      employment on that date, or
        2.            on an earlier date, being the date of termination of employment where such termination occurs as a result of
                      retrenchment for operational reasons, ill-health or incapacity, or death, in each case under and in terms of the
                      employment contract applying on that date, or

        3.            at the option of the company the date of a change of control of the company
        4.            The „share price‟ for exercise purposes will in all cases be at the March VWAP.


The grantee is therefore not able to “time” the market and is limited to exercising at the March VWAP at the end of each 3 year
holding period.



23
Remuneration Report                                 (continued)


The Long Term Incentive Plan

Earnings growth units („earnings units‟) have been allocated by the Board to the above senior executives on a once-off basis in lieu
of compensation for agreeing to enter into a fixed-term restraint agreement with the company in grant values to be nominated and
approved by the Board.
The earnings units allocated have a value per unit at the outset equal to the share price ruling at the effective date of grant. The
value per unit is revalued thereafter at the end of each financial year on the basis of the headline earnings per share (HEPS) for
that year, the value equalling the value of the units in the base year multiplied by the ratio of the inflation-adjusted HEPS in the
most recent financial year divided by the HEPS in the base year.

The grantee is entitled to a bonus on the agreed future date equal to the escalation in value of the earnings units, but howe ver
subject to compliance with the performance condition defined in below.

The agreed future date will be the earlier of –

        1.            the date of the expiry of the restraint agreement, provided that the grantee remains in employment on that
                      date, or
        2.            the date of earlier termination of employment where such termination occurs as a result of retrenchment for
                      operational reasons, ill-health or incapacity, or death, in each case under and in terms of the restraint
                      agreement, or
        3.            at the option of the company the date of a change of control of the company.



No bonus will accrue unless the HEPS growth during the holding period has exceeded the movement in the Consumer Price Index
over the holding period by more than 10% (ten percent) per annum; provided that, if the grantee so elects before the end of the
holding period, and if the grantee remains in employment for a further year after the expiry of the restraint agreement, the holding
period may be extended by one year, namely for the financial year following the expiry of the restraint agreement, and if the HEPS
growth rate exceeds the stated 10% (ten percent) condition over the extended holding period, the cash bonus will be calculated in
respect of the extended holding period and paid out on that basis.


Summary of allocations:

                                                  1st April 2008                  1st April 2009

Long Term Incentive Plan
HEPS at grant                                     14.91                           13.99

Medium Term Incentive Plan
Share price at grant                              R1.00                           R0.76


Grant Mackenzie
         LTIP                                     13 592 064
         MTIP                                      3 398 016                      3 750 864
James Waller
         LTIP                                     9 952 416
         MTIP                                     1 866 078                       1 865 255
Craig Parry
         LTIP                                     9 470 208
         MTIP                                     1 775 664                       1 810 244
Ross Teichmann
         LTIP                                     9 401 568
         MTIP                                     1 762 794                       1 917 782



24
Remuneration Report                              (continued)


Senior Management Incentive and Retention Scheme

Shareholder approval was obtained on 27 March 2009 for a Share Appreciation Rights Scheme for senior managers and key staff
as both a retention and incentive scheme and to create better alignment with shareholders.


Herewith some details of the scheme:

1.   The Share Appreciation Right Scheme includes participation by divisional executives and selected senior employees of the

     Group to ensure that the Group attracts and retains the core competencies required for formulating and implementing the

     Group‟s business strategies.

2.   As the primary intent of the new share incentive plan will be to purchase shares in the market to settle the benefits, the new

     share incentive plan will not be as dilutive as conventional share option schemes.

3.   The new share incentive plan also supports the principle of alignment of management and shareholder interests with

     Performance Conditions governing the vesting of instruments.

4.   Employees will receive annual Grants of Share Appreciation Rights, which are conditional rights to receive Shares equal to the

     value of the difference between the Exercise Price and the Grant Price. Vesting of the Share Appreciation Rights is subject to

     Performance Conditions.

5.   Upon exercise by a Participant the relevant Employer Company will settle the value of the difference between the Exercise

     Price and the Grant Price by delivering Shares, alternatively, as a fall back provision only, by settling the value in cash. Share

     Appreciation Rights not exercised within the SAR period will lapse.


In terms of the rules of the Share Appreciation Right Scheme, a maximum of 73 000 000 shares may be allotted.


                                            st
The first SAR awards were made on the 31 March 2009. A total of 6 072 500 SAR were awarded at a Grant price of R 0.76


As at 31 March 2009 assuming that every two SAR awards result in the allotment of one share, a total of 3 036 250 shares are
reserved, leaving a balance of 69 963 750 shares available to be allotted.

Not all of the vesting conditions relating to any of these schemes have been met during the current financial year and no provisions
have therefore been made in the financial statements.




25
Directors’ Responsibility and Approval Statement
The directors are required by the Companies Act of South Africa, 1973, to maintain adequate accounting records and are
responsible for the content and integrity of the annual financial statements and related financial information included in this report.
It is their responsibility to ensure that the annual financial statements fairly present the state of affairs of the group as at the end of
the financial year and the results of its operations and cash flows for the period then ended, in conformity with International
Financial Reporting Standards. The external auditors are engaged to express an independent opinion on the annual financial
statements.

The annual financial statements are prepared in accordance with International Financial Reporting Standards and are based upon
appropriate accounting policies consistently applied and supported by reasonable and prudent judgments and estimates.

The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the group
and place considerable importance on maintaining a strong control environment. To enable the directors to meet these
responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner.
The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting
procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout
the group and all employees are required to maintain the highest ethical standards in ensuring the group‟s business is conducted
in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the group is on identifying,
assessing, managing and monitoring all known forms of risk across the group. While operating risk cannot be fully eliminated, the
group endeavors to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied
and managed within predetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management that the system of internal
control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial
statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against
material misstatement or loss.

The directors have reviewed the group‟s cash flow forecast for the year to 31 March 2010 and, in the light of this review and the
current financial position, they are satisfied that the group has or has access to adequate resources to continue in operational
existence for the foreseeable future.

The external auditors are responsible for independently reviewing and reporting on the group's annual financial statements. The
annual financial statements have been examined by the group's external auditors and their report is presented on page 27.

The annual financial statements set out on pages 28 to 81, which have been prepared on the going concern basis, were approved
by the board on 19 June 2009 and were signed on its behalf by:




WL Battershill                                                 JR Waller

Pietermaritzburg
19 June 2009



Secretarial Certification
I certify, to the best of my knowledge and belief, that the company has, in respect of the period under review, lodged with the
Registrar of Companies all returns that are required by a Public Company, and that all returns are true, correct and up to date.




SJ Hackett
Company Secretary

Pietermaritzburg
19 June 2009


26
Independent Auditors Report

To the members of BSI Steel Limited

Report on the Financial Statements
We have audited the annual financial statements and group annual financial statements of BSI Steel Limited which comprise the
directors‟ report, the balance sheet and consolidated balance sheet as at 31 March 2009, the income statement and consolidated
income statement, the statement of changes in equity and consolidated statement of changes in equity and cash flow statement
and consolidated cash flow statement for the year then ended, a summary of significant accounting policies and other explanatory
notes, as set out on pages 28 to 81.

Directors’ Responsibility for the Financial Statements
The company‟s directors are responsible for the preparation and fair presentation of these financial statements in accordance with
International Financial Reporting Standards and in the manner required by the Companies Act of South Africa. This responsibility
includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor‟s judgement, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity‟s preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity‟s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall financial statement presentation.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of the company and the group
as at 31 March 2009 and the results of their operations and their cash flows for the year then ended in accordance with
International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa.




Deloitte & Touche
Per CA Sagar                                  Pietermaritzburg
Partner                                       19 June 2009


National Executive:        GG Gelink (Chief Executive), AE Swiegers (Chief Operating Officer), GM Pinnock (Audit),
                           DL Kennedy (Tax & Legal and Financial Advisory), L Geeringh (Consulting), L Bam (Corporate
                           Finance), CR Beukman (Finance), TJ Brown (Clients & Markets), NT Mtoba (Chairman of the Board),
                           CR Qually (Deputy Chairman of the Board).

Regional Leader: GC Brazier



Pietermaritzburg
19 June 2009




27
Directors’ Report
The directors submit their report for the year ended 31 March 2009


1.    Review of activities - Main business and operations

The group is engaged in sale, processing and distribution of steel and allied products and operates principally in South Africa,
Zambia and the Democratic Republic of Congo.

The operating results and state of affairs of the company are fully set out in the attached annual financial statements and do not
in our opinion require any further comment.

Net profit of the group was R 100,311,697 (2008: profit R 99,367,479), after taxation of R 25,129,264 (2008:
R 34,166,758).


2.    Going concern

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis
presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities,
contingent obligations and commitments will occur in the ordinary course of business.


3.    Post balance sheet events

Steel prices decreased by R500 and R1, 000 per ton on 1 April 2009 and 1 May 2009 respectively and is to increase by R250 per
ton effective 1 July 2009. The net realisable value of inventory at year end has been adjusted accordingly.

Business activities have been extended to Zimbabwe as from 1 May 2009 and the operation will constitute a subsidiary of BSI
Steel Africa Limited.

Land and buildings classified as held for sale at year end as per note 16 have been disposed of after year end.


4.    Authorised and issued share capital

Refer to note 9 of this report and note 17 of the annual financial statements for details of the changes in the above during the
year.


5.    Dividends Paid

No dividends were declared or paid to shareholders during the year as the directors decided that more value would be added to
shareholders wealth given the current economic climate by utilising cash resources in buying back shares during the current
financial year and will continue to do so during the following financial year if the current circumstances continue.


6.    Directors

The directors of the company during the year and to the date of this report are as follows:

Name                                                   Nationality                            Changes

WL Battershill                                         South African
JR Waller                                              South African
C Parry                                                South African                          Appointed 1 April 2008
GDG MacKenzie                                          South African
NG Payne (Non Executive)                               South African
EG Dube (Non Executive)                                South African                          Resigned 13 June 2008
WR Teichmann                                           South African                          Appointed 1 April 2008
RG Lewis (Alternate Non Executive)                     South African                          Appointed 12 May 2008
BM Khoza (Non Executive)                               South African                          Appointed 12 May 2008
NM Anderson (Alternate Non Executive)                  South African                          Appointed 13 May 2008


28
Directors’ Report                      (continued)


7.    Secretary

The secretary of the company is Stephen Hackett of:

Business Address:                            Eden Park Drive
                                             Murrayfield Park
                                             Mkondeni
                                             Pietermaritzburg
                                             3201

Postal Address:                              P.O. Box 101096
                                             Scottsville
                                             Pietermaritzburg
                                             3209


8.    Interest in subsidiaries

Details of the company's investment in subsidiaries are set out in note 8.

9.    Special Resolutions

At a general meeting of the shareholders on 12 December 2008 it was resolved that the property described as erf number 710,
Alrode Ext 4, Johannesburg be sold.

At a general meeting of the shareholders on 11 September 2008 the following resolutions were approved:

the name of the company be changed from BSI (SA) Limited to BSI Steel Limited;
the company increase its existing authorised ordinary share capital from R10,000 divided into 1,000,000,000 ordinary shares of
0.001 cent to R100,000 divided into 10,000,000,000 ordinary share of 0.001 cent each by the creation of 9,000,000,000 ordinary
shares of 0.001 cent each; and

the directors of the company be authorised until the next annual general meeting of the company to acquire the company's own
shares, upon such terms and conditions and in such amounts as the directors may from time to time decide.

At a general meeting of the shareholders on 26 March 2009 it was resolved that the company would repurchase from the BSI
Share Incentive Trust 17,620,232 ordinary shares with a par value of 0.001 cent each at an average price of 89.5 cents per share
and to cancel such shares.

10. Directors interest in shares
                                                                     GROUP                                 COMPANY
                                                             2009               2008                2009              2008
                                                                R                 R                   R                  R
Directly beneficial
 NG Payne                                                   5,526,000          1,606,176           5,526,000         1,606,176
 WL Battershill                                             1,081,953            574,914           1,081,953           574,914
 GDG Mackenzie                                              9,755,937         11,437,434           9,755,937        11,437,434
 JR Waller                                                  3,000,000          3,000,000           3,000,000         3,000,000
 WR Teichmann                                              21,782,165                   -         21,782,165                 -
 NM Anderson                                                   86,000                   -             86,000                 -
 RG Lewis                                                     100,000                   -            100,000                 -
Indirectly beneficial
  E Dube and associates                                              -        50,240,000                  -         50,240,000
  WL Battershill and associates                           336,075,214        328,727,332        336,075,214        328,727,332
  GDG Mackenzie and associates                             81,331,349         84,949,740         81,331,349         84,949,740
  JR Waller and associates                                  9,213,469          8,967,178          9,213,469          8,967,178
  C Parry and associates                                   56,195,147                   -        56,195,147                  -
  BM Khoza and associates                                  50,390,000                   -        50,390,000                  -
                                                          574,537,234        489,502,774        574,537,234        489,502,774


Between the year end and the date of this report Mr. C Parry and associates have sold 1,500,000 shares leaving a balance of
54,695,147 shares. There have been no other changes in directors‟ interest in shares.



29
Balance Sheets
as at 31 March 2009



                                                             GROUP                        COMPANY
                                        Note(s)      2009            2008          2009             2008
                                                       R               R             R                R

Assets
Non-Current Assets
Property, plant and equipment              5      193,427,366    103,082,234    121,841,576     26,507,691
Goodwill                                   6       13,442,080     13,442,080               -             -
Intangible assets                          7        4,768,448      1,527,489      4,754,141      1,527,497
Investments in subsidiaries                8                 -              -    29,040,703     59,699,153
Other financial assets                    10                 -              -              -     1,920,232
Deferred tax                              12        3,447,406      2,859,549               -             -
                                                  215,085,300    120,911,352    155,636,420     89,654,573

Current Assets
Inventories                               13      244,757,617    188,440,437    188,702,740    134,155,794
Loans to group companies                   9                 -              -    46,594,253     27,915,989
Other financial assets                    10                 -       837,445               -       837,445
Current tax receivable                              6,946,650      1,337,228      6,722,275              -
Trade and other receivables               14      320,055,031    380,314,204    245,645,659    294,226,160
Cash and cash equivalents                 15       35,087,685     26,235,946     10,163,282     15,073,425
                                                  606,846,983    597,165,260    497,828,209    472,208,813
Non-current assets held for sale          16       19,416,346               -              -               -
Total Assets                                      841,348,629    718,076,612    653,464,629    561,863,386

Equity and Liabilities
Equity
Share capital and share premium           17      117,433,439    124,301,168    124,301,165    126,221,396
Reserves                                           37,811,463     12,373,001               -             -
Accumulated profit                                260,716,690    160,404,993    159,810,460     50,878,606
                                                  415,961,592    297,079,162    284,111,625    177,100,002

Liabilities
Non-Current Liabilities
Other financial liabilities               20      111,965,130     43,836,319     91,811,055     15,763,175
Deferred tax                              12        3,534,084      6,101,235        419,063        214,934
                                                  115,499,214     49,937,554     92,230,118     15,978,109

Current Liabilities
Loans from group companies                 9                 -              -     5,736,278              -
Other financial liabilities               20       10,596,706     16,131,253      9,360,262      8,626,535
Current tax payable                                 6,374,042     23,668,998               -     8,446,837
Finance lease obligation                  21        1,202,840      1,989,400               -             -
Trade and other payables                  23      165,854,339    188,314,635    161,116,269    245,185,941
Provisions                                22                 -     1,202,211               -     1,202,211
Bank overdraft                            15      119,736,255    139,753,399    100,910,077    105,323,751
                                                  303,764,182    371,059,896    277,122,886    368,785,275
Non-current liabilities held for sale     16        6,123,641               -              -               -
Total Liabilities                                 425,387,037    420,997,450    369,353,004    384,763,384
Total Equity and Liabilities                      841,348,629    718,076,612    653,464,629    561,863,386




30
Income Statements
for the year ended 31 March 2009



                                                                        GROUP                            COMPANY
                                                Note(s)        2009              2008             2009             2008
                                                                 R                R                 R                R



Revenue                                           25        1,856,988,671 1,432,302,478 1,565,069,073           404,438,359
Cost of sales                                     26      (1,497,974,467) (1,135,268,482) (1,344,729,171)     (316,645,436)
Gross (loss) profit before exceptional
                                                            359,014,204      297,033,996      220,339,902      87,792,923
items
Exceptional items                                 26        (51,443,768)                  -   (41,692,659)                  -



