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					                                  Calgro M3 Holdings Limited
                                 (Formerly: Double Ring Trading 332 (Proprietary) Limited)
                                             (Incorporated in the Republic of South Africa)
                                                 (Registration number 2005/027663/06)
                                               Share code: CGR      ISIN: ZAE000109203
                                        (“Calgro M3” or “Calgro” or “the company”)



                                                   PROSPECTUS

Prepared and issued in terms of the Listings Requirements (“the Listings Requirements”) of the JSE
Limited (“the JSE”) relating to a private placement of shares by way of:
– an offer for subscription of a maximum of 12 000 000 new ordinary shares with a par value of
  0.001 cent in the share capital of Calgro M3 at a subscription price of 300 cents per share;
– an offer for sale by certain existing shareholders of Calgro M3 of a maximum of 6 600 000 ordinary
  shares with a par value of 0.001 cent in the share capital of Calgro M3 at a purchase price of
  300 cents per share; and
– the subsequent listing of the shares of Calgro M3 on the Alternative Exchange of the JSE (“ALTx”).
Opening date of the private placement at 09:00 on                                                           Thursday, 8 November 2007
Closing date of the private placement at 16:00 on                                                              Friday, 9 November 2007
Settlement and anticipated listing date on the Altx at 09:00                                                  Friday, 16 November 2007
This prospectus is not an invitation to the general public to subscribe for or purchase shares in Calgro M3, but is issued in compliance
with the Listings Requirements and the Companies Act, 1973 (Act 61 of 1973), as amended (“the Act”), for the purpose of providing
information to the public with regard to Calgro M3. The offer to participate in the private placement is made to invited institutional and
retail investors and selected private clients only.
At the date of listing, the authorised share capital of Calgro M3 will be R5 000 comprising of 500 000 000 ordinary shares of 0.001 cents
each. After the private placement and at the date of listing, the issued share capital of Calgro M3 will be R1 200 consisting of
120 000 000 ordinary shares of 0.001 cents each and a share premium account of R78.7 million assuming the maximum number of
shares will be issued.
The ordinary shares issued and sold in terms of the private placement will rank pari passu with all other ordinary shares issued by
Calgro M3. The JSE has granted a listing of Calgro M3 ordinary shares on Altx subject to compliance with its spread requirements, with
effect from the commencement of business on 13 November 2007.
The directors of Calgro M3, whose names are set out in paragraph 6 of this prospectus, accept, collectively and individually, full
responsibility for the accuracy of the information given herein and certify that, to the best of their knowledge and belief, no facts have
been omitted which make any statement false or misleading and that they have made all reasonable enquiries to ascertain such facts
and that this prospectus contains all information required by law and the Listings Requirements.
An English copy of this prospectus, accompanied by the documents referred to under “Documents available for inspection” as set out
in paragraph 47 of this prospectus, was registered by the Registrar of Companies on 6 November 2007 in terms of section 155(1) of
the Act. The Registrar of Companies has scrutinised the information disclosed in this prospectus. The Registrar of Companies does not
express any view on the risk for investors or the price of the shares.


          Designated Advisor                  Auditors and reporting accountants                          Legal advisor

                    BRIDGE
                   CAPITAL

                                         Corporate and
 Limited assurance advisor             Investors Relations                Company secretary                 Company attorneys



                                                                                                                  Douglas Smart Attorneys




8 November 2007
CORPORATE INFORMATION


Registered office                      Corporate advisor and designated advisor
112 – 11th Street                      Bridge Capital Advisors (Pty) Limited
Parkmore                               2nd Floor, 27 Fricker Road
Sandton                                Illovo Boulevard
2196                                   Illovo, 2196
(Private Bag X33, Craighall, 2024)     (PO Box 651010, Benmore, 2010)
Telephone: +27 11 327 0007             Telephone: +27 11 268 6231


Auditors and reporting accountants     Limited assurance advisors
ARC Incorporated                       PricewaterhouseCoopers Inc
1st Floor, Unit 5                      2 Eglin Road
299 Pendoring Road                     Sunninghill
Blackheath Ext. 6                      2157
2195                                   (Private Bag X36, Sunninghill, 2157)
(PO Box 252, Cresta, 2118)             Telephone: +27 11 797 4000
Telephone:+27 11 476 3210


Commercial banker                      Attorneys
Nedbank Limited                        Webber Wentzel Bowens
2nd Floor                              10 Fricker Road
100 Main Street                        Illovo Boulevard
Johannesburg                           Illovo, 2196
2001                                   (PO Box 61771, Marshalltown, Johannesburg, 2107)
(PO Box 1144, Johannesburg, 2000)      Telephone: +27 11 530 5000
Telephone: +27 11 630 6559


Transfer secretaries                   Company secretary
Computershare Investor Services 2004   Hofmeyr Herbstein & Gihwala Limited
(Pty) Limited                          Private Bag X40
Ground Floor, 70 Marshall Street       Sandown
Johannesburg, 2001                     Sandton
(PO Box 61051, Marshalltown, 2107)     2196
Telephone: +27 11 370 5000             Telephone: +27 11 286 1100


Company attorneys
Douglas Smart Attorneys
112 – 11th Street
Parkmore
Sandton
2196
(PO Box 651916, Benmore, 2010)
Telephone: +27 11 784 8922




2
TABLE OF CONTENTS


The definitions commencing on page 10 of this prospectus apply mutatis mutandis to the following table of
contents:

                                                                                                    Page

Corporate information                                                                                  2

Salient features                                                                                       6

Definitions                                                                                           10

PART ONE: THE BUSINESS                                                                                13

 1. Incorporation and history                                                                         13

 2. Nature of business                                                                                15

 3. Industry                                                                                          15

 4. Prospects                                                                                         15

 5. Group business segments                                                                           17

PART TWO: DIRECTORS AND EXECUTIVE MANAGEMENT                                                          18

 6. Directors’ details                                                                                18

 7. Experience of directors and executive management                                                  19

 8. Qualifications, appointments, remuneration, and borrowing powers of directors                     21

 9. Directors’ shareholdings                                                                          22

10. Directors’ service agreements                                                                     22

11. Directors’ emoluments                                                                             23

PART THREE: FINANCIAL INFORMATION                                                                     24

12. Historical financial information                                                                  24

13. Pro forma financial information                                                                   24

14. Profit forecast                                                                                   25

15. Dividends                                                                                         26

16. Material changes                                                                                  26

17. Preliminary and share issue expenses                                                              27

18. Capital commitments, lease payments and contingent liabilities                                    27

19. Borrowings and loans receivable                                                                   27

20. Adequacy of working capital                                                                       28




                                                                                                       3
                                                                   Page

PART FOUR: THE PRIVATE PLACEMENT AND LISTING                        29

21. Purpose of the private placement and listing                    29

22. Pricing                                                         29

23. Salient dates and times                                         30

24. Participation in the private placement                          30

25. Applications                                                    31

26. Issue and allocation of the private placement shares            31

27. Payment and delivery of the private placement shares            31

28. Representation                                                  32

29. Strate and trading of shares on the JSE                         32

30. Exchange Control Regulations                                    32

31. Simultaneous issues and over-subscriptions                      33

PART FIVE: SHARE CAPITAL                                            34

32. Share capital                                                   34

33. Major shareholders                                              34

34. Alterations to share capital                                    35

35. Share appreciation rights scheme 2007                           37

PART SIX: GENERAL                                                   38

36. Material transactions                                           38

37. Principal immovable properties owned or leased                  38

38. Details of subsidiaries                                         38

39. Material contracts                                              38

40. Other                                                           38

41. Commissions, discounts and brokerages                           39

42. Litigation statement                                            39

43. Advisors’ interests                                             39

44. Experts’ consents                                               39

45. King Code                                                       39

46. Directors’ responsibility statement                             39

47. Documents available for inspection                              39

48. Paragraphs of Schedule 3 to the Act which are not applicable    40




4
                                                                                        Page
Annexure 1     Other directorships held by directors                                      41

Annexure 2     Relevant provisions of the articles of association                         45

Annexure 3     Historical financial information                                           48

Annexure 4     Pro forma financial information                                            68

Annexure 5     Independent reporting accountants’ report on the audited historical
               financial information                                                      70

Annexure 6     Independent reporting accountants’ report on the unaudited
               pro forma financial information                                            72

Annexure 7     Independent reporting accountants’ report on the profit forecast           74

Annexure 8     Limited assurance provider’s report                                        76

Annexure 9     Salient features of the share incentive schemes                            78

Annexure 10    Corporate Governance                                                       80
Annexure 11    Details of subsidiary companies                                            82

Annexure 12    Principal immovable properties owned and leased                            85

Annexure 13    Details of senior management and directors of material subsidaries         86


Section A Private placement application form (to be completed by selected
          institutional investors)                                                   Attached

Section B Private placement application form (to be completed by retail and
          private client investors)                                                  Attached

Section C Private placement application form (to be completed by invited
          employees, family, friends and business associates only)                   Attached




                                                                                           5
SALIENT FEATURES


This section is only a summary of the private placement and listing. For a full appreciation of the private
placement and listing this prospectus should be read in its entirety.
The definitions commencing on page 10 of this prospectus apply mutatis mutandis to the salient features.


1. THE BUSINESS
    The founders of Calgro M3 have been involved in the civil engineering and construction industry since
    1996 (11 years) with experience across a range of developments including infrastructure, road
    construction, conversion of hostels into residential units, refurbishment of medical centres and
    construction of conference centres, gymnasiums, cluster developments, affordable housing and RDP
    projects. Calgro Developments was founded by Derek Steyn and Deon Steyn in 1995. They were later
    joined by Douw Steyn.
    In 2001, Derek, Deon and Douw and the two founders of M3 Developments, Ben-Pierre Malherbe and
    Brand Malherbe merged their respective businesses and pooled their skills.
    All qualified Quantity Surveyors, the five founders identified an opportunity in the market for a specialist
    company with a distinctive competitive offering in the residential property market.
    Calgro M3 has seen strong growth. To illustrate: in 2006 the Department of Housing delivered only
    272 000 of which 46 935 were in Gauteng, low-cost houses across South Africa. In 2007 Calgro M3 will
    have delivered 3 000 homes to individual owners, equating to 6.4% of the entire provincial yield.
    Calgro M3 is one of a few South African companies constructing RDP, GAP, affordable and cluster
    homes. The spread mitigates against risk in the portfolio from interest rate hikes, the implications of the
    National Credit Act, 2005, and any sudden economic downturns. Calgro M3 has an experienced and
    quality management team to take the Company forward.
    The Company, having 25.1% BEE ownership, is committed to delivering a higher quality product and
    service than its competitors, for instance building RDP houses to a higher than national specification
    requirement. Furthermore, Calgro M3 is one of only two residential construction companies in the
    country that is currently delivering on government’s policy of integrated and sustainable developments.


2. PROSPECTS
    Calgro M3 is in the process of securing 3 projects in the RDP and affordable housing sectors that will
    result in over 30 000 homes being constructed over the next 7 years. With an expected turnover of
    R6.2 billion over the period. The finalisation of these projects is still subject to certain conditions being
    met, and is therefore not a certainty. Furthermore, the company is in negotiations on 3 new projects to
    the value of R3.8 billion over the next 5 years with the development of over 34 000 homes. The table
    below further details the prospects discussed above:




6
                                                              Low cost – RDP housing                  Affordable housing         Cluster housing
    Type of                     Start        End           Number               Expected           Number           Expected     Number      Expected
    housing                     date         date         of homes              turn-over         of homes          turn-over   of homes     turn-over
    CATEGORY 1: RECENTLY SIGNED PROJECTS (CONDITIONAL)
    Fleurhoff Ext 2         Jun 2008 May 2012                 1 650          R85 800 000             3 850     R1 083 500 000          –             –
    Midrand                 Nov 2008     Oct 2012             8 003         R416 156 000            16 248     R4 393 304 600          –             –
    Chartwell 165                                                                                                                     50   R67 500 000
    Chartwell 167                                                                                                                     50   R67 500 000
    Mabopane                                                                                           220       R66 000 000           –             –
    Sub-total                                                 9 653         R501 956 000            20 318     R5 542 804 600        100 R135 000 000
    CATEGORY 2: IMMINENT PROJECTS UNDER FINAL NEGOTIATION
    Doornkop                Nov 2008     Oct 2012            13 200         R686 400 000             8 800     R2 376 000 000                        –
    City of Johannesburg    Jun 2008     Jun 2010            12 000         R624 000 000                 –                  –                        –
    Dawn Park                                                                                          250       R75 000 000                         –
    Sub-total                                                25 200       R1 310 400 000             9 300     R2 526 000 000          –             –
    TOTAL                                                    34 853       R1 812 356 000            29 618     R8 068 804 600        100 R135 000 000

    It is important to note that these prospects have not been included in the profit forecast.
    The company expects sustained growth over the long term as Government’s housing policies are implemented.




7
3. SUMMARY OF HISTORICAL AND FORECAST INCOME STATEMENTS
    A summary of the historical and forecast income statements of Calgro M3 and its subsidiaries for the
    years ended 28 February 2007 and the year ending 29 February 2008 and 28 February 2009, the
    preparation of which is the responsibility of the directors, are set out below:
                                                                            Audited                Forecast                Forecast
                                                                               2007                    2008                    2009
                                                                              R’000                   R’000                   R’000
    Gross revenue                                                            124 168                 562 812                 838 640
    Cost of sales                                                           (104 578)               (443 767)               (658 760)
    Gross profit                                                               19 591                119 045                179 880
    Overheads                                                                 (12 848)               (30 482)                (49 689)
    Operating profit                                                            6 743                 88 563                130 191
    Net finance costs                                                            (176)               (36 280)               (39 251)
    Profit before tax                                                           6 567                 52 283                  90 940
    Taxation                                                                   (2 193)               (14 582)                (25 745)
    Profit after tax                                                            4 374                 37 701                  65 195
    Minority interest                                                            (207)                     –                       –
    Earnings attributable to ordinary shareholders                              4 167                 37 701                  65 195
    Headline earnings attributable to ordinary
    shareholders                                                                4 167                 37 701                  65 195
    Pro forma weighted average number of shares
    in issue (’000)                                                          108 000                 111 551                120 000
    Pro forma headline earnings per share (cents)                                 3.9                   33.8                   54.3
    Pro forma earnings per share (cents)                                          3.9                   33.8                   54.3
    Notes:
    1.    The pro forma number of shares in issue for 29 February 2008 is based on the sub-division, as set out in paragraph 34.1 in this
          prospectus, and the weighting of the issued share capital until the year end 29 February 2008.
    2.    The assumptions upon which the forecast income statements are based are set out in paragraph 14 in this prospectus.


4. THE PRIVATE PLACEMENT AND THE LISTING

    4.1     Rationale for the private placement and listing
            The purpose of the private placement and listing is:
            • To raise new capital for new strategic land acquisitions;
            • To make capital resources available for the group to secure land and future projects, and
              therefore to create stability and sustainability;
            • To strengthen the balance sheet to support financial requirements. The listing is not an exit
              strategy for the existing shareholders and the cash will be utilised to achieve Group strategies;
            • To raise the group’s public profile and elevate its status in terms of key stakeholder negotiations,
              such as Government, city and town councils, financial institutions and municipalities; and
            • To attract a higher percentage of BEE participation in the Group.

    4.2     Overview of the private placement
            The private placement is made up of:
            • an offer for subscription of 12 000 000 new shares in the share capital of Calgro M3 at a
              subscription price of 300 cents per share; and
            • an offer for sale by certain existing shareholders of Calgro M3 of 6 600 000 shares in the share
              capital of Calgro M3 at a purchase price of 300 cents per share.




8
          Therefore, a total amount of R36 million, before expenses, will be raised by the company through
          the private placement to qualifying investors.
          The proceeds of the private placement will first be applied to the offer for subscription
          (R36.0 million) which will allow the company to grow its market share through funding organic
          growth, facilitating the working capital requirements of the existing business as well as facilitating
          potential acquisition opportunities. Thereafter, the proceeds of the private placement will be applied
          to the offer for sale (R19.8 million), which will allow existing shareholders to partially realise
          approximately 6.6% of their current investment in the company and to facilitate the shareholder
          spread required by the Listings Requirements.

    4.3   Pricing and allocation
          Qualifying investors that have been invited to apply for shares in Calgro M3 in terms of the private
          placement should do so by completing the attached private placement application form in
          accordance with the provisions of this prospectus and the instructions contained in the private
          placement application form. No offer will be made to the general public in terms of the private
          placement.
          The private placement price is 300 cents per share. Allocations of shares will only be made in
          multiples of 1 000 shares with a minimum allocation size of 1 000 shares.
          The final results of the private placement will be released on SENS on Monday, 12 November 2007
          and published in the press on Tuesday, 13 November 2007.
          The basis of allocation of the private placement shares will be determined by the Designated
          Advisor, in its sole discretion, after consultation with Calgro M3. Notice of the allocations will be
          given on or from Monday, 12 November 2007.

    4.4   Listing
          Subject to the achievement of the required spread of public shareholders, the JSE has formally
          approved the listing of a maximum of 120 000 000 shares in the share capital of Calgro M3 on the
          Altx with effect from commencement of business on Friday, 16 November 2007. The shares will
          trade under the abbreviated name “CALGRO”, with the share code CGR and ISIN: ZAE000109203.

    4.5   Salient dates and times
                                                                                                                        2007
          Abridged prospectus released on SENS on                                              Wednesday, 7 November

          Prospectus available on                                                                  Thursday, 8 November

          Opening date of the private placement at 09:00 on                                        Thursday, 8 November

          Expected closing date of the private placement at 16:00 on                                  Friday, 9 November

          Final allocation of the private placement shares on                                     Monday, 12 November

          Results of private placement published in the press on                                  Tuesday, 13 November

          Settlement and anticipated listing date of Calgro M3 on the Altx at 09:00                  Friday, 16 November

          Note:
          The above dates and times are subject to change. Any such change will be released on SENS and published in the press.


5   COPIES OF THE PROSPECTUS
    Copies of the prospectus, in English only, may be obtained by qualifying investors during business hours
    (08:00 to 17:00), prior to the closing date of the private placement, from the registered office of Calgro
    M3 and from the office of Bridge Capital, details of which are set out in the “Corporate information”
    section of this prospectus.




                                                                                                                               9
DEFINITIONS


In this prospectus, the annexures hereto and the private placement application form, unless the context
indicates otherwise, references to the singular include the plural and vice versa, words denoting one gender
include the others, expressions denoting natural persons include juristic persons and associations of persons
and vice versa, and the words in the first column hereunder have the meanings stated opposite them in the
second column, as follows:

“Act”                               the Companies Act, 1973 (Act 61 of 1973), as amended;

“Altx”                              the Alternative Exchange of the JSE;

“auditors” or “independent          ARC Incorporated (Practise number 952877) Registered Auditors,
 reporting accountants”             Chartered Accountants (SA);

“BEE” or “BEE Company”              means a company, close corporation, or trust which is controlled by one
                                    or more black persons, which on a see/look through basis, not less than
                                    50.1%, in value and number of the share capital is ultimately and
                                    beneficially owned by one or more black persons and the management
                                    and daily business operations of which are mainly under the direction of
                                    black persons in compliance with black economic empowerment codes
                                    of good practice;

“Bridge Capital” or                 Bridge Capital Advisors (Pty) Limited (registration number 1998/
“Designated Advisor”                016302/07), a company incorporated in accordance with the laws of
                                    South Africa and a Designated Advisor as contemplated in the Listings
                                    Requirements;

“business day”                      any day other than a Saturday, Sunday or official public holiday in
                                    South Africa;

“certificated shareholders”         shareholders who hold certificated shares;

“certificated shares”               shares which are not dematerialised in terms of Strate and title to which
                                    is represented by a share certificate or other physical document of title;

“common monetary area”              South Africa, the Republic of Namibia and the Kingdoms of Swaziland
                                    and Lesotho;

“company secretary”                 Hofmeyr Herbstein & Ghiwala Limited (registration number
                                    1997/001523/21), a company incorporated in accordance with the laws
                                    of South Africa;

“CSDP”                              Central Securities Depository Participant accepted as a participant
                                    in terms of the Securities Services Act, appointed by an individual
                                    shareholder for purposes of, and in regard, to the dematerialisation of
                                    documents of title for purposes of incorporation into the Strate system;

“dematerialised shareholders”       shareholders who hold dematerialised shares;

“dematerialised shares”             shares that have been incorporated into the Strate system and which
                                    are held on the sub-register of members in electronic form in terms
                                    of the Securities Services Act;

“directors” or “board of            the directors of Calgro M3, further details of whom appear in paragraph 6;
 directors”

“documents of title”                share certificates, certified transfer deeds, balance receipts or any other
                                    documents of title acceptable to Calgro M3 in respect of shares;


10
“DNS Trust” or “the DNS Trust” a trust with Deon Steyn as a beneficiary;

“DGS Trust” or “The DGS Trust” a trust with Douw Steyn as a beneficiary;

“employee share incentive        Calgro M3 Share Incentive Scheme, a summary of which is included
 scheme”                         in Annexure 9;

“Exchange Control                the Exchange Control Regulations, 1961, as amended, promulgated in
 Regulations”                    terms of section 9 of the Currency and Exchanges Act, 1933 (Act 9
                                 of 1933), as amended;

“Calgro M3” or “the company”     Calgro M3 Holdings Limited (registration number 2005/027663/06),
                                 a public company incorporated in accordance with the laws of
                                 South Africa;

“group” or “Calgro M3 group”     includes Calgro M3 and the trading activities of its subsidiaries;

“GAP” or “GAP housing”           includes housing between the value of R52 000 and R240 000;

“Hendrik Brand Family Trust”     a trust with Brand Malherbe as a beneficiary;

“IFRS”                           International Financial Reporting Standards;

“JSE”                            JSE Limited (registration number 2005/022939/06), a company duly
                                 registered and incorporated with limited liability under the company
                                 laws of South Africa, licensed as an exchange under the Securities
                                 Services Act, 2004;

“last practicable date”          the last practicable date prior to the finalisation of this prospectus, being
                                 Wednesday, 7 November 2007;

“listing”                        the proposed listing of the entire issued share capital of the company on
                                 the Altx, from commencement of trade on Friday, 16 November 2007;

“Listings Requirements”          the Listings Requirements of the JSE, as amended from time to time;

“Mvua”                           Mvua Property Partners (Pty) Limited, (registration number
                                 2005/014603/07), a private company incorporated and registered in
                                 accordance with the laws of South Africa;

“Mvua subscription” or           subscription by Mvua, a BEE entity, for 15 000 000 shares at R2.85 per
“Mvua BEE Transaction”           share;

“offer for sale”                 an offer, forming part of the private placement, in terms of which
                                 existing shareholders of Calgro M3 are offering for sale 6 600 000
                                 shares at the private placement price;

“offer for subscription”         an offer, forming part of the private placement, in terms of which
                                 Calgro M3 is offering for subscription 12 000 000 new shares at the
                                 private placement price;

“private placement”              the private placement of 18 600 000 shares, in terms of the offer for
                                 sale and the offer for subscription, at the private placement price to
                                 qualifying investors for cash;

“private placement               the application form in respect of the private placement, attached to and
 application form”               forming part of this prospectus;

“private placement price”        the price at which the private placement shares will be placed with
                                 qualifying investors, which is 300 cents per share;

“private placement shares”       being 18 600 000 shares, which will be placed with qualifying investors
                                 at the private placement price in terms of the private placement;


                                                                                                           11
“prospectus”                this bound document, dated Thursday, 8 November 2007, including all
                            annexures and the private placement application form;

“qualifying investors”      invited institutional and retail investors and selected private clients;

“PwC”                       PricewaterhouseCoopers Inc (registration number 1998/012055/21)
                            Registered Auditors, Charted Accountants (SA);

“Rand” or “R” or “cents”    the official currency of South Africa;

“Registrar”                 the Registrar of Companies in South Africa;

“Securities Services Act”   the Securities Services Act, 2004 (Act 36 of 2004), as amended;

“SENS”                      the Securities Exchange News Service of the JSE;

“shareholders”              registered holders of shares in Calgro M3;

“shares”                    ordinary shares of 0.001 cent each in the share capital of the company;

“share appreciation         the employee share incentive scheme, salient details of which are set
 rights scheme”             out in Annexure 9;

“South Africa”              the Republic of South Africa as constituted from time to time;

“Strate”                    the electronic settlement and clearing system used by the JSE,
                            managed by Strate Limited (registration number 1998/022242/06),
                            a public company incorporated in accordance with the laws of South
                            Africa; and

“transfer secretaries”      Computershare Investor Services 2004 (Pty) Limited (registration
                            number 2004/003647/07), a company incorporated in accordance with
                            the laws of South Africa.




