Meetings

The Board meets regularly on a scheduled basis and at such other times as circumstances may require. The table of meetings and attendance is as follows:

Board papers are issued to all directors prior to each meeting and contain relevant detail to inform members of the financial and trading position of the company and each of its operating subsidiaries, as well as covering material issues pertaining to the Group. Non-executive directors also maintain regular contact with executive directors to ensure that they are kept abreast of material matters that may require their input and guidance. INTERNAL CONTROL The directors have responsibility for the Group’s systems of internal controls. These are designed to provide reasonable assurance of effective and efficient operations, internal financial control and compliance with laws and regulations. The Group’s system of internal controls is designed to provide reasonable, but not absolute, assurance against the risk of material errors, fraud or losses occurring.

Furthermore, because of changing internal and external factors, the effectiveness of an internal control system may vary over time and must be continually reviewed and adapted. The system of internal controls is monitored throughout the Group by the audit committee, the Group internal audit department, management and employees as an integrated approach. The Board reports that: • to the best of its knowledge and belief, no material malfunction of the Group’s internal control system occurred during the period under review; • it is satisfied with the effectiveness of the Group’s internal controls and risk management; • it has no reason to believe that the Group’s code of ethics has been transgressed in any material respect; and • to the best of its knowledge and belief, no material breaches have occurred during the period under review, of compliance with any laws and regulations applicable to the Group.

INFORMATION SECURITY Compliance with legislative requirements contributes towards the protection of corporate information, but in itself only addresses a small part of the total number of threats posed to the business arising from its dependencies on information technology and the internet. Security policies and procedures for employees and the use of technologies such as enterprise and personal firewalls, antivirus systems, intrusion monitoring and detection are applied, as well as frequent application of software security “patches” issued by vendors as and when vulnerabilities are discovered. An overhaul and upgrade of the systems applicable to the Capital Equipment Group is planned for the new year. RESTRICTION ON TRADING IN SECURITIES A formal policy, implemented some years ago, prohibits directors, officers and employees with access to financial information from dealing in the Company’s securities, from the end of an interim reporting period until after the interim results have been published and similarly from the end of the financial year until after the audited annual results have been published. Directors and employees are reminded of this policy prior to the commencement of any restricted period. In addition, no dealing in the Company’s securities is permitted by any director, officer or employee whilst in possession of information which could affect the price of the Company’s securities and which is not in the public domain. Directors of the Company and of its subsidiaries are required to obtain clearance from Invicta’s chairman (and in the case of the chairman, or in the absence of the chairman, from the chairman of the Audit Committee), or his nominee, prior to dealing in the Company’s securities, and to timeously disclose to the Company full details of any transaction for notification to and publication by the JSE. All participants in the long-term equity-settled bonus share incentive scheme may not exercise these rights during a closed period. STAKEHOLDER COMMUNICATION Members of the Board meet on an ad hoc basis with institutional investors, investment analysts, individuals

and members of the financial media. Discussions at such meetings are restricted to matters that are in the public domain. Shareholders are informed, by means of press announcements and releases in South Africa and/or printed matter sent to such shareholders, and/or  announcements on SENS, of all relevant corporate matters and financial reporting as required in terms of prevailing legislation. In addition, such announcements are communicated via a broad range of channels in both the electronic and print media. The Group has also embarked on a more formal approach to providing feedback in respect of the year-end results with interviews scheduled for both radio and television after the relevant media and SENS announcements have been made. The company maintains a corporate website http://www.invictaholdings.co.za containing financial and other information, including interim and annual results. The site has links to the websites of each major operating subsidiary company. The Group will look at ways of allowing electronic shareholder participation with its transfer secretaries in the upcoming year as provided for in the new Companies Act. EMPLOYMENT EQUITY Invicta Holdings is committed to providing a working culture that is inclusive to all. It is Group policy to acknowledge and support South Africa’s Employment Equity drive in ensuring that equal opportunities are directed at our staff, regardless of race, colour, sexual orientation, sex, religion, creed or national origin. The Group remains compliant with all aspects of the Employment Equity Act by adhering to the basic requirements of the timeous submission of an online report and plan, consultation with employees and communication of the report and progress is monitored on an ongoing basis. Areas of strategic focus include recruitment as well as the development of in-house talent through coaching, mentoring and succession planning. Included in this drive is a bursary programme directed a young black students who could potentially be groomed for future senior positions once they join us after graduation, where potential Employment Equity Barriers are identified. HR implements processes to eliminate these barriers, where possible. The Group remains fully committed to providing equal opportunities to its 3 279 employees (2010: 2 240 employees).

