Limited PROGRAMME MEMORANDUM ON

Transcription

1 Limited PROGRAMME MEMORANDUM ON P R E F E R E N C E S H A R E P R O G R A M M E

2 Limited Disclaimer: This document is not an advertisement but is provided exclusively for information purposes and should not be regarded as an offer or solicitation to purchase, sell or otherwise deal with any other particular investment. While we have taken and will continue to take care that the information contained herein is true and correct, we do not guarantee the accuracy, timeliness or completeness of the information provided, and therefore disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable, directly or indirectly, to the use of or reliance upon the information. The document is protected by copyright and may not be copied, reproduced, sold or distributed without prior written consent. * Terms & Conditions apply B

3 CONTENTS CORPORATE INFORMATION 6 DOCUMENTS INCORPORATED BY REFERENCE 8 GENERAL DESCRIPTION OF THE PROGRAMME 9 SUMMARY OF THE PROGRAMME 10 TERMS AND CONDITIONS OF THE PREFERENCE SHARES 16 PROCEDURES FOR ACCEPTANCE 31 PRO-FORMA APPLICABLE PRICING SUPPLEMENT 35 DEFINITIONS AND INTERPRETATIONS 38 RISK FACTORS 47 USE OF PROCEEDS 53 DESCRIPTION OF THE ISSUER 54 CORPORATE GOVERNANCE 68 SETTLEMENT, CLEARING AND TRANSFERS 76 SOUTH AFRICAN TAXATION 78 EXCHANGE CONTROL 82 SUBSCRIPTION AND SALE 83 GENERAL INFORMATION 87 ANNEXURE 1 DIVIDENDS TAX DECLARATION AND EXEMPTION 91 1

4 Ecsponent Limited (Incorporated in the Republic of South Africa, under registration number 1998/013215/06 (the Issuer or Ecsponent ) Limited ZAR5,000,000,000 PROGRAMME MEMORANDUM ON PREFERENCE SHARE PROGRAMME Under this Preference Share Programme (the Programme ), Ecsponent may from time to time issue preference shares (the Preference Shares ) denominated in South African Rand, on the terms and conditions contained in the section of this Programme Memorandum headed Terms and Conditions of the Preference Shares. Capitalised terms used below are defined in the section of this Programme Memorandum headed Definitions and Interpretations. This Programme Memorandum will apply to Preference Shares issued under the Programme in an aggregate nominal amount which will not exceed ZAR5,000,000,000 unless such aggregate nominal amount is increased as set out in the section of this Programme Memorandum headed General Description of the Programme. This Programme Memorandum has been approved by the JSE. The Preference Shares may comprise fixed rate Preference Shares (Class A Preference Shares and/or Class G Preference Shares), zero rate Preference Shares (Class B Preference Shares) or variable rate Preference Shares (Class C Preference Shares). The Preference Shares will be issued in individual Tranches which, together with other Tranches, may form a Series of Preference Shares. Each Tranche of Preference Shares will be subject to the Terms and Conditions contained in this Programme Memorandum, provided that the Applicable Pricing Supplement relating to a Tranche of Preference Shares may specify other terms and conditions, which may replace, modify or supplement the Terms and Conditions. Details of a particular Tranche of Preference Shares, and the additional terms and conditions specific to that Tranche of Preference Shares, including, inter alia, and if applicable, the Issue Price, the Dividend Rate, the Redemption Amount and the Redemption Date, will be specified in the Applicable Pricing Supplement. Each Tranche of Preference Shares may be listed on the JSE or on such other or further exchange(s) as may be determined by the Issuer and subject to any Applicable Laws. With respect to a Tranche of Preference Shares listed on the JSE, the Applicable Pricing Supplement relating to that Tranche of Preference Shares will be delivered to the JSE and Strate before the Issue Date, and the Preference Shares in that Tranche may be traded by or through members of the JSE from the date specified in the Applicable Pricing Supplement. The trading of Preference Shares listed on the JSE will take place in accordance with the rules and operating procedures for the time being of the JSE. The settlement of trades on the JSE will take place in accordance with the electronic settlement procedures of the JSE and Strate. The settlement and redemption procedures for a Tranche of Preference Shares listed on another exchange, irrespective of whether that Tranche is listed on the JSE as well, will be specified in the Applicable Pricing Supplement. Preference Shares may be issued on a continuing basis and be placed by one or more Dealers appointed by the Issuer from time to time, which appointment may be for a specific issue or on an ongoing basis. Neither the Programme nor the Preference Shares are rated. 2