12
PART ONE: THE BUSINESS


1. INCORPORATION AND HISTORY

  1.1   The Business
        The founders of Calgro M3 have been involved in the civil engineering and construction industry
        since 1996 (11 years) with experience across a range of developments including infrastructure, road
        construction, and conversion of hostels into residential units, refurbishment of medical centres,
        construction of conference centres, gymnasiums, cluster developments, affordable housing and
        RDP projects. Calgro M3 Developments (Pty) Limited was founded by Derek Steyn and Deon Steyn
        in 1995. They were later joined by Douw Steyn.
        In 2001, Derek, Deon and Douw and the two founders of Calgro M3 Developments (Pty)
        Limited, Ben-Pierre Malherbe and Brand Malherbe merged their respective businesses and pooled
        their skills.
        All qualified Quantity Surveyors, the five founders identified an opportunity in the market for
        a specialist company with a distinctive competitive offering in the residential property market.
        Calgro M3 is one of a few South African companies constructing RDP, GAP, affordable and cluster
        homes. The spread of its activities mitigates against risk in the portfolio from interest rate hikes,
        the implications of the National Credit Act and any sudden economic downturns. Calgro M3 has
        an experienced and quality management team to take the company forward.
        The company is committed to delivering a higher quality product and service than its competitors,
        for instance building RDP houses to a higher than national specification requirement. Furthermore,
        Calgro M3 is one of only two residential construction companies in the country that is currently
        delivering on government’s policy of integrated and sustainable developments.
        Calgro M3 has had no Government protection or any investment encouragement law affecting the
        business.


2. NATURE OF BUSINESS
  Calgro M3 is built strategically on separate specialist business units focusing on high growth niche
  markets. Each operating company has its own board of directors and management team operating within
  the Group framework and structure.
  Calgro M3 operates in the residential property sector and provides a range of solutions including:
  • Project management of turnkey construction projects;
  • Procurement and servicing of land – alone and in strategic partnerships with municipal councils and
    financial institutions;
  • Construction of top structures (houses); and
  • Marketing for cluster, affordable and low cost homes.
  These skills are employed across a large range of housing market sectors:
  • RDP homes up to R52 000: Calgro M3 builds to a specification higher than national standards,
    ensuring more equity in the property for the homeowner and financial institution;
  • GAP market from RDP to R240 000: this price class is as stipulated in the Financial Sector Charter.
    The major commercial banks and financial institutions earn Charter scorecard points by bond and
    rental stock participation up to R240 000 values per house. Calgro M3 is one of few companies
    operating in this select niche;
  • Affordable homes from R240 000 to R600 000: this vibrant sector caters for a wide range of emerging
    class clients with diverse home needs;
  • Sectional title from R550 000 to R950 000: a relatively new development in Calgro M3’s offering, there
    are significant opportunities for the group; and


                                                                                                          13
     • Cluster homes from R600 000 to R1 600 000: contingent on the major driving forces in this market
       which are location, timeous construction, quality and proven marketing practices, Calgro M3 is a major
       player in this market and has a sound track record and busy order book in this sector.
     Integrated developments: these see a cross-section of RDP, GAP and affordable houses being erected
     in a single development. Calgro M3, through its subsidiary PZR Pennyville Zamimphilo Relocations (Pty)
     Limited (PZR), is currently in partnership with Johannesburg City Council in a groundbreaking flagship
     integrated development at Pennyville in south west Johannesburg. Calgro M3 is firmly aligned with the
     government’s policy named Breaking New Ground in terms of integrated developments.

     Strategic objectives

     – Acquire land:
       Seen as the group’s foremost strategic initiative and one of the major reasons for listing, Calgro M3’s
       objective is to acquire/secure land for the development of in the RDP, GAP and affordable markets.
       The cluster market deal flow is solid with the real opportunity to replace expensive third party financing
       and to lock in significantly better profitability.

     – Raise new capital:
       Closely linked in importance to land acquisition, Calgro M3 sees equity financing via a listing as the
       preferred manner of raising capital and then to gear this capital to generate a base of low cost funding
       for Group requirements.

     – Develop and grow sectional title market:
       The group has detailed objectives to capitalise on opportunities in this market.

     – Acquire people, skills and expertise:
       The introduction and bolstering of a middle management layer in terms of succession planning is seen
       as crucial for continuity and sustainability. The group is in process of appointing two black Quantity
       Surveyors which highlights its strategic intent. Calgro M3 will continue to attract and retain
       highly-skilled professionals who are capable of meeting the increasing demand.

     – Maintain and grow strategic relationships:
       There are many diverse stakeholders in the residential home construction industry. Calgro M3 enjoys
       healthy relationships with its stakeholders. However, the opportunity exists for the group to enhance
       and foster ties with town councils, municipalities, other land owners, funders, financial institutions,
       professional teams and communities.

     – Improve administration and control systems:
       Since Craig Daly’s appointment as Group Financial Director, all controls, systems and administration
       have been overhauled. Two financial managers have also been appointed to underpin the group
       structure.

     – Manage risk – infrastructure and raw materials:
       A comprehensive plan has been drawn up that identifies the infrastructure risk elements and
       safeguards. In addition the availability of sufficient quantities of bricks, cement and labour has been
       identified as a key area of concern and suitable contingencies have been built around this.

     – Maintain and improve product and service quality:
       Calgro M3 has detailed Quality Assurance and Quality Control programmes in place.

     – Optimise the value chain:
       Calgro M3 has historically used mainly external marketing agents, particularly in the cluster market.
       The group recently acquired two industry specialists, both chartered accountants, to run Calgro M3
       Marketing (Pty) Limited aimed at retaining a significant portion of the value chain.


14
  These strategic initiatives, together with the housing shortage, resulted in two principal medium-term
  (3 – 5 years) strategies:
  To focus on Gauteng in the short to medium-term. There would be little benefit to stretching personnel and
  resources and risking poor delivery. Gauteng is the province with the largest backlog of low-cost housing,
  as well as with the biggest influx of population from other provinces and from outside the country.
  There is more than sufficient impetus in the current market and for the foreseeable future to effectively
  keep Calgro M3 focused. Group strategy will be focused on organic growth and only select acquisitions
  which are highly profitable be considered. Forward integration into raw material supply is not seen as an
  immediate group strategic imperative.


3. INDUSTRY
  The current population of Gauteng is estimated to be in the region of 9.5 million people and projected
  to grow to 11.2 million by 2014 as the phenomenon of ‘urban creep’ continues, notwithstanding
  Government’s policy to curtail this. (Source: Statistics South Africa 2007). This clearly highlights the
  severe predicament facing Government and big business in terms of the dire housing shortage in
  South Africa. Widespread acknowledgement of this prompted the Financial Sector Charter in 2005.
  It is generally accepted fact that when the Charter members are statistically measured at year-end 2007,
  all will be far behind their individual and collective undertakings in terms of the Charter.
  With recent interest rate hikes and the possibility of increases, and the uncertainty surrounding the newly
  implemented National Credit Act (NCA), it may be argued that the housing sector is facing a period of
  stagnation or slower than expected growth.
  The reality is that Government and the private sector will be forced to deliver shortly on their promise
  of homes for the people. Recent demonstrations by communities that are unhappy about the lack of
  delivery, indicates that pressure will be mounting on housing delivery. Given the historical shortfall,
  this is likely to be a foremost agenda item and a primary economic driver over the longer term.
  Recently certain of the major global property funds such as Lehman Brothers have been actively buying
  shares in listed South African property funds such as Growth Point, Grayprop and Redefine. Ernst &
  Young’s 2006 Global REIT Report ranks South African listed property as the top performer over the
  previous three years.
  South Africa’s innovation in residential housing formally described as affordable housing was recognised
  internationally in 2006 when the Johannesburg Housing Company scooped a UN Habitat Award. In 2007
  International Housing Solutions, a Dublin-based property fund, entered the local residential housing
  market with a commitment of $300 million to assist in the creation of affordable housing stock.
  In her budget speech of 8 June 2007, the Minister of Housing committed R8.2 billion towards low income
  housing to accumulate to R12.5 billion in 2009. It was estimated that the current low cost housing backlog
  will be eliminated by 2016. However the continued population influx into Gauteng will have a negative
  effect by creating a ‘moving target’ scenario, as it will put additional demands on housing supply.
  The rapidly growing South African economy, the emergence of a massive middle class, the growth
  opportunities presented by the 2010 FIFA Soccer World Cup, a buoyant property market, government’s
  commitment to provide housing and the dire supply/demand imbalance will likely see housing remain at
  the forefront of economic drivers over the foreseeable future.
  To illustrate: In 2006 the Department of Housing delivered only 272 000 low-cost houses across
  South Africa. Last year 46 935 homes were enrolled with the National Home Builder’s Registration
  Council (NHBRC) in Gauteng. In 2007 Calgro M3 will have delivered 3 000 homes to individual owners,
  equating to 6.4% of the entire provincial yield.


4. PROSPECTS
  Calgro M3 is in the process of securing 3 projects in the RDP and affordable housing sectors that will
  result in over 30 000 homes being constructed over the next 7 years. With an expected turnover of
  R6.2 billion over the period. The finalisation of these projects is still subject to certain conditions being
  met, and is therefore not a certainty. Furthermore, the company is in negotiations on 3 new projects to
  the value of R3.8 billion over the next 5 years with the development of over 34 000 homes. The table
  below further details the prospects discussed above:


                                                                                                            15
16
                                                               Low cost – RDP housing                  Affordable housing         Cluster housing
     Type of                     Start        End           Number               Expected           Number           Expected     Number      Expected
     housing                     date         date         of homes              turn-over         of homes          turn-over   of homes     turn-over
     CATEGORY 1: RECENTLY SIGNED PROJECTS (CONDITIONAL)
     Fleurhoff Ext 2         Jun 2008 May 2012                 1 650          R85 800 000             3 850     R1 083 500 000          –             –
     Midrand                 Nov 2008     Oct 2012             8 003         R416 156 000            16 248     R4 393 304 600          –             –
     Chartwell 165                                                                                                                     50   R67 500 000
     Chartwell 167                                                                                                                     50   R67 500 000
     Mabopane                                                                                           220       R66 000 000           –             –
     Sub-total                                                 9 653         R501 956 000            20 318     R5 542 804 600        100 R135 000 000
     CATEGORY 2: IMMINENT PROJECTS UNDER FINAL NEGOTIATION
     Doornkop                Nov 2008     Oct 2012            13 200         R686 400 000             8 800     R2 376 000 000                        –
     City of Johannesburg    Jun 2008     Jun 2010            12 000         R624 000 000                 –                  –                        –
     Dawn Park                                                                                          250       R75 000 000                         –
     Sub-total                                                25 200       R1 310 400 000             9 300     R2 526 000 000          –             –
     TOTAL                                                    34 853       R1 812 356 000            29 618     R8 068 804 600        100 R135 000 000

     It is important to note that these prospects have not been included in the profit forecast.
     The company expects sustained growth over the long term as Governments housing policies are implemented.
5. GROUP BUSINESS SEGMENTS
  Set out below are the group business segments. Refer to Annexure 11 for full details of subsidiary
  companies in the Group.


                                             Calgro M3
                                             Calgro M3




       Low Cost
        Low Cost                             Affordable
                                             Affordable                             Cluster
                                                                                     Cluster
        Housing
         Housing                              Housing
                                              Housing                               Housing
                                                                                    Housing




                                                                                                 17
PART TWO: DIRECTORS AND EXECUTIVE MANAGEMENT


6. DIRECTORS’ DETAILS
     The full names, nationalities, ages, business addresses and functions of the directors are set out below:
     Full name and age                      Business address                 Function
     Executive directors
     Peter Muriuki Waweru (44) B.Sc         Cedarwood House                  Chief Executive Officer
                                            Ballywoods Office Park
                                            33 Ballyclare Drive
                                            Bryanston
     Craig Terence Daly (40) CA(SA)         Cedarwood House                  Financial Director
                                            Ballywoods Office Park
                                            33 Ballyclare Drive
                                            Bryanston
     Ben Pierre Malherbe (41)               Cedarwood House                  Operations Director
     MBA, B.Sc (QS)                         Ballywoods Office Park
                                            33 Ballyclare Drive
                                            Bryanston
     Frederik Johannes Steyn (44)           Cedarwood House                  Marketing and Strategic
     B.Sc (QS)                              Ballywoods Office Park           Planning Director
                                            33 Ballyclare Drive
                                            Bryanston
     Non-executive directors
     Pumla Fundiswa Radebe (51) BA          Cedarwood House                  Independent Chairperson
                                            Ballywoods Office Park
                                            33 Ballyclare Drive
                                            Bryanston
     Sonwabo Edwin Funde (64) M.Sc          Cedarwood House                  Independent Non-executive
                                            Ballywoods Office Park           Director
                                            33 Ballyclare Drive
                                            Bryanston
     Quinton Encombe Woods (45) MBA         Cedarwood House                  Non-executive Director
                                            Ballywoods Office Park
                                            33 Ballyclare Drive
                                            Bryanston
     Hatla Ntene (53) B.Sc (QS)             32 Impala Road                   Independent Non-executive
                                            Chiselhurston                    director
                                            Sandton
                                            2149

     All of the directors are South African citizens, except for Peter Waweru, who is a Kenyan, a resident in
     South Africa.
     In terms of the declarations lodged by the directors in accordance with Schedule 21 of the Listings
     Requirements, none of the following applies to any of the directors listed above for the 12 months
     preceding the date of this prospectus: bankruptcies, insolvencies or individual voluntary compromise
     arrangements; receiverships, compulsory liquidations, creditors’ voluntary liquidations, administrations,
     company voluntary liquidations, or any compromise or arrangement with creditors generally or any class
     of creditors of any company where such person is or was a director with an executive function of such
     company at the time of any such event; compulsory liquidations, administrations or partnership voluntary
     arrangements of any partnerships of which the person is or was a partner at the time of such event;


18
  receiverships of any asset(s) of such person or of a partnership of which the person is or was a partner
  at the time of such event; public criticisms of such person by statutory or regulatory authorities, including
  recognised professional bodies; disqualification by a Court from acting as a director of a company or from
  acting in the management or conduct of the affairs of any company; and any offence involving
  dishonesty. The operations of Calgro has been in existence for more than 5 years, and therefore founders
  information is not required to be disclosed. No directors or senior management are partners to a
  partnership with share capital and unlimited liability


7. EXPERIENCE OF DIRECTORS AND EXECUTIVE MANAGEMENT

  7.1   Executive directors

        7.1.1 Peter Muriuki Waweru (44) BSc – Chief Executive Officer
              Peter holds a BSc. in mathematics from the University of Nairobi, Kenya. He furthered his
              studies abroad achieving a post graduate Diploma in Actuarial Science at City University,
              London and a Certificate in Actuarial Techniques from the Institute of Actuaries in London.
              He specialised in actuarial modelling and valuations at Hymans Robertsons Consultants &
              Actuaries in London before moving to South Africa where he joined Ginsberg Malan
              & Carsons Consultants & Actuaries. Peter has been Managing Director of PSG Channel
              Management Services and Chief Executive Officer of NBC Africa. He was the founder of
              Abacus Financial Services which provided structured housing finance to the low cost and
              affordable market sector. Peter is an accomplished businessman and marketer who has
              a thorough understanding of the housing market and relevant stakeholders in South Africa.

        7.1.2 Craig Terence Daly (40) CA(SA) – Financial Director
              Craig is a qualified Chartered Accountant. He has a number of years of strategic experience
              in blue-chip companies including Kohler, Malbak, Afrox Healthcare and AECI Explosives.
              He has held a number of listed company directorships. Craig was Financial Director and
              subsequently Group Strategic Director at Cashbuild. Craig is highly experienced in strategy,
              finance, mergers and acquisitions, operations, ICT, human resources and risk management.

        7.1.3 Ben Pierre Malherbe (41) BSc (QS) – Operations Director
              Ben graduated from the University of the Orange Free State with a BSc degree in Quantity
              Surveying. He then went on to achieve a post graduate Master of Business Administration
              (MBA) degree from the University of Stellenbosch in 1993. Ben started as a quantity
              surveyor for civil engineering company Con Roux Construction and then for Stocks & Stocks.
              In 2001 Ben and his brother Brand joined forces with the Steyn brothers and Calgro M3 was
              formed. He is skilled in civils and property development and is responsible for the group’s
              highly acclaimed Pennyville project, an integrated housing development.

        7.1.4 Frederik Johannes Steyn (44) BSc (QS) – Marketing and Strategic Planning Director
              Derek is a qualified Quantity Surveyor having graduated from the University of the Orange
              Free State in 1988. He worked as a quantity surveyor for 5 years at Eskom. Thereafter he
              became a project manager at Safrich, an established property development company
              specialising in the affordable housing market sector. Calgro was started in 1995 by Derek and
              his brothers, Deon and Douw. Derek is very knowledgeable in cluster developments, land
              acquisitions and affordable housing.

  7.2   Non-executive director

        7.2.1 Quinton Encombe Woods (45) MBA – Non-executive Director
              Quinton holds a Master of Business Administration (MBA) post graduate degree from
              Henley Management College. He spent 16 years in the Tiger Brands Group and has
              extensive experience in corporate recovery, turnarounds, restructuring and consulting.
              He has held senior directorships on the board of two public companies and has significant
              experience in industries including FMCG, telecommunications, independent education,
              corporate finance and franchising.


                                                                                                            19
      7.3   Independent Non-executive directors

            7.3.1 Pumla Fundiswa Radebe (51) BA – Independent Non-executive Chairperson
                  Pumla specialises in social analysis, project planning and management, and has more than
                  20 years experience at local and regional government level. She holds a Bachelor of Arts
                  in Social Science from the University of Fort Hare, a Certificate in Municipal Management
                  from Rand Afrikaans University and a Certificate in Project Management from Pretoria
                  Technikon. She has significant experience on national, provincial and local government
                  affairs. Pumla is Managing Partner for Bungane Development Consultants, a former
                  Chairperson of Johannesburg City Parks, President of the International Federation for Parks
                  and Recreation Administration, Chairperson of PIKITUP Johannesburg, a chief examiner and
                  board member on the Films and Publications Board and Acting Chairperson of the
                  Independent Development Trust. She also sits on the Boards of Khuselo Investments,
                  Khuselo Telecoms and Impi-Linux.