TRAINING EDUCATION AND DEVELOPMENT OF STAFF In-house training and development: The Group’s philosophy on training the right employee, at the right time provides returns for the employer in increased productivity, knowledge, loyalty, and contribution to the Group. Ongoing training and skills development also forms the basis of transformation; therefore it is an imperative for any company aiming to develop a competitive edge. In order to create this passion within the Group’s staff, Invicta needs to help its people reach their full potential through ongoing training and development. After the successful external re-branding by BMG, it has embarked on a Brand Ambassador training initiative that essentially transforms BMG employees to BMG Brand Ambassadors with a renewed heart and mind. The Group provides a broad range of initiatives, including technical, management and sales training, as well as softer skills programmes, with technical courses being delivered via e-learning. E-learning provides the major benefit being convenience and flexibility. Staff can log in when convenient whilst learning can be applied immediately and shared with colleagues. Training via e-learning also enhances the much needed computer skills. All theoretical training is finished off with practical training sessions delivered by the Group’s technical resource division. Education and career development As part of the Group’s holistic approach to employee development, it also offers educational assistance to employees who are keen to further their own qualifications on a part-time basis by completing work related courses. Student bursaries The Group also currently has eight bursars participating in a bursary scheme as well as one engineering graduate who is completing her practical year within the Group. The Group is committed to partnering projects that are focused on developing the technical skills base of the country as a requirement for its business, as well as the economy as a whole.

Over the past three years BMG has funded CASME – Centre for the Advancement for Science and Maths Education. This project is training 50 educators from 25 rural, under-resourced schools in and around Umgungundlovu in KwaZulu-Natal, and providing learning and teaching resources through a Teachers’ Resource Centre based at the FET College. The project includes ongoing school-based support for teachers, as well as a learner support programme, which addresses further education opportunities, with a focus on technical and engineering programmes offered by the FET College. BMG also has a long-standing relationship with the PROTEC branches in Tongaat and Inanda/ Kwa Mashu in KwaZulu-Natal. Protec’s aim is to increase the country’s technologically skilled human resource base through the provision of educator-based training and a Learner Excellence Programme (learner-based education) to under-resourced schools in South Africa. This holistic programme is aimed at Grade 10 learners who participate until they reach Grade 12 and they are supported through their tertiary education studies and beyond. Research results clearly indicate that the Protec branches are having a positive impact on the academic performance of beneficiaries from historically disadvantaged communities. At least 50% of learners from Protec passed with University passes between 2002 and 2010, significantly more than the provincial averages. Protec has a long and consistent track record of helping learners improve their results and go on to successful technological careers. They have expert staff and experienced leadership who show great passion in implementing every project. BMG will be extending the Group’s commitment to Protec by partnering them in the development of two new branches in key trading areas of Steelpoort and Carletonville in the year ahead. BLACK ECONOMIC EMPOWERMENT (“BEE”) Invicta has requested Bravura Consultancy to act as its consultants in terms of Broad-Based Black Economic Empowerment (“B-BBEE”) as well as the BEESCORE to re-certify the BEE status of its various operations. The Group envisages improving its BEE status from its current Level Five contributor to a Level Four contributor in terms of the Broad-Based Rating Scorecard.