Gross profit                                                 307,570,436      297,033,996      178,647,243      87,792,923


Other income                                                     780,013         3,322,951         912,013        3,164,454
Operating expenses                                         (154,912,010)     (145,923,374)    (95,444,048)     (45,586,829)


Operating profit before interest and                27       153,438,439      154,433,573       84,115,208         45,370,548
taxation

Investment income                                 28           1,358,188         1,487,349      63,645,726       11,885,662
Finance costs                                     29        (29,355,666)      (22,386,685)    (18,907,674)     (12,166,653)


Profit before taxation                                       125,440,961      133,534,237      128,853,260      45,089,557

Taxation                                          30        (25,129,264)      (34,166,758)    (19,921,406)     (12,987,559)


Profit for the year attributable to BSi Steel
Limited shareholders                                         100,311,697       99,367,479      108,931,854      32,101,998

Basic and diluted earnings per share (cents)      40                 13.98            15.05




31
Statements of changes in equity
for the year ended 31 March 2009

                                   Share capital        Share premium       Foreign        Revaluation       Accumulated            Total          Minority           Total
                                                                         currency           reserve             profit         attributable to     interest       shareholders
                                                                         translation                                           equity holders                        equity
                                                                            reserve                                            of the group

                                          R                   R                R                 R                 R                  R               R                 R

Group
Balance at 01 April 2007                   1,000                    -       2,834,731         1,473,616        60,521,785        64,831,132       18,621,575       83,452,707

Profit for the year                            -                   -                   -                 -     99,367,479        99,367,479                   -    99,367,479
Issue of shares                            6,221         127,377,655                   -                 -               -      127,383,876                   -   127,383,876
Purchase of own / treasury                   (19)         (1,920,213)                  -                 -               -       (1,920,232)                  -    (1,920,232)
shares
Purchase of minority interests                      -               -                  -        532,444                 -           532,444       (18,188,242)    (17,655,798)
Reversal of NDR to accumulated                      -               -                  -       (515,729)          515,729                 -                 -               -
profit
Listing expenses                                    -      (1,163,476)                 -              -                    -      (1,163,476)                 -    (1,163,476)
Revaluation of property, plant                      -               -                  -      4,650,625                    -       4,650,625                  -     4,650,625
and equipment
Purchase of Discount Steel                          -               -       2,827,451           569,863                    -      3,397,314                   -     3,397,314
Zambia Limited
Dividends paid                                      -               -                  -                 -                 -                  -     (433,333)        (433,333)
Total changes                              6,202         124,293,966        2,827,451         5,237,203        99,883,208       232,248,030       (18,621,575)    213,626,455
Balance at 01 April 2008                   7,202         124,293,966        5,662,182         6,710,819       160,404,993       297,079,162                   -   297,079,162

Revaluation of property, plant                      -               -                  -      2,900,000                    -      2,900,000                   -     2,900,000
and equipment
Currency translation differences                 -                  -      22,538,462                    -               -       22,538,462                   -    22,538,462
Profit for the year                              -                  -               -                    -    100,311,697       100,311,697                   -   100,311,697
Issue of shares                                157         13,848,843               -                    -               -       13,849,000                   -    13,849,000
Purchase of treasury shares                   (157)       (13,848,843)              -                    -               -      (13,849,000)                  -   (13,849,000)
Purchase of own shares                         (75)        (6,867,654)              -                    -               -       (6,867,729)                  -    (6,867,729)
Total changes                                  (75)        (6,867,654)     22,538,462         2,900,000       100,311,697       118,882,430                   -   118,882,430


Balance at 31 March 2009                   7,127         117,426,312       28,200,644         9,610,819       260,716,690       415,961,592                   -   415,961,592
Note(s)                                        17             17               18                 19
Statements of changes in equity
for the year ended 31 March 2009


                                                                                         Revaluation       Accumulated          Total        Minority       Total equity
                                   Share capital       Share premium      Foreign         reserve             profit       attributable to   interest
                                                                        currency                                           equity holders
                                                                       translation                                         of the company
                                                                         reserve


                                          R                 R              R                   R                 R               R               R                R

Company
Balance at 01 April 2007                  1,000                   -                  -        295,360        18,481,248      18,777,608                 -    18,777,608


Realisation of non-distributable                   -              -                  -       (295,360)          295,360               -                 -              -
reserve

Profit for the year                           -                  -                   -                 -     32,101,998      32,101,998                 -    32,101,998
Issue of shares                           6,218        127,377,655                   -                 -               -    127,383,873                 -   127,383,873
Share issue expenses                          -         (1,163,477)                  -                 -               -     (1,163,477)                -    (1,163,477)
Total changes                             6,218        126,214,178                   -       (295,360)       32,397,358     158,322,394                 -   158,322,394

Balance at 01 April 2008                  7,218        126,214,178                   -                 -     50,878,606     177,100,002                 -   177,100,002

Profit for the year                           -                  -                   -                 -    108,931,854     108,931,854                 -   108,931,854
Issue of shares                             157         13,848,843                   -                 -               -     13,849,000                 -    13,849,000
Employees share option scheme              (176)       (15,769,055)                  -                 -              -     (15,769,231)                -   (15,769,231)
cancelled
Total changes                                 (19)       (1,920,212)                 -                 -    108,931,854     107,011,623                 -   107,011,623
Balance at 31 March 2009                  7,199        124,293,966                   -                 -    159,810,460     284,111,625                 -   284,111,625

Note(s)                                       17            17                 18               19
Cash Flow Statements
for the year ended 31 March 2009



                                                                    GROUP                              COMPANY
                                             Note(s)        2009              2008              2009             2008

                                                              R                 R                 R                R

Cash flows from operating activities

Cash receipts from customers                            1,934,969,250     1,253,161,898     1,610,393,404      137,080,418
Cash paid to suppliers and employees                   (1,770,667,512)   (1,316,975,666)   (1,583,994,911)    (335,157,124)
Cash generated from (used in) operations       31        164,301,738        (63,813,768)       26,398,493     (198,076,706)
Interest income                                            1,358,188          1,487,349         1,277,376       10,758,995
Dividends received                                                 -                  -        62,368,350        1,126,667
Finance costs                                            (27,413,759)       (20,403,683)      (17,752,681)     (11,803,549)
Tax paid                                       32         (47,592,930)      (18,689,908)      (34,886,389)      (4,773,395)
Cash flows of held for sale asset              33                   -         3,000,000                 -                -
Net cash from / (used in) operating                       90,653,237        (98,420,010)      37,405,149      (202,767,988)
activities

Cash flows used in investing activities

Purchase of property, plant and equipment       5       (110,121,395)       (52,685,450)      (97,965,168)     (26,990,522)
Disposal of property, plant and equipment       5            215,216          4,908,033           200,278          582,032
Purchase of other intangible assets             7          (3,675,914)       (1,499,379)       (3,658,782)      (1,502,662)
Disposal of other intangible assets             7                   -            97,735                 -           97,733
Acquisition of businesses                      34                  -        (22,304,686)                -      (22,304,686)
Loans to group companies repaid                                    -                  -       (12,941,986)               -
Purchase of minority interest                                      -                  -                 -      (24,929,649)
Proceeds from loans from group companies                           -                  -                 -       37,541,338
Purchase of financial assets                                       -                  -                 -       (1,920,232)
Disposal of financial assets                                 837,445                  -           837,445                -
Disposal of financial assets                                       -            300,000                 -                -
Net cash used in investing activities                   (112,744,648)       (71,183,747)    (113,528,213)      (39,426,649)

Cash flows from financing activities

Proceeds on share issue                        17                   -      126,220,396                   -    126,220,396
Reduction of share capital or buy back of      17          (6,867,729)      (1,920,232)                (19)             -
shares
Other financial liabilities raised                        63,974,777        43,333,135        76,781,607       24,356,328
Repayment of shareholders loan                                     -        (8,357,567)                -       (7,915,317)
Finance lease (disposed of) / acquired                    (1,941,553)            6,688        (1,154,993)               -
(Repayment) / proceeds from finance leases                  (786,560)        1,989,400                 -                -
Net cash from financing activities                        54,378,935       161,271,820        75,626,595      142,661,407


Total cash movement for the year                          32,287,524        (8,331,937)          (496,469)     (99,533,230)
Cash at the beginning of the year                       (113,517,453)     (105,321,520)       (90,250,326)       9,282,904
Effect of exchange rate movement on cash                  (3,418,641)          136,004                  -                -
balances
Total cash at end of the year                  15         (84,648,570)    (113,517,453)       (90,746,795)     (90,250,326)




34
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies

Presentation of annual financial statements

The annual financial statements have been prepared in accordance with International Financial Reporting Standards, and the
Companies Act of South Africa, 1973. The annual financial statements have been prepared on the historical cost basis, as
modified by the revaluation of land and buildings, available for sale financial assets and financial liabilities at fair value through
profit and loss. They incorporate the principal accounting policies set out below.

These accounting policies are consistent with the previous period.

1.1    Significant judgements

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the
amounts represented in the annual financial statements and related disclosures. Use of available information and the application
of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be
material to the annual financial statements. Significant judgements include:

Trade receivables and loans and receivables

The group assesses its trade receivables and loans and receivables for impairment at each balance sheet date. In determining
whether an impairment loss should be recorded in the income statement, the group makes judgements as to whether there is
observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

The impairment for trade receivables and loans and receivables is calculated on a portfolio basis, based on historical loss ratios,
adjusted for national and industry-specific economic conditions and other indicators present at the reporting date that correlate
with defaults on the portfolio. These annual loss ratios are applied to loan balances in the portfolio and scaled to
the estimated loss emergence period.

Allowance for slow moving, damaged and obsolete stock

An allowance for stock is held in order to write stock down to the lower of cost or net realisable value. Management reviews the
stock ageing report regularly; with the policy that stock should always be sold. There are limited circumstances where stock is
sold below cost. Stock obsolescence is reviewed on a stock item basis with any unrealisable stock being written off in the
relevant period. The write down is included in the operation profit note.

Value determination of inventory on hand

Inventory carrying a lower net realisable value than cost due to the turn in the steel market have been revalued on balance sheet
date. The net realisable value has been calculated by taking into account the effects of steel price decreased from April to May
2009. The inventory value was determined by using current replacement cost and increasing it by an average gross profit
percentage based on sales made after balance sheet date.

Fair value estimation

The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the
current market interest rate that is available to the group for similar financial instruments.

Impairment testing

The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value-in-
use calculations and fair values. These calculations require the use of estimates and assumptions.

The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying
amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the
lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities.




 35
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies (continued)

1.1 Significant judgements (continued)

If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group
of assets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain
and could materially change over time.

Provisions

Provisions were raised and management determined an estimate based on the information available. Additional disclosures of
these estimates of provisions are included in note 22 - Provisions.

Contingent provisions on business combinations

Contingencies recognised in the current year required estimates and judgements.

Taxation

 Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many
 transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The
 group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the
 final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the
 income tax and deferred tax provisions in the period in which such determination is made.

The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the
deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets
requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable
income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the
extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net
deferred tax assets recorded at the balance sheet date could be impacted.

1.2     Property, plant and equipment

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred
subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of
property, plant and equipment, the carrying amount of the replaced part is derecognised.

The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included
in the cost of property, plant and equipment.

Day-to-day expenses incurred on property, plant and equipment are expensed directly into profit or loss for the period.
Maintenance that meets the recognition criteria is capitalised. Property, plant and equipment, except for owner-occupied
property, is carried at cost less accumulated depreciation and any impairment losses.

Property, plant and equipment is carried at revalued amount, being the fair value at the date of revaluation less any subsequent
accumulated depreciation and subsequent accumulated impairment losses. Revaluations are made with sufficient regularity such
that the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date.

Any increase in an asset‟s carrying amount, as a result of a revaluation, is credited directly to equity in the revaluation reserve.
The increase is recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously
recognised in profit or loss.




 36
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies (continued)

1.2     Property, plant and equipment (continued)

Any decrease in an asset‟s carrying amount, as a result of a revaluation, is recognised in profit or loss in the current period. The
decrease is debited directly to equity in the revaluation reserve to the extent of any credit balance existing in the revaluation
surplus in respect of that asset.

Item                                                                       Average useful life
Land                                                                       Indefinite
Plant and machinery                                                        1 to 12 years
Furniture and fixtures                                                     4 years
Motor vehicles                                                             1 to 5 years
Office equipment                                                           3 years
IT equipment                                                               3 years

The residual value and the useful life of each asset are reviewed at each financial period-end.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be
depreciated separately.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another
asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the
item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined
as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

1.3     Goodwill

Goodwill is initially measured at cost, being the excess of the business combination over the company's interest of the net fair
value of the identifiable assets, liabilities and contingent liabilities.

Subsequently goodwill is carried at cost less any accumulated impairment. For the purpose of impairment testing, goodwill is
allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination. Cash-
generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount
of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to
the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised
for goodwill is not reversed in a subsequent period.

The excess of the company‟s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the
cost of the business combination is immediately recognised in profit or loss.

Internally generated goodwill is not recognised as an asset.

1.4     Intangible assets
Intangible assets are initially recognised at cost.

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable
limit to the period over which the asset is expected to generate net cash inflows. Amortisation is not provided for these intangible
assets. For all other intangible assets amortisation is provided on a straight line basis over their useful life, and tested for
impairment if there is an indication that they may be impaired.



 37
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies (continued)

1.4     Intangible assets (continued)
Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item                                                                         Useful life

Computer software                                                            2 to 10 years


1.5     Investments in subsidiaries

Group annual financial statements

The group annual financial statements include those of the holding company and its subsidiaries. The results of the subsidiaries
are included from the effective date of acquisition.

On acquisition the group recognises the subsidiary‟s identifiable assets, liabilities and contingent liabilities at fair value, except
for assets classified as held-for-sale, which are recognised at fair value less costs to sell.

Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired, such as a discount on
acquisition, is credited to profit and loss in the period of acquisition. The interest of minority shareholders is stated at the
minority's proportion of the fair values of the assets and liabilities recognised. Subsequently, any losses applicable to the
subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate. W here necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used in line with those used by the group.

All material intercompany balances and transactions are eliminated.

1.6     Financial Instruments

Initial recognition

The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability
or an equity instrument in accordance with the substance of the contractual arrangement.

Financial assets and financial liabilities are recognised on the group's balance sheet when the group becomes party to the
contractual provisions of the instrument.

Trade and other receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the
effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when
there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will
enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 120 days overdue) are
considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the
asset‟s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed
at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised
in the income statement within operating expenses. When a trade receivable is uncollectible, it is written off against the
allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating
expenses in the income statement.

Trade and other receivables are classified as loans and receivables.



 38
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies (continued)


1.6     Financial Instruments (continued)

Trade and other payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective
interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Theseare initially and
subsequently recorded at fair value.

Bank overdraft and borrowings

Bank overdrafts and borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using the
effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption
of borrowings is recognised over the term of the borrowings in accordance with the group‟s accounting policy for borrowing
costs.

Other financial liabilities are measured initially at fair value and subsequently at amortised cost, using the effective interest rate
method.

Other loans and receivables

Other financial assets classified as loans and receivables are initially recognised at fair value plus transaction costs, and are
subsequently carried at amortised cost less any accumulated impairment.

Financial assets at fair value through profit or loss

Investments are measured initially and subsequently at fair value, gains and losses arising from changes in fair value are
included in profit or loss for the period.

Derivatives

The group enters into derivative financial instruments (forward exchange contracts) in order to manage its exposure to interest
rate and foreign exchange rate risk which have a cash flow impact. Changes in the fair value of derivative financial instruments
are recognised in profit or loss as they arise.

1.7     Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of
current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered
from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet
date.

Deferred tax assets and liabilities

A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises
from:
            the initial recognition of goodwill; or
            the initial recognition of an asset or liability in a transaction which:
          -       is not a business combination; and
          -       at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).



39
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies (continued)

1.7     Tax (continued)

Current tax assets and liabilities

A deferred tax liability is recognised for all taxable temporary differences associated with investments in subsidiaries, branches
and associates, and interests in joint ventures, except to the extent that both of the following conditions are satisfied:
            the parent, investor or venturer is able to control the timing of the reversal of the temporary difference; and
            it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will
be available against which the deductible temporary difference can be utilised, unless the deferred tax asset arises from the
initial recognition of an asset or liability in a transaction that:
             is not a business combination; and
             at the time of the transaction affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for all deductible temporary differences arising from investments in subsidiaries, branches
and associates, and interests in joint ventures, to the extent that it is probable that:
           the temporary difference will reverse in the foreseeable future; and
           taxable profit will be available against which the temporary difference can be utilised.