            7.3.2 Sonwabo Edwin Funde (64) MSc – Independent Non-executive Director
                  Eddie is an M.Sc Electrical Engineering graduate from the St Petersburg Polytechnical
                  Institute in Russia. He underwent further training in public policy and change management
                  at the Civil Service College in the UK. He completed the Programme on Government
                  Management and Training (USA) and the Executive Candidates Programme on Public Service
                  at The University of the Witwatersrand. He has undergone training in Telecommunications
                  Policy and Regulation at the Adam Smith Institute (UK) and at the United States
                  Telecommunications Training Institute in Washington. Eddie is currently a director of several
                  companies including Murray & Roberts and is Chairman of the South African Broadcasting
                  Corporation and President of the South African Communications Forum. He is a past director
                  of Denel, Eskom and Chairman of the Independent Development Trust and has held various
                  leadership positions with the African National Congress.

            7.3.3 Hatla Ntene (53) BSc (QS) – Independent Non-executive Director
                  Hatla obtained his Bachelor of Science (Quantity Surveying) from the University of Dublin,
                  and is currently Executive Chairman of Mvua Property Partners. He became the black
                  employment partner for Farrow Laing Ntene in 1996 where he served for 5 years. He was
                  also the property executive manager of Propnet (Property Division of Transnet) for three
                  years and brings a wealth of experience dating back to 1977, to Calgro M3.

7.4         SENIOR MANAGEMENT

            7.4.1 Deon Steyn, BSc (QS)
                  Deon graduated from University of Orange Free State in 1991 as a BSc (QS) after which he
                  started his career as junior quantity surveyor at Farrow Laing and Partners in Johannesburg.
                  In 1995, Deon and his brothers Derek and Douw started Calgro with the financial backing
                  of Safrich.

            7.4.2 Douw Steyn, BSc (QS)
                  Douw graduated in 1978 with a BSc (QS) after which he started his career as quantity
                  surveyor at Eskom Mega Watt Park. In 1995, Douw and his brothers Derek and Deon started
                  Calgro with the financial backing of Safrich.

            7.4.3 Brand Malherbe, BSc (QS)
                  Brand qualified as a Quantity Surveyor in 1993 and has been involved in the affordable
                  housing space for 12 years. His expertise includes project management and construction.
                  He has been involved in numerous initiatives across Gauteng.

            7.4.4 Jan Roode, CA(SA)
                  Jan is a qualified Chartered Accountant and completed his articles at Arthur Andersen in
                  1998. He then started a business with Alwyn de Waal which operated in the cellular
                  communications industry. Jan then joined Calgro as financial director. Jan also consulted for


20
              four years gaining experience in a variety of fields in the financial services industry. In May
              2004 Jan and Alwyn de Waal started their own business focussing on the marketing and
              administration of off-plan residential property development projects. On 1 September 2007
              Jan joined Calgro M3 to head up the cluster marketing side of the business.

       7.4.5 Terence Walter Graaf
              Terence completed his articles in 2003. He is highly experienced in all IT aspects of the
              accounting and audit requirements of the Group. Terence is currently in his final year,
              studying towards his B.Com degree with UNISA. Terence is studying towards his Charted
              Accountant qualification.

       7.4.6 Alwyn de Waal CA(SA)
              Alwyn is a qualified Chartered Accountant and completed his articles at Arthur Andersen in
              1998. He then started a business with Jan Roode which operated in the cellular
              communications industry. Thereafter Alwyn went on to gain invaluable experience in
              corporate finance at AngloGold. Alwyn also consulted for 4 years in the banking environment,
              gaining experience in merger and acquisition type projects including business migrations,
              commercialisation, compliance, etc. In May 2004 Alwyn and Jan Roode started their own
              business focusing on the marketing and administration of off-plan residential property
              development projects. On 1 September 2007 Alwyn joined Calgro M3 to head up the cluster
              marketing side of the business.


8. QUALIFICATIONS, APPOINTMENTS, REMUNERATION, AND BORROWING POWERS OF
   DIRECTORS
  • The relevant provisions of the articles of association of Calgro M3 relating to qualification,
    appointment, remuneration and borrowing powers of directors are set out in Annexure 2. The
    borrowing powers may only be varied by special resolution.
  • The remuneration and benefits paid to directors for the year ended 28 February 2007 are set out
    in out in note 25 to the annual financial statements contained in Annexure 3.
  • Remuneration for the non-executive directors will be R15 000 per month for S Funde and P Radebe
    and R40 000 per month for Q Woods.
  • There will be no variation in the remuneration receivable by any of the directors as a direct
    consequence of the private placement and listing.
  • No fees were paid or accrued as payable within the three years preceding the date of this prospectus
    to a third party in lieu of directors’ fees.
  • The borrowing powers of the Directors of Calgro M3 and the directors of the subsidiaries have not
    been exceeded in the past 3 years.
  • There have been no exchange control restrictions over Calgro M3 Group over the past 3 years.
  • No sums were paid or agreed to be paid within the three years preceding the date of this prospectus
    to any director or to any company in which he is beneficially interested, directly or indirectly, or of
    which he is a director (the “associate company”), or to any partnership, syndicate or other association
    of which he is a member (the “associate entity”), in cash or securities or otherwise, by any person
    either to induce him to become or to qualify him as a director, or otherwise for services rendered by
    him or by the associate company or the associate entity in connection with the promotion or formation
    of Calgro M3.
  • No promoter has any material beneficial interest, direct or indirect, in the promotion of Calgro M3 and
    in any material property to be acquired or proposed to be acquired by Calgro M3 out of the proceeds
    of the private placement or during the three years preceding the date of this prospectus.
  • All the directors of the company are free from any conflict of interest between the directors duties and
    his/her private interests.
  • No director of the group has any material beneficial interest, whether direct or indirect, (in
    transactions), that were effected by Calgro M3 during the current or immediately proceeding financial
    year or during an earlier financial year, remain in any respect outstanding or unperformed.




                                                                                                          21
     8.1     Borrowing powers of Calgro M3 subsidiaries
             The powers of the directors of each subsidiary in the group, to borrow, mortgage, bind the property
             and undertaking of such subsidiary and to issue securities shall be limited to the amount authorised
             by the company.


9. DIRECTORS’ SHAREHOLDINGS
     The directors will, at the last practicable date, before and after the private placement hold, directly and
     indirectly the following shares in Calgro M3:
     Before the private placement1
     Director                                                                   Number of shares held
                                                                               Direct                 Indirect          Percentage
     P Waweru                                                                       –             3   500 000                   3.2
     C Daly                                                                         –             3   500 000                   3.2
     B P Malherbe                                                                   –            12   900 000                 11.9
     F J Steyn                                                                      –            12   900 000                 11.9
     P Radebe                                                                       –             2   850 000                   2.7
     E Funde                                                                        –             2   850 000                   2.7
     Q Woods                                                                        –             2   800 000                   2.6
                                                                                      –          40 900 000                      38.2

     After the private placement 2
     Director                                                                   Number of shares held
                                                                               Direct                 Indirect          Percentage
     P Waweru                                                                       –             3   252 000                   2.7
     C Daly                                                                         –             3   252 000                   2.7
     B P Malherbe                                                                   –            11   984 000                 10.0
     F J Steyn                                                                      –            11   984 000                 10.0
     P Radebe                                                                       –             2   648 000                   2.3
     E Funde                                                                        –             2   648 000                   2.3
     Q Woods                                                                        –             2   602 000                   2.2
                                                                                      –          23 133 000                      32.0
     Notes:
     1.    The percentage shareholdings after the private placing are based on the assumption that the private placement will be fully
           subscribed.
     2.    Other than as disclosed in the table above, and as detailed in paragraph 33, no other director has any material beneficial
           interest, whether direct or indirect, in any transactions which were affected by the company during the current or immediately
           preceding financial year or during an earlier financial year and remain in any respect outstanding or unperformed.
     3.    Calgro M3’s attorneys hold in trust 50% of the shareholding of each director from the a date of listing. 50% of the said 50%,
           will be released on the publication of the audited results for the year ending 29 February 2008, and the remaining 50% of the
           said 50%, will be released on the publication of the audited results for the year ending 28 February 2009.


10. DIRECTORS’ SERVICE AGREEMENTS
     The directors’ service agreements require a months’ notice period and contain no unusual or onerous
     provisions. They are available for inspection in terms of paragraph 47 in the prospectus.




22
11. DIRECTORS’ EMOLUMENTS
                                           Allowances
                                                   and                                                   Bonus’
                              Basic         consulting                                                  and sale
  2007                       salary               fees           Pension         Medical aid           of shares        Totals
                             R’000              R’000              R’000              R’000                R’000        R’000
  Executive
  P Waweru                        –                      –                –                    –                 –            –
  F J Steyn                     989                      –                –                    –                 –            –
  B P Malherbe                1 190                      –                –                    –                 –            –
  C Daly                          –                      –                –                    –                 –            –
                              2 179                      –                –                    –                 –            –
  Non-executive
  Q Woods                           –                 235                 –                    –                 –            –
                              2 179                   235                 –                    –                 –            –
  Notes:
  1.   P Waweru and C Daly were employed as directors after 1 March 2007 and therefore no emoluments were paid to them
       during the year ended 2007.
  2.   Q. Woods is a prospective director at 28 February 2007 and received consulting fees from Calgro during the year ended 2007.




                                                                                                                              23
PART THREE: FINANCIAL INFORMATION


12. HISTORICAL FINANCIAL INFORMATION
     The audited and reviewed consolidated historical financial information for Calgro M3 and its subsidiaries
     for the year ended 28 February 2007, the preparation of which is the responsibility of the directors,
     is presented in Annexure 3. Annexure 5 contains the independent reporting accountants’ report on the
     consolidated historical financial information of Calgro M3 and its subsidiaries. The independent reporting
     accountants have given and have not withdrawn their written consent to the issue of the prospectus,
     containing the reports in the form and context in which they appear.


13. PRO FORMA FINANCIAL INFORMATION
     The unaudited pro forma balance sheet after the private placement, set out below and in Annexure 4,
     is provided for illustrative purposes only to provide information about how the private placement may
     have impacted on the group’s results and financial position. Due to the nature of the unaudited pro forma
     financial information, it may not give a fair presentation of the group’s financial position, after the private
     placement. The unaudited pro forma balance sheet should be read in conjunction with the independent
     reporting accountants’ report thereon set out in Annexure 6. The directors of Calgro M3 are responsible
     for the preparation of the unaudited pro forma financial information.

     PRO FORMA BALANCE SHEET AT 28 FEBRUARY 2007
                                                                                                    Unaudited
                                                                                                     Pro forma
                                                                                                      financial
                                                                  Pro forma                       information
                                    Audited            Mvua           before                      after private
                                   financial            BEE          private        Offer for       placement(2)
                               information(1)    transaction      placement      subscription     28 Feb 2007
                                                                       R’000            R’000             R’000
     ASSETS
     Non-current assets               7 401                 –           7 401                –           7 401
     Current assets                  60 081                 –          60 081                –          60 081
     Cash                             1 067            41 170          42 237           32 300          74 537
     Total assets                    68 549            41 170        109 719            32 300         142 019
     EQUITY AND LIABILITIES
     Share capital (3) (4)                 1           42 750          42 751           32 300          75 051
     Reserves                          4 777                –           4 777                –           4 777
     Minority interest                   207                –             207                –             207
     Total shareholders’ funds         4 985           42 750          47 735           32 300          80 035
     Non-current liabilities            654                 –             654                 –            654
     Current liabilities             61 330                 –          61 330                 –         61 330
     Bank overdraft                   1 580            (1 580)              –                 –              –
     Total liabilities               63 564                 –          61 984                 –         61 984
     Total liabilities and
     shareholders’ funds             68 549            41 170        109 719            32 300         142 019
     Pro forma shares in issue    108 000                            108 000                           120 000
     Net asset value in shares
     (cents)                         4.62                               44.20                             66.70
     Net tangible value per share
     (cents)                         1.10                               40.68                             63.53




24
   Notes:
   1.   Extracted, without adjustment, from the audited financial information of Calgro M3 Group for the year end 28 February 2007
        presented in Annexure 3.
   2.   Represents the pro forma balance sheet of Calgro M3, after the Mvua subscription and the private placement, on the following
        assumptions:
        – the Mvua subscription and the private placement in terms of the offer for subscription were effective 28 February 2007;
           and
        – the private placement in terms of the offer for subscription was fully subscribed and 12 000 000 shares were issued for
           total of R36 million, less estimated costs as set out in paragraph 17 in the prospectus.
   3.   The Mvua subscription represents the issue of 15 000 000 shares at 285 cents each, subject to a call option upon the
        occurrence of certain events as agreed between the parties. If the net fair value of the rights and obligations of the call option
        is not zero at inception or in the future, depending on the value of the underlying instrument, an asset or liability should be
        recognised. The fair value of the issue of shares in terms of the Mvua subscription needs to be determined on the effective
        date of the issue in terms of IFRS 2: Share Based Payments, and any deemed discount shall be charged to the income
        statement in the relevant period.
   4.   Represents the private placement of 12 000 000 shares at 300 cents each, net of transaction costs estimated at R3.7 million.


14. PROFIT FORECAST
   The unaudited consolidated profit forecast of Calgro M3 for the years ending 29 February 2008 and
   28 February 2009, the preparation of which is the responsibility of the directors, is set out below. The
   forecast has been examined by the reporting accountants and should be read in conjunction with their
   report thereon as set out in Annexure 7.
                                                                                                       Forecast             Forecast
                                                                                                           2008                 2009
                                                                                                          R’000                R’000
   Gross revenue                                                                                        562 812              838 640
   Cost of sales                                                                                       (443 767)            (658 760)
   Gross profit                                                                                         119 045              179 880
   Overheads                                                                                            (30 482)             (49 689)
   Operating profit                                                                                       88 563             130 191
   Net finance costs                                                                                     (36 280)            (39 251)
   Profit before tax                                                                                      52 283               90 940
   Taxation                                                                                              (14 582)             (25 745)
   Profit after tax                                                                                       37 701               65 195
   Headline earnings attributable to ordinary shareholders                                                37 701               65 195
   Pro forma weighted average number of shares in issue                                                 111 551              120 000
   Pro forma earnings per share (cents)                                                                    33.8                 54.3
   Pro forma headline earnings per share (cents)                                                           33.8                 54.3

   Notes to the profit forecasts
   The accounting policies applied in arriving at the forecast revenue are consistent in all respects and those
   accounting policies applied to the historic information presented.

   Material assumptions underlying the preparation of the profit forecasts
   The forecast profit information is based on the assumptions that circumstances which could affect the
   company’s business, but which are outside the control of the directors, will not materially alter in such
   way as to affect the trading of the company. More specifically:
   • Trading conditions are not expected to be materially different in each of the forecast periods, which
     would include, inter alia, growth in market;
   • Government’s RDP programme and commitment to delivery will continue through the forecast period;
   • Present interest rates as well as taxation rates will remain relatively stable;
   • Current inflation rates will remain relatively constant;



                                                                                                                                      25
     • no unforeseen delays in regulatory or municipal authorisations;
     • no unforeseen delays in services connections;
     • no unforeseen materials supply shortages or delays; and
     • labour legislation will not materially change and the labour force will remain relatively stable without
       strike action.
     Assumptions under the control of the directors:
     The forecast profit information is based on the following assumptions which are under the control of the
     directors:
     • there will be continuity in existing management and trading policies;
     • there will be no change in the current accounting policies; and
     • no projects currently unsigned are included in the forecast.
     It should be noted that Calgro currently applies the guidance under International Financial Reporting
     Standards (‘IFRS’) relating to the revenue recognition for construction contracts in accounting for revenue
     from the developments. The International Financial Reporting Interpretations Committee (‘IFRIC‘) has
     issued a draft interpretation (D21 Real Estate Sales) on accounting for revenue from the sale of real
     estate, which could impact Calgro’s accounting for revenue. The draft interpretation proposes that
     revenue be recorded as construction progresses only if the developer is providing construction services,
     rather than selling goods (completed real estate units). It proposes features that indicate whether the
     seller is providing construction services. The interpretation could influence the timing of the revenue
     recognition if it is approved in its current form. Calgro shall continue with its current accounting policy
     and will apply the interpretation once finalised and effective, which could result in a change in accounting
     policy.


15. DIVIDENDS
     There will be no dividend declared in respect of the financial year ending 29 February 2008.
     Any dividends not claimed for a period of not less than three years from the date on which such
     dividends became payable may be forfeited for the benefit of the company. There is no arrangement
     under which future dividends will be waived or have been waived.
     In terms of the Articles of Association of Calgro M3:
     • all shares including placing shares rank equally for dividends;
     • all unclaimed dividends may be invested or otherwise made use of by the directors for the benefit
       of the company until claimed, provided that dividends unclaimed for a period of three years from
       the date on which they were declared may be declared forfeited by the directors for the benefit of the
       company; and
     • any dividend may be paid wholly or in part:
       – by the distribution of specific assets; or
       – by the issue of paid-up shares or debentures of the company or of any other company; or
       – in cash; or
       – in any other way which the directors or the company in general meeting may at the time of
         declaring the dividend determine.


16. MATERIAL CHANGES
     The directors report that there have been no material changes in the financial or trading position of
     Calgro M3 and its subsidiaries since 28 February 2007.
     There have been no material changes to the business of Calgro M3 and its subsidiaries during the past
     five years. The business of Calgro M3 or its subsidiaries or any part thereof is not managed or proposed
     to be managed by a third party under any contract or arrangement.




26
17. PRELIMINARY AND SHARE ISSUE EXPENSES
   The estimated expenses of the private placement and the listing, exclusive of Value-Added Tax, are as
   follows:
                                                                                                     R’000
   Printing, publication, distribution and advertising expenses                                        130
   JSE documentation fees                                                                                61
   JSE listing fees                                                                                      20
   Designated Advisor – Bridge Capital                                                                 500
   Capital raising fees – Bridge Capital                                                             1 241
   Limited assurance accountants – PWC                                                                 910
   Reporting accountants – ARC                                                                         300
   Attorneys – Hofmeyer, Herbstein & Gihwala                                                           150
   Attorneys – Weber Wenzel Bowens                                                                     250
   Sundry                                                                                              138
   Estimated total                                                                                   3 700

   The abovementioned estimated expenses, which will not exceed the share premium, will be written-off
   against the share premium account to the extent permissible by the Act.


18. CAPITAL COMMITMENTS, LEASE PAYMENTS AND CONTINGENT LIABILITIES
   The company had no material capital commitments, lease payments and contingent liabilities at
   28 February 2007. There have been no material changes to the capital commitments, lease payments
   and contingent liabilities of the company since that date.


19. BORROWINGS AND LOANS RECEIVABLE
   Details of material loans made to the group and/or any of its subsidiaries are disclosed below:

   Nedbank Limited
   The outstanding loan of R154 594 is secured under motor vehicles as disclosed in note 3 of Annexure 3,
   bearing interest at a rate linked to prime and repayable in monthly instalments of R13 603.31.

   Nedbank Limited
   The outstanding loan of R886 277 is secured under plant and machinery as disclosed in Annexure 3,
   bearing interest at a rate linked to prime and repayable in monthly instalments of R27 034.15.

   Aquarella Investments 269 (Pty) Limited
   The outstanding loan of R9.9 million is unsecured, interest free and is repayable in the following
   12 months. This will be funded out of proceeds from the listing.

   RZT Zelpy 4489 (Pty) Limited
   The outstanding loan of R300 000 is unsecured, interest free and is repayable in the following 12 months.
   This will be funded out of proceeds from the listing.

   Holdgro Projects (Pty) Limited
   The outstanding loan of R1.1 million is unsecured, interest free and has no fixed terms of repayment.
   This will be funded out of proceeds from the listing.

   Rand Merchant Bank Limited
   The outstanding loan of R4.5 million is secured under land included in inventory, bears interest at a rate
   linked to prime and is repayable on transfer of the property within a 12 month period. This will be funded
   out of proceeds from the listing.


                                                                                                          27
     Salamax 1583 (Pty) Limited
     The outstanding loan of R2.8 million is unsecured, interest free and is repayable in the following
     12 months. This will be funded out of proceeds from the listing.
     The loans arose primarily for the purchase of land, which will be repaid within 24 months from cash
     generated from operations during the ordinary course of business.
     Save as disclosed in note 6 of Annexure 3, no material loans have been made by Calgro M3, including
     loans made, cash or security furnished by Calgro M3 to or for the benefit of any promoter, director or
     manager or any associate of any promoter, director or manager of Calgro M3 and its subsidiaries within
     the preceding three years. The amounts outstanding at 28 February 2007 in respect of the directors’
     trusts, as of the date of this prospectus, have been settled.
     No debentures or debenture stock have been issued by way of conversion or replacement of debentures
     previously issued.
     No loan capital is outstanding.


20. ADEQUACY OF WORKING CAPITAL
     The directors are of the opinion that the working capital available to Calgro M3, following the private
     placement, is sufficient for the group’s present requirements, that is, for at least the next 12 months
     from the date of issue of this prospectus.




28
PART FOUR: THE PRIVATE PLACEMENT AND LISTING


21. PURPOSE OF THE PRIVATE PLACEMENT AND LISTING
   Subject to the achievement of the required spread of public shareholders, the JSE has formally approved
   the listing of a maximum of 12 000 000 shares in the share capital of Calgro M3 on the Altx with effect
   from commencement of business on Friday, 16 November 2007. The shares will trade under the
   abbreviated name “CALGRO”, with the share code “CGR” and ISIN: ZAE000109203.
   Calgro has reserves in excess of R4 million at 28 February 2007. The company will have a public
   shareholding of at least 100 shareholders who will hold a minimum of 10% of the issued ordinary shares
   on the day of listing.
   A total amount of R36 million, before expenses, will be raised by the issue of a maximum of 12 000 000
   new shares by the company for cash, and a total amount of R19 800 000 million, before expenses, will
   be raised from the sale of a maximum of 6 600 000 shares by the existing shareholders for cash, to
   qualifying investors. The proceeds received in terms of the private placement will first be applied to the
   offer for subscription and thereafter to the offer for sale. The proceeds from the offer for subscription
   will be utilised to grow the company’s market share in the construction business, through potential
   acquisition opportunities and to facilitate the working capital requirements of the existing business.
   The purpose of the private placement and the listing are:
   • to raise new capital for new strategic land acquisitions;
   • to make capital resources available for the Group to secure land and future projects, and therefore to
     create stability and sustainability;
   • to strengthen the balance sheet to support financial requirements. The listing is not an exit strategy
     for the vendors and the cash will be utilised to achieve Group strategies;
   • to raise the Group’s public profile and elevate its status in terms of key stakeholder negotiations with
     Government, councils, banks, municipalities, etc.; and
   • to attract a higher percentage of BEE participation in the Group.
   The purpose of the offer for sale is to allow existing shareholders to partially realise approximately 6.6%
   of their current investment in the company and to comply with the Listing Requirements regarding
   shareholder spread.