CORPORATE SOCIAL INVESTMENT (“CSI”) As a responsible South African citizen, the Group has made commendable contributions towards enhancing basic services at community level. The Group carefully selects initiatives that will have the maximum impact on basic needs of South African’s and, where an immediate need arises, it also undertakes more ad hoc projects to address specific issues. Some examples of initiatives the Group undertook are as follows: • Supporting a feeding scheme where the Group’s financial as well as time contributions enabled the foundation to distribute food parcels to needy school children and their families. • Funding for the education of scholars in the critical areas of mathematics and science during Saturday schooling initiatives. • The Group supports a foundation that provides the poor, who have sound micro-enterprise ideas, with capital and guidance to help them get themselves out of poverty. • Scholarships to underprivileged and financially disadvantaged children. • The Group is also supporting various homes, such as a centre for abused and neglected children, a home for young pregnant girls as well as a crèche in Khayelitsha. • The Group also provide significant funding to an institution who supports people in providing a loving and stable home for orphans and vulnerable children, whether on a temporary basis, a foster parent or by adopting. Education and career development As well as the extensive staff training which is dealt with elsewhere in this report, the Group sees education as a primary area of focus for the future growth of the country. Funding is provided to centres providing education to educators, which are based in 25 rural under-resourced schools. A further major funding project is in respect of a nonprofit technological career development programme, focusing on quality of mathematics and science. The Group acknowledges that a holistic approach is necessary, of which academic support is but one element.

Sport development Within the Group, sponsorship as well as dedicated time is allocated to form a local soccer championship league consisting of players from the community as well as from the Company. By investing time and energy into this initiative, the Group strongly believes that people prefer to rather invest their energy in community-related events where they can create a sense of belonging rather than spending time on the streets. General All the Group operations, no matter how small, have contributed to supporting the destitute and underprivileged in the communities in which they exist and function. QUALITY MANAGEMENT AND OCCUPATIONAL HEALTH AND SAFETY The consistent supply of both quality products and service to customers is key to the Group’s successes. To this end, the Group continues to focus on the ISO quality system to assist in achieving this. CEG has maintained their ISO certification with TUV Rheinland in all its divisions, including the Criterion Equipment Division. The Autobax Division has maintained its ISO certification with Lloyds. BMG’s Quality Management Systems (QMS) certified in 2003, is now well established, with their current ISO 9001:2008 standard only due for re-certification in December 2012. BMG’s commitment to a safe and healthy working environment for customers and employees is demonstrated by the implementation of the OHSAS 18001:2007 standard. The Group continues to progress the development and implementation of the OHSAS 18001 Occupational Health and Safety Management System in its major operations, with CEG aiming to achieve certification of this standard in the 2011 calendar year. ACCESS TO INFORMATION The Company and all its subsidiaries are compliant with the provisions of the Promotion of Access to Information Act. The manual in terms of this legislation is available from the registered office of the Company and on the Company’s website.

SUSTAINABILITY REPORT The Board is committed to creating long-term value for all its stakeholders by providing sustainable businesses in an integrated approach to the communities in which it operates. The sustainability objectives of the Group are: • Act in the best interests of Group shareholders and Group principals, by representing them in a manner which brings credit to their products and brands. • Ensuring that customers receive an integrated and environmentally sound solution that meets their specific needs. • Providing employees with a working environment and encouraging a culture which allows them to achieve as much as possible and to have a fulfilled working career. • Delivering sustainable returns to shareholders which are not at the expense of the Group’s ethical standards. • The Group continues to measure its expenditure on non-renewable resources and to eliminate any unnecessary or inefficient processes. The primary areas of consumption in the Group continue to be transport, fuel and electricity. The Group continually looks at optimising its warehouse locations and inventory holdings in a bid to minimise transport cost and fuel consumption, with consolidation of certain locations planned for the new year. • As customers continue to search for more efficient and productive products, the Group, through its various operations, continues to develop these with its various principals around the world and to offer solutions to the market. The Board wishes to take this opportunity to thank all the stakeholders in the Group for their ongoing commitment and loyalty to the development of a sustainable business and relationships. Arnold Goldstone Chief Executive Officer Invicta Holdings Limited

