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INTEGRATED ANNUALREPORT 2012TV & VIDEOCARBONCREDITSBRACKETS& MOUNTSSATELLITESHOWER HEADSSHELVINGLIGHTINGSOLAR GEYSERSAUDIOREMOTE WORLDHOME SECURITYLIGHTBULBSLED LIGHTSTOUCHSCREENACCESSORIESAV SOLUTIONSPV PANELSBATTERIESCOMPUTERGEYSER TIMERSDATA ONMINI-SUBSCCTVELECTRICALMV SWITCHGEARNETWORKINGTELECOMSGENERATORSMULTIMEDIA

Scope of thisreportAnnual Integrated ReportThis is Ellies first step to deliveringa fully integrated reportEllies Holdings Limited (Ellies) is a leading South Africanmanufacturer, wholesaler, importer and distributor indiversified sectors, including consumer goods, renewableenergy and power and telecommunications infrastructure,servicing the local and African market. A detailed groupstructure can be found on page 4 of this integrated report.This report covers the period 1 May 2011 to 30 April 2012.The previous year’s report was published in October 2011.The report deals with the annual financial statements,operational and strategic overview, as well as non-financialhighlights.Ellies will for the first time be reporting according to a selfdeclared level C, integrated annual report, in accordance withthe Global Reporting Initiatives standards (GRI G3). As this isthe first integrated report produced by the group, this reporthas not been externally assured, however an assuranceprocess will be put in place going forward. The GRI Index canbe found on the company’s website. This is the first step in theprocess to deliver a fully integrated report to stakeholders.The annual financial statements can be found onpages 49 to 92 of this report and have been audited by PKF(Jhb) Inc., the group’s external auditors. The independentauditors’ report can be found on page 52 of this report.The financial statements were prepared in accordancewith the International Financial reporting Standards (IFRS),the requirements of the Companies Act of South Africa,regulations of the JSE Limited (JSE) and recommendationsof King III.Throughout this report Ellies has highlighted case studies,based on the following: BladeRoom (page 2), Elltrix (page 13),Project Power Save (page 20), the rebranding of both Elliesand Megatron (page 26) as well as the Store-within-a-storeconcept (page 45). The case studies are aimed at providingmore details around these subjects.As stated in the Ellies 2011 annual report, costs saved on the2011 report were redirected and made available to the ElliesEngage initiative. A detailed CSI report, covering the ElliesEngage initiatives of the year under review, can be found onpages 42 to 44 of this report.Any queries regarding this integrated report or its contentsshould be directed to:Irwin LipworthTel: 011 490 381794 Eloff Street ExtVillage DeepJohannesburg, 2001Email: irwin.lipworth@ellies.co.za

ContentsSCOPE OF THIS REPORTIFCCase study one: BladeRoom2GROUP OVERVIEW3Group structure4Mission statement7Milestones: Inception to present11Key indicators12Case study two: Elltrix13LEADERSHIPBoard of directors14Executive management16Chairman’s and Chief Executive Officer’s report17Case study three: Project Power Save20PERFORMANCE SUMMARYChief Financial Officer’s Report21Financial highlights24Wealth distribution24Ellies as an investment24Five-year review25Case study four: Rebranding26SUSTAINABILITY AND CORPORATEGOVERNANCESHAREHOLDER INFORMATIONAnalysis of shareholders46Interaction with shareholders47Shareholders’ diary47Share trading statistics48Engaging with stakeholders27Corporate governance report31ANNUAL FINANCIAL STATEMENTS49Risk management and internal controls37NOTICE OF ANNUAL GENERAL MEETING93Sustainability report40ANNEXURE A99Corporate Social Investment42FORM OF PROXY10145CORPORATE INFORMATIONIBCCase study five: Store within a store

Case study: oneDATA CENTREBackgroundThe company behind the BladeRoomGroup has over 20 years’ experiencein designing and producing missioncritical modular facilities for bluechip and government clients worldwide. The organisation began inthe catering field, deploying largescale modular kitchens for eventssuch as the Olympics and for theUK government. In 2002 the BritishArmy commissioned their expertisein precise control of pressureregimes, utilisation of free outsideair and extensive filtration systemsto build a turnkey operating theatreto be deployed in Basra. Sincethen 65 operating theatres havebeen delivered around the world.A need for highly filtered, free aircooling in the data centre world wasidentified and led to the inventionand development of the BladeRoomsystem.ELLIES INTEGRATED ANNUAL REPORT 2012 2Energy savingBladeRoom and MegatronThe design features of the productresulted in a critical benefitfor customers’ energy savings.BladeRoom offers a product with aproven Power Usage Effectiveness(PUE) of 1.20 in comparisonwith other Johannesburg datacentres, which have a PUE of 1.9.The BladeRoom modules aremanufactured in the UK usingintelligent Building ManagementSystems (BMS) to directly matchthe free air cooling to the demandof the IT, which reduces the energyconsumption of the data centre.This combined with intelligentfire suppression; N 1 redundancyon all components and the quickmanufacturing and deployment timesmakes this a market leading product.The Telecoms Division of MegatronFederal has been appointed asBladeRoom’s Integration Partnersfor Africa, making Megatron theonly supplier of this product on thecontinent. The first BladeRoom inAfrica was completed by Megatron asa proof of concept project in January2012 and is in the process of beingsold. Many other negotiations aretaking place with potential customersaround Africa.AwardsMegatrons’ design for this datacentre won the most innovativedesign in its category at the WorldData Centre awards which werehosted in London in December 2011.The award recognised Megatron’sachievement in innovation in themedium data centre arena, with theestablishment of Africa and SouthAfrica’s first green data park inCenturion.