A deferred tax asset is recognised for the carry forward of unused tax losses and unused STC credits to the extent that it is
probable that future taxable profit will be available against which the unused tax losses and unused STC credits can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the
balance sheet date.

Tax expenses

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the
extent that the tax arises from:
             a transaction or event which is recognised, in the same or a different period, directly in equity, or
             a business combination.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in
the same or a different period, directly to equity.


1.8     Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is
classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Finance leases - lessor

The group recognises finance lease receivables on the balance sheet.

Finance income is recognised based on a pattern reflecting a constant periodic rate of return on the group‟s net investment
in the finance lease.




40
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies (continued)

1.8     Leases (continued)

Finance leases – lessee

Finance leases are recognised as assets and liabilities in the balance sheet at amounts equal to the fair value of the leased
property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the
balance sheet as a finance lease obligation.

The discount rate used in calculating the present value of the minimum lease payments is the .

The lease payments are apportioned between the finance charge and reduction of the outstanding liability.The finance charge is
allocated to each period during the lease term so as to produce a constant periodic rate of on the remaining balance of the
liability.

Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between
the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset. This liability
is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.9     Inventories

Inventories are measured at the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and
the estimated costs necessary to make the sale.

The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the
inventories to their present location and condition.

The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for
specific projects is assigned using specific identification of the individual costs.

The cost of inventories is assigned using the weighted average cost formula. The same cost formula is used for all inventories
having a similar nature and use to the entity.

When inventories are sold, the carrying amounts of those inventories are recognised as an expense in the period in which the
related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories
are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any
write-down of inventories, arising from an increase in net realisable value, are recognised as a reduction in the amount of
inventories recognised as an expense in the period in which the reversal occurs.


1.10 Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale
transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the
asset is available for immediate sale in its present condition. Management must be committed to the sale, which should be
expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets held for sale are measured at the lower of its carrying amount and fair value less costs to sell.

A non-current asset is not depreciated while it is classified as held for sale, or while it is part of a disposal group classified as
held for sale.

Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale are recognised in profit or
loss.


41
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies (continued)

1.11 Impairment of assets

The group assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such
indication exists, the group estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the group also:
           tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment
           annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the
           annual period and at the same time every period.
           tests goodwill acquired in a business combination for impairment annually.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not
possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which
the asset belongs is determined.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its
recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in
profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease.

Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units, or
groups of cash-generating units, that are expected to benefit from the synergies of the combination.

An impairment loss is recognised for cash-generating units if the recoverable amount of the unit is less than the carrying amount
of the units. The impairment loss is allocated to reduce the carrying amount of the assets of the unit in the following order:
             first, to reduce the carrying amount of any goodwill allocated to the cash-generating unit and
             then, to the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for
assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of
those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is
recognised immediately in profit or loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation
increase.

1.12 Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

If the group reacquires its own equity instruments, the consideration paid, including any directly attributable incremental costs
(net of income taxes) on those instruments are deducted from equity until the shares are cancelled or reissued. No gain or loss
is recognised in profit or loss on the purchase, sale, issue or cancellation of the group‟s own equity instruments. Consideration
paid or received shall be recognised directly in equity.




42
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies (continued)

1.13 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation
leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the
service is rendered and are not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their
entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or constructive
obligation to make such payments as a result of past performance.

Defined contribution plans

Payments to defined contribution retirement benefit plans are charged as an expense as they fall due.

Payments made to industry-managed (or state plans) retirement benefit schemes are dealt with as defined contribution plans
where the group‟s obligation under the schemes is equivalent to those arising in a defined contribution retirement benefit plan.

1.14 Provisions and contingencies

Provisions are recognised when:
            the group has a present obligation as a result of a past event;
            it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
            a reliable estimate can be made of the obligation.


The amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

After their initial recognition contingent liabilities recognised in business combinations that are recognised separately are
subsequently measured at the higher of:
            the amount that would be recognised as a provision; and
            the amount initially recognised less cumulative amortisation.


Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 36.

1.15 Revenue

Revenue from the sale of goods is recognised when all the following conditions have been satisfied:
            the group has transferred to the buyer the significant risks and rewards of ownership of the goods;
            the group retains neither continuing managerial involvement to the degree usually associated with ownership nor
           effective control over the goods sold;
            the amount of revenue can be measured reliably;
            it is probable that the economic benefits associated with the transaction will flow to the group; and
            the costs incurred or to be incurred in respect of the transaction can be measured reliably.




43
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies (continued)

1.15 Revenue (continued)

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be
recognised only to the extent of the expenses recognised that are recoverable.

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for
goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax.
Turnover comprises of sales to customers and services rendered to customers. Turnover is stated at the invoice amount and is
exclusive of value added taxation.

Royalties are recognized on the accrual basis in accordance with the substance of the relevant agreements. Dividends are
recognized in profit or loss, when the company‟s right to receive payment has been established.

Interest is recognised, in profit or loss, using the effective interest rate method.

Service fees included in the price of the product are recognised as revenue over the period during which the service is
performed.


1.16 Cost of sales

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the
related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories
are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of
inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised
as an expense in the period in which the reversal occurs.

The related cost of providing services recognised as revenue in the current period is included in cost of sales.

1.17 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as
part of the cost of that asset until such time as the asset is ready for its intended use. The amount of borrowing costs eligible for
capitalisation is determined as follows:
            Actual borrowing costs on funds specifically borrowed for the purpose of obtaining a qualifying asset less any
           temporary investment of those borrowings.
           Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of
           obtaining a qualifying asset. The borrowing costs capitalised do not exceed the total borrowing costs incurred.


The capitalisation of borrowing costs commences when:
            expenditures for the asset have occurred;
            borrowing costs have been incurred, and
            activities that are necessary to prepare the asset for its intended use or sale are in progress.


Capitalisation is suspended during extended periods in which active development is interrupted.

Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale
are complete.

All other borrowing costs are recognised as an expense in the period in which they are incurred.




44
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies (continued)

1.18 Translation of foreign currencies

Foreign currency transactions

A foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency amount the spot
exchange rate between the functional currency and the foreign currency at the date of the transaction.

At each balance sheet date:
            foreign currency monetary items are translated using the closing rate;
          non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
          exchange rate at the date of the transaction; and
            non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at
     the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those
at which they were translated on initial recognition during the period or in previous annual financial statements are recognised in
profit or loss in the period in which they arise.

When a gain or loss on a non-monetary item is recognised directly in equity, any exchange component of that gain or loss is
recognised directly in equity. W hen a gain or loss on a non-monetary item is recognised in profit or loss, any exchange
component of that gain or loss is recognised in profit or loss.

Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency amount the
exchange rate between the Rand and the foreign currency at the date of the cash flow.

Investments in subsidiaries, joint ventures and associates

The results and financial position of a foreign operation are translated into the functional currency using the following
procedures:
          assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance
          sheet;
          income and expenses for each income statement item are translated at exchange rates at the dates of the
          transactions; and
            all resulting exchange differences are recognised as a separate component of equity.

Exchange differences arising on a monetary item that forms part of a net investment in a foreign operation are recognised
initially in the translation reserve and recognised in profit or loss on disposal of the net investment.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets
and liabilities arising on the acquisition of that foreign operation are treated as assets and liabilities of the foreign operation.

The cash flows of a foreign subsidiary are translated at the exchange rates between the functional currency and the foreign
currency at the dates of the cash flows.


1.19 Segment reporting

A business segment report is a group of assets and operations engaged in providing products of services that are subject to
risks and returns that are different from those of other business segments. A geographical segment is engaged in providing
products or services within a particular economic environment that are subject to risks and return that are different from those
segments operating in other economic environments.

For management purposes, the group is currently organised into three main segments, namely merchanting, trading and
exporting.




45
Notes to the Annual Financial Statements
for the year ended 31 March 2009


1. Accounting policies (continued)

1.19 Segment reporting (continued)

This is the basis on which the group reports its primary segment information. The geographical split is a secondary segment,
with the major geographical segments being South Africa and the balance of the African continent. Segment information is
presented in Note 4.


1.20 Related parties

Parties are considered related if one party has the ability to control or exercise significant influence over the other party in
making financial and operating decisions. The group enters into various related party transactions in the ordinary course of
business. The terms and conditions of those related party transactions are no more favourable than those granted to third
parties in arm's length transactions.


1.21 Financial guarantee contracts

Financial guarantee contracts are accounted for in terms of IFRS 4: Insurance Contracts and consequently are measured initially
at cost and thereafter in accordance with IAS 37: Provisions, Contingent liabilities and contingent assets.



2.    New standards and interpretations not yet adopted

The annual financial statements have been prepared in accordance with International Financial Reporting Standards on a
basis consistent with the prior year except for the adoption of the following new or revised standards.
            IFRS5 Non-current Assets Held for Sale and Discontinued Operations
            IAS1 Presentation of Financial Statements
            IAS2 Inventories
            IAS10 Events after the Balance Sheet Date
            IAS17 Leases
            IAS21The Effects of Changes in Foreign Exchange Rates
            IAS24 Related Party Disclosures
            IAS28 Investments in Associates
            IAS32 Financial Instruments: Disclosure and Presentation
            IAS33 Earnings per Share
            IAS39 Financial Instruments: Recognition and Measurement
            IFRIC15 Agreements for the Construction of Real Estate
            IFRIC16 Hedges of a Net Investment in a Foreign Operation
            IFRIC10 Interim Financial Reporting and Impairment
            IFRIC11 IFRS2 - Group and Treasury Share Transactions
            IFRIC12 Service Concession Arrangements
            IFRIC13 Customer Loyalty Programmes
            IFRIC14 IAS19 - The Limited on a Defined Benefit Asset, Minimum Funding Requirements and their interactions


Management is in the process of assessing the impact of the new and revised standards and interpretations.




46
Notes to the Annual Financial Statements
for the year ended 31 March 2009


3.    Risk management

Foreign exchange risk

The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the US dollar. Foreign exchange risk arises from future commercial transactions, recognised
assets and liabilities and net investments in foreign operations.

The group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk.
Currency exposure arising from the net assets of the group‟s foreign operations is managed primarily through borrowings
denominated in the relevant foreign currencies.

The group expects its foreign exchange contracts to hedge its exposure to foreign currency fluctuations. The group also
purchases US Dollars on an ongoing basis to hedge its exposure. The balances arising on material transactions
denominated in foreign currencies is immediately hedged through the use of foreign exchange contracts.

At 31 March 2009, if the currency had strengthened by 10% against the US dollar with all other variables held constant,
post-tax profit for the year would have been R 3,593,103 (2008: R 2,647,716) lower, mainly as a result of foreign exchange
gains/losses on translation of US dollar denominated trade receivables, financial assets at fair value through profit or loss,
debt securities classified as available for sale and foreign exchange losses/gains on translation of US dollar denominated
borrowings. If the currency had weakened by 10% against the US dollar with all other variables held constant, post-tax
profit for the year would have been R3,593,103 (2008: R2,647,716) higher.

Profit is less sensitive to movement in Rand/US dollar exchange rates in 2009 than 2008 because of the decreased amount
of US dollar-denominated borrowings.


                                                                      GROUP                                COMPANY
                                                             2009                2008               2009                2008
                                                                R                  R                   R                  R



 Foreign currency exposure at balance sheet date


 Liabilities

 Current, USD - loan (2008: USD 1,100,000)                            -         8,626,535                    -         8,626,535

 Accounts payable, USD 2,294,388                           22,302,602                    -        22,302,602
 (2008: USD -)




47
Notes to the Annual Financial Statements
for the year ended 31 March 2009


3.    Risk management (continued)

Foreign exchange risk (continued)

                                                                     GROUP                                  COMPANY
                                                            2009                2008               2009               2008
                                                               R                  R                   R                  R



Exchange rates used for conversion of foreign items were:

USD                                                            9.7205            8.1200            9.7205            8.1200

Forward exchange contracts which relate to future commitments


Amount in foreign currency purchased                                             Forward exchange rate             Maturity date

2,065,612 USD                                                                    1USD = R9.54                      01 April 2009

875,000 USD                                                                      1USD= R 9.55                      06 April 2009

695,000 USD                                                                      1USD - R9.67                      02 June 2009

166,649 USD                                                                      1USD = R9.55                      30 April 2009

207,176 USD                                                                      1USD = R9.57                      08 May 2009

289,620 €                                                                        1EUR = R12.90                     15 June 2009



Recognised in profit for the year

Foreign exchange variance                                            -           837,445                    -           837,445


The group reviews its foreign currency exposure, including commitments on an ongoing basis. The company expects its foreign
exchange contracts to hedge foreign exchange exposure.

Price Risk

The group is not exposed to commodity price risk.

Interest rate risk

As the group has no significant interest-bearing assets, the group‟s income and operating cash flows are substantially independent
of changes in market interest rates.

The group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration
refinancing, renewal of existing positions, alternative financing and hedging. Based on these scenarios, the group calculates the
impact on profit and loss of a defined interest rate shift. For each simulation, the same interest rate shift is used for all
currencies.




48
Notes to the Annual Financial Statements
for the year ended 31 March 2009


3.     Risk management (continued)

Interest rate profile of the company



Financial instruments                                                                       2009                             2008

                                                                                              R                                  R



Cash in current banking institutions                                         10.00 %      35,038,853          11.00 %       26,203,143

Albion Trade Finance Resources Limited                                             -%                -        12.00 %         5,086,363

Undisclosed debtors discounting facility                                     12.50 %      73,467,835          14.00 %      139,753,398

Overdraft facilities used                                                    13.00 % 119,736,255                     -%                 -

Bond over property - floating rate                                           11.75 %      72,248,053          12.50 %       26,578,968

Finance leases                                                               12.75 %      48,600,602          13.75 %      21,665,106



 Sensitivity analysis

 At year-end the sensitivity to open to exposure of floating interest rates on the operating profit is as follows:

                                                                                                                            2009

                                                                                                                              R


+10%                                                                                                                      (3,593,103)

-10%                                                                                                                      3,593,103


                                                                                                                            2008

                                                                                                                             R

+10%                                                                                                                      (2,647,716)

-10%                                                                                                                      2,647,716


Credit risk

Credit risk is managed on a group basis.

Credit risk consists mainly of cash deposits, cash equivalents, derivative financial instruments and trade debtors. The company
only deposits cash with major banks with high quality credit standing and limits exposure to any one counterparty.

Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing
basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control
assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual
risk limits are set based on internal or external ratings in accordance with limits set by the board. The utilisation of credit limits is
regularly monitored. Sales to retail customers are settled in cash or using major credit cards.



49
Notes to the Annual Financial Statements
for the year ended 31 March 2009


3.    Risk management (continued)

Credit guarantee insurance is purchased when deemed appropriate.

No credit limits were exceeded during the reporting period, and management does not expect any losses from non- performance
by these counterparties.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic
nature of the underlying businesses, group treasury maintains flexibility in funding by maintaining availability under committed
credit lines.

The table below analyses the group‟s financial liabilities and net-settled derivative financial liabilities into relevant maturity
groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the
table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of
discounting is not significant.

 GROUP

 At 31 March 2009                                        Less than 1         Between 1          Between 2           Over 5 years
                                                            year                and                and
                                                                              2 years            5 years

 Borrowings                                                16,213,977          15,844,649        43,646,896           52,311,640
 Trade and other payables                                 165,854,339                    -                  -                  -



 At 31 March 2008                                        Less than 1         Between 1          Between 2          Over 5 years
                                                            year                and                and
                                                                              2 years            5 years

 Borrowings                                                 1,402,089           1,496,557          5,896,255         17,317,780
 Trade and other payables                                 188,314,635                    -                  -                  -



 COMPANY

 At 31 March 2009                                        Less than 1         Between 1          Between 2           Over 5 years
                                                            year                and                and
                                                                              2 years            5 years

 Borrowings                                                 8,074,578         11,999,811         34,445,567           45,248,366
 Trade and other payables                                 161,116,269                    -                  -                  -



 At 31 March 2008                                        Less than 1       Between 1 and      Between 2 and         Over 5 years
                                                            year              2 years            5 years

 Borrowings                                                   403,692            458,629            1,829,286          6,119,170
 Trade and other payables                               245,185,941                      -                   -                     -




50
Notes to the Annual Financial Statements
for the year ended 31 March 2009


3.    Risk management (continued)

Fair value estimation

The group is exposed to equity securities price risk because of investments held by the group and classified on the consolidated
balance sheet either as available for sale or at fair value through profit or loss. The group is not exposed to commodity price risk.
To manage its price risk arising from investments in equity securities, the group diversifies its portfolio. Diversification of the
portfolio is done in accordance with the limits set by the group.