5 The Preference Shares will be obligations solely of the Issuer and are unsecured. The Preference Shares will not be obligations of, or the responsibility of, or guaranteed by any person other than the Issuer. No liability whatsoever in respect of any failure by the Issuer to pay any amount due under the Preference Shares will be accepted by any party other than the Issuer. Prospective purchasers of Preference Shares issued under the Programme should pay particular attention to the section of this Programme Memorandum headed Risk Factors. The price/yield and amount of a Tranche of Preference Shares to be issued under the Programme will be determined by the Issuer at the time of issue in accordance with prevailing market conditions With effect from the Programme Date, this Programme Memorandum is an update of the Programme Memorandum dated 8 September 2014 and therefore replaces the Programme Memorandum dated 8 September The Conditions of any Preference Shares issued before the Programme Date are not amended by any amendments to the Programme Memorandum. Further copies of the Programme Memorandum This Programme Memorandum can be obtained during normal office hours at the registered office of the Issuer and is available on the Issuer s website, as well as on the JSE s website, Corporate Advisor and JSE Debt Sponsor Questco (Pty) Ltd Auditors Programme Memorandum dated 15 December

6 IMPORTANT INFORMATION The definitions and interpretations commencing on page 30 of this Programme Memorandum apply to this section on Important Information. GENERAL This Programme Memorandum is to be read in conjunction with all documents which are deemed to be incorporated herein by reference. This Programme Memorandum shall be read and construed on the basis that such documents are incorporated into and form part of this Programme Memorandum. Refer to the section headed Documents Incorporated by Reference for a list of these documents. None of the Corporate Advisor and JSE Debt Sponsor, the Legal and Tax Advisor or any of their respective subsidiaries or holding companies or a subsidiary of their holding company (affiliates), other professional advisers named herein nor the JSE have separately verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility is accepted by the aforementioned parties as to the accuracy or completeness of the information contained in this Programme Memorandum or any other information provided by the Issuer and they do not accept any liability in relation to the information contained in this Programme Memorandum or any other information provided by the Issuer in connection with the Programme. No Person has been authorised by the Issuer to give any information or to make any representation not contained in or not consistent with this Programme Memorandum or any other document entered into in relation to the Programme or any other information supplied by the Issuer in connection with the Programme and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer or any of the other parties referred to in this document. Neither this Programme Memorandum nor any other information supplied in connection with the Programme is intended to provide a basis for any credit or other evaluation, or should be considered as a recommendation by the Issuer, the Corporate Advisor and JSE Debt Sponsor or the Legal and Tax Advisor or other professional advisers that any recipient of this Programme Memorandum or any other information supplied in connection with the Programme should subscribe for, or purchase, any Preference Shares. Each Person contemplating the subscription for, or purchase of, any Preference Shares should determine for itself the relevance of the information contained in this Programme Memorandum and should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness of the Issuer and its subscription for, or purchase of, Preference Shares should be based upon any such investigation as it deems necessary. Neither the delivery of this Programme Memorandum nor any Applicable Pricing Supplement, nor the offering, sale or delivery of any Preference Shares shall at any time imply that the information contained herein is correct at any time subsequent to the date hereof, or that any other financial statements or other information supplied in connection with the Programme is correct at any time subsequent to the date indicated in the document containing the same. The JSE Debt Sponsor, Legal Advisor and other professional advisers expressly do not undertake to review the financial condition or affairs of the Issuer during the life of the Programme. Investors should review, inter alia, the most recent financial statements of the Issuer when deciding whether or not to subscribe for, or purchase, any Preference Shares. 4