22. PRICING
   The private placement price is 300 cents per share. Allocations of the shares will only be made in
   multiples of 1 000 shares with minimum allocation size of 1 000 shares. Fractions of shares in Calgro M3
   will not be issued. The private placement will be payable in full in Rands without deduction or set-off.
   Results of the private placement will be released on SENS on Monday, 12 November 2007 and published
   in the press on Tuesday, 13 November 2007.
   The private placement will not be underwritten.




                                                                                                           29
23. SALIENT DATES AND TIMES
     The offer opens at 09:00 on Thursday, 8 November 2007 and is expected to close at 16:00 on Friday,
     9 November 2007.
                                                                                                            2007
     Abridged prospectus released on SENS on                                          Wednesday, 7 November

     Prospectus available on                                                             Thursday, 8 November

     Opening date of the private placement at 09:00 on                                   Thursday, 8 November

     Closing date of the private placement at 16:00 on                                      Friday, 9 November

     Final allocation of the private placement shares on                                 Monday, 12 November

     Results of private placement published in the press on                              Tuesday, 13 November

     Settlement and anticipated listing date of Calgro M3 on the Altx at 09:00             Friday, 16 November

     Note:
     The above dates and times are subject to change. Any such change will be released on SENS and published in the
     press.


24. PARTICIPATION IN THE PRIVATE PLACEMENT
     Invited institutional and retail investors and selected private clients, together “qualifying investors”, may
     participate in the private placement.

     Invited institutional investors:
     Invited institutional investors are to provide Bridge Capital, with their irrevocable indications of interest
     by 12:00 on Friday, 9 November 2007. Invited institutional investors will be informed of their allocated
     shares, if any, on or from Monday, 7 November 2007, when the collated applications will be provided
     to the transfer secretaries and Strate. Invited institutional investors must make the necessary
     arrangements to enable their CSDP to make payment for the allocated shares on the settlement date.
     The allocated shares will be transferred, on a “delivery versus payment” basis, to successful institutional
     applicants on the settlement date, which is expected to be Friday, 16 November 2007.

     Invited retail investors:
     Invited retail investors are to provide Bridge Capital, with their completed private placing application
     forms by 16:00 on Friday, 9 November 2007. Invited retail investors will be informed of their
     allocated shares, if any, on or from Monday, 12 November 2007. Invited retail investors must make the
     necessary arrangements to enable their CSDP or broker, as the case may be, to make payment for the
     allocated shares on settlement date. The allocated shares will be transferred, on a “delivery versus
     payment” basis, to successful retail applicants on the settlement date, which is expected to be Friday,
     16 November 2007.

     Selected private clients:
     Selected private clients are to provide Bridge Capital, with their completed private placing application
     forms by 16:00 on Friday, 9 November 2007. Selected private clients will be informed of their allocated
     shares, if any, on or from Monday, 12 November 2007. Selected private clients must make the necessary
     arrangements to enable their CSDP or broker, as the case may be, to make payment for the allocated
     shares on settlement date. The allocated shares will be transferred, on a “delivery versus payment”
     basis to successful private client applicants on the settlement date, which is expected to be Friday,
     16 November 2007.




30
25. APPLICATIONS

   25.1 Acceptance
        No applications will be accepted after 16:00 on Friday, 9 November 2007.

   25.2 Applications irrevocable
        Applications submitted by qualifying investors shall constitute irrevocable offers and may not be
        withdrawn once received by Bridge Capital.

   25.3 Copies of applications
        Copies or reproductions of the application form will be accepted at the discretion of Bridge Capital.

   25.4 Alterations to application
        Any alterations on the application form must be authenticated by full signature.

   25.5 Evidence of capacity to apply
        No documentary evidence of capacity to apply need accompany an application but the company
        reserves the right to call upon any applicant to submit such evidence for noting, which evidence will
        be held on file with the transfer secretaries or returned to the applicant at the applicant’s risk.

   25.6 Incomplete application forms
        Incomplete application forms will not be accepted. All application forms must be stamped and
        signed by a CSDP or broker prior to being submitted.

   25.7 Reservation of rights
        Bridge Capital reserve the right to refuse any application(s), either in whole or part, or to pro rate
        any or all application(s) (whether or not received timeously) in any manner as they may, in their sole
        and absolute discretion, determine.
        Bridge Capital reserve the right to accept or reject, either in whole or part, any private placement
        application form should the terms contained in this prospectus, and the instructions herein, not be
        properly complied with.


26. ISSUE AND ALLOCATION OF THE PRIVATE PLACEMENT SHARES
   All shares applied and subscribed for in terms of this prospectus will be issued at the expense of the
   company.
   All shares placed in terms of this prospectus will be allotted subject to the provisions of the articles
   of association and will rank pari passu in all respects with any existing issued shares.
   Allocations of shares will only be made in multiples of 1 000 shares with minimum allocation size of
   1 000 shares.
   The bases of allocation of the shares, based on irrevocable indications of interest and applications
   accepted by the company in accordance with paragraph 24 above, will be determined by Bridge Capital
   in its sole discretion, after consultation with the company. Applicants may receive fewer than the number
   of shares applied for.
   It is intended that notice of the allocations will be given on or from Monday, 12 November 2007.
   Successful applicants’ accounts with their CSDP, or broker will be credited with the allocated shares on
   the listing date on a “delivery versus payment” basis.


27. PAYMENT AND DELIVERY OF THE PRIVATE PLACEMENT SHARES
   No payment should be submitted with the private placement application form delivered to Bridge Capital.
   Applicants must make the necessary arrangements to enable their CSDP or broker to make payment for
   the allocated shares on the settlement date, which is expected to be Friday, 16 November 2007,
   in accordance with each applicant’s agreement with their CSDP or broker.


                                                                                                           31
     The allocated shares will be transferred, on a “delivery versus payment” basis, to successful qualifying
     investors on the settlement date, which is expected to be Friday, 16 November 2007.
     The applicant’s CSDP or broker must commit to Strate to the receipt of the applicant’s allocation of
     shares against payment on Friday, 16 November 2007.
     On the listing date, the applicant’s allocation of shares will be credited to the applicant’s CSDP or broker
     against payment during the Strate settlement runs, prior to the opening of the market.
     The CSDP or broker concerned will receive and hold the dematerialised shares on the applicant’s behalf.


28. REPRESENTATION
     Any person applying for or accepting the shares shall be deemed to have represented to the company
     that such person was in possession of a copy of this prospectus at that time. Any person applying for
     or accepting the shares on behalf of another:
     • shall be deemed to have represented to the company that such person is duly authorised to do so and
       warrants that such person and the purchaser for whom such person is acting as an agent is duly
       authorised to do so in accordance with all relevant laws;
     • guarantees the payment of the private placement price; and
     • warrants that a copy of this prospectus was in the possession of the purchaser for whom such person
       is acting as agent.


29. STRATE AND TRADING OF SHARES ON THE JSE
     Shares of Calgro M3 may only be traded on the JSE (Altx) in electronic form (dematerialised shares) and
     will be trading for electronic settlement in terms of Strate immediately following the listing. The allocated
     shares will be transferred to successful qualifying investors in dematerialised form only. Accordingly, all
     successful qualifying investors must appoint a CSDP directly, or through a broker, to receive and hold the
     dematerialised shares on their behalf. Should a shareholder require a physical share certificate for its
     shares, it will have to materialise its shares following the listing and should contact its CSDP or broker
     to do so.
     Strate is a system of “paperless” transfer of securities. If you have any doubt as to the mechanics of
     Strate, please consult your CSDP, broker or other appropriate advisor. You are also referred to the Strate
     website at www.strate.co.za for more information. Some of the principal features of Strate are as
     follows:
     • electronic records of ownership replace share certificates and physical delivery of certificates;
     • trades executed on the JSE must be settled within five business days;
     • all investors owning dematerialised shares or wishing to trade their securities on the JSE are required
       to appoint either a CSDP or a broker to act on their behalf and to handle their settlement requirements;
       and
     • unless investors owning dematerialised shares specifically request their CSDP to register them as an
       “own name” dematerialised shareholder (which entails a fee), the nominee company of their CSDP
       or broker holding the shares on their behalf, will be the shareholder (member) of the relevant company
       and not the investor. Subject to the agreement between the investor and the CSDP or broker, the
       investor is entitled to instruct the CSDP or broker (or the company of their CSDP or broker), as to how
       it wishes to exercise the rights attaching to the shares and/or to attend and vote at shareholders’
       meetings.


30. EXCHANGE CONTROL REGULATIONS
     The following summary is intended as a guide and is therefore not comprehensive. If you are in any
     doubt regarding the Exchange Control Regulations, please consult your professional advisor.

     30.1 Emigrants from the common monetary area
          • a former resident of the common monetary area who has emigrated, may use emigrant blocked
            funds to subscribe for shares in terms of this prospectus;


32
       • all payments in respect of subscriptions of shares by an emigrant, using emigrant blocked funds,
         must be made through the authorised dealer in foreign exchange controlling the blocked assets;
       • any shares issued pursuant to the use of emigrant blocked funds, will be credited to their
         blocked share accounts at the CSDP controlling their blocked portfolios;
       • shares subsequently rematerialised and issued in certificated form, will be endorsed
         “Non-Resident” and will be sent to the authorised dealer in foreign exchange through whom the
         payment was made; and
       • if applicable, refund monies payable in respect to unsuccessful applications, or partly successful
         applications, as the case may be, for shares in terms of this prospectus, emanating from
         emigrant blocked accounts, will be returned to the authorised dealer in foreign exchange through
         whom the payments were made, for credit to such applicant’s blocked accounts.

  30.2 Applicants resident outside the common monetary area
       • a person who is not resident in the common monetary area should obtain advice as to whether
         any governmental and/or other legal consent is required and/or whether any formality must be
         observed to enable a subscription to be made in terms of the private placement;
       • this prospectus is not an offer in any area or jurisdiction in which it is illegal to make such an offer.
         In such circumstances, this prospectus and any private placement application form have been
         sent for information purposes only; and
       • applicants that are resident outside the common monetary area should note that, where shares
         are subsequently rematerialised and issued in certificated form, such share certificates will be
         endorsed “non-resident” in terms of the Exchange Control Regulations.


31. SIMULTANEOUS ISSUES AND OVER-SUBSCRIPTIONS
  No simultaneous or almost simultaneous issue of shares have been made by the company.
  The placing is fully open to the applicants and no oversubscription will occur as the placing shares have
  been fully placed. Any monies received for more shares than available, refunds will be paid with interest.




                                                                                                               33
PART FIVE: SHARE CAPITAL


32. SHARE CAPITAL [8]

     32.1 Authorised and issued share capital
            The authorised and issued share capital of Calgro M3, taking into account the private placement
            and listing costs as set out in paragraph 17, which are to be offset against the share premium, are
            set out below:
                                                                                                                                         R
            Authorised
            500 000 000 shares of 0.001 cent each                                                                                  5 000
            Issued
            Before the private placement
            108 000 000 shares of 0.001 cent each                                                                                1 080
            Share premium                                                                                                   42 750 000
            Issued
            After the private placement
            120 000 000 shares of 0.001 cent each                                                                                1 200
            Share premium                                                                                                   78 750 000

            All the authorised and issued shares are of the same class and rank pari passu in every respect.
            Save as set out in paragraph 34.1 below, there has been no sub-division or consolidation of shares
            during the three years prior to the date of issue of this prospectus.
            Save as provided for in paragraph 34 below, no offer has been made for the subscription or sale
            of shares during the three year period preceding the date of issue of this prospectus.
            No debentures will be issued or offered in terms of this placement.


33. MAJOR SHAREHOLDERS
     The shareholders, other than directors, who are, directly or indirectly beneficially interested in 5% or
     more of the issued share capital of Calgro M3 at the last practicable date are as follows:
     Name of                                                   Number of shares                           Percentage held
     shareholder                                           Before the     After the                  Before the       After the
                                                              private       private                     private         private
                                                           placement    placement                    placement      placement
     Hendrik Brand Family Trust                            12 900 000           11 984 000                    11.9                   10.0
     The DNS Trust                                         12 900 000           11 984 000                    11.9                   10.0
     The DGS Trust                                         12 900 000           11 984 000                    11.9                   10.0
     Mvua                                                  15 000 000           15 000 000                    13.9                   12.5
     Notes:
     •   The “After the private placement” column assumes that the private placement will be fully subscribed.
     •   No other shareholder, other than the directors and as set out in the table above, will, as far the directors of Calgro M3 are aware,
         directly or indirectly, hold 5% or more of the issued share capital of Calgro M3 following the private placement. The company
         will have a public shareholding of at least 100 shareholders that will hold a minimum of 10% of the shares on the day of listing.
         There will be no controlling shareholder in Calgro M3 after the private placement.
     •   There will be no change in the status of the controlling shareholder status as a result of the private placement.
     •   There have been no changes in the trading objects of Calgro M3 and its subsidiaries during the last five years.




34
34. ALTERATIONS TO SHARE CAPITAL

   34.1 Alterations to authorised share capital
        • Calgro M3 was initially incorporated on 5 August 2005 as Double Ring Trading 332 (Pty) Limited
          with an authorised ordinary share capital of 1 000 ordinary shares with a par value of R1.00.
        • the company:
          – Increased its authorised share capital from 1 000 shares to 2 000 with par value of R1.00 per
            share on 1 June 2007;
          – sub-divided its authorised ordinary share capital of 2 000 ordinary shares with a par value of
            R1.00 per share into 200 000 000 ordinary shares with a par value of R0.00001 per share on
            1 June 2007;
          – increased its authorised share capital from 200 000 000 shares to 500 000 000 shares with
            a par value of R0.00001 per share on 1 September 2007; and
        • save as set out above, no other increase in authorised share capital, share repurchases,
          sub-divisions or consolidations have been undertaken by Calgro M3.

   34.2 Issue/Sale of shares
        • On incorporation, Calgro M3 issued and allotted 100 ordinary shares of R1.00 per share to the
          initial subscriber of shares in the company. These shares have been sold and transferred to:
          – The DGS Trust (20 shares);
          – The DNS Trust (20 shares);
          – FJS Trust (20 shares);
          – The BPM Family Trust (20 shares); and
          – The Hendrik Brand Family Trust (20 shares).
        • On 1 March 2006 the following shares were issued in proportion to their existing holdings:
          – The Hendrik Brand Family Trust                                    109 shares at R1.00 each;
          – The BPM Family Trust                                              109 shares at R1.00 each;
          – The DGS Trust                                                     109 shares at R1.00 each;
          – The DNS Trust                                                     109 shares at R1.00 each;
          – FJS Trust                                                         109 shares at R1.00 each.
        • On 1 November 2006 the following shares were issued:
          – Jacqueline Pontus                                                   3 shares at R1.00 each;
          – Ewoudt Carney                                                       2 shares at R1.00 each;
          – Wendy Carter                                                        2 shares at R1.00 each;
          – Big Sky Trust                                                      33 shares at R1.00 each;
          – Opal Trust                                                         33 shares at R1.00 each;
          – Peter Waweru Investments (Pty) Limited                             35 shares at R1.00 each;
          – Craig Daly Family Trust                                            35 shares at R1.00 each;
          – Business Venture Investments No. 231 (Pty) Limited                 28 shares at R1.00 each;
          – Khuselo Investments (Pty) Limited                                  57 shares at R1.00 each;
          – Vencor Capital Share Investment (Pty) Limited                      57 shares at R1.00 each.
        • These shares were offered to the shareholders by the company and there were not terms
          attached.
        • On the 15th October 2007, 15 000 000 share were issued to Mvua in terms of the agreement
          as set out in paragraph 36 at a value of 285 cents per share. The 15 000 000 shares represented
          13.9% of the total issued share capital of 108 000 000, post the share split as indicated in
          paragraph 34.1.
          Save for the issue and sale as set out above, no further issue or sale was effected in regard
          to any share.


                                                                                                       35
              The ordinary resolutions to approve the above issues of shares were implemented at the time
              of the issues. In terms of an ordinary resolution approved by a 75% majority of shareholders
              passed on 1 March 2006 and 1 November 2006, respectively, the directors have the power
              to allot and issue shares of the company for cash, subject to the following conditions:
          •   compliance with the provisions of the Act, the Listings Requirements and the memorandum and
              articles of association of Calgro M3;
          •   that the securities be of a class already in issue;
          •   that securities be issued to public shareholders and not to related parties;
          •   that an announcement giving full details, including the impact on net asset value and earnings
              per share, be published at the time of any issue representing, on a cumulative basis within
              a financial year, 5% or more of the number of securities in issue prior to the issue/s;
          •   that issues in the aggregate in any one financial year shall not exceed 15% of the company’s
              issued share capital of that class;
          •   that, in determining the price at which an issue of securities will be made in terms of this
              authority, the maximum discount permitted shall be 10% of the weighted average traded price
              of those securities over the 30 business days prior to the date that the price of the issue is
              determined or agreed by the directors; and
          •   that the approval will be valid until the next annual general meeting or for 15 months from the
              date of the resolution, whichever period is the shorter.

     34.3 Issues or offers of shares by subsidiaries
          None.

     34.4 Unissued shares
          In terms of the resolution passed at a general meeting of Calgro M3 on 2 November 2007, prior to
          the allotment and issue of the private placement shares, the authorised but unissued shares in the
          company will be under the control of the directors of Calgro M3 until its next annual general
          meeting, subject to the provisions of sections 221 and 222 of the Act and the Listings
          Requirements.

     34.5 Voting, rights and variation of rights
          Set out below are extracts from the articles of association of the company relating to voting, rights
          and variation of rights:

          34.5.1 Voting rights
                   “Subject to the provisions of the articles and to any special terms as to voting rights upon
                   which any share may be issued or which may from time to time attach to a share, every
                   member shall:
                   • if the share capital is divided into shares of par value, be entitled to that proportion of the
                     total votes in the company which the aggregate amount of the nominal value of the
                     shares held by him bears to the aggregate amount of the nominal value of all the shares
                     issued by the company;
                   • if the share capital is divided into shares of no par value, be entitled to 1 (one) vote in
                     respect of each share he holds.
                   Notwithstanding the provisions of articles, a member of the company present in person
                   or, if the member is a body corporate, represented, at any meeting of the company shall
                   on a show of hands have only 1 (one) vote, irrespective of the number of shares he holds
                   or represents.
                   Any body corporate holding shares conferring the right to vote may, by resolution of its
                   directors or other governing body, appoint a person to act as its representative at any
                   general meeting of the company or at any meeting of holders of any class of shares of the
                   company.
                   Such representative shall be entitled to exercise the same rights on behalf of the body
                   corporate which he represents as that body corporate could exercise if it were a natural
                   person.”


36
   34.6 Modification of rights
        “If at any time the share capital is divided into different classes of shares, all or any of the special
        rights or privileges attached to any class of shares, including the par value of the shares, may:
        • only be varied or cancelled by special resolution and with;
        • the prior written consent of 3/4 (three quarters) of the holders of the issued shares of that class;
           or
        • the prior sanction of a resolution passed by 3/4 (three quarters) of the holders of the shares
           of that class present or represented by proxy and voting at a separate general meeting,
        be varied or cancelled as provided for in articles, whether or not the company is being
        wound-up or a winding-up is contemplated.
        Any shares not ranking pari passu in all respects with any other shares (as regards par value, rate
        of dividend, voting and any other term of issue) shall, for the purpose of this article, be deemed to
        constitute a separate class of shares.
        The special rights attached to the shares of any class shall not, unless otherwise expressly provided
        by the conditions of issue of such shares, be deemed to be varied by the creation or issue of further
        shares:
        • ranking pari passu therewith; or
        • enjoying lesser rights,
        and which do not have preference over the first mentioned shares.”

        34.6.1 Preferential conversion rights
                There are no preferential conversion or exchange rights of any securities of the companies.

   34.7 No other listings
        The issued shares of Calgro M3 will be listed on the ALTx. No other shares of Calgro M3 are listed
        on any stock exchange.


35. SHARE APPRECIATION RIGHTS SCHEME 2007
   Save as disclosed in the share appreciation right scheme, there are no contracts or arrangements, either
   actual or proposed, whereby any option or preferential right of any kind has been or will be given to any
   person to subscribe for any shares in the company or its subsidiaries.