4.    Segment reporting

Primary reporting format - primary business segments.

For management purposes the group is organised into three main business segments, namely Stockists, Bulk sales and
Exporting.

Other group operations mainly comprise of the rental of property and the processing of plant. Neither of these constitutes a
separately reportable segment.

The segment results for the year ended 31 March 2009 are as follows:

                                                                                   2009

                                           Stockists         Bulk sales         Exporting            Other             Total
                                               R                  R                 R                  R                 R

 Revenue - external                          672,999,297     525,113,671        634,312,291        24,563,412     1,856,988,671
 Revenue - internal                           19,495,909      44,550,589        333,556,097        14,383,718       411,986,313
 Total segment revenue                       692,495,206     569,664,260       967,868,388         38,947,130     2,268,974,984


 Operating profit before interest             40,580,284       32,003,388        81,786,991          (932,224)      153,438,439
 and taxation

 Investment income                                388,223             984           569,567            399,414         1,358,188
 Finance costs                                (9,779,621)     (9,463,921)       (4,035,462)        (6,076,662)      (29,355,666)
 Profit before taxation                       31,188,886       22,540,451        78,321,096        (6,609,472)      125,440,961
 Taxation                                    (11,216,603)     (8,911,616)      (12,191,651)         7,190,606       (25,129,264)
 Profit for the year                          19,972,283       13,628,835        66,129,445           581,134       100,311,697

                                                                                   2008

                                            Stockists        Bulk sales         Exporting            Other             Total
                                                R                  R                 R                 R                  R

 Revenue - external                          510,844,432     452,260,170       453,087,004         16,110,872     1,432,302,478
 Revenue - internal                           19,146,451       5,269,288       231,886,970                  -       256,302,709
 Total segment revenue                       529,990,883     457,529,458       684,973,974         16,110,872     1,688,605,187


 Operating profit before interest              41,239,570      40,723,870        67,070,437          5,399,696      154,433,573
 and taxation

 Investment income                                276,356         714,157            195,905           300,931         1,487,349
 Finance costs                                (6,517,021)     (9,759,969)        (2,387,130)       (3,722,565)      (22,386,685)
 Profit before taxation                       34,998,905       31,678,058        64,879,212         1,978,062       133,534,237
 Taxation                                     (8,939,631)     (9,027,663)      (15,302,101)         (897,363)       (34,166,758)
 Profit for the year                          26,059,274       22,650,395        49,577,111         1,080,699        99,367,479


51
Notes to the Annual Financial Statements
for the year ended 31 March 2009


4.     Segment reporting (continued)

Inter-segment transfers or transactions are entered into under normal commercial terms and conditions that would have been
available to unrelated third parties.

Segment assets consist primarily of property, plant and equipment inventories, trade and other receivables and cash and cash
equivalents.

Unallocated assets comprise deferred taxation, intangible assets and other financial assets.

Segment liabilities comprise operating liabilities. Unallocated liabilities comprise items such as taxations and borrowings.

Capital expenditure comprises additions to property, plant and equipment (Note 5), including additions resulting from acquisitions
through business combinations.

The segment assets and liabilities at 31 March 2009 for the year then ended are as follows:



                                                                      2009

                               Stockists         Bulk sales        Exporting            Other         Eliminations             Total


                                    R                 R                 R                 R                 R                   R


 Assets                        202,187,391       119,712,541       250,184,172       319,197,972        (49,933,447)     841,348,629

 Liabilities                   (46,861,815)      (36,806,109)      (71,878,279)      (319,029,667)        49,188,833     (425,387,037)

                               155,325,576        82,906,432       178,305,893            168,305          (744,614)     415,961,592




The segment assets and liabilities at 31 March 2008 for the year then ended are as follows:


                                                                      2008

                               Stockists         Bulk sales        Exporting            Other         Eliminations             Total


                                    R                 R                 R                 R                 R                   R



 Assets                        283,339,759        183,879,891       161,873,516        60,908,326         28,075,120       718,076,612

 Liabilities                 (109,364,983)      (143,396,625)       (62,094,959)     (38,374,051)       (67,766,832)     (420,997,450)

                               173,974,776        40,483,266        99,778,557         22,534,275       (39,691,712)       297,079,162




52
Notes to the Annual Financial Statements
for the year ended 31 March 2009


4.    Segment reporting (continued)

Secondary reporting format – geographical segments

The Group‟s four biggest segments operate in two main geographical areas. The home country of the Company is the Republic of
South Africa. The areas of operation are principally merchandising, trading and exporting of steel.




                                                                                             2009
                                                                            RSA             Africa            Total
                                                                             R                 R                R
 Revenue – external                                                    1,222,676,380     634,312,291 1,856,988,671
 Revenue - internal                                                       78,430,216      333,556,097      411,986,313
 Total segment revenue                                                 1,301,106,596      967,868,388    2,268,974,984


 Operating profit before interest and taxation                           71,651,448       81,786,991      153,438,439


 Investment income                                                           788,621          569,567       1,358,188

 Finance costs                                                           (25,320,204)      (4,035,462)    (29,355,666)
 Profit before taxation                                                  47,119,865       78,321,096      125,440,961
 Taxation                                                                (12,937,613)     (12,191,651)    (25,129,264)
 Profit for the year                                                      34,182,252       66,129,445      100,311,697




                                                                                             2008
                                                                            RSA             Africa            Total
                                                                             R                 R                R

 Revenue - external                                                      979,215,474      453,087,004    1,432,302,478
 Revenue - internal                                                     (18,204,169)      18,204,169                 -
 Total segment revenue                                                   961,011,305      471,291,173    1,432,302,478


 Operating profit before interest and taxation                            87,363,136       67,070,437     154,433,573

 Investment income                                                        1,291,444           195,905       1,487,349
 Finance costs                                                          (19,999,555)      (2,387,130)     (22,386,685)
 Profit before taxation                                                   68,655,025       64,879,212     133,534,237
 Taxation                                                               (18,864,657)     (15,302,101)     (34,166,758)
 Profit for the year                                                      49,790,368       49,577,111       99,367,479




53
Notes to the Annual Financial Statements
for the year ended 31 March 2009


4.     Segment reporting (continued)
Revenue is allocated based on the country in which the customer is located.


The segment assets and liabilities at 31March 2009 for the year then ended are as follows:



                                                                                             2009
                                                                   RSA             Africa       Eliminations         Total
                                                                     R                R                R               R


Assets                                                         641,097,904      250,184,172     (49,933,447)     841,348,629

Liabilities                                                   (402,697,591)     (71,878,279)        49,188,833   (425,387,037)

Net Equity                                                      238,400,313      178,305,893         (744,614)    415,961,592




                                                                                             2008
                                                                   RSA             Africa       Eliminations         Total
                                                                     R                R                R               R


Assets                                                         528,127,976      161,873,516         28,075,120   718,076,612

Liabilities                                                   (291,135,659)     (62,094,959)    (67,766,832)     (420,997,450)

Net Equity                                                      236,992,317       99,778,557    (39,691,712)      297,079,162




54
Notes to the Annual Financial Statements
for the year ended 31 March 2009


5.    Property, plant and equipment


 GROUP

                                                2009                                               2008

                            Cost /         Accumulated Carrying value            Cost /       Accumulated Carrying value
                           Valuation       depreciation                         Valuation     depreciation

                               R                 R                 R                R               R              R

 Land and Buildings       137,973,769         (402,281)       137,571,488        66,445,693                  4    66,445,697
 Plant and machinery       38,994,547       (2,737,680)        36,256,867        25,291,701     (1,508,614)       23,783,087
 Furniture and fixtures     1,538,113         (450,345)         1,087,768           896,945      (173,424)             723,521
 Motor vehicles            16,634,422       (2,574,113)        14,060,309        8,720,137        (453,564)        8,266,573
 Office equipment           3,285,533         (726,602)         2,558,931        1,073,142        (448,854)            624,288
 IT equipment               2,588,509        (1,445,344)         1,143,165       1,733,231     (1,013,158)             720,073
 Leased assets              9,066,048        (8,317,210)          748,838         7,584,660     (5,065,665)       2,518,995



 Total                    210,080,941      (16,653,575)       193,427,366       111,745,509     (8,663,275)      103,082,234




 COMPANY

                                                2009                                               2008

                            Cost /         Accumulated Carrying value            Cost /       Accumulated Carrying value
                           Valuation       depreciation                         Valuation     depreciation

                               R                 R                R                 R               R              R

 Land and Buildings        96,018,805                     -     96,018,805       15,075,682                  -    15,075,682
 Plant and machinery       11,822,931         (408,482)         11,414,449        2,489,605      (144,584)        2,345,021
 Furniture and fixtures     1,033,701         (283,871)           749,830          601,746       (101,870)             499,876
 Motor vehicles            12,065,040       (1,512,281)        10,552,759         7,544,479      (242,851)        7,301,628
 Office equipment           2,747,350         (662,651)          2,084,699       1,039,914       (441,891)             598,023
 IT equipment               2,430,326       (1,409,292)        1,021,034         1,692,815      (1,005,354)         687,461
 Leased assets                         -                  -                 -       10,965         (10,965)                  -



 Total                    126,118,153        (4,276,577)       121,841,576       28,455,206     (1,947,515)       26,507,691




55
Notes to the Annual Financial Statements
for the year ended 31 March 2009


5.    Property, plant and equipment (continued)

Reconciliation of property, plant and equipment – Group - 2009

                            Opening       Additions     Disposals     Classified as   Transfers       Revaluations    Foreign     Depreciation       Total
                            Balance                                   held for sale                                   exchange
                                                                                                                     movements
                               R              R              R             R              R                 R            R              R               R

 Land and Buildings        66,445,697     84,549,131              -    (18,900,000)            -        2,900,000     2,954,004      (377,344)    137,571,488
 Plant and machinery       23,783,087    14,269,352               -      (516,346)        17,198                -         6,742   (1,303,166)       36,256,867
 Furniture and fixtures       723,521       561,732        (14,938)               -       20,799                -        65,772     (269,118)        1,087,768
 Motor vehicles             8,266,573      7,646,775      (248,375)               -            -                -       431,120    (2,035,784)     14,060,309
 Office equipment             624,288      2,232,389              -               -     (37,997)                -       18,074        (277,823)      2,558,931
 IT equipment                 720,073       862,016        (17,499)               -            -                -       18,350        (439,775)       1,143,165
 Leased assets              2,518,995              -              -               -            -                -      283,188     (2,053,345)          748,838
                           103,082,234   110,121,395      (280,812)   (19,416,346)                      2,900,000     3,777,250    (6,756,355)    193,427,366


Reconciliation of property, plant and equipment – Group - 2008


                            Opening       Additions      Additions     Disposals      Transfers       Revaluations    Foreign     Depreciation       Total
                            Balance                       through                                                     exchange
                                                       business                                                      movements
                                                       combinations
                                R             R               R             R             R                R             R              R               R

 Land and buildings        17,399,268    31,297,138      9,496,370                -            -        7,521,066      731,855                -    66,445,697
 Plant and machinery       17,085,626     8,109,806        269,989        (383,115)     (17,156)                -     (11,368)     (1,270,695)     23,783,087
 Furniture and fixtures       242,245        415,694       267,513         (31,704)      17,156                 -      (17,181)       (170,202)       723,521
 Motor vehicles             3,487,369     7,842,152        578,212     (1,957,529)             -                -     (305,438)   (1,378,193)       8,266,573
 Office equipment             111,430      1,040,267             -        (244,617)            -                -         3,536       (286,328)       624,288
 IT equipment                 585,088        455,339       273,232        (343,121)            -                -        16,219       (266,684)       720,073
 Leased assets                      -      3,525,054     2,672,921       (941,157)             -                -      168,940      (2,906,763)     2,518,995
                           38,911,026     52,685,450     13,558,237     (3,901,243)               -     7,521,066      586,563     (6,278,865)     103,082,234
Notes to the Annual Financial Statements
for the year ended 31 March 2009


5. Property, plant and equipment (continued)

Reconciliation of property, plant and equipment – Company - 2009


                                                          Opening        Additions        Disposals    Transfers       Depreciation     Total
                                                          Balance
                                                              R               R               R             R                R             R

 Buildings                                               15,075,682     80,943,123                 -             -                -   96,018,805
 Plant and machinery                                      2,345,021      9,322,470                 -             -        (253,042)    11,414,449
 Furniture and fixtures                                     499,876        445,626                 -       (2,536)      (193,136)         749,830
 Motor vehicles                                           7,301,628      4,783,291         (248,375)             -     (1,283,785)    10,552,759
 Office equipment                                           598,023      1,707,437                 -         2,536        (223,297)     2,084,699
 IT equipment                                               687,461        763,221          (17,499)             -      (412,149)     1,021,034
                                                         26,507,691     97,965,168         (265,874)               -    (2,365,409)   121,841,576



Reconciliation of property, plant and equipment – Company - 2008



                                              Opening     Additions       Additions       Disposals    Transfers       Depreciation     Total
                                              Balance                      through
                                                                      divisionalisation
                                                 R            R                R               R            R                R             R

 Land and buildings                            334,936   15,075,682               -        (334,936)            -                 -   15,075,682
 Plant and machinery                            66,299            -       2,405,689                -            -        (126,967)     2,345,021
 Furniture and fixtures                        164,251     482,134          81,434         (25,116)    (141,723)          (61,104)       499,876
 Motor vehicles                                 10,141            -       7,729,274       (189,098)             -         (248,689)    7,301,628
 Office equipment                                    -      468,400       157,189           (36,800)      141,723        (132,489)       598,023
 IT equipment                                  270,75I     175,560        415,160           (45,968)            -        (128,042)       687,461
                                               846,378   16,201,776     10,788,746         (631,918)               -      (697,291)    26,507,691
Notes to the Annual Financial Statements
for the year ended 31 March 2009


5.    Property, plant and equipment (continued)

                                                                    GROUP                                 COMPANY
                                                            2009                  2008             2009               2008
                                                              R                    R                 R                  R

Pledged as security
Carrying value of assets pledged as security:

Land and buildings                                       117,723,772         52,078,009         96,018,805         15,075,682

Motor vehicles                                              9,115,431        5,817,591          9,115,431          5,817,591

Plant and machinery                                        31,644,849        19,549,404         10,540,257            989,186

Office equipment                                             196,186           261,581            196,186            261,581


Other than the land and buildings, the above assets are all encumbered by instalment sale agreements, which bear interest at
prime less 1%, are repayable over varying periods of 2 to 72 months and for which the monthly instalments total R2,894,178
(2008: R474,959).

The land and buildings are encumbered by mortgage bonds bearing interest at varying rates linked to prime (11.5% - 12.5%),
are repayable on a ten year term in total monthly instalments of R999,245 (2008: R408,705).


Assets subject to finance lease (net carrying amount)


Property, plant and equipment - Zambia                      748,838          2,518,995                    -                  -


Revaluations

The Klipriver property was revalued by the company's directors and the value is deemed to equal the building costs spent on
erection of the property. The Alrode property was similarly valued and the value is deemed to equal the revalued amount as per
the prior year's financial statements.

Land and buildings are re-valued annually.

The valuations were performed using the discounted cash flow approach (other, describe, e.g. recent arms length transaction),
and the following assumptions were used:
Discount rate - 12%
Current market related gross rentals were assumed; and
Increased demand for industrial land.

The effective date of revaluation of the properties in Zambia was 11 May 2007. The revaluations were performed by Mr Musonda
Kasase of Anderson and Anderson International Valuation Surveyors. Anderson and Anderson are not connected to the group.

The carrying value of the revalued assets under the cost model would have been:



Land and buildings                                      128,747,437         51,639,104                    -                  -

A register containing the information required by paragraph 22(3) of Schedule 4 of the Companies Act is available for inspection
at the registered office of the company.