7 RESPONSIBILITY STATEMENT The Issuer certifies that to the best of its knowledge and belief there are no 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 as well as that the Programme Memorandum contains all information required by Applicable Law and the JSE Debt Listings Requirements. The Issuer accepts full responsibility for the accuracy of the information contained in the Programme Memorandum, except as otherwise stated therein. The listing of any Tranche of Preference Shares on the JSE or elsewhere is not to be taken as an indication of the merits of the Issuer or the Preference Shares. The JSE takes no responsibility for the contents of the Programme Memorandum (as amended or restated from time to time), or the annual report of the Issuer or the amendments to the annual report, makes no representation as to the accuracy or completeness of any of the foregoing documents and expressly disclaims any liability for any loss arising from or in reliance upon the whole or any part of the Programme Memorandum. The JSE expressly disclaims any liability for any loss arising from or in reliance upon the whole or any part of this Programme Memorandum or any Applicable Pricing Supplement or the annual financial report or any other information incorporated by reference into this Programme Memorandum (as amended or restated from time to time). OFFERS IN SOUTH AFRICA ONLY This Programme Memorandum has been prepared for the purposes of complying with the Companies Act and the Regulations published in terms thereof and the JSE Debt Listings Requirements and the information disclosed may not be the same as that which would have been disclosed if this Programme Memorandum had been prepared in accordance with the laws and regulations of any jurisdiction outside of South Africa. This Programme Memorandum has been issued in connection with the offering of the Preference Shares in South Africa. The distribution of this Programme Memorandum and the making of an offer for the Preference Shares may be restricted by law in certain jurisdictions. Persons into whose possession this Programme Memorandum comes must inform themselves about and observe any and all such restrictions. This Programme Memorandum does not constitute an offer of or invitation to subscribe for and/or purchase any such Shares or Preference Shares of the Company in any Affected Jurisdiction. No one has taken any action that would permit a public offering of Preference Shares to occur in an Affected Jurisdiction. Neither the Preferences Shares nor the Programme Memorandum have, nor will they be, registered under the US Securities Act, 1933 or with the regulatory authority of any state or jurisdiction of an Affected Jurisdiction and may not be offered, sold, pledged or otherwise transferred in an Affected Jurisdiction or to any national, resident or subject of an Affected Jurisdiction where any such offer, sale, pledge or transfer is prohibited. Neither this document nor any copy of it may be sent to or taken into an Affected Jurisdiction where the distribution of the prospectus is prohibited. 5

8 CORPORATE INFORMATION Registered address: Limited Acacia House Green Hill Village Office Park Cnr Botterklapper & Nentabos Streets The Willows, Pretoria East PO Box 39660, Garsfontein East, 0060 Date of incorporation of Ecsponent 09 July 1998 Place of incorporation of Ecsponent Johannesburg, South Africa Company secretary Timbavati Business Consultants Proprietary Limited (Registration number 2015/103289/07) Acacia House Green Hill Village Office Park Cnr of Nentabos and Botterklapper Street The Willows Pretoria East, 0181 (PO Box 39660, Garsfontein East, 0060) Debt Sponsor and Corporate Advisor Questco Proprietary Limited (Registration number 2002/005616/07) The Pivot Entrance D, 2nd Floor No. 1 Montecasino Boulevard Fourways, 2055 (PO Box 98956, Sloane Park,

9 Legal and Tax Advisors Webber Wentzel 10 Fricker Road, Illovo Boulevard Johannesburg, 2196 (PO Box 61771, Marshalltown 2107) Auditors Nexia SAB&T Chartered Accountants Inc. 119 Witch-Hazel Avenue, Highveld Technopark Centurion Pretoria (P.O. Box 10512, Centurion, 0046) Transfer Secretaries Link Market Services South Africa (Pty) Ltd (Registration Number: 2000/007239/07) 13th Floor Rennie House, 19 Ameshoff Street, Braamfontein, 2001 (PO Box 4844, Johannesburg 2000) Banker First National Bank 1 First Place Corner Simmonds and Pritchard Street Johannesburg, 2001 (P.O. Box 1153, Johannesburg, 2000) 7

10 DOCUMENTS INCORPORATED BY REFERENCE Words used in this section headed Documents Incorporated by Reference shall bear the same meanings as used in the section headed Definitions and Interpretations and as defined elsewhere in this Programme Memorandum, except to the extent that they are separately defined in this section or the context otherwise requires. The documents listed below are deemed to be incorporated in, and to form part of, this Programme Memorandum: i) the audited annual financial statements and annual report of the Issuer for the financial years ending 30 September 2012 and 31 December 2013 and 2014, together with such statements, reports and notes to be read with such financial statements, and in respect of the Preference Shares issued after the date of the Programme Memorandum, the financial statements and notes thereto in respect of further financial years, as and when such financial statements become available; ii) iii) iv) the unaudited interim financial statements of the Issuer, together with such statements, reports and notes to be read with such unaudited interim financial statements, for the period ended September 2012, June 2013, June 2014 and June 2015, and in respect of any issue of Preference Shares after the date of the Programme Memorandum, the unaudited interim financial statements, and notes thereto, in respect of further financial years, as and when such interim financial statements become available; all information pertaining to the Issuer which is relevant to the Preference Shares and which is electronically disseminated on the Stock Exchange News Service of the JSE ( SENS ) to SENS subscribers. each Applicable Pricing Supplement; v) any other supplement to this Programme Memorandum circulated by the Issuer from time to time; and vi) the Memorandum of Incorporation of the Issuer. This Programme Memorandum and the applicable documents referred to above are available for inspection, during normal office hours, at the registered office of the Issuer and are available on the Issuer s website, This Programme Memorandum is and, when they become available, the documents listed in paragraphs (iv) to (v) above will also be available for inspection on the JSE s website, Any statement contained in this Programme Memorandum or in any document which is incorporated by reference into this Programme Memorandum will be deemed to be modified or superseded for the purposes of this Programme Memorandum to the extent that a statement contained in any such subsequent document which is deemed to be incorporated by reference in this Programme Memorandum modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). The Issuer will publish a new Programme Memorandum or a further supplement to this Programme Memorandum, as the case may be, on the occasion of any subsequent issue of Preference Shares only where there has been: (a) (b) a material change in the condition (financial or otherwise) in respect of the Issuer which is not then reflected in this Programme Memorandum or any supplement to this Programme Memorandum; or any modification of the terms of the Programme which would make this Programme Memorandum inaccurate or misleading. Any such new Programme Memorandum or supplemented Programme Memorandum, as the case may be, will be deemed to have substituted the previous Programme Memorandum from the date of issue of the new Programme Memorandum or supplemented Programme Memorandum, as the case may be. 8

