HUDACO INDUSTRIES GROUP PROVIDENT FUND

1 HUDACO INDUSTRIES GROUP PROVIDENT fund surplus APPORTIONMENT PLAN Status of the plan and related payments The surplus apportionment plan has been approved and payments have been made to those former members who have submitted the appropriate registration documentation. There are still former members who have been contacted but have not submitted the required documentation. There are also former members who have benefits due to them but who we have been unable to locate. The fund has appointed Benefit Recovery Services (BRS) to assist in the process. Should you know any former members please convey the above message to them and ask them to contact the BRS call centre on 086 727 7004 Please contact Hilary Jansen of HUDACO s payroll department, Henville Salary Bureau, at 011-345-8220 should you have any queries with regard to payments.

2 Final Report on the 30 June 2002 surplus Apportionment Schemes The Registrar of Pension Funds has approved the surplus apportionment plan. A copy of the final report is available from the GROUP employee benefits manager or the fund administrators. A summary is set out below for the information of all members and former members. The agreed surplus apportionment date was 30 June 2002. At 30 June 2002, the fund s assets totalled R64m and its liabilities amounted to R58,3m. The fund reserves at 30 June 2002 therefore totaled R5,7m. On the advice of the fund s actuary, the trustees set aside R1,2m of the reserves, to protect ongoing members in the event that Old Mutual reduces its interim bonus rate, or removes non-vested bonuses (called processing error reserve). A further R1,5m was set aside to allow for the actual cost of apportioning the surplus .

3 (It must be stressed that this amount is a conservative allowance, and any cost savings will be released to surplus ). The fund actuary has determined the actuarial surplus in the fund to be R2,9m. 1 400 members left the fund between its inception and 30 June 2002. 905 of these members did not receive the minimum withdrawal benefit as set out in the Act, as they had less than 5 years service at date of exit and therefore forfeited some or all of their employer contributions on exit. They have a claim of R4,4m on the surplus , which includes the amount of their employer contributions forfeited plus interest to 30 June 2002, computed at the net return on fund investments for the period. The full fund surplus will therefore be distributed proportionately to all of these 905 former members who will each be paid approximately 66% (R2,9m/ R4,4m) of their claim, plus interest from 30 June 2002 to date of payment.

4 Income tax will be deducted from the amount due, even if it is transferred into another PROVIDENT fund . As a result, neither current members nor employers will have a claim on the surplus , as there will be no surplus left over once former members claims are settled. Equally former members, who left after 5 year of service and so received all of their employer contributions on exit, will have no claim against the surplus .