58
Notes to the Annual Financial Statements
for the year ended 31 March 2009


6.    Goodwill

GROUP

                                                                             2009
                                            Cost / Valuation         Accumulated Carrying            Carrying value
                                                                      value amortization
                                                   R                          R                             R


 Goodwill                                     13,442,080                       -                      13,442,080


                                                                             2008
                                            Cost / Valuation         Accumulated Carrying            Carrying value
                                                                      value amortization
                                                   R                          R                             R



 Goodwill                                     13,442,080                       -                      13,442,080



Reconciliation of goodwill – Group - 2009

                                                                                                Opening           Total
                                                                                                Balance
                                                                                                    R                 R

 Goodwill                                                                                      13,442,080       13,442,080



Reconciliation of goodwill – Group - 2008
                                                                Opening        Additions        Foreign          Total
                                                                Balance         through        Exchange
                                                                          divisionalisation    movements
                                                                     R              R              R               R


 Goodwill                                                        3,772,862         9,257,059      412,159       13,442,080




Impairment testing of goodwill

The remaining goodwill was assessed by reference to the value-in-use of the cash-generating units. Discount factors ranging
between 10% to 12% per annum (2008: 10% to 12% per annum) were applied in the value-in-use model.




59
Notes to the Annual Financial Statements
for the year ended 31 March 2009


6.    Goodwill (continued)

Allocation of goodwill to cash-generating unit

Goodwill has been allocated for impairment testing purposes to the underlying discreet business segments as they represent
separately identifiable cash-generating units. The following cash-generating units, being the lowest level of asset for which there
are separately identifiable cash flows, have carrying amounts of goodwill:

                                                                                                            GROUP
                                                                                                   2009               2008

                                                                                                     R                  R

 Stockists                                                                                         4,215,585          4,215,585
 Bulk sales                                                                                        1,185,136          1,185,136
 Exporting                                                                                         5,482,306          5,482,306
 Other                                                                                             2,559,053          2,559,053
                                                                                                  13,442,080         13,442,080



 7. Intangible assets

 GROUP                                                   2009                                             2008
                                      Cost /       Accumulated Carrying value        Cost /       Accumulated Carrying value
                                     Valuation     amortisation                     Valuation     amortisation
                                         R               R            R                 R              R             R
 Computer software                     5,654,225       (885,777)     4,768,448       2,013,616       (486,127)        1,527,489


 COMPANY                                                 2009                                             2008
                                      Cost /       Accumulated Carrying value        Cost /       Accumulated Carrying value
                                     Valuation     amortisation                     Valuation     amortisation
                                         R                R           R                 R               R            R
 Computer software                     5,633,483       (879,342)     4,754,141      2,013,620        (486,123)        1,527,497



 Reconciliation of intangible assets - Group - 2009


                                                       Opening       Additions          Foreign      Amortisation       Total
                                                       balance                         exchange
                                                                                       movements
                                                            R              R                R               R               R
 Computer software                                    1,527,489     3,675,914            3,072       (438,027)         4,768,448



 Reconciliation of intangible assets - Group - 2008


                                                        Opening       Additions       Foreign         Amortisation       Total
                                                        balance                       exchange
                                                                                     movements
                                                              R           R              R                  R               R
 Computer software                                      188,445     1,499,379          (97,735)        (62,600)        1,527,489



60
Notes to the Annual Financial Statements
for the year ended 31 March 2009

7.    Intangible assets (continued)
Reconciliation of intangible assets – Company - 2009

                                                                   Opening       Additions      Amortisation       Total
                                                                   Balance
                                                                      R              R                R              R
Computer software                                                1,527,497       3,658,782       (432,138)      4,754,141

Reconciliation of intangible assets – Company - 2008

                                      Opening        Additions    Additions     Disposals        Amortisation        Total
                                      Balance                       through
                                                                   business
                                                                 combinations
                                          R              R              R            R                  R                R
Computer software                      181,480      1,499,385         3,277        (97,733)       (58,912)        1,527,497



8.    Investments in subsidiaries

Name of company                                                    % holding % holding           2009               2008
                                                                      2009     2008                R                  R

Garrison Steel (Pty) Ltd                                                 -%        100%                 -       15,779,781
Newcolab (Pty) Ltd                                                      100%       100%            1,000              1,000
Red Chip Investments (Pty) Ltd                                          100%       100%        2,460,968           2,460,968
Shearcut (Pty) Ltd                                                     100%        100%               100                100
Shearcut Precision Steel (Pty) Ltd                                       -%       100%                      -         1,000
BSI Steel Zambia Ltd *                                                 100%       100%        25,339,512        25,339,512
Doddleprops (Pty) Ltd                                                  100%       100%         1,239,123          1,239,023
Discount Steel Africa (Pty) Ltd                                         -%        100%                      -     7,589,081
Discount Steel KZN (Pty) Ltd                                            -%         100%                     -      1,471,602
Discount Steel Trading (Pty) Ltd                                         -%        100%                     -     5,817,086

                                                                                              29,040,703          59,699,153

* Indirect holding of BSI Steel Katanga SPRL and BSI Steel Africa Ltd - 100% (2008: 100%)

 9. Loans to (from) group companies
                                                                                                        COMPANY
                                                                                               2009               2008
                                                                                               R                    R
Subsidiaries
Shearcut (Pty) Ltd                                                                            27,836,629             723,401
Discount Steel KZN (Pty) Ltd                                                                              -       21,366,474
BSI Steel Zambia Ltd                                                                          17,329,935           5,826,113
Red Chip Investments (Pty) Ltd                                                                (1,541,274)                    -
Doddleprops (Pty) Ltd                                                                          1,427,689                     -
Newcolab (Pty) Ltd                                                                            (3,196,187)                    -
BSI Steel Katanga (Pty) Ltd                                                                    (998,817)                     -

                                                                                              40,857,975        27,915,988



61
Notes to the Annual Financial Statements
for the year ended 31 March 2009

9.    Loans to (from) group companies (continued)

 Intercompany loans are classified as loans and receivables and their carrying value approximates fair value. All intercompany
 loans are made in the ordinary course of business, are interest-free, unsecured and repayable within 30 days of statement
 issue.

                                                                         GROUP                                 COMPANY
                                                                  2009            2008              2009                 2008
                                                                     R              R                  R                   R

 The above loans are disclosed as follows:


 Current assets                                                          -               -        46,594,253          27,915,989
 Current liabilities                                                     -               -        (5,736,278)                    -

                                                                         -               -        40,857,975          27,915,989




10. Other financial assets
                                                                         GROUP                                 COMPANY
                                                                2009              2008                2009               2008
                                                                 R                  R                      R               R



 Derivative financial instruments
 Foreign exchange contract                                               -        837,445                      -          837,445



 Loans and receivables
 The BSI Share Trust                                                     -               -                     -         1,920,232
 The above loan is unsecured, interest free
 with no fixed terms of repayment.
 Total other financial assets                                            -        837,445                      -       2,757,677


 The financial assets are disclosed as follows:


 Non-current assets
 Loans and receivables                                                   -               -                     -       1,920,232



 Current assets
 Derivative financial instruments                                        -        837,445                      -          837,445
                                                                         -        837,445                      -       2,757,677



 The above loans and receivables are held at amortised cost and the carrying value is deemed to be the fair value.

 There were no gains or losses realised on the disposal of held to maturity financial assets in 2009 and 2008, as all the financial
 assets were disposed of at their redemption date.



62
Notes to the Annual Financial Statements
for the year ended 31 March 2009

11. Financial assets by category
The accounting policies for financial instruments have been applied to the line items below:

GROUP - 2009


                                     Loans and           Fair value          Financial         Held to        Available for
                                    receivables         through profit       derivatives       maturity         sale
                                                        or loss / held
                                                           for trading

                                           R                   R                  R               R                 R

Trade and other receivables           320,055,031                    -                     -              -                   -
Cash and cash equivalents              35,087,685                    -                     -              -                   -
                                      355,142,716                    -                     -              -                   -

GROUP - 2008


                                     Loans and           Fair value          Financial         Held to        Available for
                                    receivables         through profit       derivatives       maturity         sale
                                                        or loss - held
                                                        for trading
                                             R                  R                   R              R                 R

Other financial assets                          -                    -           837,445                  -                   -
Trade and other receivables           380,314,204                    -                 -                  -                   -
Cash and cash equivalents              26,235,947                    -                 -                  -                   -
                                      406,550,151                    -           837,445                  -                   -

COMPANY - 2009


                                     Loans and           Fair value          Financial         Held to        Available for
                                    receivables         through profit       derivatives       maturity         sale
                                                        or loss - held
                                                        for trading
                                             R                  R                   R              R                 R

Loans to group companies               46,594,253                    -                     -              -                   -
Trade and other receivables           245,645,659                    -                     -              -                   -
Cash and cash equivalents              10,163,282                    -                     -              -                   -
                                      302,403,194                    -                     -              -                   -


COMPANY - 2008


                                     Loans and           Fair value          Financial         Held to        Available for
                                    receivables         through profit       derivatives       maturity         sale
                                                        or loss - held
                                                        for trading
                                             R                  R                   R              R                 R

Loans to group companies              27,915,989                     -                 -                  -                   -
Other financial assets                 1,920,232                     -           837,445                  -                   -
Trade and other receivables           294,226,160                    -                 -                  -                   -
Cash and cash equivalents             15,073,425                     -                 -                  -                   -
                                      339,135,806                    -           837,445                  -                   -




63
Notes to the Annual Financial Statements
for the year ended 31 March 2009

12. Deferred tax
                                                                      GROUP                            COMPANY
                                                               2009            2008             2009             2008
                                                                 R               R                R                R

 Deferred tax asset (liability)


 Accelerated capital allowances for tax                       (339,751)       (1,030,061)       (419,063)        (214,934)
 purposes
Revaluation, net of related depreciation                              -       (4,095,395)              -                    -
 Tax losses available for set off against future                      -        1,883,770               -                    -
 taxable income
 Other deferred tax                                           253,073                     -            -                    -
                                                               (86,678)       (3,241,686)       (419,063)        (214,934)



                                                                      GROUP                            COMPANY
                                                             2009              2008             2009             2008
                                                               R                 R                R                R

 Reconciliation of deferred tax asset
 (liability)

 At beginning of the year                                  (3,241,686)      3,113,978           (214,934)      (190,202)
 Reduction due to rate change                                         -      (114,764)                  -          7,700
 Increase (decrease) in tax losses available for set off      (620,706)    (2,419,598)                  -              -
 against future taxable income
 Originating temporary difference on tangible fixed         (1,000,871      (4,569,168)           54,802         171,767
 assets
 Effect of exchange rate movement                              (68,955)              -                  -              -
 Prior year adjustment                                       2,708,854          10,333          (258,931)       101,492
 Acquisition of business                                              -        737,533                  -      (305,691)
 Classification as held for sale                             2,136,686               -                  -              -
                                                               (86,678)    (3,241,686)          (419,063)      (214,934)
 The above deferred tax balance is disclosed as follows:

 Non-current assets                                           3,447,406      2,859,549                  -               -
 Non-current liabilities                                    (3,534,084)    (6,101,235)          (419,063)       (214,934)
                                                               (86,678)    (3,241,686)          (419,063)       (214,934)


13. Inventories

 Work in progress                                            1,819,439     12,064,668           1,819,439     12,064,668
 Merchandise                                               242,938,178    176,375,769         186,883,301   122,091,126
                                                           244,757,617    188,440,437         188,702,740    134,155,794


 Carrying value of inventories carried at fair             112,133,344                -        81,198,637               -
 value less costs to sell




64
Notes to the Annual Financial Statements
for the year ended 31 March 2009

13. Inventories (continued)

 Inventory has been written down to fair value less costs to sell due to steel price decreases. Inventory write downs throughout
 the current financial year amounts to R51, 443,768 (2008: R-) of which R31, 144,738 (2008: R-) relates to inventory on hand at
 balance sheet date. The company write downs comprised R41, 692,659

                                                                      GROUP                                COMPANY
                                                             2009               2008                2009               2008
                                                               R                   R                  R                   R
 Inventory pledged as security

 Inventory pledged as security                             75,000,000        25,000,000            75,000,000        25,000,000

 Inventory was pledged as security for a credit facility with Arcelor Mittal, previously Nedbank Limited, on behalf of the group. At
 year end the facility amounted to R175, 000,000 (2008: R140, 000,000).


14.     Trade and other receivables

 Trade receivables (net of provision)                     292,110,154       357,260,333           237,607,262      282,931,593
 Prepayments                                                 1,252,606         3,858,904             174,236           106,675
 Deposits                                                      316,106           239,714               31,750            31,750
 VAT                                                         4,067,999       14,022,008             2,618,168         7,897,973
 Staff loans                                                   298,777          157,730              137,960           109,508
 Sundry debtors                                            22,009,389         4,775,515             5,076,283         3,148,661

                                                          320,055,031       380,314,204           245,645,659      294,226,160


 Trade and other receivables are classified as loans and receivables at amortised cost and their carrying values approximate
 their fair value.

 Trade and other receivables pledged as security

 Trade and other receivables with a value of R237, 607,262 (2008: R278, 752,184) were pledged as security for the debtors
 discounting facility. At year end the outstanding balance on the facility amounted to R73, 467,835 (2008: 132,397,983).

 Trade and other receivables past due and not impaired

 The ageing of amounts past due and not impaired:

 1 month past due                                           11,744,116        9,824,630            8,407,290         7,060,680
 2 and more months past due                                42,055,781        17,006,548           24,651,089        13,377,425

 Trade and other receivables impaired

 As of 3I March 2009, trade and other receivables of R 7,574,511 (2008: R 5,618,144) were impaired and provided for.
 The carrying amount of trade and other receivables are denominated in the following currencies:

 Rand                                                    240,251,505        276,428,060           237,607,262      290,269,125
 US Dollar                                                51,858,649          4,059,874                     -                -




65
Notes to the Annual Financial Statements
for the year ended 31 March 2009

14.     Trade and other receivables (continued)

                                                                       GROUP                           COMPANY
                                                                2009             2008           2009              2008
                                                                  R                 R              R                 R


 Reconciliation of provision for impairment of trade and other receivables


 Opening balance                                                5,618,145         858,540        2,640,559                -
 Provision for impairment                                       5,580,261       5,352,040        2,336,588       2,760,428
 Amounts written off as uncollectible                         (2,267,088)       (687,968)      (2,267,088)         (73,647)
 Unused amounts reversed                                      (1,356,807)       (905,982)                -         (46,222)
 Acquisition of business                                                -       1,001,515                -                -
                                                               7,574,511        5,618,145       2,710,059        2,640,559


 The maximum exposure to credit risk at the reporting date is the fair value of each class of trade and other receivables
 mentioned above. The group does not hold any collateral as security.

 At year end trade and other receivables comprised 1,140 individual debtors (2008: 1,102).


15. Cash and cash equivalents
                                                                       GROUP                           COMPANY
                                                                2009             2008           2009              2008
                                                                  R                 R              R                 R

 Cash and cash equivalents consist of:

 Cash on hand                                                   48,832             32,803           33,003          25,287
 Bank balances                                              34,968,652         26,203,143      10,130,279      15,048,I38
 Short-term deposits                                           70,201                   -                -               -
 Bank overdraft                                          (119,736,255)      (139,753,399)    (100,910,077)   (105,323,751)
                                                          (84,648,570)      (113,517,453)      (90,746,795     (90,250,326)



 These have been disclosed as follows:
 Current assets                                             35,087,685         26,235,946      10,163,282       15,073,425
 Current liabilities                                     (119,736,255)      (139,753,399)    (100,910,077)   (105,323,751)
                                                          (84,648,570)      (113,517,453)     (90,746,795)     (90,250,326)


 The undisclosed debtor discounting facility is secured by:

 - invoice discounting agreement incorporating a purchase of book debts;
 - unlimited suretyship, exclusing cession of loans funds by:


 Red Chip Investments (Proprietary) Limited
 Newcolab (Proprietary) Limited
 Shearcut (Proprietary) Limited
 Doddleprops (Proprietary) Limited




66
Notes to the Annual Financial Statements
for the year ended 31 March 2009


15. Cash and cash equivalents (continued)
 - cession of Lombards Local and Export Policy No. SDC8720/D1 and 104045.

 At 31 March 2009 the company had an overdraft facility from Stanbic Bank Zambia Limited of USDI,200,000 (2008:
 USD1,200,000) to secure working capital and an additional USDI50,000 guarantee for the supplier line. If called in the
 company would have an obligation to the bank in terms of counter indemnity of USD500,000 (2008: USD500,000). The
 guarantee is secured by way of a legal mortgage of USD600,000 (2008: USD600,000) on the company's properties and floating
 debenture over stocks and debtors for USD500,000 (2008: R500,000).