                                                                                                             37
PART SIX: GENERAL


36. MATERIAL TRANSACTIONS
     Details of the material contracts entered into in writing by the company or any of its subsidiaries during
     the two years preceding the date of this prospectus, being a contract entered into otherwise than in the
     ordinary course of business carried on, or proposed to be carried on, by the company or any of its
     subsidiaries are as follows:

     Mvua BEE transaction
     • On 21 September 2007, the company concluded a transaction with Mvua in terms of which the
       company issued 15 000 000 ordinary shares to Mvua at a cash price of R2.85 per share.
     • Mvua is entitled, in terms of the shareholders agreement, to nominate one (1) Director to the Board
       of Directors of Calgro M3 so long as it holds more than 5% of the issued share capital of the company
       or 85% of the subscription shares (15 000 000 shares).
     • The effective date of the transaction was the 12 October 2007.
     • Mvua is precluded from selling any of the shares acquired in the Mvua BEE Transaction to any person,
       other than a Black Person or a Black Company (as defined under Code 100 of the codes of good
       practice issued in terms of the Broad-Based Black Economic Empowerment Act, 53 of 2003,
       as amended) for a two year period from the effective date.
     • Mvua grants to the company or its nominee the right to acquire all of the shares acquired by Mvua
       in the Mvua BEE Transaction upon the happening of a material adverse event, namely the insolvency,
       liquidation or placement under judicial management of Mvua; or a breach by Mvua of any of the
       warranties given to the company under the Mvua BEE Transaction.


37. PRINCIPAL IMMOVABLE PROPERTIES OWNED AND LEASED
     Details of the principal immovable properties held or occupied by the Calgro M3 group are set out
     in Annexure 12.
     Save for the properties disclosed in Annexure 12, the Group has not acquired, nor proposed to acquire
     property within the last 3 years.


38. DETAILS OF SUBSIDIARIES
     Details of the group’s subsidiaries are set out in Annexure 11.


39. MATERIAL CONTRACTS
     Save as disclosed in paragraph 36, there are no other material contracts nor any material contracts that
     contain any obligation or settlement that is material to Calgro M3.


40. OTHER
     • The company has not paid any material technical or secretarial fees during the three years preceding
       the issue of this prospectus.
     • No amount has been paid or has accrued as payable, or was proposed to be paid within the preceding
       three years, to any promoter, or to any partnership, syndicate or other association of which he/she/it
       is or was a member.
     • The company and group has not disposed of any material property other than in the ordinary course
       of business during the past three years, nor proposes to dispose of, at the date of this prospectus.
     • Calgro M3 and its group companies, have not purchased any material assets, other than in the ordinary
       course of business, nor purchased securities in an unlisted subsidiary or associated company in the
       prior 2 years.




38
   • No promoter, director or member of any partnership has any beneficial interest, direct or indirect, in
     any transaction with Calgro M3.
   • No cash or securities has been paid to or given to any promoter, who is not a director, by Calgro M3
     in the preceding 3 years.
   • No material contract (written or verbal) has been entered into, at any time, containing an obligation or
     settlement that is material to the Group, at the date of this prospectus.
   • There are no royalties payable or items of a similar nature in respect of the applicant and any of its
     subsidiaries.


41. COMMISSIONS, DISCOUNTS AND BROKERAGES
   Other than as disclosed in paragraph 17, there have been no commissions, discounts, brokerages or
   other special terms granted during the three years preceding the date of the prospectus in connection
   with the issue or sale of any shares, stock or debentures in the capital of Calgro M3.


42. LITIGATION STATEMENT
   There are no legal or arbitration proceedings, including any proceedings that are pending or threatened
   of which Calgro M3 is aware, that may have or have had in the recent past, being at least the previous
   12 months, a material effect on the group’s financial position.


43. ADVISORS’ INTERESTS
   None of the advisors, whose particulars are set out in the “Corporate information” section of this
   prospectus, hold any shares in the company or have agreed to acquire any shares in the company at the
   date of this prospectus.


44. EXPERTS’ CONSENTS
   Each of the company’s advisors, commercial banker and the transfer secretaries have consented in
   writing to act in the capacities stated and to their names appearing in this prospectus and have not
   withdrawn their consent prior to the registration of this prospectus.


45. KING CODE
   The company’s Corporate Governance Report is set out in Annexure 10.


46. DIRECTORS’ RESPONSIBILITY STATEMENT
   The directors, whose names are set out in paragraph 6 above, collectively and individually, accept full
   responsibility for the accuracy of the information given and certify that, to the best of their knowledge
   and belief there are no other 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 this
   prospectus contains all information required by law and the Listings Requirements.


47. DOCUMENTS AVAILABLE FOR INSPECTION
   Copies of the following documents will be available for inspection at the registered office of the company
   at any time during normal business hours from 08:00 to 17:00 for a period of 14 days from the date of
   this prospectus:
   • the memorandum and articles of association of the Calgro M3 and its subsidiaries;
   • the signed reports by the reporting accountants;
   • the written consents of the company’s advisors, commercial banker and transfer secretaries to act in
     those capacities, which consents have not been withdrawn prior to registration;
   • the company’s share incentive scheme;
   • the executive directors’ service agreements;


                                                                                                          39
     •   the audited annual financial statements of Calgro M3 for the financial years ended 28 February 2007;
     •   the reviewed pro forma consolidated financial results for Calgro M3 for the year ended 28 February 2007;
     •   copies of the material contracts referred to in paragraph 39 above; and
     •   a copy of this prospectus.


48. PARAGRAPHS OF SCHEDULE 3 TO THE ACT WHICH ARE NOT APPLICABLE
     The numbers of the paragraphs in Schedule 3 to the Act, which are not applicable, are: 1(b), 2(d), 6(a)(iii),
     6(d), 6(e)(ii), 6(g), 6(h), 8(b), 8(d), 12, 13, 14, 17(c), 18(b), 20(b), 21, 24, 26, 27 and Part III.
     Signed at Johannesburg by Craig Daly on his own behalf and on behalf of all the directors of the company
     on Friday, 2 November 2007, he being duly authorised in terms of a power of attorney granted to him by
     such directors.



     SGD
     For: Craig Terence Daly



     SGD
     For: Peter Waweru



     SGD
     For: Fredrick Johannes Steyn



     SGD
     For: Ben Pierre Malherbe



     SGD
     For: Quinton Woods



     SGD
     For: Pumla Radebe



     SGD
     For: Sonwabo Edwin Funde



     SGD
     For: Hatla Ntene




40
                                                                                              Annexure 1


OTHER DIRECTORSHIPS HELD BY DIRECTORS


Set out below are the names of all the companies and partnerships of which the directors have been
a director or partner at any time during the previous five years, indicating whether or not the individual
is still a director or partner:
Director                     Role           Directorships/Partnerships
Peter Muriuki Waweru         Director       Inyanga Trading 315 (Pty) Limited
                             Director       Continental Africa Trading (Pty) Limited
                             Director   ^   Anglo Dutch Life Limited
                             Director       Business Venture Investments No. 766 (Pty) Limited
                             Director   ^   Business Venture Investments No. 856 (Pty) Limited
                             Director       Business Venture Investments No. 878 (Pty) Limited
                             Director       Business Venture Investments No. 999 (Pty) Limited
                             Director   ^   Channel Management Services (Pty) Limited
                             Director       Consultancy Diplomatique International (Pty) Limited
                             Director   ^   House of Indulgence (Pty) Limited
                             Director   ^   Magmak Investments (Pty) Limited
                             Director   ^   Professional Fund Service Advisors and Actuaries Africa
                                            (Pty) Limited
                             Director ^     PSG Channel Group Companies
                             Director       Saken Trading (Pty) Limited
                             Director       Smart Applications International (Pty) Limited
Jan Jacobus Roode            Member         Cybervine CC
                             Director       Cybervine Technologies (Pty) Limited
                             Director ^     Dormant Company No. 1 (Pty) Limited
                             Director ^     I A Business Solutions (Pty) Limited
                             Director       In Excess Trading 41 (Pty) Limited
                             Director       Neocore Group Companies
Craig Terence Daly           Director   ^   Blairgowrie (Randburg) Nursery School Society (Section 21)
                             Director   ^   Cashbuild Group Companies
                             Director   ^   Abercom Group Limited
                             Director   ^   Arban Group Holdings Limited
                             Director   ^   Bintech (Pty) Limited
                             Director   ^   Erven 13 and 14 Randjiespark (Pty) Limited
                             Director       Hightrade-Invest 60 (Pty) Limited
                             Director   ^   Hyper-Quip Packing (Pty) Limited
                             Director       Ivory Park Spaza Wholesale
                             Director   ^   Kablam No. 18
                             Director   ^   Malbak Group Companies
                             Director   ^   Nursery Properties (Pty) Limited
                             Director   ^   Protea Chemical Properties (Pty) Limited
                             Director   ^   Shubalala Game Lodge (Pty) Limited
                             Director   ^   The Berden Group Limited
                             Director   ^   Trade Park (Pty) Limited
                             Director   ^   U-Build (Pty) Limited
                             Director   ^   Vantage Securities Limited
Ben Pierre Malherbe          Director   ^   Trustgro Investments (Pty) Limited
                             Director   ^   Bonnie Vie Home Owners Association (Section 21)
                             Director       CALC Boureknaars (Pty) Limited
                             Director       Camargue Home Owners Association (Section 21)
                             Director       Cedar Crest Home Owners Association (Section 21)
                             Director   ^   Cherrywood Home Owners Association (Section 21)
                             Director   ^   Chestnut Grove Home Owners Association (Section 21)


                                                                                                         41
Director                  Role           Directorships/Partnerships
Deon Noel Steyn           Director ^     Dormant Company No. 1 (Pty) Limited
                          Director ^     Dormant Company No. 2 (Pty) Limited
                          Director ^     Dormant Company No. 3 (Pty) Limited
                          Director ^     Dormant Company No. 4 (Pty) Limited
                          Director ^     Dormant Company No. 5 (Pty) Limited
                          Director ^     Elfgro Projects (Pty) Limited
                          Director ^     Firenza Homeowners Association (Section 21)
                          Director       Gorgeous Gadget Shelf 102 (Pty) Limited
                          Member ^       Henque 2201 CC
                          Director ^     Northriding Ext 86 Home Owners Association (Section 21)
                          Member         Starfish Drive Travel CC
                          Member         Starfish Diving CC
                          Director       Witkoppen Ext 87 Home Owners Association
                          Director       CALC Bourekenaars (Pty) Limited
                          Director ^     Designer Neo Classic (Pty) Limited
                          Director ^     Firenza Home Owners Association (Section 21)
                          Member ^       Henique 2201 CC
                          Member ^       Knightstale Kennels CC
Douw Gerbrand Steyn       Member         Starfish Diving CC
                          Director       Valyspruit Home Owners Association (Section 21)
                          Director       Elfgro Projects (Pty) Limited
                          Member         Madusa Ontwikkelaars CC
                          Director ^     Trustgro Developments (Pty) Limited
                          Director ^     Turkey Interiors (Pty) Limited
                          Member         Cybervine CC
                          Director       Cybervine Technologies (Pty) Limited
                          Director ^     I A Business Solutions (Pty) Limited
                          Director       In Excess Trading 41 (Pty) Limited
                          Director       Neocore (Pty) Limited
Hendrik Brand Malherbe    Director       Neocore Group Companies
                          Director ^     Zil Trex 89 (Pty) Limited
Alwyn Ignatius de Waal    Director       Cedar Crest home owners Association (Section 21)
                          Director ^     Cherrywood Home owners association (Section 21)
                          Director ^     Contra-Con Construction (Pty) Limited
                          Director ^     Dormant Company No. 1 (Pty) Limited
                          Director       Firenza Home Owners Association (Section 21)
Fredrick Johannes Steyn   Director       Hightrade-Invest 58 (Pty) Limited
                          Director       Hightrade-Invest 60 (Pty) Limited
                          Director   ^   Northriding Ext 86 Home Owners Association (Section 21)
                          Director   ^   Valyspruit Home Owners Association (Section 21)
                          Director       Witkoppen Ext 87 Home Owners Association (Section 21)
                          Director       Zemfaktor South Africa Trading (Pty) Limited
                          Director       Sizanani Knowledge Management Services (Pty) Limited
                          Director   ^   Radix SA Technologies (Pty) Limited
                          Director       Becoserv (Pty) Limited
                          Director       Global Web Intact (Pty) Limited
                          Director       R Comm. System Technology (Pty) Limited
                          Director       Bakithi Holdings (Pty) Limited
                          Director       Bakithi Trading (Pty) Limited
                          Director       Business Process Enabling South Africa (Section 21)
                          Director   ^   Ednofund Investments (Pty) Limited
                          Director   ^   Eskom Holdings
                          Director       Igwija Gambling BEE SPV (Pty) Limited
                          Director       IMPI Linux (Pty) Limited


42
Director                Role           Directorships/Partnerships
Sondwabe Edwin Funde    Director       Institute of Economic Policy (Section 21)
                        Director   ^   ITEC Tiwende Telecommunications (Pty) Limited
                        Director       Kaheris (Pty) Limited
                        Director   ^   Kemilimks International SA (Pty) Limited
                        Director       Khuselo Investments (Pty) Limited
                        Director       Khuselo Telecoms (Pty) Limited
                        Director       Madije Investments (Pty) Limited
                        Director       Msina Communications (Pty) Limited
                        Director       Murray and Roberts Holdings Limited
                        Director   ^   Nexis Capital (Pty) Limited
                        Director       Onetel Limited
                        Director       Petzetakis Africa (Pty) Limited
                        Director       Radix SA Technologies (Pty) Limited
                        Director       SEF Technologies (Pty) Limited
                        Director   ^   Sonothevu Development Strategies (Pty) Limited
                        Director       South African Broadcasting Corporation Limited
                        Director       South African Communication Forum (Section 21)
                        Director   ^   SSC Mandarin Africa (Pty) Limited
                        Director       Swanvest 323 (Pty) Limited
                        Director       The ZA Domain Name Authority (Section 21)
                        Director       Tiyende Holdings (Pty) Limited
                        Director       Tiyende Telecommunications (Pty) Limited
                        Director       Ubuntu – Botho Investments (Gauteng) Limited
                        Director   ^   Vertel Systems (Pty) Limited
                        Director       Zemlyatchestvo Community Upliftment (Section 21)
Quinton Encombe Woods   Director ^     Cortex Business Management (Pty) Limited
                        Director ^     LMA Consulting (Pty) Limited
                        Director ^     LMA Corporate Advisors (Pty) Limited
                        Director       LMA Equity Partners Limited
                        Director ^     Stock Market Challenge (Pty) Limited
                        Director ^     World Educational Technologies Limited
                        Director       Ama Tuk Tuk (Pty) Limited
                        Director       Business Venture Investments No. 231 (Pty) Limited
                        Officer        Hightrade – Invest 60 (Pty) Limited
                        Director ^     IXIA Trading 112 (Pty) Limited
                        Director ^     Lifehouse Investments 12 (Pty) Limited
                        Director ^     Loxicom Networking and Telecommunications (Pty) Limited
                        Director ^     Micromega Holdings Limited
                        Member ^       Stand 743 Kyalami Ext 4 CC
                        Director       The Sagewood Foundation (Section 21)
Pumla Fundiswa Radebe   Director       Bungane Group Companies
                        Director       Food and Tree for Africa (Section 21)
                        Director       IMPI Linux (Pty) Limited
                        Director       Khuselo Group Companies
                        Member         Mannda Investments CC
                        Director ^     Touraissance Group of Companies
                        Director ^     Vertel Systems (Pty) Limited
                        Director ^     Vuka Project Management Services (Pty) Limited
                        Director       Brakpan Bus Company (Pty) Limited
                        Director ^     Johannesburg City Parks (Section 21)
                        Director ^     Kgwebo-Matla Investments (Pty) Limited
                        Director ^     Khuthele Projects (Pty) Limited
                        Director ^     Life Changing Word Bible Church (Section 21)
                        Director       Maendelo Projects (Pty) Limited
                        Director       Pickitup Johannesburg (Pty) Limited
                        Director       Bungane Group of Companies
                        Member         Radebe Carriers CC
                        Director ^     SSC Mandarin Africa (Pty) Limited


                                                                                                 43
Director                      Role         Directorships/Partnerships
Hatla Ntene                   Director     Autumn Storm Investments 223 (Pty) Limited
                              Director     Autumn Storm Investments 241 (Pty) Limited
                              Director     Boliba Property Investments (Pty) Limited
                              Director ^   Buhlobo Properties (Pty) Limited
                              Director ^   Davis Langdon Farrow Laing (Pty) Limited
                              Director ^   Davis Langdon Farrow Laing Holdings (Pty) Limited
                              Member       Magaleng Trading CC
                              Director ^   Mohope Property Holdings (Pty) Limited
                              Director     Mokala Engineers International (Pty) Limited
                              Director     Morali Investments (Pty) Limited
                              Director     Mvua Property Partners (Pty) Limited
                              Director     Royal Albatross Properties 136 (Pty) Limited
                              Member       Simcha Properties 9 CC
                              Director     Southern Palace Investments 226 (Pty) Limited
Terence Graaf                 Member       Black Ops Technologies CC
^ Director/Member resigned.




44
                                                                                                  Annexure 2


RELEVANT PROVISIONS OF THE ARTICLES OF ASSOCIATION


Extracts from the articles of association of Calgro M3 Holdings Limited are set out below:


RETIREMENT OF DIRECTORS

“30.1 All the directors shall retire at the first annual general meeting and, subject to Article 35 hereof,
      at every annual general meeting thereafter one-third of the directors, or if their number is not
      a multiple of three, then the number nearest to but not less that one-third, shall retire from office.

30.2   The length of time a director has been in office shall be computed from his last election, appointment
       or date upon which he was deemed re-elected.

30.3   A director retiring at a meeting shall retain office until the election of directors at that meeting has
       been completed.

30.4   Retiring directors shall be eligible for re-election.

30.5   No person, other than a director retiring at the meeting shall, unless recommended by the directors,
       be eligible for election to the office of a director at any general meeting, unless:
       30.5.1 not more than twenty eight, but at least seven clear days before the day appointed for the
              meeting, there shall have been delivered at the office of the company a notice in writing
              by a member (who may also be the proposed director) duly qualified to be present and to vote
              at the meeting for which such notice is given;
       30.5.2 such notice sets out the member’s intention to propose a specific person for election
              as director; and
       30.5.3 notice in writing by the proposed person of his willingness to be elected is attached thereto
              (except where the proposer is the same person as the proposed).

30.6   Subject to the preceding article, the company may at the meeting at which a director retires, fill the
       vacated office by electing a person thereto and in default the retiring director, if willing to continue
       to act, shall be deemed to have been reelected, unless:
       30.6.1 it is expressly resolved at such meeting not to fill such vacated office; or
       30.6.2 a resolution for the reelection of such director was put to the meeting and rejected.

30.7   A person appointed by the directors as a director in terms of Article 29.1.2:
       30.7.1 shall retire at the following annual general meeting;
       30.7.2 shall be eligible for reelection.

30.8   If the number of directors should become less than the permissible minimum in terms of the articles,
       the remaining directors may only act:
       30.8.1 to fill any vacancies on the board of directors; or
       30.8.2 to convene general meetings.”


BORROWING POWERS

“32.1 Subject to the provisions of Article 32.3 the directors may from time to time:
       32.1.1 borrow for the purpose of the company such sums as they think fit;


                                                                                                            45
        32.1.2 secure the payment or repayment of any such sums or any other sum, as they think fit,
               whether by the creation and issue of debentures, mortgage or charge upon all or any of the
               property or assets of the company;
        32.1.3 make such regulations regarding the transfer of debentures, the issue of certificates
               therefore (subject to article 7 hereof) and all such other matters incidental to debentures
               as the directors think fit.

32.2    No special privileges as to:
        32.2.1 allotment of shares in the company; or
        32.2.2 the attending and voting at general meetings; or
        32.2.3 the appointment of directors,
        or otherwise, shall be given to the holders of debentures of the company, save with the sanction
        of the company in general meeting.

32.3.   The directors shall procure (but as regards subsidiaries of the company only insofar as by the exercise
        of voting and other rights or powers of control exercisable by the company they can procure) that the
        aggregate principal amount at any one time outstanding in respect of moneys so borrowed or raised by:
        32.3.1 the company; and
        32.3.2 all the subsidiaries for the time being of the company (excluding moneys borrowed or raised
               by any of such companies from any other of such companies but including the principal
               amount secured by any outstanding guarantees or suretyships given by the company or any
               of its subsidiaries for the time being for the share capital or indebtedness of any other
               company or companies whatsoever and not already included in the aggregate amount of the
               moneys so borrowed or raised),
        shall not exceed the aggregate amount at that time authorised to be borrowed or secured
        by the directors of the company’s holding company (if any) in respect of that holding company and all
        the then subsidiaries of that holding company, provided that no such sanction shall be required to the
        borrowing of any moneys intended to be applied and actually applied within ninety days in the
        repayment (with or without any premium) of any moneys then already borrowed and outstanding and
        notwithstanding that new borrowing may result in the abovementioned limit being exceeded.”


POWERS ENABLING A DIRECTOR TO VOTE ON A PROPOSAL, ARRANGEMENT OR CONTRACT IN
WHICH HE IS MATERIALLY INTERESTED

“28.13 No director or intending director shall be disqualified by his office from contracting with the company
       with regard to:
         28.13.1 his tenure of any other office or place of profit under the company or in any company
                 promoted by the company or in which the company is interested;
         28.13.2 professional services rendered or to be rendered by such director;
         28.13.3 any sale or other transaction.

28.14    No such contract or arrangement entered into by or on behalf of the company in which any director
         is in any way interested is voidable solely by reason of such interest.

28.15    No director so contracting or being so interested shall be liable to account to the company for any
         profit realised by any such appointment, contract or arrangement by reason of his office as director
         or of the fiduciary relationship created thereby.

28.16    A director may not vote nor be counted in the quorum (and if he shall do so his vote shall not be
         counted) on any resolution for his own appointment to any other office or place of profit under the
         company or in respect of any contract or arrangement in which he is interested, provided that this
         prohibition shall not apply to:




46
        28.16.1 any arrangement for giving to any director any security or indemnity in respect of money
                lent by him to or obligations undertaken by him for the benefit of the company; or
        28.16.2 any arrangement for the giving by the company of any security to a third party in respect
                of a debt or obligation of the company which the director has himself guaranteed or
                secured; or
        28.16.3 any contract by a director to subscribe for or underwrite shares or debentures of the
                company; or
        28.16.4 any contract or arrangement with a public company in which he is interested by reason only
                of being a director, officer, creditor or member of such legal person,
        and these provisos may at any time be suspended or relaxed either generally, or in respect of any
        particular contract or arrangement, by the company in general meeting.