REMUNERATION REPORT Role of the Remuneration Committee and terms of reference The Remuneration Committee is a committee of the Board of Directors and is responsible for: • making recommendations to the Board on the general policy on executive remuneration, benefits, conditions of service and staff retention; • determining the specific remuneration packages of executive directors and senior management of the Group including, but not limited to, basic salary, performance-based short- and long-term incentives, pensions and other benefits; and • the design and operation of the Group’s share incentive schemes. The full terms of reference of the Committee have been agreed by the Board. Members of the Remuneration Committee during 2011 • CH Wiese (Chairman) • DI Samuels • A Goldstone – Attendance ex Officio All members of the Committee are non-executive directors. The Committee met five times during 2011. The chief executive officer attends the Committee meetings by invitation and assists the Committee in its deliberations, except when issues relating to his own compensation are discussed. No director is involved in deciding his or her own remuneration. In 2010 the Committee was advised by the Group’s finance and human resources divisions on the implementation of the executive incentive schemes. The Company’s auditors, Deloitte & Touche, have not provided advice to the Committee. However, in their capacity as Group auditors, they perform normal audit procedures on the remuneration of directors. The Remuneration Committee meets at least annually and the attendance at meetings held was as follows:

Remuneration policy and executive remuneration Principles of executive remuneration The Group’s remuneration policy aims to attract and retain high-calibre executives and to motivate them to develop and implement the Group’s business strategy in order to optimise long-term shareholder value creation. The policy conforms with King III and is based on the following principles: • Total rewards are set at levels that are competitive within the relevant market. • Incentive-based rewards are earned through the achievement of demanding performance conditions consistent with shareholder interests over the short-, medium- and long-term. • Incentive plans, performance measures and targets are structured to operate effectively throughout the business cycle. • The design of long-term incentives is prudent and does not expose shareholders to unreasonable financial risk. Elements of executive remuneration The four elements of executive remuneration consist of a base salary, benefits, an annual incentive and long-term incentives. The Committee seeks to ensure an appropriate balance between the fixed and performance-related elements of executive remuneration, and between those aspects of the package linked to short-term financial performance and those aspects linked to longer-term shareholder value creation. A further consideration has been the need to retain critical skills in the Group. The Committee considers each element of remuneration relative to the market and takes into account the performance of the Group and the individual executive in determining both quantum and design. The policy relating to each component of remuneration is summarised below: Base salary The base salary of the executives is subject to annual review. It is set to be competitive at the median level, with reference to market practice in companies comparable in terms of size, market sector and business complexity. Group and Company performance, individual performance and changes in responsibilities are also taken into consideration when determining annual base salaries.

Benefits Benefits for executives include membership of a retirement fund and a medical aid, to which contributions are made by the executives and the Group. Short-term incentive All executives are eligible to participate in a short-term incentive with payment levels based on either corporate or individual performance or both. Key performance indicators are set on an individual basis each year. The incentive plan is contractual but not pensionable. The Committee retains the discretion to make positive adjustments to bonuses earned at the end of the year on an exceptional basis, taking into account both Group performance and the overall and specific contribution of individual executives to meeting the Group’s objectives. The Committee reviews measures annually, to ensure that the targets set are appropriate, given the economic context and the performance expectations for the Group. Long-term incentive Invicta Holdings long-term bonus and share incentive scheme In order to attract and retain key staff, the Group requires appropriate long-term incentive schemes. Many of the Group’s operations require key technical skills which are often difficult to replace. In trying to address the critical factor, the Committee, in consultation with industry professionals, has designed a long-term bonus incentive scheme for key executives. In terms of the scheme, executives will be rewarded on their performance, with reference to the growth in the Invicta share price over a period of three to five years. The bonus, as determined by the formula, will be settled with equity in Invicta by the relevant operational entity or on terms of the existing Invicta Holdings Limited Share Trust. The bonus scheme will constantly be reviewed by the Committee for its effectiveness and will be amended from time to time, if necessary. Divisional senior executives and management are on a cash-based bonus system, which ensures they are rewarded for performance in those areas over which they have direct influence. Details of the Invicta Holdings Long-Term Bonus and Share Incentive Scheme are detailed on page 32.