 16.     Non-current assets held for sale
 The group has decided to dispose of one of its properties, namely Erf number 710, Alrode Ext 4, Johannesburg, measuring
 1.6435 hectares consisting of factories and warehouses erected on it. The assets and liabilities of the disposal group are set
 out below and the revaluation reserve relating to the property, plant and equipment, which will be realised on sale, is disclosed in
 note 19. Other financial liabilities comprise a bond over the property which was previously disclosed under note 20.

 The decision was made by the board to discontinue these operations due to the successful conclusion of a sale agreement for
 the above property. Transfer has taken place on 10 June 2009.

                                                                      GROUP                                 COMPANY
                                                             2009               2008                2009                2008
                                                               R                   R                   R                  R

 Non-current assets held for sale
 Property, plant and equipment                              19,416,346                  -                     -                 -


 Non-current liabilities held for sale
 Other financial liabilities                                 3,986,955                  -                     -                 -
 Deferred tax                                                2,136,686                  -                     -                 -
                                                            6,123,641                   -                     -                 -


 17.     Share capital and share premium

 Authorised
 10,000,000,000 Ordinary shares of 0.001                      100,000             10,000               100,000            10,000
 cents each


 Issued                                                            7,127            7,202                  7,199            7,218
 712,728,151 Ordinary shares of
 0.001cents each
 Share premium                                            117,426,312       124,293,966          124,293,966       126,214,178
                                                          117,433,439       124,301,168           124,301,165       126,221,396

 Reconciliation of number of shares
 issued:
 Reported as at 1 April 2008                             719,854,996              10,000         721,775,228             10,000
 Share conversion                                                   -         99,990,000                    -        99,990,000
 Cancellation of shares                                  (15,700,000)                  -         (17,620,232)                 -
 Issue of ordinary shares                                 15,700,000        132,267,454            15,700,000       132,267,454
 Issue of ordinary shares to directors                              -       489,507,774                     -       489,507,774
 Less: treasury shares held                               (7,126,845)        (1,920,232)                    -                 -
                                                          712,728,151       719,854,996           719,854,996       721,775,228



67
Notes to the Annual Financial Statements
for the year ended 31 March 2009


17.      Share capital and share premium (continued)

During the year under review the following share issues to the BSI Share Incentive Scheme were made:

4 April 2008 11 500 000 ordinary shares at R0.85
13 August 2008 4 200 000 ordinary shares at R 0.97

These shares were repurchased by the company as disclosed in note 9 of the directors‟ report.

Unissued ordinary shares are under the control of the directors in terms of a resolution of members passed at the last annual
general meeting. This authority remains in force until the next annual general meeting.



                                                                         GROUP                            COMPANY
                                                               2009                 2008           2009              2008
                                                                  R                   R              R                 R
Reconciliation of share premium
Reported as at 1 April 2008                                 124,293,966                   -     126,214,178                 -
Issue of shares - ordinary shares                             13,848,843       127,377,655         13,848,843     127,377,655
Cancellation of shares                                      (13,848,843)                  -      (15,769,055)               -
Share issue expenses                                                    -       (1,163,476)                 -     (1,163,477)
Treasury shares held                                          (6,867,654)       (1,920,213)                 -               -

                                                             117,426,312       124,293,966       124,293,966      126,214,178


18.      Foreign currency translation reserve
Translation reserve comprises exchange differences on consolidation of foreign subsidiaries.
                                                                                                          GROUP
                                                                                                      2009           2008
                                                                                                          R            R

Acquisition of business                                                                                       -     2,827,451
Subsequent consolidation                                                                          28,200,644        2,834,731

                                                                                                  28,200,644        5,662,182


19.      Revaluation reserve
In terms of the articles of association, these reserves are distributable on realisation.
                                                                                                          GROUP
                                                                                                   2009              2008
                                                                                                     R                 R

Property revaluation reserves                                                                       9,610,819       6,710,819


The above revaluation reserves are inclusive of revaluations relating to Land and Buildings held for sale as per note 16
amounting to R6,140,957 and will be realised during the next financial year.




68
Notes to the Annual Financial Statements
for the year ended 31 March 2009


20.      Other financial liabilities
                                                                            GROUP                            COMPANY
                                                                     2009            2008              2009            2008
                                                                      R                R                 R               R
At fair value through profit or loss

Drawbridge Trading Limited                                                  -       8,626,535                 -       8,626,535
The above loan was incurred on the purchase
of Discount Steel Zambia Limited. It is
unsecured, interest free and repayable on 30
June 2008.
Derivative financial liabilities
Foreign exchange contract                                         1,713,181                 -        1,402,995                -
                                                                  1,713,181         8,626,535         1,402,995       8,626,535
Held at amortised cost

Albion Trade Finance Resources Limited The                                  -        5,086,363                    -               -
loan facility of USD 1,000,000 was obtained
to finance working capital and the loan is
repayable on demand. The loan
attracts interest at a rate of 12% per annum,
an annual arrangement fee of 3% of the facility
and a commitment fee at 0.5% on the
unutilised portion of the facility at each
month end. The facility is not secured.

Instalment sale agreements                                       48,600,602       19,675,706          40,363,203      6,763,175
The above instalment sale agreements are
secured over property, plant and equipment
as per note 5. They are repayable over
periods varying from 2 to 72 months and
bear interest at varying rates linked to prime.

Mortgage bond
                                                                 72,248,053         26,578,968       59,405,119        9,000,000
The above bonds are secured by land and
building per note 5. They bear interest at
varying rates linked to prime (11.5% -
12.5%), are repayable on a ten year term in
total monthly instalments of R999,244.97.
                                                             120,848,655            51,341,037        99,768,322      15,763,175
Total other financial liabilities                             122,561,836           59,967,572       101,171,317      24,389,710

The maturity of the above liabilities is disclosed per note 3.

Non-current liabilities
At amortised cost                                             111,965,130           43,836,319        91,811,055      15,763,175

Current liabilities

At fair value                                                     1,713,181          8,626,535         1,402,995       8,626,535
At amortised cost                                                 8,883,525          7,504,718         7,957,267               -
                                                                 10,596,706         16,131,253         9,360,262       8,626,535
                                                             122,561,836            59,967,572       101,171,317      24,389,710

The fair values of the financial liabilities approximate their carrying values.
The directors, in terms of the company‟s Articles of Association, have unlimited borrowing powers.



69
Notes to the Annual Financial Statements
for the year ended 31 March 2009
                                                                     GROUP                                     COMPANY
                                                            2009               2008                    2009              2008
                                                              R                   R                      R                 R

21.     Finance lease obligation

Minimum lease payments due

 - within one year                                         1,202,840           1,989,400                         -                   -

The group policy is to lease certain motor vehicles, plant and equipment under finance leases.

The leases are all repayable in the next financial year and the average effective borrowing rate was 12% (2008: 13%). Interest
rates are linked to prime at the contract date. All lease repayments vary with the interest rate and no arrangement has been
entered into for contingent rent.

The group's obligations under finance leases are secured by the lessor's charge over the leased assets. Refer note 5. These
liabilities are measured at amortised cost, and their carrying value approximates fair value.

22.     Provisions

Reconciliation of provisions - Group - 2009


                                                                             Opening              Utilised              Total
                                                                             Balance               during
                                                                                                  the year
                                                                                  R                   R                    R
Provision export rebates                                                      1,202,211          (1,202,211)                     -


Reconciliation of provisions - Group - 2008


                                                                             Opening              Utilised               Total
                                                                             Balance               during
                                                                                                  the year
                                                                                  R                   R                    R
Provision export rebates                                                      1,801,625           (599,414)          1,202,211


Reconciliation of provisions - Company - 2009


                                                                             Opening               Utilised             Total
                                                                             Balance               the year
                                                                                 R                    R                    R
Provision export rebates                                                     1,202,211           (1,202,211)                     -


Reconciliation of provisions - Company - 2008


                                                                              Opening             Additions              Total
                                                                              Balance
Provision export rebates                                                                -         1,202,211          1,202,211


This provision represents management's best estimate of the group's shortfall of export rebates already taken to income. There is
an expectation that these export rebates will be received but due to the complexity of the qualifying regulations and past
experience, it is expected that not all export rebates will be received.

The provision for export rebates is classified as a financial liability measured at amortised cost and its carrying value
approximates fair value.



70
Notes to the Annual Financial Statements
for the year ended 31 March 2009


23.      Trade and other payables

                                                                      GROUP                                     COMPANY
                                                             2009               2008                 2009                 2008
                                                               R                   R                    R                   R



Trade payables                                            156,548,493      158,497,208       154,034,161          132,286,217
VAT                                                          1,117,836            38,228                    -                   -
Accruals and other payables                                 7,429,816        29,086,250         6,942,660          17,839,529
Accrued expenses                                               31,085             20,488                    -                   -
Other accrued expenses                                        139,448           126,548             139,448          171,944
Deposits received                                             587,661           545,913                     -                   -
Intercompany investment loans                                         -                 -                   -      94,888,251

                                                          165,854,339       188,314,635       161,116,269         245,185,941


Trade and other payables are held at amortised cost and their carrying value approximates fair value.

The intercompany investment loans arose on the divisionalisation of the following businesses into BSI Steel Limited

- Discount Steel Africa (Proprietary) Limited
- Discount Steel KZN (Proprietary) Limited
- Garrison Steel (Proprietary) Limited
- Discount Steel Trading (Proprietary) Limited


The company has a credit facility of R175,000,000 with Arcelor Mittal which is secured as follow:

- a bond over inventory to the value of R75,000,000;

- reversionary cession of debtors and

- guarantees by the following companies:

Red Chip Investments (Proprietary) Limited

Shearcut (Proprietary) Limited

Doddleprops 6 (Proprietary) Limited




71
Notes to the Annual Financial Statements
for the year ended 31 March 2009


24.      Financial liabilities by category
The accounting policies for financial instruments have been applied to the line items below:

GROUP - 2009

                                                         Financial           Fair value          Fair value          Total
                                                       liabilities at       through profit     through profit
                                                      amortised cost        or loss - held         or loss
                                                                            for trading
                                                              R                    R                  R               R
Other financial liabilities                                120,848,655                  -            1,713,181    122,561,836
Finance lease obligation                                     1,202,840                  -                    -      1,202,840
Trade and other payables                                  165,854,339                   -                    -   165,854,339
Bank overdraft                                             119,736,255                  -                    -   119,736,255
                                                          407,642,089                   -            1,713,181    409,355,270

GROUP - 2008

                                                         Financial           Fair value          Fair value          Total
                                                       liabilities at       through profit     through profit
                                                      amortised cost        or loss - held         or loss
                                                                            for trading
                                                              R                    R                  R               R
Other financial liabilities                                51,341,037                   -            8,626,535      59,967,572
Finance lease obligation                                   1,989,400                    -                    -       1,989,400
Trade and other payables                                 188,314,635                    -                    -   188,314,635
Bank overdraft                                           139,753,399                    -                    -    139,753,399
Provisions                                                  1,202,211                   -                    -       1,202,211
                                                          382,600,682                   -            8,626,535    391,227,217


COMPANY - 2009

                                                         Financial           Fair value          Fair value          Total
                                                       liabilities at       through profit     through profit
                                                      amortised cost        or loss - held      or loss -
                                                                            for trading         designated
                                                              R                    R                   R              R
Loans from group companies                                  5,736,278                   -                   -       5,736,278
Other financial liabilities                                99,768,322                   -           1,402,995    101,171,317
Trade and other payables                                  161,116,269                   -                   -     161,116,269
Bank overdraft                                            100,910,077                   -                   -    100,910,077
                                                          367,530,946                   -            1,402,995    368,933,941

COMPANY - 2008

                                                         Financial           Fair value          Fair value          Total
                                                       liabilities at       through profit     through profit
                                                      amortised cost        or loss - held      or loss -
                                                                            for trading         designated
                                                              R                    R                   R              R
Other financial liabilities                                15,763,175                   -            8,626,535     24,389,710
Trade and other payables                                  245,185,941                   -                    -    245,185,941
Bank overdraft                                            105,323,751                   -                    -    105,323,751
Provisions                                                  1,202,211                   -                    -      1,202,211
                                                         367,475,078                    -            8,626,535    376,101,613




72
Notes to the Annual Financial Statements
for the year ended 31 March 2009

25.      Revenue
                                                                         GROUP                                    COMPANY
                                                                2009                2008                   2009             2008
                                                                  R                    R                     R                R

Sale of goods                                              1,856,988,671      1,432,262,338         1,565,069,073       404,438,359
Rental Income                                                          -             40,140                     -                 -
                                                           1,856,988,671      1,432,302,478         1,565,069,073       404,438,359



26.      Cost of sales

Sale of goods
Cost of goods sold                                         1,497,974,467      1,135,268,482         1,344,729,171       316,645,436
Write down of inventories to net realiseable                  51,443,768                   -           41,692,659                  -
value

                                                           1,549,418,235      1,135,268,482         1,386,421,830       316,645,436



27.      Operating profit before interest and taxation

Operating profit before interest and taxation for the year is stated after accounting for the following:

Income from subsidiaries
Dividends received                                                        -                 -              62,368,350     1,126,667


Operating lease charges
Premises
      Contractual amounts                                       2,625,722          2,019,874                3,400,564     1,533,340
Equipment
      Contractual amounts                                         161,417            100,736                        -              -
                                                               2,787,139           2,120,610                3,400,564     1,533,340



(Loss) profit on sale of property, plant and                      (65,596)         1,011,310                 (65,596)       (49,886)
equipment
Profit on sale of other financial assets                                  -          300,000                        -       300,000
Foreign exchange gains                                          7,368,237        15,750,357                  312,194               -
Auditors' remuneration - fees                                   1,720,898            984,370                1,437,940       207,250
Auditors'remuneration - consulting fees                           275,696             56,247                 267,836         14,800
Depreciation                                                    6,756,355          6,278,865                2,365,409       697,291
Amortisation                                                      438,027             62,600                 432,138         58,912
Employee costs                                                88,998,066         50,494,448                56,721,139     7,795,011




73
Notes to the Annual Financial Statements
for the year ended 31 March 2009


27.      Operating profit before interest and taxation (continued)
                                                           GROUP                            COMPANY
                                                   2009              2008            2009             2008
                                                     R                 R               R                R
Expenses by nature
Employee benefit expense                         (88,998,066)    (50,494,448)      (56,721,139)     (7,795,011)
Depreciation                                      (6,756,355)     (6,278,865)       (2,365,409)       (697,291)
Amortisation                                        (438,027)        (62,600)         (432,138)        (58,912)
Impairment charges                                      (100)               -             (100)               -
Transportation expenses                           (1,906,314)       (570,626)       (5,243,000)       (197,955)
Advertising costs                                 (1,960,055)       (844,514)         (990,747)       (115,605)
Operating lease payments                          (2,787,139)     (2,120,610)       (3,400,564)     (1,533,340)
Other expenses                                (1,601,484,189) (1,220,820,193)   (1,412,712,781)   (351,834,151)
Total cost of sales, distribution costs and
administrative expenses                       (1,704,330,245) (1,281,191,856)   (1,481,865,878)   (362,232,265)


28.      Investment income

Dividend revenue
Subsidiaries - local                                        -               -       62,368,350       1,126,667

Interest revenue
Bank                                                944,568          923,527           869,081         622,951
Interest charged on trade and other                 358,261          288,287           358,261          60,190
receivables
Interest source - other                               55,359         275,535            50,034      10,075,854
                                                  1,358,188        1,487,349        63,645,726      11,885,662


29.      Finance costs

Non-current borrowings                                     -         874,983                 -               -
Trade and other payables                             191,844       4,386,788           191,844       6,993,891
Finance leases                                     2,515,621       1,983,002         1,154,993         363,104
Bank                                               2,128,922       9,111,401         1,617,113          10,649
Current borrowings                                22,304,364       3,780,238        15,926,580       2,993,848
Interest paid                                              -               -                 -         772,413
Other interest paid                                2,214,915       2,237,377            17,144       1,032,748
Shareholders loans                                         -          12,896                 -               -
                                                 29,355,666       22,386,685        18,907,674      12,166,653


30.      Taxation

Major components of the tax expense

Current
Local income tax - current period                 24,688,552      31,540,047        19,717,277      12,922,987

Deferred
Originating and reversing temporary               1,636,555        2,522,280           (54,802)         24,732
differences
Changes in tax rates                                        -        114,764                 -           7,700
Effect of exchange rate movement                    1,513,011               -                -               -
Prior year adjustment                             (2,708,854)        (10,333)          258,931          32,140
                                                    440,712        2,626,711           204,129          64,572
                                                 25,129,264       34,166,758        19,921,406      12,987,559




74
Notes to the Annual Financial Statements
for the year ended 31 March 2009


30.        Taxation (continued)

Reconciliation of the tax expense

Reconciliation between applicable tax rate and average effective tax rate.