28.17   A contract which violates the terms of Article 28.16 can be ratified by the company in general
        meeting.

28.18   The terms of Article 28.16 shall not prevent a director from voting as a member at a general meeting
        at which a resolution in which he has a personal interest is tabled.”

REMUNERATION OF DIRECTORS

“28.4   The directors shall be entitled to such remuneration as the company in general meeting may from
        time to time determine, which remuneration shall be divided among the directors in such
        proportions as they may agree, or in absence of such agreement, equally, except that in such event
        any director holding office for less than a year shall only rank in such division in proportion to the
        period during which he has actually held office.

28.5    Such remuneration shall accrue to the directors from day to day.

28.6    Any director who:
        28.6.1   serves on any executive or other committee; or
        28.6.2   devotes special attention to the business of the company; or
        28.6.3   goes or resides outside South Africa for the purpose of the company; or
        28.6.4   otherwise performs or binds himself to perform services which, in the opinion of the
                 directors, are outside the scope of the ordinary duties of a director,
        may be paid such extra remuneration or allowance in addition to or in substitution of the
        remuneration to which he may be entitled as a director, as a disinterested quorum of
        the directors or a remuneration committee appointed by the board may from time to time
        determine.

28.7    The directors shall also be paid all their travelling and other expenses necessarily expended by them
        in connection with:
        28.7.1   the business of the company; and
        28.7.2   attending meetings of the directors or of committees of the directors or of the company.”

“28.9   A director may hold any other office or place of profit under the company (except that of auditor) or
        any subsidiary or holding company of the company in conjunction with his office of director, for such
        period and on such terms as to remuneration (in addition to the remuneration to which he may be
        entitled as a director) and otherwise as a disinterested quorum of the directors or a remuneration
        committee appointed by the board may determine.”


QUALIFICATION OF DIRECTORS

“29.3   A director shall not be required to hold any qualifying shares.”


                                                                                                           47
                                                                                                Annexure 3


HISTORICAL FINANCIAL INFORMATION


The definitions commencing on page 10 of this prospectus have been used in this report.

Basis of preparation
The historical financial information presented below, the preparation of which is the responsibility of the
directors, has been extracted without adjustment from the audited consolidated annual financial statements
of Calgro M3 for the year ended 28 February 2007. This has been presented in a manner required by the
Companies Act and in accordance with International Financial Reporting Standards.
ARC Incorporated issued an unqualified audit opinion on the audited statutory annual financial statements for
the year ended 28 February 2007. The independent reporting accountants report on historical information is
set out in Annexure 5 to this prospectus.

Commentary
During the last 6 months, the company continued its rapid expansion across all housing ranges, concluding
significant new projects in the latter half of the year. Management believe that with the new signed
contracts, one of which is the single largest integrated housing development in South African to date,
Midrand, with the building of more than 24 000 homes, that revenue will continue to grow over the next
three years. Management turned around a loss of R62 156 from the 2006 year, to record a profit of
R4.4 million. Majority of the profit is made up of sales of cluster units becoming ready for sale.
There have been no changes in the nature of the business of Calgro M3 nor have there been major changes
in the nature of property, plant and equipment or changes in policy of Calgro 3M.
On 15 October 2007, the group concluded its second BEE transaction with Mvua.




48
CONSOLIDATED BALANCE SHEET AT 28 FEBRUARY
                                                                        Group
Figures in Rand                                    Notes          2007            2006
ASSETS
Non-current assets
Investment property                                    2    1 364 516                 –
Property, plant and equipment                          3    1 505 242            75 091
Goodwill                                               4    3 799 950                 –
Deferred tax                                           7      731 210           373 513
                                                            7 400 918           448 604
Current assets
Inventories                                            8   34   493   258             –
Other financial assets                                 6    6   639   625   3 469   843
Construction contracts and receivables                 9    6   855   475   5 453   871
Trade and other receivables                           10   12   092   812     115   007
Cash and cash equivalents                             11    1   066   642     505   719
                                                           61 147 812       9 544 440
Total assets                                               68 548 730       9 993 044
EQUITY
Equity attributable to equity holders of company
Share capital                                         12              930           100
Reserves
Retained earnings                                           4 776 692           609 844
Minority interest                                             206 926                 –
                                                            4 984 548           609 944
LIABILITIES
Non-current liabilities
Other financial liabilities                           13        518 842               –
Deferred tax                                           7        134 689         327 068
                                                                653 531         327 068
Current liabilities
Other financial liabilities                           13   32   760   341   2 680   851
Current tax payable                                         2   943   980     200   493
Trade and other payables                              14   25   625   858   3 772   175
Bank overdraft                                        11    1   580   472   2 402   513
                                                           62 910 651       9 056 032
Total liabilities                                          63 564 182       9 383 100
Total equity and liabilities                               68 548 730       9 993 044
Number of shares in issue                                           930             100
Net asset value per share                                         5 360           6 099
Tangible net asset value per share                                1 274           6 099




                                                                                      49
CONSOLIDATED INCOME STATEMENT
                                                                                      Group
Figures in Rand                                                  Notes          2007            2006
Revenue                                                             15    124 168 498   49 975 944
Cost of sales                                                       16   (104 577 612) (42 627 810)
Gross profit                                                               19 590 886     7 348 134
Other income                                                                  202 866
Operating expenses                                                        (13 050 764)    (7 054 567)
Operating profit/(loss)                                             17     6 742 988        293    567
Finance revenue                                                     18        66 154           3   951
Fair value adjustments                                              19                     (308    298)
Finance costs                                                       20       (241 958)       (89   787)
Profit/(Loss) before taxation                                               6 567 184      (100 567)
Taxation                                                            21     (2 193 410)       38 411
Profit/(Loss) after taxation                                               4 373 774          (62 156)
Attributable to:
Equity holders of the parent                                               4 166 848          (62 156)
Minority interest                                                            206 926
Earnings per ordinary share
Basic earnings per share                                                       cents           cents
The calculation is based on a profit of R4 166 848 *2000 loss:
R62 156) and on a weighted average of 930 (2006: 100)
ordinary shares in issue during the year                                     447 018          62 156
Headline earnings per share
Headline earnings per share has been calculated in terms of
IAS 33 and excludes profits and losses of a capital nature                   509 401           (23 66)
Reconciliation of headline earnings:                                       4 166 848          (62 156)
Net profit attributable to shareholders
Adjusted for:
– Gains on disposal of assets                                                 (7   946)
– Consulting fees                                                            236   311
– Loans written off                                                          342   219         38 491
– Headline earnings/losses for the year                                    4 737   432        (23 665)




50
STATEMENT OF CHANGES IN EQUITY
                                                                              Total
                                                                       attributable
                                                                          to equity
Figures in Rand                            Share      Retained       holders of the     Minority            Total
                                          capital     earnings     group/company        interest           equity
Group
Balance at 1 March 2005                         100    672 000             672 100                –       672 100
Changes in equity
Loss for the year                                 –     (62 156)           (62 156)               –       (62 156)
Total changes                                           (62 156)           (62 156)               –       (62 156)
Balance at 1 March 2006                         100    609 844             609 944                –       609 944
Changes in equity
Profit for the year                               –   4 166 848          4 166 848       209 926        4 373 774
Issues of shares                                830           –                830             –              830
Total changes                                         4 166 848          4 167 678       206 926        4 374 604
Balance at 28 February 2007                     830   4 776 692          4 777 622       206 926        4 984 548


CASH FLOW STATEMENT
                                                                                             Group
Figures in Rand                                                       Notes              2007               2006
Cash flows from operating activities
Cash receipts from customers                                                    110 674 082   54 167 498
Cash paid to suppliers and employees                                           (131 162 843) (54 871 677)
Cash utilised in operations                                               22    (20 488 761)            (704 179)
Interest income                                                                      66 154                3 951
Finance costs                                                                      (241 958)             (89 787)
Net cash from operating activities                                              (20 664 565)           (790 015)
Cash flows from investing activities
Purchase of property, plant and equipment                                  3     (1 614   787)            (72 260)
Sale of property, plant and equipment                                      3         32   883                   –
Acquisition of businesses                                                 23     (3 800   013)                  –
Increase in financial assets                                                     (3 169   716)        (3 469 843)
Net cash from investing activities                                               (8 551 633)          (3 542 103)
Cash flows from financing activities
Proceeds on share issue                                                   12            830                 100
Increase/(Repayment) of financial liabilities                                    30 598 332           2 372 553
Net cash from financing activities                                               30 599 162           2 372 653
Total cash movement for the year                                                  1 382 964           (1 959 465)
Cash at the beginning of the year                                                (1 896 794)              62 871
Total cash at end of the year                                             11          (513 830)       (1 896 594)




                                                                                                                   51
ACCOUNTING POLICIES

1. PRESENTATION OF CONSOLIDATED FINANCIAL INFORMATION
     The consolidated financial information has been prepared in accordance with International Financial
     Reporting Standards,. The consolidated financial information has been prepared on the historical cost
     basis, except for the measurement of investment properties and certain financial instruments at fair
     value, and incorporate the principal accounting policies set out below.
     These accounting policies are consistent with the previous period.
     The preparation of financial statements in conformity with IFRS requires the use of certain critical
     accounting estimates. It also requires management to exercise its judgment in the process of applying
     the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas
     where assumptions and estimates are significant to the consolidated financial statements, are disclosed
     in note 1.1.

     1.1   Significant judgments
           In preparing the consolidated annual financial statements, management is required to make
           estimates and assumptions that affect the amounts represented in the consolidated annual
           financial statements and related disclosures. Use of available information and the application of
           judgment is inherent in the formation of estimates. Actual results in the future could differ from
           these estimates which may be material to the consolidated annual financial statements. During the
           year under review no significant judgments were made by management.

     1.2   Consolidation
           (a) Subsidiaries
               Subsidiaries are all entities (including special purpose entities) over which the group has the
               power to govern the financial and operating policies generally accompanying a shareholding of
               more than one half of the voting rights. The existence and effect of potential voting rights that
               are currently exercisable or convertible are considered when assessing whether the group
               controls another entity. Subsidiaries are fully consolidated from the date on which control is
               transferred to the group.
               They are de-consolidated from the date that control ceases.
               The purchase method of accounting is used to account for the acquisition of subsidiaries by the
               Group. The cost of an acquisition is measured as the fair value of the assets given, equity
               instruments issued and liabilities incurred or assumed at the date of exchange, plus costs
               directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent
               liabilities assumed in a business combination are measured initially at their fair values at the
               acquisition date, irrespective of the extent of any minority interest. The excess of the cost of
               acquisition over the fair value of the group’s share of the identifiable net assets acquired is
               recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of
               the subsidiary acquired, the difference is recognised directly in the income statement.
               Inter-company transactions, balances and unrealised gains on transactions between group
               companies are eliminated. Unrealised losses are also eliminated but considered an impairment
               indicator of the asset transferred. Accounting policies of subsidiaries have been changed where
               necessary to ensure consistency with the policies adopted by the group.
           (b) Transactions and minority interests
               The group applies a policy of treating transactions with minority interests as transactions with
               parties external to the group. Disposals to minority interests result in gains and losses for the
               group that are recorded in the income statement. Purchases from minority interests result in
               goodwill, being the difference between any consideration paid and the relevant share acquired
               of the carrying value of net assets of the subsidiary.




52
1.3   Segment reporting
      A business segment is a group of assets and operations engaged in providing products or services
      that are subject to risks and returns that are different from those of other business segments.

1.4   Investment property
      Investment property is recognised as an asset when, and only when, it is probable that the future
      economic benefits that are associated with the investment property will flow to the enterprise, and
      the cost of the investment property can be measured reliably. Investment property is initially
      recognised at cost. Transaction costs are included in the initial measurement. The investment
      property is transferred from inventory, as the main business of the group is to construct residential
      property.
      Cost model
      Investment property is carried at cost less depreciation and any accumulated impairment losses.
      Depreciation is provided to write down the cost, less estimated residual value by equal installments
      over the useful life of the property, which is as follows:
      Property – land                                               Indefinite
      Property – buildings                                          20 years

1.5   Property, plant and equipment
      The cost of an item of property, plant and equipment is recognised as an asset when:
      • it is probable that future economic benefits associated with the item will flow to the group; and
      • the cost of the item can be measured reliably.
      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.
      Property, plant and equipment is carried at cost less accumulated depreciation and any impairment
      losses.
      Item                                                          Average useful life
      Plant and machinery                                           4 years
      Furniture and fixtures                                        6 years
      Motor vehicles                                                5 years
      Office equipment                                              6 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.

1.6   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.



                                                                                                               53
           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.
           The group allocates goodwill to each business segment in each country in which it operates (Note 26).

     1.7   Investments in subsidiaries

           Group consolidated annual financial statements
           The group consolidated 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.

           Company consolidated annual financial statements
           In the company’s separate consolidated annual financial statements, investments in subsidiaries
           are carried at fair value through profit or loss.
           The cost of an investment in a subsidiary is the aggregate of: the fair value, at the date of exchange,
           of assets given, liabilities incurred or assumed, and equity instruments issued by the company; plus
           any costs directly attributable to the purchase of the subsidiary.
           An adjustment to the cost of a business combination contingent on future events is included in the
           cost of the combination if the adjustment is probable and can be measured reliably.

     1.8   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.

           Loans to/(from) group companies
           These include loans to holding companies, fellow subsidiaries, subsidiaries, joint ventures and
           associates and are recognised initially at fair value plus direct transaction costs.
           Subsequently these loans are measured at amortised cost using the effective interest rate method,
           less any impairment loss recognised to reflect irrecoverable amounts.
           On loans receivable an impairment loss is recognised in profit or loss when there is objective
           evidence that it is impaired. The impairment is measured as the difference between the
           investment’s carrying amount and the present value of estimated future cash flows discounted at
           the effective interest rate computed at initial recognition.

           Loans to shareholders, directors, managers and employees
           These financial assets are initially at fair value plus direct transaction costs.
           Subsequently these loans are measured at amortised cost using the effective interest rate method,
           less any impairment loss recognised to reflect irrecoverable amounts.
           On loans receivable an impairment loss is recognised in profit or loss when there is objective
           evidence that it is impaired. The impairment is measured as the difference between the
           investment’s carrying amount and the present value of estimated future cash flows discounted at
           the effective interest rate computed at initial recognition.

           Trade 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 impairment estimated
           irrecoverable amounts are recognised in profit or loss when there is objective evidence that the
           asset is impaired. The impairment 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.



54
      Trade 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.

      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.

      Loans and receivables
      These financial assets are initially measured at fair value plus direct transaction costs.
      At subsequent reporting dates these are measured at amortised cost using the effective interest
      rate method, less any impairment loss recognised to reflect irrecoverable amounts. An impairment
      loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and
      is measured as the difference between the investment’s carrying amount and the present value of
      estimated future cash flows discounted at the effective interest rate computed at initial recognition.
      Impairment losses are reversed in subsequent periods when an increase in the investment’s
      recoverable amount can be related objectively to an event occurring after the impairment was
      recognised, subject to the restriction that the carrying amount of the investment at the date the
      impairment is reversed shall not exceed what the amortised cost would have been had the
      impairment not been recognised.

1.9   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 an asset or liability in a transaction
      which 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 to the extent that it is
      probable that taxable profit will be available against which the deductible temporary difference can
      be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an
      asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor
      taxable profit/(tax loss).
      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.



                                                                                                            55
         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 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.

     1.10 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 – 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 liability.
         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 – lessor
         Operating lease income is recognised as an income on a straight-line basis over the lease term.
         Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying
         amount of the leased asset and recognised as an expense over the lease term on the same basis
         as the lease income.

         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.

     1.11 Inventories
         Inventories are measured at the lower of cost and net realisable value on the first-in, first-out basis.
         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.
         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, are recognised as a reduction in the amount of
         inventories recognised as an expense in the period in which the reversal occurs.




56
1.12 Construction contracts and receivables
    Where the outcome of a construction contract can be estimated reliably, contract revenue and
    costs are recognised by reference to the stage of completion of the contract activity at the balance
    sheet date, as measured by the proportion that contract costs incurred for work performed to date
    bear to the estimated total contract costs. Variations in contract work, claims and incentive
    payments are included to the extent that they have been agreed with the customer. When the
    outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to
    the extent that contract costs incurred are recoverable. Contract costs are recognised as an
    expense in the period in which they are incurred. When it is probable that total contract costs will
    exceed total contract revenue, the expected loss is recognised as an expense immediately.

1.13 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.
    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.

1.14 Share capital and equity
    Ordinary shares are classified as equity
    If the group reacquires its own equity instruments, those instruments are deducted from equity.
    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.
    Contract revenue comprises:
    • the initial amount of revenue agreed in the contract; and
    • variations in contract work, claims and incentive payments:
       – to the extent that it is probable that they will result in revenue;
       – they are capable of being reliably measured.

1.15 Revenue
    Service revenue is recognised by reference to the start of completion of the transaction at balance
    sheet date. Stage of completion is determined by the proportion of costs incurred to date.
    Contract revenue comprises:
    • the initial amount of revenue agreed in the contract; and
    • variations in contract work, claims and incentive payments:
       – to the extent that it is probable that they will result in revenue;
       – they are capable of being reliably measured.
    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.
    Interest is recognised, in profit or loss, using the effective interest rate method.




                                                                                                        57
     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.
          Contract costs comprise:
          • costs that relate directly to the specific contract;
          • costs that are attributable to contract activity in general and can be allocated to the contract; and
          • such other costs as are specifically chargeable to the customer under the terms of the contract.

     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; and
          • 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.
          Qualifying assets consist of work-in-progress assets and land acquired for development related
          assets.
          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.




58
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

2. INVESTMENT PROPERTY
                                                                               Group
                                                    2007                                               2006
                                             Accumulated          Carrying                     Accumulated        Carrying
                                      Cost   depreciation            value             Cost    depreciation          value

  Investment property         1 364 516                        1 364 516

  Reconciliation of investment property: Group – 2007
                                                                                                Transfer
                                                                          Opening                  from
                                                                          balance             inventory             Total
  Investment property                                                                         1 364 516         1 364 516

  Details of property
  Building situated on stand 2334
  Northriding Ext 82
  – transfer from inventory                                                                     673 002
  Building situated on stand 2336
  Northriding Ext 82
  – transfer from inventory                                                                     691 514

  The above capitalised costs were incurred in the last few months of the year as per Note 1.4.
  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.


3. PROPERTY, PLANT AND EQUIPMENT
                                                                               Group
                                                    2007                                               2006
                                             Accumulated          Carrying                     Accumulated        Carrying
                                      Cost   depreciation            value             Cost    depreciation          value

  Plant and machinery         1 100   000        (94    934)   1 005    066              –                –             –
  Furniture and fixtures        194   159        (27    375)     166    784         52 234          (15 374)       36 860
  Motor vehicles                289   849        (34    687)     255    162              –                –             –
  Office equipment               20   823          (3   649)      17    174          9 500           (1 583)        7 917
  IT equipment                   69   857          (8   801)      61    056         36 960           (6 646)       30 314
                              1 674 688         (169 446)      1 505 242            98 694          (23 603)       75 091

  Reconciliation of property, plant and equipment: Group – 2007
                                        Opening
                                        balance           Additions           Disposals Depreciation                Total
  Plant and machinery                             –       1 107   650                  –        (102     584)   1 005   066
  Furniture and fixtures                     36 860         141   014                  –          (11    090)     166   784
  Motor vehicles                                  –         289   849                  –          (34    687)     255   162
  Office equipment                            7 917          17   174             (6 454)           (1   463)      17   174
  IT equipment                               30 314          59   100           (18 483)            (9   875)      61   056
                                             75 091       1 614 787             (24 937)        (159 699)       1 505 242




                                                                                                                          59
     Reconciliation of property, plant and equipment: Group – 2006
                                                   Opening
                                                   balance         Additions       Depreciation              Total
     Furniture and fixtures                          19 731              25 800             (8 671)        36 860
     Office equipment                                     –               9 500             (1 583)         7 917
     IT equipment                                         –              36 960             (6 646)        30 314
                                                     19 731              72 260            (16 900)        75 091

     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.


