INVESTIGATION AND SECURITY ACTIVITIES …

1 Essential Business InformationEssential Business InformationJOHANNESBURG OFFICE BALLYOAKS OFFICE PARK, BUILDING B, 35 BALLYCLARE DRIVE, BRYANSTON EXT 7 P O BOX 3044, RANDBURG, 2125 TEL: +27 11 513 -1450 FAX: +27 11 463-2771 PORT ELIZABETH OFFICE 1ST FLOOR, BLOCK F, SOUTHERN LIFE GARDENS, 70 2ND AVENUE, NEWTON PARK P O BOX 505, HUNTERS RETREAT, 6017 TEL: +27 41 394-0600 FAX: +27 41 363-2869 WEBSITE: REG NO: 1986/003014/07 DIRECTORS: MAUREEN MPHATSOE (CHAIRPERSON), JIM FICK (EXPERIAN), GLEN BALS (EXPERIAN), ANDREW MCGREGOR (MANAGING) Copyright Who Owns Whom (Pty) Ltd INVESTIGATION AND SECURITY ACTIVITIES INCLUDING VEHICLE TRACKING Siccode 88920 May 2012 COMPILED BY: Kim Imrie INVESTIGATION and SECURITY ACTIVITIES including Vehicle Tracking Contents Siccode 88920 Copyright Who Owns Whom (Pty) Ltd Contents 1 INTRODUCTION 1 2 DESCRIPTION OF THE INDUSTRY 1 Industry Supply Chain 2 3 SIZE OF THE INDUSTRY 3 4 STATE OF THE INDUSTRY 8 Local 8 Corporate Actions 12 Regulations 13 Black Economic Empowerment 14 Regional 15 International 16 5 INFLUENCING FACTORS 17 Economic Environment 17 Input Costs & Efficiency 18 Crime, Collaboration and Risk Management 18 Information Technology and Technology 19 Labour Resources 20 Environmental Concerns 22 Cyclicality 22 6 COMPETITION 22 Barriers to Entry 22 Research and Development 23 Innovation 23 7 SWOT ANALYSIS 24 8 FUTURE OUTLOOK 25 9 INDUSTRY ASSOCIATIONS 26 10 REFERENCES 28 Publications 28 Websites 28 APPENDIX 1 30 SASA Gold Class Membership Criteria 30 APPENDIX 2 32 Vesa Members list of Vehicle Tracking companies.

2 32 ORGANOGRAM 88920 33 INVESTIGATION and SECURITY ACTIVITIES 33 COMPANY PROFILES 35 ADT SECURITY (PTY) LTD 35 ARCFYRE INTERNATIONAL (PTY) LTD 38 BIDVEST MAGNUM (PTY) LTD 39 INVESTIGATION and SECURITY ACTIVITIES including Vehicle Tracking Contents Siccode 88920 Copyright Who Owns Whom (Pty) Ltd CHUBB SECURITY SA (PTY) LTD 42 COMPUTER SECURITY & FORENSIC SOLUTIONS (PTY) LTD 45 ENFORCE SECURITY SERVICES (PTY) LTD 46 FIDELITY SECURITY GROUP (PTY) LTD 48 GUARDIAN FORENSIC SERVICES CC 58 IDECO GROUP LTD 59 IMVULA QUALITY PROTECTION (PTY) LTD 61 PROTEA COIN GROUP (ASSETS IN TRANSIT & ARMED REACTION) (PTY) LTD 63 PROTEA COIN GROUP ( SECURITY SERVICES) (PTY) LTD 66 SBV SERVICES (PTY) LTD 68 SERVEST SECURITY (DIVISION OF SERVEST (PTY) LTD) 70 STALLION SECURITY (PTY) LTD 72 TOP SECURITY (PTY) LTD 74 VUSELA RISK SERVICES GROUP (PTY) LTD 76 ORGANOGRAM 88920A 77 Vehicle Tracking Service Providers 77 COMPANY PROFILES 78 ALTECH NETSTAR (PTY) LTD 78 C-TRACK (SA) (PTY) LTD 81 MIX TELEMATICS AFRICA (PTY) LTD 83 TRACKER NETWORK (PTY) LTD 85 INVESTIGATION and SECURITY ACTIVITIES including Vehicle Tracking Page 1 of 89 Siccode 88920 Copyright Who Owns Whom (Pty) Ltd 1 INTRODUCTION According to the South African SECURITY Association (SASA) the local private SECURITY industry is valued at an annual R50bn.

3 The industry, previously thought of as fragmented, is becoming less so and is moving towards convergence with higher LSM categories and corporates demanding more sophisticated services. Crime and customer demand for improved technological innovations are driving change and have resulted in co-operation between SECURITY companies and new and innovative IT entrants. The emphasis of this report will be on INVESTIGATION , surveillance, guard and other protective ACTIVITIES for individuals and property and excludes the installation of alarm systems as defined by Standard Industrial Classification code 8892. Vehicle tracking companies also fall under this sector through the supply and installation of tracking devices, stolen vehicle recovery and more increasingly diversification into fleet management. The cash-in-transit (CIT) sector is also covered. 2 DESCRIPTION OF THE INDUSTRY The SECURITY industry, globally and locally, is moving from being isolated in terms of product offerings, customers and industry participants to being much more integrated.