Equity-settled bonus share incentive right scheme The Group employed a long-term bonus equity-settled share incentive right scheme (“LBSIR scheme”) for key executives in 2006. In terms of the LBSIR scheme executives are granted a bonus share incentive right (“the bonus right”) calculated with reference to a specified number of shares at a price equal to the weighted average five-day closing market price on the date of grant. The bonus right vests after a period of one year, (subject to the achievement of the performance conditions set for the executive), and the bonus right becomes exercisable after a further two-year period, after which the executive has a further two-year period in which to take up the bonus right before it lapses. The bonus right is determined based on the difference between the grant price and the weighted average five-day closing share price on the exercise date. The bonus, as determined by the formula, will be settled with Invicta shares. The bonus right expense has been calculated using a Black Scholes valuation model and is expensed over a three-year period from the grant date and is recorded in the Share Appreciation Reserve.

Executive directors’ interests in the LBSIR scheme are set out in note 36 on page 80 of the 2011 Annual Report. A long-term loan scheme for executives on the board of directors of Invicta Holdings Limited (“Invicta”) The purpose of the loan is to incentivise Invicta executives over the long term by providing them with a mechanism to acquire a meaningful stake in Invicta, thereby aligning them with the interests of Invicta shareholders. A subsidiary of Invicta, Humulani Marketing (Pty) Limited (“Humulani”) will make a seven-year loan to the executives to acquire shares in Invicta within 90 days of the loan being granted. Interest on the loan will be charged at the Income Tax Official Rate for low interest loans to employees as published by SARS from time to time (currently 6,5% per annum), calculated daily and capitalised annually. Capital shall be repayable at the end of the loan period.

Servicing of the loan will be by interest being paid annually using dividends received on the Invicta shares which have been acquired with the loan. If the dividends received are less than the interest payable, the shortfall shall be capitalised. The executive may, at his election, pay off all or part of the accumulated interest at any time, but shall not be obliged to do so. The loan will be secured by a cession and pledge of the Invicta shares acquired with the loan, plus a cession and pledge of additional Invicta shares which may be provided by the executive, plus any additional security that the Invicta Remuneration Committee may require from time to time, such that the value of the security:loan ratio will be at least 1,5:1. The loan will be limited to a multiple of each executive’s cost to company. The multiple will vary depending on the executive’s position and responsibility, as well as the security he is able to provide for the loan. The limit will be determined by the Remuneration Committee. The total capital value of the loans to the Invicta executives shall not exceed R85 million and the maximum loan to any one individual shall not exceed R40 million. Humulani will grant the executive a put of the shares (acquired with the loan) at 75% of the price paid by him for the shares, which shall be used to offset any loan balance at the time. The put shall only be exercisable when the loan falls due for repayment at the end of the loan period or if his employment with the Group is terminated due to no fault of his, eg death or disability. By the time this report reaches shareholders, details of the proposed loans will have been announced. We refer shareholders to this announcement. In line with the principles stated above, the Remuneration Committee has authorised the implementation of a bonus bank scheme at senior and middle management level which entails management earning a performance-based bonus, which is effectively paid out over the subsequent three years. External appointments Executive directors are not permitted to hold external directorships or offices without the approval of the Board. If such approval is granted, directors may retain the fees payable from such appointments. Directors’ fees Directors’ payments for services as directors and other emoluments are set out in note 36 on pages 79 and 80

of the 2011 Annual Report. Members will be requested to consider an ordinary resolution approving these emoluments at the annual general meeting. Non-executive directors’ fees The annual fees payable to non-executive directors of the Company are based on a fee for attendance per meeting of the Board and, where applicable, per meeting of sub-committees. An additional fee is paid to the Chairman of both the Board and the Audit Committee. Non-executive directors do not participate in the Company’s annual bonus plan, or in any of its share incentive schemes. Directors’ and executive management’s service contracts None of the directors are bound by service contracts. All executive directors, who are also directors of subsidiary companies, have an engagement letter which provides for a notice period of between one and three months to be given by either party. The Group chief executive officer has no service contract. None of the non-executive directors have a contract of employment with the Group. In terms of the Articles of Association, not less than one-third of the directors are required to retire by rotation at each annual general meeting of the Company and may offer themselves for re-election. The appointment of new directors during the year is required to be confirmed at the next annual general meeting and such new directors are required to retire at such annual general meeting, but may offer themselves for re-election. Approval This remuneration report has been approved by the Board of Directors of Invicta. Signed on behalf of the Remuneration Committee Dr CH Wiese Chairman of the Remuneration Committee