4. GOODWILL
                                                                         Group
                                                  2007                                            2006
                                           Accumulated        Carrying                    Accumulated      Carrying
                                    Cost   depreciation          value            Cost    depreciation        value

     Goodwill                  3 799 950                  3 799 950

     Reconciliation of goodwill: Group – 2007
                                                                               Additions
                                                                                 through
                                                                    Opening     business
                                                                    balance combinations                     Total
     Goodwill                                                                            3 799 950       3 799 950

     For details of the goodwill, see notes 23 and 27.
     The recoverable amount of goodwill is determined based on value-in-use calculations. These calculations
     use post-tax cash flow projections based on financial budgets approved by management covering a
     three-year period. The growth rate does not exceed the short-term high risk rate for the property market.
     Impairment tests for goodwill
     Goodwill is allocated to the group’s cash-generated units identified according to the business segment.
     A segment-level summary of the goodwill allocated is presented below:
                                                    Cluster       Affordable             Low cost           Group
     Goodwill                                                                            3 799 950       3 799 950




60
                                                                                                 Group
  Figures in Rand                                                                       2007              2006

5. OTHER FINANCIAL ASSETS
  Loans receivable
  Presidor Twenty Four (Pty) Limited                                               1 140 000                  –
  RZT Zelpy 4228 (Pty) Limited                                                     1 140 000                  –
  Other loans receivable                                                             297 000        1 651   770
  Ben Pierre Trust                                                                   715 619          358   556
  Hendrik Brand Trust                                                                888 371          356   111
  The FJ Steyn Trust                                                                 699 698          361   552
  DN Steyn Trust                                                                     739 692          365   167
  The Douw Steyn Trust                                                             1 019 245          376   687
                                                                                   6 639 625        3 469 843

  The above loans are unsecured, interest
  free and repayable in the following
  12 months.
  Current assets
  Loans receivable                                                                 6 639 625        3 469 843
  Accelerated allowances for tax purposes                                            596 521             46 445

  An entity shall disclose the amount of a deferred tax asset and the nature of the evidence supporting its
  recognition, when:
  • the utilisation of the deferred tax asset is dependent on future taxable profits in excess of the profits
     arising from the reversal of existing taxable temporary differences; and
  • the entity has suffered a loss in either the current or preceding period in the tax jurisdiction to which the
     deferred tax asset relates.
                                                                                                  Group
  Figures in Rand                                                                        2007              2006

6. INVENTORIES
  Work in progress                                                                35 857 774                  –
  Transfer to investment property                                                  (1 364 516)                –
                                                                                  34 493 258                  –

  Inventory pledged as security
  Inventory to the value of R21 500 000 was pledged as security for finance facilities included in note 13.

7. CONSTRUCTION CONTRACTS AND RECEIVABLES
  Contracts in progress at balance sheet date
  Costs incurred on construction contracts
  in progress                                                                      4 791 300        4 418 995
  Progress profit recognised                                                       2 064 175        1 034 876
  Construction contracts in progress                                               6 855 475        5 453 871

  Advances received in excess of work completed are included in trade and other payables.




                                                                                                              61
                                                                Group
     Figures in Rand                                   2007             2006

8. TRADE AND OTHER RECEIVABLES
     Trade receivables                            11 250 245              –
     Deposits                                          2 794          2 794
     VAT                                             839 773        112 213
                                                  12 092 812        115 007


9. CASH AND CASH EQUIVALENTS
     Cash   and cash equivalents consist of:
     Cash   on hand                                      830               –
     Bank   balances                               1 065 812         506 019
     Bank   overdraft                             (1 580 472)     (2 402 613)
                                                    (513 830)     (1 896 594)
     Current assets                                1 066 642         506 019
     Current liabilities                          (1 580 472)     (2 402 613)
                                                    (513 830)     (1 896 594)

10. SHARE CAPITAL
     Authorised
     1 000 ordinary shares of R1.00 each               1 000               –

     Reconciliation of number of shares issued:
     Issue of shares – ordinary shares – 2006                           100
     Issue of shares – ordinary shares – 2007           830               –
                                                        830             100

     Issued
     930 ordinary shares of R1.00 each                  930             100




62
                                                                                              Group
   Figures in Rand                                                                    2007            2006

11. OTHER FINANCIAL LIABILITIES
   Held at amortised cost
   Nedbank Limited                                                                  154 594              –
   The loan is secured under motor vehicles in note 3, bearing interest at a
   rate linked to prime and repayable in monthly instalments of R13 603.31.
   Nedbank Limited                                                                  886 277              –
   The loan is secured under plant and machinery in note 3, bearing interest at
   a rate linked to prime and repayable in monthly instalments of R27 034.15.
   Aquarella Investments 269 (Pty) Limited                                      9   867 681              –
   The loan is unsecured, interest free and is repayable in the following
   12 months.
   RZT Zelpy 4489 (Pty) Limited                                                     300 000              –
   The loan is unsecured, interest free and is repayable in the following
   12 months.
   Holdgro Projects (Pty) Limited                                               1   137 158      2 680 851
   The loan is unsecured, interest free and has no fixed terms of repayment.
   Rand Merchant Bank Limited                                                   4   491 364              –
   The loan is secured under land included in inventory, bears interest at a
   rate linked to prime and is repayable on transfer of the property within a
   12 month period.
   Salamax 1583 (Pty) Limited                                                   2   800 000              –
   The loan is unsecured, interest free and is repayable in the following
   12 months.
   Rand Merchant Bank Limited                                                   9   563 666              –
   The loan is secured under land included in inventory, bears interest at a
   rate linked to prime and is repayable on transfer of the property within a
   12 month period.
   D Earle                                                                      3   136 000              –
   The loan is unsecured, interest free and is repayable in the following
   12 months.
   Barnards Attorneys                                                               942 443              –
   The loan is unsecured, interest free and is repayable in the following
   12 months.
                                                                              33 279 183         2 680 851
   Non-current liabilities
   At amortised cost                                                                518 842              –
   Current liabilities
   At amortised cost                                                          32 760 341         2 680 851
                                                                              33 279 183         2 680 851


12. TRADE AND OTHER PAYABLES
   Trade payables                                                             10 934 854         1 883 964
   Amounts received in advance                                                11 076 658           739 923
   VAT                                                                         3 604 346         1 148 288
   Deposits received                                                              10 000                 –
                                                                              25 625 858         3 772 175


13. REVENUE
   Construction contracts                                                    124 168 498        49 975 944




                                                                                                         63
                                                                                                  Group
     Figures in Rand                                                                     2007              2006

14. COST OF SALES
     Sale of goods
     Building costs                                                                 55 694 072       7 999 854
     Construction contracts
     Construction costs                                                             48 883,540      34 627 956
                                                                                   104 577 612      42 627 810


15. OPERATING PROFIT/(LOSS)
     Operating profit for the year is stated after accounting for the following:
     Operating lease charges
     Premises
     • Contractual amounts                                                            523 356         277 480
     Equipment
     • Contractual amounts                                                             25 389              4 700
                                                                                      548 745         282 180
     Profit/(loss) on sale of property, plant and equipment                              7 946               –
     Depreciation on property, plant and equipment                                     159 698          16 900
     Employee costs                                                                  8 534 433       4 734 051


16. FINANCE INCOME
     Interest revenue
     Bank                                                                              66 154              3 951


17. FAIR VALUE ADJUSTMENTS
     Investment in subsidiaries
     Other financial liabilities                                                      (308 298)                –
                                                                                      (308 298)      4 375 292


18. FINANCE COSTS
     Bank                                                                             241 958             89 787




64
                                                                                                      Group
   Figures in Rand                                                                         2007               2006

19. TAXATION
   Major components of the tax expense (income)
   Current
   Local income tax – current period                                              2 743 486                   8 034

   Deferred
   Originating and reversing temporary differences from construction
   contracts in progress                                                               (550 076)           (46 445)
                                                                                  2 193 410               (38 411)

   Reconciliation of the tax expense                                                            %                %
   Reconciliation between applicable tax rate and average effective tax rate:
   Applicable tax rate                                                                    29.00               29.00
   Tax loss used                                                                              –                9.19
   Disallowable charges                                                                    3.82                   –
   Current years losses in subsidiaries                                                    0.58                   –
   Fair value adjustment                                                                      –                   –

20. CASH USED IN OPERATIONS
   Profit/Loss) before taxation                                                   6 567 184              (100 567)
   Adjustments for:
   Depreciation                                                                        159     698         16 900
   Profit on sale of assets                                                               (7   946)              –
   Interest received                                                                    (66    154)         (3 951)
   Finance costs                                                                       241     958         89 787
   Fair value adjustments                                                                        –        308 298
   Interest and penalties – taxes                                                                –         14 860
   Changes in working capital
   Inventories                                                                  (35    857     774)              –
   Trade and other receivables                                                  (11    977     805)        571 384
   Construction contracts and receivables                                         (1   401     605)     (5 107 652)
   Trade and other payables                                                      21    853     683       3 506 762
                                                                                (20 488 761)             (704 179)

21. FAIR VALUE OF ASSETS ACQUIRED
   Goodwill                                                                       3 799 950                       –

   Consideration paid
   Cash                                                                          (3 800 012)                      –
   Equity – 62.5 ordinary shares in PZR Pennyville Zamamphilo
   Relocation (Pty) Limited                                                                     62                –
                                                                                 (3 799 950)                      –

   Net cash outflow on acquisition
   Cash consideration paid                                                       (3 800 013)                      –




                                                                                                                 65
22. RELATED PARTIES
     Relationships
     Subsidiaries                                                               Refer to Note 5

23. DIRECTOR’S EMOLUMENTS
     Executive
     Group
     2007                                                                        Emoluments                  Total
                                                                                          R                     R
     In connection with the affairs of the company or its subsidiaries               1 704 000          1 704 000

     2006
     In connection with the affairs of the company or its subsidiaries               1 838 000          1 838 000


24. SEGMENT INFORMATION
     (a) Primary reporting format – business segments
         At 28 February 2007, the group is organised on a national basis into three main business segments:
         • Construction of residential cluster housing with a wide range of variety;
         • Construction of residential affordable housing with a wide range of variety;and
         • Construction of low cost housing.
     The segment results for the year ended 28 February 2007 are as follows:
                                                     Cluster       Affordable        Low Cost                Group
                                                          R                R               R                     R
     Revenue                                    58   261   163     31 234 334       34   673   001     124 168   498
     Cost of sales                             (48   883   539)   (25 259 537)     (30   434   535)   (104 577   611)
     Gross profit                                9   377   624      5 974 797        4   238   466      19 590   887
     Operating profit/Segment result             2   888   812       (249 189)       4   103   366       6 742   989
     Finance revenue                                         –              –                    –          66   154
     Finance costs                                           –              –                    –        (241   958)
     Profit before taxation                                  –              –                    –       6 567   185
     Taxation                                                –              –                    –      (2 193   411)
     Profit after taxation                                   –              –                    –       4 373   774

     The segment results for the year ended
     28 February 2006 are as follows:
     Revenue                                 39 968 229           10 007 715                     –      49 975 944
     Cost of sales                          (34 627 956)           (7 999 854)                   –     (42 627 810)
     Gross profit                             5 340 273             2 007 861                    –       7 348 134
     Operating loss/Segment result              487 617              (502 349)                   –          (14 732)
     Finance revenue                                  –                     –                    –            3 951
     Finance costs                                    –                     –                    –         (89 787)
     Loss before taxation                             –                     –                    –        (100 568)
     Taxation                                         –                     –                    –           38 412
     Loss after taxation                              –                     –                    –          (62 156)

     Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, trade
     and other receivable and cash and cash equivalents.
     Segment liabilities comprise operating liabilities.




66
   Capital expenditure comprises additions to property, plant and equipment (Note 3) and goodwill (Note 4)
                                                     Cluster       Affordable        Low Cost             Group
                                                          R                R               R                  R
   Assets                                        48 637 967        4 063 651       21 680 912        74 382 530
   Liabilities                                   45 982 165        4 618 092       18 798 355        69 398 612
   Capital expenditure (Notes 3 and 4)            1 551 210           55 176        3 808 351         5 414 737

   The segment assets and liabilities at
   28 February 2007 and capital expenditure
   for the year then ended are as follows:
   Assets                                         7 369 602        2 903 541                  –       9 993 043
   Liabilities                                    6 402 947        3 260 153                  –       9 383 100
   Capital expenditure (Notes 3 and 4)               53 910           18 350                  –          72 260


25. BUSINESS COMBINATIONS
   On 1 October 2006, the group acquired 62.5% of the shares in PZR Pennyville Zamamphilo Relocation
   (Pty) Limited, a newly formed construction company operating in South Africa. PZR Zamamphilo
   Relocation (Pty) Limited had no assets or liabilities at the date of acquisition. For details of the acquisition
   see note 23.

26. EARNINGS PER SHARE
   Basic
   Basic earnings per share is 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.
                                                                                                  Group
                                                                                          2007              2006
                                                                                             R                 R

   Profit attributable to equity holders of the company                              4 166 848           (62 156)
   Weighted average number of ordinary shares in issue                                     930               100
   Basic earnings per share (cents)                                                    448 048           (62 156)


27. HEADLINE EARNINGS
   Net profit attributable to shareholders                                           4 166 848           (62 156)
   Adjusted for:
   Gains on disposal of assets                                                          (7 946)                –
   Consulting fees                                                                     236 311                 –
   Loans written off                                                                   342 219            38 491
   Headline earnings/(loss) for the year                                             4 737 432           (23 665)


28. SUBSEQUENT EVENTS
   There are no material subsequent events to the date of this report.




                                                                                                                67
                                                                                                ANNEXURE 4


PRO FORMA FINANCIAL INFORMATION


The unaudited pro forma consolidated balance sheet of Calgro M3 group is presented for illustrative purposes
only, to provide information about how the Mvua BEE Transaction and the private placement in terms of the
offer for subscription, may have impacted on the group’s financial position, had the Mvua BEE Transaction
and the private placement in terms of the offer for subscription been effective 28 February 2007. Due to the
nature of the unaudited pro forma financial information, it may not give a fair presentation of the group’s
financial position after the Mvua BEE Transaction and the private placement in terms of the offer for
subscription.
The unaudited pro forma financial information should be read in conjunction with the reporting accountants’
report thereon as set out in Annexure 6. The directors of Calgro M3 group are responsible for the preparation
of the unaudited pro forma financial information and have adopted uniform accounting policies which have
been applied consistently throughout the year.
The definitions commencing on page 10 of this prospectus have been used in this report.

PRO FORMA BALANCE SHEET
                                                                                                  Unaudited
                                                                                                   Pro forma
                                                                                     Private        company
                                                                     Pro forma placement        after private
                                             Audited                     before in terms of       placement
                                            financial   Mvua BEE        private the offer for   28 February
                                        information(1) Transaction   placement subscription              2007(2)
                                                                          R’000        R’000            R’000

ASSETS
Non-current assets                            7 401             –        7 401             –          7 401
Current assets                               60 081             –       60 081             –         60 081
Cash                                          1 067        41 170       42 237        32 300         74 537
Total assets                                 68 549        41 170      109 719        32 300        142 019

EQUITY AND LIABILITIES
Share capital (3) (4)                             1        42 750       42 751        32 300         75 051
Reserves                                      4 777             –        4 777             –          4 777
Minority interest                               207             –          207             –            207
Total shareholders’ funds                     4 985        42 750       47 735        32 300         80 035
Non-current liabilities                         654             –          654              –           654
Current liabilities                          61 330             –       61 330              –        61 330
Bank overdraft                                1 580        (1 580)           –              –             –
Total liabilities                            63 564                     61 984                       61 984
Total equity and liabilities                 68 549        41 170      109 719        32 300        142 019
Pro forma shares in issue                   108 000                    108 000                      120 000
Net asset value in shares (cents)              4.62                      44.20                        66.70
Net tangible value per share (cents)           1.10                      40.68                        63.53




68
Notes:
1. Extracted, without adjustment, from the audited financial information of Calgro M3 Group for the year end 28 February 2007
   presented in Annexure 3.
2. Represents the pro forma balance sheet of Calgro M3 after the Mvua subscription and the private placement on the following
   assumptions:
   •   the Mvua subscription and the private placement in terms of the offer for subscription were effective 28 February 2007; and
   •   the private placement in terms of the offer for subscription was fully subscribed and 15 000 000 shares were issued for total of
       R36.0 million, less estimated costs as set out in paragraph 17 of the prospectus.
3. The Mvua subscription represents the issue of 15 000 000 shares at 285 cents each, subject to a call option upon the occurrence of
   certain events as agreed between the parties. If the net fair value of the rights and obligations of the call option is not zero at
   inception or in the future, depending on the value of the underlying instrument, an asset or liability should be recognised. The fair
   value of the issue of shares in terms of the Mvua subscription needs to be determined on the effective date of the issue in terms
   of IFRS 2: Share Based Payments and any deemed discount shall be charged to the income statement in the relevant period.
4. Represents the private placement of 12 000 000 shares at 300 cents each, net of transaction costs estimated at R3.7 million.




                                                                                                                                     69
                                                                                                   ANNEXURE 5


INDEPENDENT REPORTING ACCOUNTANTS’                                    REPORT         ON      THE     AUDITED
HISTORICAL FINANCIAL INFORMATION


“The Directors
Calgro M3 Holdings Limited
28, 7th Avenue
Parktown North
2194
                                                                                                30 October 2007
Dear Sirs

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT                              ON    THE    HISTORICAL       FINANCIAL
INFORMATION OF CALGRO M3 HOLDINGS LIMITED

Purpose of this report
At your request, we present our report on the historical financial information of Calgro M3 Holdings Limited
and its subsidiaries for the year ending 28 February 2007 and comparative figures as set out in Annexure 3
of the prospectus, to be dated on or about 30 October 2007.

Directors’ responsibility
The directors of Calgro M3 Holdings Limited are responsible for the preparation and fair presentation of the
historical financial information contained herein in accordance with the International Financial Reporting
Standards, in the manner required by the Companies Act of South Africa and Listings Requirements. This
responsibility includes: designing, implementing, and maintaining internal controls relevant to the preparation
and fair presentation of the historical financial information 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.

Reporting accountants’ responsibility
Our responsibility is to express an opinion on the report of historical financial information included in the
Prospectus.
We have audited the historical financial information of the Calgro M3 Holdings Limited for the year ended
28 February 2007 and comparative figures as set out in Annexure 3 to the prospectus.

Scope of the 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 historical financial information for the year ended 28 February 2007 and comparative figures is free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
abovementioned historical financial information. The procedures selected depend on the auditors’
judgement, including the assessment of the risks of material misstatement of the historical financial
information, 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 historical financial information 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 historical financial information presentation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.


70
Audit opinion
In our opinion, the historical financial information of Calgro M3 Holdings Limited relating to the year ended
28 February 2007 and comparative figures, presents fairly in all material respects, the financial position of
group at 28 February 2007, and of its financial performance and its 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 and the Listings Requirements.


Consent
We consent to the inclusion of this letter and the reference to our opinion in the prospectus to be issued to
Calgro M3 shareholders in the form and context in which it appears.


Yours faithfully


ARC Incorporated
Registered Auditor

PO Box 252, Cresta, 2118

Per
Partner
Chartered Accountant (SA)”




                                                                                                          71
                                                                                                ANNEXURE 6


INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE UNAUDITED PRO
FORMA FINANCIAL INFORMATION


“The Directors
Calgro M3 Holdings Limited
28, 7th Avenue
Parktown North
2194

                                                                                              30 October 2007

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANTS’ LIMITED ASSURANCE REPORT ON THE PRO FORMA
FINANCIAL INFORMATION OF CALGRO M3 HOLDINGS LIMITED AND ITS SUBSIDIARIES

The board of directors of Calgro M3 Holdings Limited (“Calgro”) has resolved to conclude a private
placement in terms of an offer for subscription of 12 000 000 shares and an offer for sale of 6 600 000 shares
at 300 cents each (“the private placement”) and subsequently to apply for a listing on the Altx (“the listing”).
We have performed our limited assurance engagement in respect of the unaudited pro forma balance sheet
of Calgro set out in Annexure 5 of the prospectus to be dated on or about 1 November 2007 and issued in
connection with the private placement and listing of Calgro (“the prospectus”). The pro forma financial
information has been prepared in accordance with the requirements of the JSE Limited (“JSE”) Listing
Requirements, for illustrative purposes only, to provide information about how the proposed listing might
have affected the pro forma financial information presented, had the corporate action been undertaken at the
date of the pro forma financial information being reported on.
The pro forma financial information has been prepared in accordance with the requirements of the JSE
Limited Listings Requirements, for illustrative purposes only, to provide information about how the private
placement and listing might have affected the reported historical financial information presented, had the
private placement and listing been undertaken at the balance sheet date.


Directors’ responsibility
The directors are responsible for the compilation, contents and presentation of the pro forma financial
information contained in the prospectus and for the financial information from which it has been prepared.
Their responsibility includes determining that: the pro forma financial information has been properly compiled
on the basis stated; the basis is consistent with the accounting policies of Calgro and the pro forma
adjustments are appropriate for the purposes of the pro forma financial information disclosed in terms of the
Listings Requirements.


Reporting accountants’ responsibility
Our responsibility is to express our limited assurance conclusion on the pro forma financial information
included in the prospectus. We conducted our assurance engagement in accordance with the International
Standard on Assurance Engagements applicable to Assurance Engagements Other Than Audits or Reviews
of Historical Financial Information and the Guide to Pro Forma Financial Information issued by The South
African Institute of Chartered Accountants.
This standard requires us to obtain sufficient appropriate evidence on which to base our conclusion.
We do not accept any responsibility for any reports previously given by us on any financial information used
in the compilation of the pro forma financial information beyond that owed to those to whom those reports
were addressed by us at the dates of their issue.


72
Sources of information and work performed
Our procedures consisted primarily of comparing the unadjusted financial information with the source
documents, considering the pro forma adjustments in light of the accounting policies of Calgro, considering
the evidence supporting the pro forma adjustments and discussing the adjusted pro forma financial
information with the directors of the company in respect of the corporate actions that are the subject of this
prospectus.
In arriving at our conclusion, we have relied upon financial information prepared by the directors of Calgro
and other information from various public, financial and industry sources.
While our work performed has involved an analysis of the historical financial information and other
information provided to us, our assurance engagement does not constitute an audit or review of any of the
underlying financial information conducted in accordance with International Standards on Auditing or
International Standards on Review Engagements and accordingly, we do not express an audit or review
opinion.
In a limited assurance engagement, the evidence-gathering procedures are more limited than for a
reasonable assurance engagement and therefore less assurance is obtained than in a reasonable assurance
engagement. We believe our evidence obtained is sufficient and appropriate to provide a basis for our
conclusion.