4 Convergence has become a catch phrase and is defined as the ability of one or different networks to carry different services. The term also applies to the physical SECURITY industry which is becoming integrated with the IT industry mainly as a result of technological innovations in Internet Protocol (IP) networking. The private SECURITY industry comprises a range of private companies involved in the provision of SECURITY and SECURITY -related ACTIVITIES including guarding, assets in transit, renting of alarm systems, monitoring of these systems, risk and SECURITY consultancy, and the manufacture and distribution of SECURITY equipment. The companies operate in a competitive environment and attempt to gain an advantage by offering more than one service. With advanced products coming onto the market there is evidence of new partnerships emerging between physical SECURITY players and IT software integrators.

5 Due to its competitive nature and the high demand for private SECURITY in the country, measures have been taken by its main regulatory body, the Private SECURITY Industry Association (PSIRA) to tighten regulations to prevent unscrupulous companies and individuals from entering the industry. Protective alliances such as the SECURITY Industry Alliance, comprising an alliance of SECURITY organisations holding to similar standards has been set up to restore and maintain the integrity of the industry. The South African SECURITY Association (SASA) has gone one step further by setting up Gold class membership where all member companies hold to a prescribed set of requirements. See Appendix 1 for requirements and a member list. The guarding sector has historically been most subject to fly-by-nights and is the largest employer in this sector, worth billions of Rand annually. INVESTIGATION and SECURITY ACTIVITIES including Vehicle Tracking Page 2 of 89 Siccode 88920 Copyright Who Owns Whom (Pty) Ltd It is also the sector most likely to have a high number of unregistered companies that do not comply with legislation.

6 PSIRA inspections are undertaken in order to root out such companies. The industry is governed by the Private SECURITY Industry Regulatory Act 56 of 2001, discussed in more detail under Regulations. One of the main tenets of the act is the requirement that all private SECURITY businesses be registered with PSIRA. Apart from registration aspects, other functions of PSIRA include providing letters of good standing and involve the processing of training course reports. In the cash in transit (CIT) sector, there are a number of large groups. Prior to 1986 banks owned the cash in transit facility Fidelity Services. According to an industry expert at Fidelity, prior to 2006 the Fidelity Services Group comprised three divisions operating as separate companies: Fidelity Cash Management Services, Supercare and Fidelity Guards. In 2006, these 3 divisions were unbundled as follows: Fidelity Cash Management Services which was bought out by G4S; The Supercare Services Group specialising in cleaning services; and Fidelity Guards with its emphasis on the guarding component.

7 In terms of the buyout in 2006 a restraint was placed on Fidelity Guards from trading in the CIT market. This restraint ended mid 2009 and The Fidelity SECURITY Group has re-entered the CIT market with Fidelity Cash Solutions. G4S has its roots locally in the merger between Group 4 Falck and Securicor in 2004. SBV was established in 1986 by the three main banks trading at that time, Standard, Barclays and Volkskas and was later joined by Nedbank. Previously SBV operated on a cost recovery basis by and for the banks. However, now it is expanding into other areas and operates as a commercial company. Protea SECURITY and Coin SECURITY Group, wholly owned subsidiaries of Mvelaserve, united in July 2007 to form The Protea Coin Group. The vehicle tracking industry comprises four main companies, Tracker, Matrix Vehicle Tracking, Altech Netstar and C-Track. There are a number of smaller vehicle tracking companies, compliant with legislation, which are members of the Vehicle SECURITY Association of South (VESA).

8 See Appendix 2 for a list of these companies. A new association for the electronics SECURITY industry, the Electronic SECURITY Industry Alliance (ESIA) has been established. Industry Supply Chain The industry provides services to a broad range of participants and is itself made up of many players as evidenced by the more than 30 SECURITY and related associations and organisations currently in operation. Broadly participants provide services to the following groups: INVESTIGATION and SECURITY ACTIVITIES including Vehicle Tracking Page 3 of 89 Siccode 88920 Copyright Who Owns Whom (Pty) Ltd Owners of large spaces such as Government, Airports and Universities with high traffic levels require increasingly sophisticated methods of monitoring and access control; Corporates and SMEs. Corporates are a large purchaser of guarding and surveillance services. As technology becomes more updated, there has been a shift from physical to automated SECURITY .

9 Vehicle tracking services and fleet management services are in demand; Homeowners: Due to the high crime rate most suburban homes have an alarm monitoring service; and Banks and retailers require CIT services to transport cash. Suppliers to the industry are the manufacturers of alarms, vehicle monitoring devices and other surveillance and SECURITY equipment. Technical specialists in wiring technology are required for the large numbers of homeowners requiring a basic alarm monitoring system. Increasingly IT specialists are necessary for the installation of additional features onto an existing IT network. Biometric fingerprint technology specialists are becoming more in demand as this form of technology becomes popular as a means of identification in access control. A supplier of this technology is Advanced Corporate SECURITY Systems which has amongst its clients Standard Bank, Eskom, SARS, SAPS, Denel and the SABC.

10 A company expanding into Africa is ERS Biometrics. They are supplying fingerprint identification access control and time and attendance systems to Nigerian telecommunications company, SB Telecoms. SB Telecoms clients include corporates, financial institutions, hospitals and most government departments. Due to industry convergence, companies that would have been classified as a supplier have partnered with SECURITY companies. An example of this is Vusela SECURITY and QuikTrak. 3 SIZE OF THE INDUSTRY According to PSIRA the private SECURITY industry is growing at approximately 18% per annum. SASA valued the sector at approximately R50bn per annum, but according to the National Sales and Marketing Manager for G4S, Daphne du Preez, this is closer to R55bn. The table below indicates the number of active SECURITY businesses registered in each province during 2010 and 2011. The increase of 1332 registered businesses clearly illustrates the 18% growth.