                                                                        GROUP                             COMPANY
                                                                  2009              2008           2009              2008
                                                                   R                 R              R                 R
Applicable tax rate                                            28.00 %             29.00 %         28.00 %            29.00 %

Exempt income                                                       -%                  -%        (13.53)%                -%
Tax loss used                                                       -%              (1.80)%            -%                 -%
Decrease in tax rate                                                -%              (0.09)%            -%             (0.02)%
Permanent differences                                           (0.31)%             (0.29)%         0.11 %            (0.07)%
Prior year                                                       0.45 %                 -%          0.72 %                -%
Other                                                            0.16 %             (0.47)%         0.16 %            (0.11)%
Non taxable foreign items                                       (8.27)%             (0.76)%            -%                 -%
                                                               20.03 %              25.59 %        15.46 %            28.80 %



31.        Cash generated from (used in) operations

Profit before taxation                                     125,440,961        133,534,237      128,853,260        45,089,557


Adjustments for:


Depreciation and amortisation                                7,194,382          6,341,468         2,797,547          756,203
Loss (profit) on sale of assets                                 65,596         (1,306,787)           65,596         (250,114)
Dividends received                                                      -                  -   (62,368,350)       (1,126,667)
Interest income                                             (1,358,188)        (1,487,349)      (1,277,376)      (10,758,995)
Finance costs                                               29,355,666         22,386,685       18,907,674         12,166,653
Impairment loss / realisation of investment                             -                  -    30,658,470                  -
Movements in provisions                                     (1,202,211)          (599,414)      (1,202,211)        1,202,211
Foreign exchange gain on forward exchange                             -          (837,500)                  -       (837,500)
contract
Foreign exchange gains                                       7,368,237        (15,750,357)                  -               -


Changes in working capital:


(Increase) in inventories                                 (44,601,405)        (81,088,052)     (54,546,946)     (133,329,309)
Decrease / (Increase) in trade and other                   68,423,333        (170,432,152)     48,580,501       (277,213,564)
receivables
(Decrease) / increase in trade and other                  (26,384,633)         45,425,453      (84,069,672)      166,224,819
payables
                                                          164,301,738        (63,813,768)       26,398,493 (198,076,706)




75
Notes to the Annual Financial Statements
for the year ended 31 March 2009

                                                      GROUP                         COMPANY
                                               2009            2008          2009              2008
                                                 R               R             R                 R
32.     Tax paid

Balance at beginning of the year           (22,331,770)    (9,333,100)     (8,446,837)        (297,245)
Current tax for the year recognised in     (24,688,552)   (31,540,047)    (19,717,277)      (12,922,987)
income statement
Adjustment in respect of businesses sold              -       (148,531)             -                  -
and acquired during the year including
exchange rate movements
Balance at end of the year                   (572,608)     22,331,770      (6,722,275)        8,446,837

                                           (47,592,930)   (18,689,908)    (34,886,389)       (4,773,395)



33.     Cash flows of held for sale operations

Non-current assets held for sale                      -       3,000,000                 -              -



34.     Acquisition of subsidiaries

 Fair value of assets acquired
 Property, plant and equipment                        -       7,680,409                 -     7,680,409
 Deferred tax assets / liabilities                    -    15,198,911                   -    15,198,911
 Inventories                                          -       8,281,149                 -     8,281,149
 Trade and other receivables                          -    20,657,556                   -    20,657,556
 Trade and other payables                             -   (33,124,193)                  -   (33,124,193)
 Cash                                                 -       1,799,664                 -     1,799,664
 Bank overdraft                                       -    (2,053,422)                  -    (2,053,422)
 Current tax payable                                  -       (148,531)                 -     (148,531)
 Total net assets acquired                            -    18,291,543                   -    18,291,543
 Net assets acquired
                                                      -    18,291,543                   -    18,291,543
 Fair value adjustments                               -       5,812,807                 -     5,812,807

                                                      -    24,104,350                   -    24,104,350


 Consideration paid
 Cash                                                 -   (24,104,350)                  -   (24,104,350)


 Net cash outflow on acquisition
 Cash consideration paid                              -   (24,104,350)                  -   (24,104,350)
 Cash acquired                                        -       1,799,664                 -     1,799,664

                                                      -   (22,304,686)                  -   (22,304,686)




76
Notes to the Annual Financial Statements
for the year ended 31 March 2009

                                                                        GROUP                                 COMPANY
                                                                 2009             2008                2009              2008
                                                                   R                 R                    R               R
35.      Commitments

Authorised capital expenditure


Not yet contracted for and authorised by                      13, 995, 645      70,000,000            4,390,618                -
directors


This committed expenditure relates to the establishment of the steel processing and distribution plant in Klipriver, Johannesburg
and will be financed by available bank facilities and mortgage facilities and will be fulfilled within the next financial year.


Operating leases – as lessee
(expense)

Minimum lease payments due

- within one year                                              1,301,343         1,087,128                     -               -
- in second to fifth year inclusive                            3,904,028         4,348,512                     -               -
                                                               5,205,371         5,435,640                     -               -


Operating lease payments represent rentals payable by the group for certain of its office properties. Leases are negotiated for an
average term of seven years and rentals are fixed for an average of three years. No contingent rent is payable.


36.      Contingencies

The group has issue cross-guarantees in the form of unlimited surety ships excluding loan sessions, in favour of Nedbank
Corporate as per note 15.


37.      Related parties


Relationships

Holding company                                                              BSI Steel Limited

Subsidiaries                                                                 Refer to note 8

Shareholder with significant influence                                       Refer to shareholding analysis

Entity under control of shareholder with indirect influence                  Drawbridge Trading Limited

Members of key management                                                    William Battershill

                                                                             Grant Mackenzie

                                                                             James Waller




77
Notes to the Annual Financial Statements
for the year ended 31 March 2009


37.     Related parties (continued)
 `




Related party balances
                                                                                   COMPANY
                                                                            2009             2008
                                                                              R                R

Loan accounts - owing (to) by related parties
Garrison Steel (Proprietary) Limited                                                 -     38,686,570
Newcolab (Proprietary) Limited                                             (3,196,186)       3,615,233
Shearcut Precision Steel (Proprietar) Limited                                        -       (131,904)
Doddleprops (Proprietary) Limited                                            1,427,689       1,854,362
Red Chip Investments (Proprietary) Limited                                 (1,541,274)     (3,729,514)
Shearcut (Proprietary) Limited                                             27,836,629        7,008,280
Discount Steel KZN (Proprietary) Limited                                             -     25,273,223
Discount Steel Africa (Proprietary) Limited                                          -     44,571,600
Discount Steel Trading (Proprietary) Limited                                         -    100,511,828
Drawbridge Trading Limited                                                           -       8,626,535
BSI Steel Katanga SPRL                                                       (998,817)               -
BSI Steel Zambia Limited                                                   17,329,935                -

Amounts included in trade receivable (trade payable) regarding related
parties
Shearcut (Proprietary) Limited                                             (2,453,396)    (1,925,424)
Doddleprops 6 (Proprietary) Limited                                            (78,222)             -
Red Chip Investments (Proprietary) Limited                                   (446,291)              -
BSI Steel Zambia Limited                                                     8,972,722              -
BSI Steel Katanga SPRL                                                       5,050,220              -
Discount Steel Zambia Limited                                                         -   37,694,426
Discount Steel Africa (Proprietary) Limited                                           -     9,476,471

Related party transactions

Interest paid to (received from) related parties
Discount Steel Africa (Proprietary) Limited                                           -     (327,394)
Discount Steel Africa (Proprietary) Limited                                           -       400,070
Shearcut (Proprietary) Limited                                                        -     (988,495)
Doddleprops (Proprietary) Limtied                                                     -     (158,418)
Garrison Steel (Proprietary) Limited                                                  -   (1,432,560)
Discount Steel KZN (Proprietary) Limited                                              -     (659,774)
Newcolab (Proprietary) Limited                                                        -     (415,863)
Newcolab (Proprietary) Limited                                                        -       102,826
Discount Steel Trading (Proprietary) Limited                                          -     (443,925)
Discount Steel Trading (Proprietary) Limited                                          -       404,596
Red Chip Investments (Proprietary) Limited                                            -      (42,719)
Red Chip Investments (Proprietary) Limited                                            -       299,810

Purchases from (sales to) related parties
Shearcut (Proprietary) Limited                                              11,203,364      2,764,963
Garrison Steel (Proprietary) Limited                                                 -        318,355
BSI Steel Zambia Limited                                                 (209,922,634)              -
BSI Steel Katanga SPRL                                                    (40,537,549)              -




78
Notes to the Annual Financial Statements
for the year ended 31 March 2009


37.     Related parties (continued)
                                                                                                     COMPANY
                                                                                              2009             2008
                                                                                                R                R
Rent paid to (received from) related parties
Doddleprops 6 (Pry) Ltd                                                                         823,389                  -
Red Chip Investments (Pty) Ltd                                                                1,894,584                  -

Administration fees paid to (received from) related parties
Discount Steel Africa (Proprietary) Limited                                                           -    (360,495)
Shearcut (Proprietary) Limited                                                                1,799,047     (13,764)
Garrison Steel (Proprietary) Limited                                                                  -    (355,545)
Discount Steel KZN (Proprietary) Limited                                                              -    (989,568)
Discount Steel Trading (Proprietary) Limited                                                          -    (449,370)
BSI Steel Zambia Limited                                                                         90,406            -
BSI Steel Katanga SPRL                                                                           12,601            -

Dividends from/(to) related parties
Discount Steel Africa (Proprietary) Limited                                                  39,304,905    1,126,667
Discount Steel Trading (Proprietary) Limited                                                 23,482,332            -
Discount Steel KZN (Proprietary) Limited                                                      5,286,934            -
Garrison Steel (Proprietary) Limited                                                         23,303,199            -
Shearcut Precision Steel (Proprietary) Limited                                                1,647,149            -

Compensation to directors and other key
management

Details of compensation to directors and other key management is detailed in note 38.


38.     Directors’ Emoluments

 EXECUTIVE

 2009                                                      Basic           Performance     Retirement ,        Total
                                                        remuneration           bonus       medical and
                                                                                          other benefits
                                                               R                  R               R                  R
 WL Battershill                                            1,417,573          4,158,512        239,527      5,815,612
 GDG Mackenzie                                             1,461,250          3,605,193        237,757      5,304,200
 JR Waller                                                 1,073,624          2,475,397        175,228      3,724,249
 WR Teichmann                                              1,048,159          2,826,725        127,037      4,001,921
 C Parry                                                   1,017,433          3,353,671        166,343      4,537,447
                                                           6,018,039        16,419,498         945,892     23,383,429


 2008                                                      Basic           Performance      Retirement,         Total
                                                        remuneration          bonus        medical and
                                                                                          other benefits
                                                               R                  R               R                  R
 WL Battershill                                            1,078,352          3,044,284        191,363      4,313,999
 GDG Mackenzie                                               967,354          2,878,411        176,587      4,022,352
 JR Waller                                                   723,542          1,721,432        263,120      2,708,094
 C Parry                                                     335,766            651,610         99,150      1,086,526
                                                           3,105,014          8,295,737        730,220     12,130,971


79
Notes to the Annual Financial Statements
for the year ended 31 March 2009


38.     Directors’ Emoluments (continued)

NON-EXECUTIVE


2009                                                                        Directors' fees      Committee            Total
                                                                                                   fees
                                                                                   R                 R                     R
NG Payne                                                                         80,004           129,996            210,000
EG Dube                                                                          13,334             6,666             20,000
BM Khoza                                                                         66,670            33,330            100,000
                                                                                160,008           169,992            330,000

2008
                                                                            Directors' fees      Committee            Total
                                                                                                   fees
                                                                                    R                R                    R

NG Payne                                                                        46,667              75,833           122,500
EG Dube                                                                         46,667              23,333            70,000
                                                                                 93,334             99,166           192,500



39.     Post balance sheet event

Steel prices have decreased by R500 and R1,000 per ton on 1 April 2009 and 1 May 2009 respectively and is to increase by
R250 per ton effective 1 July 2009. The net realisable value of inventory at year end has been adjusted accordingly.

Business activities have been extended to Zimbabwe as from 1 May 2009 and the operation will constitute a subsidiary BSI Steel
Africa Limited.

Land and buildings classified as held for sale at year end as per note 16 have been disposed of on 10 June 2009.


40.     Earnings per share
                                                                                                         GROUP
                                                                                                 2009               2008
                                                                                                    R                 R
 Basic

 Profit attributable to ordinary shareholders                                                  100,311,697          99,367,479

 Weighted average number of ordinary shares in issue                                           717,574,859         660,174,383

 Basic and diluted earnings per share (cents)                                                           13.98              15.05
 Reconciliation of headline earnings
 Headline earnings attributable to ordinary shareholders:

 Profit attributable to equity holders of the group                                            100,311,697          99,367,479

 Adjusted for:

 - loss (profit) on disposal of property, plant and equipment                                        65,596        (1,306,787)
 - tax impact of the above adjustments                                                             (18,367)            365,900
 Headline earnings attributable to ordinary shareholders                                       100,358,926          98,426,592



80
Notes to the Annual Financial Statements
for the year ended 31 March 2009


40.      Earnings per share (continued)

                                                                                                           GROUP
                                                                                                   2009               2008
                                                                                                     R                  R


 Weighted number of shares
                                                                                                 717,574,859        660,174,383


 Headline earnings per share (cents)
                                                                                                          13.99              14.91

 Basic

 Basic earnings per share are calculated by dividing the profit attributable to equity holders of the group by the weighted average
 number of ordinary shares in issue during the year.


 Headline

 Headline earnings per share is calculated by excluding all the capital gains and losses from the profit attributable to ordinary
 shareholders and dividing the resultant headline earnings by the weighted average number of ordinary shares in issue during the
 year.




81
Shareholder Analysis
BSI Steel Limited: Shareholder Analysis Tables

Register Date: 27 March 2009
Issued Share Capital: 737,475,228 shares


SHAREHOLDER SPREAD                                         No. of shareholders           %          No. of Shares      %

                                      1 - 1,000 shares                         73            7.77             48,246    0.01

                                 1,001 - 10,000 shares                       463          49.26            2,430,628    0.33

                              10,001 - 100,000 shares                        273          29.04            9,823,538    1.33

                            100,001 - 1,000,000 shares                         89            9.47        30,721,374     4.17

                            1,000,001 shares and over                         42             4.47       694,451,442    94.17
                                                                             940              100       737,475,228      100

DISTRIBUTION OF SHAREHOLDERS                               No. of shareholders           %          No. of Shares      %

Banks                                                                           2            0.21            202,769    0.03

Brokers                                                                         2            0.21            309,629    0.04

Close Corporations                                                             19            2.02            326,430    0.04

Endowment Funds                                                                 5            0.53       164,205,838    22.27

Hedge Fund                                                                      1            0.11          3,378,505    0.46

Individuals                                                                  807          85.85          87,439,152    11.86

Insurance Companies                                                             1            0.11             50,000    0.01

Investment Companies                                                            2            0.21            139,188    0.02

Mutual Funds                                                                    6            0.64        41,325,462     5.60

Nominees and Trusts                                                            56            5.96       345,988,284    46.92

Other Corporations                                                              7            0.74            703,856    0.10

Pension Funds                                                                   3            0.32             70,000    0.01

Private Companies                                                             25             2.66        75,215,883    10.20
Public Companies                                                               1             0.11           500,000     0.07
Share Incentive Trust                                                          3             0.32        17,620,232     2.39
                                                                             940              100       737,475,228      100


PUBLIC / NON - PUBLIC SHAREHOLDERS                        No. of shareholdings           %          No. of Shares      %
Non - Public Shareholders                                                   50               5.32      579,533,662     78.58
Directors of the Company                                                     8               0.85      524,147,234     71.07

Directors of Subsidiaries                                                       3            0.32        13,784,903     1.87

Designated Adviser                                                              4            0.43          2,720,000    0.37

Staff Holdings                                                                35           3.72          38,881,525     5.27
Public Shareholders                                                          890          94.68         157,941,566    21.42
                                                                             940            100         737,475,228      100

Beneficial shareholders holding of 5% or more


Other than directors‟ holding disclosed in note 10 of the Directors‟ Report, there are no holding of 5% or more.