Conclusion
Based on our examination of the evidence obtained, nothing has come to our attention, which causes us to
believe that:
• the pro forma financial information has not been properly compiled on the basis stated;
• such basis is consistent with the accounting policies of Calgro; and
• the adjustments are not appropriate for the purposes of the pro forma financial information as disclosed
  in terms of Section 8.17 and 8.30 of the Listings Requirements.


Yours faithfully

PricewaterhouseCoopers Inc
Director: P McCrystal”




                                                                                                           73
                                                                                                  ANNEXURE 7


INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE PROFIT FORECAST


“The Directors
Calgro M3 Holdings Limited
28, 7th Avenue
Parktown North
2194

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANTS’ LIMITED ASSURANCE REPORT ON THE PROFIT
FORECAST OF CALGRO M3 HOLDINGS LIMITED

We have examined the forecast of Calgro M3 Holdings Limited and its subsidiaries (“Calgro”) for the years
ending 29 February 2008 and 28 February 2009 as set out in Paragraph 18 of Part 3 of the prospectus, to be
dated on or about 1 November 2007.

Directors’ responsibility
The directors of Calgro are responsible for the forecast, including the assumptions set out in the notes, on
which it is based, and for the financial information from which it has been prepared. This responsibility, arising
from compliance with the Listing Requirements, includes: determining whether the assumptions, barring
unforeseen circumstances, provide a reasonable basis for the preparation of the forecast; whether the
forecast has been properly compiled on the basis stated; and whether the forecast is presented on a basis
consistent with the accounting policies of the group.


Reporting accountants’ responsibilities
Our responsibility is to provide a limited assurance report on the forecast prepared for the purpose of
complying with the Listing Requirements and for inclusion in the prospectus. We conducted our assurance
engagement in accordance with the International Standard on Assurance Engagements applicable to the
Examination of Prospective Financial Information and the Revised Guide on Forecasts issued by The South
African Institute of Chartered Accountants. This standard requires us to obtain sufficient appropriate
evidence as to whether or not:
• management’s best-estimate assumptions on which the forecast is based are not unreasonable and are
  consistent with the purpose of the information;
• the forecast is properly prepared on the basis of the assumptions;
• the forecast is properly presented and all material assumptions are adequately disclosed; and
• the forecast is prepared and presented on a basis consistent with the accounting policies of the group.
While our work performed has involved an analysis of the historical financial information and other
information supplied to us, our assurance engagement does not constitute an audit or review of any of the
underlying financial information conducted in accordance with International Standards on Auditing or
International Standards on Review Engagements and accordingly, we do not express an audit or review
opinion.
In a limited assurance engagement, the evidence–gathering procedures are more limited than for a
reasonable assurance engagement and, therefore, less assurance is obtained than in a reasonable assurance
engagement. We believe our evidence obtained is sufficient and appropriate to provide a basis for our limited
assurance conclusion.




74
Conclusion
Based on our examination of the evidence obtained, nothing has come to our attention that causes us to
believe that:
• the assumptions, barring unforeseen circumstances, do not provide a reasonable basis for the preparation
  of the forecast;
• the forecast has not been properly compiled on the basis stated;
• the forecast has not been properly presented and all material assumptions are not adequately disclosed;
  and
• the forecast is not presented on a basis consistent with the accounting policies of the group.
Actual results are likely to be different from the forecast, since anticipated events frequently do not occur as
expected and the variation may be material; accordingly no assurance is expressed regarding the achievability
of the forecast.


Yours faithfully


PricewaterhouseCoopers Inc
Director: P McCrystal”




                                                                                                             75
                                                                                                 ANNEXURE 8


LIMITED ASSURANCE PROVIDER’S REPORT


“The Directors
Calgro M3 Holdings Limited
28, 7th Avenue
Parktown North
2194

                                                                                               30 October 2007

Dear Sirs

INDEPENDENT LIMITED ASSURANCE REPORT REGARDING THE PRESENTATION AND DISCLOSURE
OF HISTORICAL FINANCIAL INFORMATION CONTAINED IN THE PROSPECTUS FOR THE PROPOSED
LISTING OF CALGRO M3 HOLDINGS LIMITED, IN COMPLIANCE WITH SECTION 8 OF THE LISTINGS
REQUIREMENTS OF THE JSE

Introduction
Calgro M3 Holdings Limited (“Calgro”) proposes to list its ordinary shares on the Alternative Exchange of the
JSE Limited (“JSE”). At your request, we have completed our assurance engagement to provide limited
assurance regarding the presentation and disclosures contained in the historical financial information of
Calgro set out in Annexure 3 of the prospectus to Calgro shareholders to be dated on or about 1 November
(“the Prospectus”) in compliance with Section 8 of the listing requirements of the JSE Limited (“the JSE
Listings Requirements”).
We are not the auditors of Calgro or its subsidiaries and have not performed an audit or review of the audited
financial statements, on which the historical financial information is based.


Directors’ responsibility
The directors of Calgro are responsible for the compilation, contents and preparation of the Prospectus and
for the accuracy of the information, including the financial information, contained therein and for the financial
information from which it has been prepared. The reporting accountants are responsible for reporting on the
historical information of Calgro set out in Annexure 3 of the Prospectus.


Assurance provider’s responsibilities
Our responsibility is to report any instances of non-compliance to you and to express our limited assurance
conclusion on whether or not the presentation and disclosure requirements of the relevant paragraphs of
Section 8 of the JSE Listing Requirements have been met in the historical financial information of Calgro as
set out in Annexure 3 of the Prospectus.
Our assurance engagement was performed in accordance with the International Standards on Assurance
Engagements, ISAE 3000 Assurance Engagements other than Audits or Reviews of Historical Financial. This
standard requires us to comply with ethical requirements and to plan and perform our assurance engagement
to obtain limited assurance, expressed below, regarding the subject matter of the engagement.


Work performed
Our procedures did not involve an independent examination of the financial information of Calgro included in
the Prospectus and consisted primarily of comparing the historical financial information of Calgro in the
Prospectus to the disclosure requirements of Section 8 JSE Listings Requirements.
Because the above procedures do not constitute either an audit or review performed in accordance with the
International Standards on Auditing or International Standards on Review Engagements, we do not express


76
any assurance on the fair presentation of the financial information of Calgro included in this Prospectus. Had
we performed additional procedures, or had we performed an audit or review of the financial information of
Calgro included in the Prospectus, other matters may have come to our attention that would have been
reported to you.
In a limited assurance engagement, the evidence gathering procedures are more limited than for a
reasonable assurance engagement and therefore less assurance is obtained than in a reasonable assurance
engagement.
We believe the evidence is sufficient and appropriate to provide a basis for our conclusion.


Conclusion
Based on our work, nothing has come to our attention that causes us to believe that the presentation and
disclosures of the historical financial information of Calgro included in Annexure 3 of the Prospectus is not in
accordance with Section 8 of the JSE Listing Requirements.


Yours Faithfully


PricewaterhouseCoopers Inc
Director: P McCrystal




                                                                                                             77
                                                                                                   ANNEXURE 9


SALIENT FEATURES OF THE SHARE INCENTIVE SCHEMES


• A share appreciation right scheme (the “Scheme”) has been established in terms of which the
  remuneration committee (“RemCom”) of the board of directors of the company shall grant share
  appreciation rights (“SARs”) to eligible employees in terms of the Scheme.
• Directors and officers or other employees holding full-time salaried employment or office of the company
  or its subsidiaries or associates (the “Group”) will be eligible to participate in the Scheme, to the extent
  that the relevant Group company has recommended participation in the Scheme to the RemCom.
• The aggregate number of shares which may be allocated under the Scheme shall not exceed 12.5% of
  the number of issued shares at any time. This limit excludes shares in respect of which SARs under the
  Scheme have been exercised or have lapsed without being exercised.
• The maximum number of shares allocated to an individual in respect of all unvested SARs granted in terms
  of the Scheme shall not exceed 2% of the issued ordinary share capital of the company at any time.
• Eligible employees will receive annual grants of SARs, which are conditional rights to receive shares equal
  to the difference between the exercise price (being the market value of a share on the business day
  immediately preceding the date on which a SAR is exercised) and the grant price (being, in respect of the
  first grant following the adoption of the Scheme, the value as specified by the RemCom in the letter of
  grant, and in respect of grants other than the first grant, the market value of the share on the business
  day immediately preceding the date on which the RemCom resolved to grant a SAR to an eligible
  employee as specified in the letter of grant).
• For the purpose of the Scheme, the market value of the shares is calculated as the 30 day average closing
  price of a share as quoted on the JSE immediately preceding the date on which a determination of the
  market value of the shares is to be made for the purpose of the Scheme.
• Vesting of the SARs is subject to performance conditions as specified in the letter of grant. The duration
  and specific nature of the performance conditions and the period in respect of which a performance
  condition is to be satisfied will be stated in the letter of grant and will be determined by the Remcom on
  an annual basis in respect of each new grant of SARs.
• The SARs will become exercisable on fulfilment of the performance conditions (“the vesting date”). Upon
  exercise by a participant (an eligible employee to whom a grant has been made and who has accepted
  such grant) the relevant Group 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.
• SARs not exercised within the period stated in the letter of grant will lapse.
• In the event that:
     – a participant’s employment with a Group company terminates by reason of his resignation or dismissal
       on grounds of misconduct, poor performance or proven dishonest or fraudulent conduct before the
       vesting date, all SARs will lapse;
     – a participant retires while a SAR remains unexercised, the participant shall be entitled to the same rights
       and be subject to the same conditions under the SAR as if he had continued to be a participant; and
     – a participant ceases to be an employee of the Group by reason of retrenchment, death, ill health,
       disability of any other circumstance which the RemCom may consider appropriate, the RemCom shall
       permit a pro rata portion of the unvested SARs to vest on the date of cessation of employment. The
       pro rata portion of the SARs that vest will reflect the number of months served since the date of grant
       and the extent to which the performance conditions, in the opinion of the RemCom have been satisfied.
       Vested but unexercised SARs can be exercised within six months of the date of cessation of
       employment.
• Provision is made for adjustment when there is a change of control of the company or the shares cease
  being listed on the Altx. The RemCom may also take such action as they consider appropriate to protect
  the interests of participants where a Group company (other than the company) ceases to be a member of
  the Group, provided that the participant is no worse off.

78
• The Scheme provides for the participation and/or adjustment in the event of a rights issue, capitalisation
  issue, capital distribution, subdivision of shares, consolidation of shares, the company being put into
  liquidation for purposes of reorganisation or any other event affecting the share capital of the company or
  in the event of the company making distributions to shareholders.
• If the Company is placed into liquidation otherwise than for the purposes of reorganisation, the SARs shall
  ipso facto lapse as from the date of liquidation and any unvested grants which have not yet vested shall
  ipso facto lapse from the date of liquidation.
• The Scheme may be amended from time to time, subject to approval by shareholders in general/annual
  general meeting to the extent required in terms of the Listing Requirements and/or compliance with any
  applicable statute, regulation, rules or Listings Requirements from time to time.




                                                                                                          79
                                                                                               ANNEXURE 10


CORPORATE GOVERNANCE


The directors endorse, and accept full responsibility for, the application of the principles necessary to ensure
that effective corporate governance is practised consistently throughout the group. In discharging this
responsibility, the intention is to comply with the requirements of the Code of Corporate Practices and
Conduct (“the Code”) as set out in the second King Report on Corporate Governance (“King II”) in both letter
and spirit. The group’s approach to corporate governance strives to be stakeholder inclusive, based on good
communication and integrated into every aspect of the group’s business. One of the important objectives of
the board would be to find the correct balance between conforming within the parameters of the Code of
King II and performing in an entrepreneurial way.
The directors are pro-actively taking steps to ensure that all the elements required to make the group fully
compliant with the recommendations incorporated in the Code have been implemented.

Chairperson and Chief Executive Officer
The board is chaired by Pumla Radebe, an independent non-executive director. The Chairperson is
responsible for providing leadership to the board and overseeing its efficient operation.
The Chief Executive Officer (“CEO”), Peter Waweru, is responsible for proposing and continuously updating,
implementing and maintaining the strategic direction of the group, as well as ensuring that the day-to-day
affairs of the group are appropriately supervised and controlled.
The main board consists of 8 directors: 4 executive and 4 non-executive, 3 of who are independent. Calgro
M3 has separated the roles of Chairman and Chief Executive Officer, the former being non-executive. All the
executive directors have formal employment contracts with specific restraint clauses for the executive
directors. The main board of directors meets at least four times per annum with the boards of the operating
companies meeting once monthly.
The board will retain full and effective control over the business of Calgro M3. The board has defined levels
of materiality through a written delegation of authority, which sets out decisions the board wish to reserve
for itself. The delegation will be regularly reviewed and monitored.
The Non executive directors will bring an independent view to the board’s decision-making. No one director
has unfettered powers of decision-making.

Remuneration and Nominations Committee
Calgro M3 is cognisant of the recommendations of the King II. In compliance with this report the
Remuneration Committee will be chaired by Pumla Radebe, an independent non-executive director. Eddie
Funde (independent non executive) and Quinton Woods (non-executive) are the other members of this
Committee. The main functions of the Remuneration Committee are to:
• propose the remuneration (including under the share incentive scheme) of executive directors and senior
  executives;
• benchmark Calgro M3 remuneration practices against local and international best practice;
• ensure that a succession planning process is in place;
• ensure that appointments to the Board of Directors are formal and a transparent matter for the Board as
  a whole; and
• administer the share incentive scheme.

AUDIT COMMITTEE
In compliance with the King II, the Audit Committee will be chaired by an independent non-executive person.
Eddie Funde (independent non-executive) and Quinton Woods (non executive) are the other members of this
Committee. The function of this Committee is to operate in close cooperation with the Group Financial
Director who is not a member of the Audit Committee. The Committee will monitor and review:


80
The company’s internal financial control system and financial risk management system.
• The reports of the external auditors.
• The annual report and the annual financial statements.
• The external audit findings, reports and fees and the approval thereof.
• Group compliance with applicable legislation and requirements of regulatory authorities.

Company Secretary
The Company Secretary acts as advisor to the board and plays a pivotal role in ensuring compliance with
statutory regulations and the Code, the induction of new directors, tabling information on relevant regulatory
and legislative changes, and giving guidance to the directors regarding their duties and responsibilities. The
directors have unlimited access to the advice and services of the Company Secretary.




                                                                                                           81
                                  ANNEXURE 11


DETAILS OF SUBSIDIARY COMPANIES


Group structure




82
Set out in the table below are details of the subsidiary companies, all of which are unlisted:
Name, registration                                                          Nature of business
number, date, place                                      Percentage of      and full names
of incorporation and                        Issued       issued share       of directors
length of time          Date became a       share        capital held by    of each
in business             subsidiary          capital      Calgro M3          subsidiary
Calgro M3 Land (Pty) December 2006          100 shares   100%               Land development.
Limited,                                                                    Frederik Johannes Steyn,
2005/027072/07.                                                             Ben Pierre Malherbe,
Date: 31/08/2005.                                                           Craig Terence Daly
Place: PTA
Since: December 2006
Calgro M3               January 2007        100 shares   100%               Property development.
Developments (Pty)                                                          Frederik Johannes Steyn,
Limited,                                                                    Deon Noel Steyn,
1996/017246/07.                                                             Craig Terence Daly
Date: 12/05/1996
Place: PTA
Since: 1996
MS5 Projects (Pty)      July 2004           100 shares   100%               Property development and
Limited,                                                                    construction.
2004/014691/07.                                                             Ben Pierre Malherbe,
Date: 01/06/2004                                                            Terence Walter Graaff,
Place: PTA                                                                  Hendrik Brand Malherbe
Since: July 2004
MS5 Pennyville (Pty)    July 2005           100 shares   100%               Property development and
Limited,                                                                    construction.
2005/024397/07.                                                             Ben Pierre Malherbe,
Date: 08/07/2005                                                            Craig Terence Daly
Since: July 2005
PZR Pennyville        August 2005           100 shares   100%               Civils and construction as principal.
Zamimphilo Relocation                                                       Ben Pierre Malherbe,
(Pty) Limited,                                                              Teddy Freddrick Greaver
2005/027240/07.
Date: 04/08/2005.
Since: August 2005
Hightrade-Invest 60     January 2007        100 shares   100%               Land development.
(Pty) Limited,                                                              Frederik Johannes Steyn,
2005/027489/07.                                                             Ben Pierre Malherbe,
03/08/2005.                                                                 Craig Terence Daly
Date: PTA
Since: August 2006
Calgro M3 Land 102      January 2007        100 shares   100%               Land development.
(Pty) Limited,                                                              Frederik Johannes Steyn,
2005/027255/07.                                                             Ben Pierre Malherbe,
Date: 04/08/2005                                                            Craig Terence Daly
Place: PTA
Since: August 2006
CM3 Witkoppen           January 2007        100 shares   100%               Property development.
Ext 87 (Pty) Limited,                                                       Deon Noel Steyn,
2005/018386/07.                                                             Ben Pierre Malherbe,
Date: 05/06/2005.                                                           Craig Terence Daly
Place: PTA
Since: July 2006



                                                                                                              83
Name, registration                                                                 Nature of business
number, date, place                                              Percentage of     and full names
of incorporation and                             Issued          issued share      of directors
length of time              Date became a        share           capital held by   of each
in business                 subsidiary           capital         Calgro M3         subsidiary
CM3 Witkoppen               January 2007         100 shares      100%              Property development.
Ext 131 (Pty) Limited,                                                             Ben Pierre Malherbe,
2005/017717/07.                                                                    Frederik Johannes Steyn
Date: 26/05/2005.
Place: PTA
Since: August 2006
CM3 Northriding             July 2005            100 shares      100%              Investment in movable and
Ext 86 – Mio Bella                                                                 immovable property as principal.
(Pty) Limited,                                                                     Frederik Johannes Steyn,
2004/014541/07.                                                                    Deon Noel Steyn,
Date: 27/05/2004.                                                                  Craig Terence Daly
Place: PTA
Since: July 2005
CM3 Northriding             July 2005            100 shares      100%              Property development.
Ext 94 – Cherrywood                                                                Frederik Johannes Steyn,
(Pty) Limited,                                                                     Deon Noel Steyn,
2004/014636/07.                                                                    Craig Terence Daly
Date: 01/06/2004.
Place: PTA
Since: July 2005
CM3 Randpark Ridge          July 2006            100 shares      100%              Property development.
Ext 120 (Pty) Limited,                                                             Frederik Johannes Steyn,
2005/018284/07.                                                                    Deon Noel Steyn,
Date: 31/05/2005.                                                                  Craig Terence Daly
Place: PTA
Since: July 2006
Aquarella Investments January 2007               100 shares      100%              Investment in movable and
265 (Pty) Limited,                                                                 immovable property as principal.
2005/035305/07.                                                                    Frederik Johannes Steyn,
Date: 04/10/2005.                                                                  Ben Pierre Malherbe,
Place: PTA                                                                         Craig Terence Daly
Since: August 2006
Neoprop                     August 2007          100 shares      100%              Estate agency services.
2006/006036/07.                                                                    Craig Terence Daly,
Date: 27/02/2006                                                                   Jan Jacobus Roode,
Place: PTA                                                                         Alwyn Ignatius de Waal.
Since: August 2007
Note: Calgro M3 was converted into a public company on 30 August 2007.




84
                                                                                          ANNEXURE 12


PRINCIPAL IMMOVABLE PROPERTIES OWNED OR LEASED


Details of the principal immovable properties held or occupied by the Calgro M3 group are set below:
                                  Property                                                 Monthly
Landlord                          description          Period of lease       Area          rental
                                                       (years)               (m2)          (Rand)
Leased
Ballywood Properties 2            Ballywoods Office                          51 455        208 661
(Pty) Limited                     Park, Ballywoods
                                  Drive, Bryanston
Rennies Property Management       3rd Floor, His     Month-to-month          175           6 500
(Pty) Limited                     Majesty’s Building
                                  West,
                                  Johannesburg Central
Owned
The group does not own any immovable properties other than project land that is developed and sold.




                                                                                                       85
                                                                                                      ANNEXURE 13


DETAILS OF SENIOR MANAGEMENT AND DIRECTORS OF MATERIAL SUBSIDARIES


The details of full names, ages, qualifications and business addresses of senior management and directors
of the Calgro M3’s material subsidiaries are set below:
Name, age, nationality and                          Function and
qualification                                       experience                            Business address
Deon Noel Steyn, 40                                 MD – Calgro M3 Developments.          Ballywoods Office Park,
SA, B.Sc (QS)                                       16 years’ experience in residential   Ballywoods Drive, Bryanston
                                                    development and construction.
Douw Gerbrand Steyn, 54                             Director – Calgro M3                  Ballywoods Office Park,
SA, B.Sc (QS)                                       Developments; 29 years’               Ballywoods Drive, Bryanston
                                                    experience in residential
                                                    development and construction.
Hendrik Brand Malherbe, 38                          MD – MS5 Projects. 12 years’          Ballywoods Office Park,
SA, B.Sc (QS)                                       experience in residential             Ballywoods Drive, Bryanston
                                                    development and construction.
Alwyn Ignatius de Waal, 33                          Director – Neoprop. five years’       Ballywoods Office Park,
SA, CA(SA)                                          experience in land sourcing and       Ballywoods Drive, Bryanston
                                                    residential property marketing.
Jan Jacobus Roode, 35                               Director – Neoprop. five years’       Ballywoods Office Park,
CA(SA)                                              experience in land sourcing and       Ballywoods Drive, Bryanston
                                                    residential property marketing.
Terence Walter Graaff, 28                           Director – MS5 Projects.              Ballywoods Office Park,
                                                    Joined the group having been          Ballywoods Drive, Bryanston
                                                    an auditor and audit manager
                                                    at ARC Inc. Financial
                                                    manager for the low cost and
                                                    affordable housing.
Note: All of the above are South Africa citizens.




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