GroupoverviewEllies Holdings LimitedThe group was established in 1979with only five employeesThe Ellies Group was established in 1979 in Johannesburg,by founder Ellie Salkow, with only five employees. Today Elliescomprises two divisions, the Consumer Goods and Servicesdivision and the Infrastructure division. The ConsumerGoods and Services division is the largest manufacturer,importer, wholesaler and distributor of television receptionrelated electronic products as well as domestic electronicand industrial audio products and employees in excess of1 400 individuals. The Consumer Goods and Services divisionoffer services to retail, furniture, hardware and independentmarket places in Southern Africa, with exports into Africa,Europe and Australia. The group controls the packaging,marketing, sale and distribution of both its own manufacturedand imported products.In May 2008 Ellies acquired Megatron Federal, which nowforms Ellies’ Infrastructure division. This division offers awide range of products and services in the field of powergeneration, transmission, distribution, construction andtelecommunications. The company’s key focus is themanufacturing of transformers, medium voltage withdrawableand fixed pattern switchgear, diesel generator sets, miniaturesub-stations and sheet metal products, with servicesthat include: engineering and installation, construction,complete outdoor yard solutions and civil building works.In November 2011, Megatron acquired the Andrews Towersbusiness from Commscope in America.In 2010 Ellies established In-Toto Solutions, in partnershipwith Intoto Technology Investments, specialising in bothinfrastructure and renewable energy projects in theGovernment and Corporate sectors.Ellies holds a 45% vested interest in SkyeVine as a jointventure with Q-KON. SkyeVine’s core business is satellitebased broadband designed for the home user and smallenterprise markets.The group was listed on the Johannesburg Stock Exchange’s(JSE) Alternative Exchange (AltX) on 5 September 2007, underEllies Holdings Limited (ELI). In November 2010 the groupmoved to the Main Board of the JSE, listed as part of the“Electronics & Electrical” sector.The group currently has a level 6 (Value Add) BEE rating andthe management team are in the process of putting a plan inplace to improve this rating over the next two years. The groupis also ISO 9001:2008 certified.ELLIES INTEGRATED ANNUAL REPORT 2012 3

Group overview (continued)Group structure(PTY) LTDPROPERTIES (PTY) LTDELLIESConsumer Goodsand Services (page 5)63%Infrastructure (page 8) Distribution and LogisticsSales and MerchandisingMarketing and designManufacturing and EngineeringResearch and DevelopmentPackagingELLIES INTEGRATED ANNUAL REPORT 2012 4Port ElizabethEast LondonBloemfonteinNelspruitPart of DurbanMEGATRON FEDERAL Four new factoriesbuilt in Chloorkop Office parkMegatron Federal: Power Products Infrastructure Products TelecommunicationsSUPPORTED BYEllies/ElsatElsat RentalsEllies CorporateEllies Renewable EnergySUPPORTED BY37%CONTRIBUTION TO REVENUE Manufacturing Turnkey projects International partnerships

The distribution and logistics department employ 172employees.Consumer Goods and ServicesDistribution and LogisticsThe group maintains extensive warehousing throughoutSouthern Africa to ensure ‘just-in-time’ deliveries tocustomers. These warehouses store products manufacturedby the group as well as imported goods, with sufficientinventory to best meet orders processed.Sales and MerchandisingEllies operates its own vehicle fleet and uses courier servicesthat specialise in deliveries to retail, furniture chains andindependents in rural areas. These courier services haveoffices on site at Ellies head office in Johannesburg.Most goods are delivered to customers anywhere in southernAfrica with a 48-hour turnaround, with extensive containerloading facilities for expediting export orders. The company’sforwarding and clearing agents have offices on site at headoffice.The distribution163 g and DesignThis department was also in charge of the rebranding of Elliesthis year. Not only did Ellies Holdings undergo a rebrandingexercise, but the entire product range has been rebranded.The rationale behind the rebranding was to strengthen thebrand, as well as create stronger brand awareness. The newbranding is currently being rolled-out throughout the country.Distribution and LogisticsThe marketing and design department employ 13 employees.Marketing and %20%18%7%Sales and MerchandisingThe sales force comprises over 170 sales representatives,managers, product knowledge representatives andmerchandisers throughout southern Africa. The group’ssix key customer areas are: Retail chain stores Furniture chain stores Hardware chain stores Independent stores Exports uring and EngineeringEllies has a dedicated R&D department with experiencedengineers, which holds patents for many of its manufacturedproducts. The facility comprises three key manufacturingdivisions:Aluminium and plastics manufacturingProduct development and the manufacturing of antennaeusing specialised machinery.ELLIES INTEGRATED ANNUAL REPORT 2012 5