82
Notice of Annual General Meeting
BSI Steel Limited
(formerly BSI (SA) Limited)
(Incorporated in the Republic)
(Registration no 2001/023164/06)
JSE code: BSS ISIN: ZAE000125134
(“BSI” or “the Company”)


Notice is hereby given that the annual general meeting of members of BSI Steel Limited will be held at BSI Steel Limited Gauteng,
Erf 24, Farm Waterval, M61, Klipriver on Tuesday, 8 September 2009 at 4.00 pm to consider the business set out herein and if
deemed fit, to pass, with or without modification the ordinary and special resolutions set out below:


Ordinary Business:

Ordinary resolution no. 1: Consideration of Annual Financial Statements

To receive and adopt the annual financial statements for the company and the group for the year ended 31 March 2009, together
with the directors‟ and auditors‟ reports.


Ordinary resolution no. 2: Re-appointment of auditors

To re-appoint Deloitte and Touche as independent auditors of the company for the year ending 31 March 2010, such auditors having
been nominated by the company‟s Audit Committee in terms of section 270(A)(i) of the Companies Act (act 61 of 1973), as
amended.


Ordinary resolution no. 3: Re-election of directors

In terms of article 117 of the company‟s articles of association, the following directors retire by rotation at the annual general
meeting, but being eligible, offer themselves for re-election. Such re-elections are to be voted on individually unless a resolution is
agreed to by the meeting (without any vote against it) that a single resolution be used.


G D G Mackenzie
N G Payne
C Parry


A brief CV of each director is available on pages 6 and 7 of this annual report.


Ordinary resolution no. 4: Directors’ remuneration

Resolved that the remuneration of the directors as set out on page 79 and 80 of this report be confirmed and approved.


Ordinary Resolution no 5: Approval of proposed directors’ remuneration


Resolved that the non-executive directors‟ remuneration proposed for the year ending 31 March 2010 as set out below, be
approved.


Non-executive directors               R 80 000 per annum
Audit Committee Chairman              R 85 000 per annum
Risk Committee Chairman               R 45 000 per annum
Audit Committee member                R 40 000 per annum



83
Notice of Annual General Meeting                                              (continue)

Ordinary Resolution no. 6: Unissued ordinary shares placed under the control of the
directors

Resolved that the entire authorised but unissued ordinary share capital of the company, from time to time be placed under the
control of the directors of the company, which directors are, subject to the Listings Requirements of the JSE Limited (“JSE”) and the
provisions of sections 221 and 222 of the Companies Act (Act 61 of 1973), as amended (“the Act”), authorised to allot and issue any
such shares at such time or times, to any such person or persons, company or companies and upon such terms and conditions as
they may determine, such authority to remain in force until the next annual general meeting of the company, but at all times subject
to sufficient unissued shares being available for issue and subject to the provisions of the Act.


Ordinary resolution no. 7: General authority to issue of shares for cash

Resolved that in terms of the Listing Requirements of the JSE Limited (“JSE”), the mandate given to the directors of the company in
terms of a general authority to issue shares for cash, as and when suitable opportunities arise, be renewed subject to the following
conditions:

1    The general authority be valid until the company‟s next annual general meeting provided that it shall not extend beyond fifteen
     months from the date of the passing of this ordinary resolution (whichever period is shorter).
2    The allotment and issue of the shares must be made to public shareholders as defined in the Listing Requirements of the JSE
     and not to related parties.
3    The shares which are the subject of the issue for cash must be of a class already in issue, or where this is not the case, must
     be limited to such shares or rights that are convertible into a class already in issue.
4    The number of shares issued for cash in aggregate in any one financial year shall not exceed 50% (fifty percent) of the
     company‟s issued ordinary share capital. The number of ordinary shares which may be issued shall be based on the number of
     ordinary shares in issue at the date of such application less any ordinary shares issued during the current financial year,
     provided that any ordinary shares to be issued pursuant to a rights issue (announced, irrevocable and fully underwritten) or
     acquisition (concluded up to the date of application including announcement of the final terms) may be included as though they
     were shares in issue at the date of application.
5    The maximum discount at which ordinary shares may be issued is 10% (ten percent) of the weighted average traded price of
     those shares over the 30 business days prior to the date that the price of the issue is agreed between the company and the
     party subscribing for the securities or any other price agreed to by the JSE.
6    After the company has issued shares for cash which represent, on a cumulative basis within a financial year, 5% (five percent)
     or more of the number of shares in issue prior to that issue, the company shall publish an announcement containing full details
     of the issue (including the number of shares issued, the average discount to the weighted average traded price of the shares
     over the 30 business days prior to the date that the price of the issue is agreed in writing between the issuer and the party
     subscribing for the shares and the effect of the issue on net asset value, net tangible asset value, earnings and headline
     earnings per share), or any other announcements that may be required in such regard in terms of the Listing Requirements of
     the JSE which may be applicable from time to time.

In terms of the Listing Requirements of the JSE, a 75% (seventy five percent) majority of the votes cast by shareholders present or
represented by proxy at the general meeting, excluding the Designated Adviser and the controlling shareholders together with their
associates, must be cast in favour of ordinary resolution number 7 for it to be approved.


Special Business

Special resolution: General Authority to repurchase shares:

Resolved in terms of section 85 of the Companies Act (Act 61 of 1973), as amended and the memorandum and articles of
association of the company (or one of its wholly-owned subsidiaries) that the directors of the company be authorised, by way of a
general authority, until this authority lapses at the next annual general meeting of the company provided that it shall not extend
beyond fifteen months from the date of passing of this special resolution (whichever period is the shorter), to acquire the company‟s
own shares, upon such terms and conditions and in such amounts as the directors may from time to time decide, but subject to the
Listings Requirements of the JSE Limited (“JSE”) subject to the following terms and conditions:



84
Notice of Annual General Meeting                                                  (continue)

1        any repurchase of securities must be effected through the order book operated by the JSE trading system and done without any
         prior understanding or arrangement between the company and the counter party;
2        at any point in time, the company may only appoint one agent to effect any repurchases on its behalf;
3        the number of shares which may be repurchased pursuant to this authority in any financial year may not in the aggregate
         exceed 20% (twenty percent) of the company‟s issued share capital as at the date of passing of this special resolution or 10%
         of the company‟s issued share capital in the case of an acquisition of shares in the company by a subsidiary of the company;
4        repurchases of shares may not be made at a price greater than 10% (ten percent) above the weighted average of the market
         value of the securities for the five business days immediately preceding the date on which the transaction was effected;
5        repurchases may not be undertaken by the company or any of its wholly owned subsidiaries during a prohibited period as
         defined in the Listings Requirements of the JSE unless a repurchase programme is in place where the dates and quantities of
         securities to be traded during the relevant period are fixed and full details of the programme have been disclosed in an
         announcement over SENS prior to the commencement of the prohibited period;
6        repurchases may only take place if, after such repurchase, the shareholder spread of the company complies with the Listing
         Requirements of the JSE;
7        after the company has acquired shares which constitute, on a cumulative basis, 3% (three percent) of the initial number of
         shares in issue (at the time that authority from shareholders for the repurchase is granted) of the relevant class of securities and
         for each 3% in aggregate of the initial number of that class acquired thereafter, the company shall publish an announcement
         containing full details of such repurchase, and;
8        the company may not enter the market to proceed with the repurchase of its shares until the company‟s Designated Adviser has
         confirmed the adequacy of the company‟s working capital for purposes of undertaking the repurchase of shares in writing to the
         JSE.


The effect of the special resolution and the reason there for is to extend the general authority given to the directors of the company
or any subsidiary of the company in terms of the Act and the JSE Listings Requirements for the acquisition by the company or its
subsidiaries of the company‟s securities which authority shall be used at the directors‟ discretion during the course of the period
authorised.

In accordance with the Listings Requirements of the JSE Limited, the directors record that:

The company is currently effecting a repurchase of its securities and the directors would utilise the renewed general authority to
repurchase securities as and when suitable opportunities present themselves, which opportunities may require expeditious and
immediate action.

The directors, after considering the effect of the maximum number of securities which may be repurchased pursuant to the gene ral
authority, are of the opinion that for a period of 12 months after the date of the notice of this annual general meeting:

-            the company and the group will be able to pay their debts in the ordinary course of business;
-            the consolidated assets of the company and of the group will be in excess of the liabilities of the company and the group;
             the assets and liabilities being recognised and measured in accordance with the accounting policies used in the latest
             audited group annual financial statements ;
-            the share capital and reserves of the company and of the group are adequate for ordinary purposes; and
-            the working capital of the company and the group will be adequate for ordinary business.


Disclosures required in terms of paragraph 11.26 of the JSE Listings Requirements:

The following additional information, some of which may appear elsewhere in this annual report is provided in terms of the JSE
Listing Requirements for purposes of the special resolution:

Directors of the company – pages 6 and 7
Major shareholders – page 82
Directors‟ interest in the company‟s shares – page 29
Company‟s share capital – page 67



    85
Notice of Annual General Meeting                                             (continue)

Directors’ responsibility statement

The directors, whose names are given on page 6 and 7 of this annual report, collectively and individually accept full responsibility for
the accuracy of the information pertaining to the above special resolution and certify that to the best of their knowledge and belief
there are no facts that have been omitted which would make any statement false or misleading and that all reasonable enquiries to
ascertain such facts have been made and that the aforementioned special resolution contains all the information required by the
JSE.


Material change

Other than the facts and developments reported on in this Annual Report, there have been no material changes in the financial or
trading position of the company or its subsidiaries since the company‟s financial year end and the signature date of this annual
report.

Litigation statement

Other than as disclosed or accounted for in this annual report, the directors are not aware of any, legal or arbitration proceedings,
including any proceedings that are pending or threatened of which the company is aware which may have or have had in the recent
past, being at least the previous 12 months from date of this annual report, a material effect on the financial position of the company
and its subsidiaries.


Voting and Proxies
A shareholder of the company entitled to attend, speak, and vote at the annual general meeting is entitled to appoint a proxy or
proxies to attend, speak and on a poll vote in his stead. The proxy need not be a shareholder of the company. A form of proxy is
attached for the convenience of any certificated shareholder and own name registered dematerialised shareholder who cannot
attend the annual general meeting, but who wishes to be represented.

Additional forms of proxy may also be obtained on request from the company‟s registered office. The completed forms of proxy must
be deposited at, posted or faxed to the transfer secretaries at the address set out on the inside of the back cover, to be received by
no later than 9:00 on Monday, 7 September 2009. Any member who completes and lodges a form of proxy will nevertheless be
entitled to attend and vote in person at the annual general meeting should the member subsequently decide to do so.

On a show of hands, every shareholder of the company present in person or by proxy shall have 1 (one) vote only, irrespective of
the number of shares he holds or represents, provided that a proxy shall, irrespective of the number of members he represents have
only 1 (one) vote. On a poll, every shareholder of the company who is present in person or represented by proxy, shall have one
vote for every share held in the company by such shareholder.

Shareholders who have dematerialised their ordinary shares through a CSDP or broker, other than own name registered
dematerialised shareholders, and who wish to attend the annual general meeting must request their CSDP or broker to issue them
with a Letter of Representation. Alternatively dematerialised shareholders other than own name registered dematerialised
shareholders, who wish to be represented, must provide their CSDP or broker with their voting instructions in terms of the custody
agreement between them and their CSDP or broker in the manner and by time-frame stipulated.


By order of the board




S J Hackett
Company Secretary
Pietermaritzburg
05 August 2009



86
Form of Proxy
BSI Steel Limited
(formerly BSI (SA) Limited)
(Incorporated in the Republic)
(Registration no 2001/023164/06)
JSE code: BSS ISIN: ZAE000125134
(“BSI” or “the Company”)

For use by the holders of the company‟s certificated ordinary shares (“certificated shareholder”) and/or dematerialised ordinary
shareholders whose shares are held through a CSDP or broker and who have selected own name registration (“own name
dematerialised shareholders”) at the annual general meeting of the company to be held at BSI Steel Limited Gauteng, Erf 24, Farm
Waterval, M61, Klipriver on Tuesday, 8 September 2009 at 4.00 pm and at any adjournment thereof.

Not for the use by holders of the company‟s dematerialised ordinary shares who are not own name dematerialised shareholders.
Such shareholders must contact their CSDP or broker timeously if they wish to attend and vote at the annual general meeting and
request that they be issued with the necessary Letter of Representation to do so, or provide the CSDP or broker timeously with their
voting instructions should they not wish to attend the annual general meeting in order for the CSDP or broker to vote thereat in
accordance with their instructions.

I/We (Please print full names)

of (address)

being the holder(s) of                                        ordinary shares in the company, hereby appoint
                                                                                            or failing him / her
                                                                                            or failing him / her

the chairperson of the annual general meeting, as my/our proxy to vote for me/us on my/our behalf at the annual general meeting
which will be held for the purpose of considering and deemed fit, passing, with or without modification, the special and ordinary
resolutions to be proposed thereat and at any adjournment thereof; and to vote for/and or against the special and ordinary resolution
and/or abstain from voting in respect of the ordinary share register in my/our name/s, in accordance with the following instruction:
(*Please indicate with an ”X” the appropriate space below how you wish your votes to be cast unless otherwise instructed my/our
proxy may vote as he/she thinks fit).

                                                                        In favour        Against         Abstain
ORDINARY BUSINESS
   1. To adopt the annual financial statements for the year
      ended 31 March 2009
   2. To re-appoint Deloitte and Touche as independent
      auditors of the company
   3. (a) To re-elect Mr G D G Mackenzie as a director
          (b) To re-elect Mr N G Payne as a director
          (c) To re-elect Mr C Parry as a director
     4.   To approve remuneration paid to directors
     5.   To approve proposed directors‟ remuneration
     6.   To place unissued shares under the control of the
          directors
     7.   General authority to issue shares for cash
SPECIAL BUSINESS
   8. Special resolution
       General Authority to repurchase shares

Signed this                                          day of                                               2009

Signature

Assisted by (if applicable)

Please read the notes on the reverse.



87
Notes to form of proxy
1    This form of proxy is to be completed only by those members who are:
         a)    holding shares in certificated form; or
         b)    recorded in the sub register in electronic form in their “own name”.
2    A shareholder may insert the name or names of two alternative proxies of his/her choice in the space provided, with or without
     deleting “the chairman of the meeting”. The person whose name appears first on the form of proxy and who is present at the
     annual general meeting will be entitled to act as proxy to the exclusion of those whose names follow. Any such proxy, who need
     not be a shareholder of the company, is entitled to attend, speak and vote on behalf of the shareholder.
3    A proxy is entitled to one vote on a show of hands and, on a poll, one vote for each share held. A shareholder‟s instructions to
     the proxy must be indicated in the appropriate spaces.
4    If a shareholder does not indicate on this instrument that the proxy is to vote in favour of or against any resolution or to abstain
     from voting or gives contradictory instructions, or should any further resolution/s or any amendment/s which may be properly put
     before the annual general meeting be proposed, the proxy shall be entitled to vote as he thinks fit.
     Forms of proxy must be lodged at, posted to or faxed to the transfer secretaries, Computershare Investor Services (Pty) Ltd,
     Ground Floor, 70 Marshall Street, Johannesburg, 2001 (P O Box 61051, Marshalltown, 2107) to reach the company by no later
     than 09.00 on Monday, 7 September 2009.
5    Documentary evidence establishing the authority of the person signing the proxy in a representative capacity must be attached
     to this form of proxy unless previously recorded by the company‟s transfer secretaries or waived by the chairperson of the
     annual general meeting.
6    The completion and lodging of this form of proxy does not preclude the relevant shareholder from attending the annual general
     meeting and speaking and voting in person to the exclusion of any proxy appointed in terms of this proxy form.
7    Any alteration or correction made to this form of proxy must be initialed by the signatory/ies.
8    The chairman of the meeting may accept or reject any form of proxy, which is completed and/or received other than in
     accordance with these notes, provided that he shall not accept a proxy unless he is satisfied as to the manner in which a
     member wishes to vote.
9    Shareholders who have dematerialised their shares must inform their Central Securities Depository Participant (“CSDP”) or
     broker of their intention to attend the annual general meeting and request their CSDP or broker to issue them with the
     necessary Letter of Representation to attend the annual general meeting or provide their CSDP or broker with their voting
     instructions should they not wish to attend the annual general meeting in person but wish to be represented there at. This must
     be done in terms of the agreement entered into between the members and their CSDP or broker.




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