11 GENERAL DESCRIPTION OF THE PROGRAMME Words used in this section headed General Description of the Programme shall bear the same meanings as used in the section headed Definitions and Interpretations and as defined elsewhere in this Programme Memorandum, except to the extent that they are separately defined in this section or the context otherwise requires. The Issuer may from time to time issue multiple Tranches, Series and classes of Preference Shares under the Programme, pursuant to this Programme Memorandum, provided that the aggregate nominal amount of all of the Preference Shares issued under the Programme from time to time does not exceed the Programme Amount. A Series of Preference Shares may be listed on the Main Board of the JSE or on such other, or additional financial exchange(s) as may be determined by the Issuer, subject to Applicable Laws. Unlisted Preference Shares may also be issued under the Programme, but will not be regulated by the JSE. The Applicable Pricing Supplement will specify whether or not a Series of Preference Shares will be listed and, if so, on which financial exchange. If the Issuer issues a Series of unlisted Preference Shares or a Series of Preference Shares is listed on any financial exchange other than (or in addition to) the JSE, the Issuer will, by no later than the last Day of the month of issue of that Series of Preference Shares, inform the JSE in writing of the aggregate nominal amount and the Redemption Date (if any) of that Series of Preference Shares. This Programme Memorandum and any supplement will only be valid for the issue of Preference Shares in an aggregate nominal amount which, when added to the aggregate nominal amount then outstanding of all the Preference Shares previously or simultaneously issued under the Programme, does not exceed ZAR5,000,000,000. From time to time the Issuer may wish to increase the Programme Amount. Subject to the Applicable Procedures and all Applicable Laws, the Issuer may, without the consent of Preference Shareholders or any other shareholder, increase the Programme Amount by delivering a notice thereof to the Preference Shareholders in accordance with Condition 19 (Notices) of the Terms and Conditions, and to the Debt Sponsor, the JSE and Strate. Upon such notice being given to the Preference Shareholders and the conditions set out in this Programme Memorandum for the Issuer to exercise this right having been met, all references in this Programme Memorandum (and each agreement, deed or document relating to the Programme and/ or this Programme Memorandum) to the Programme Amount will be, and will be deemed to be, references to the increased Programme Amount set out in such notice. Neither the Programme nor the Preference Shares are rated. Any future rating of a Series of Preference Shares is not a recommendation to subscribe for, buy, sell or hold any Preference Shares, and may be subject to revision, suspension or withdrawal at any time by the rating agency. A summary of the Programme and the Terms and Conditions appears below. 9

12 SUMMARY OF THE PROGRAMME The following summary does not purport to be complete and is taken from, and is qualified in its entirety by, the remainder of this Programme Memorandum and, in relation to the Terms and Conditions of any particular Tranche of Preference Shares, the Applicable Pricing Supplement. Capitalised terms used in this summary shall have the same meaning as set out in the section headed Definitions and Interpretations. PARTIES Issuer Calculation Agent JSE Debt Sponsor CSD JSE Ecsponent Limited (registration number 1998/013215/06) (formerly John Daniel Holdings Limited), a public company duly registered and incorporated on 9 July 1998, under the laws of South Africa and listed on the VCM on the JSE, having its registered address at Acacia House, Green Hill Village Office Park, Cnr of Nentabos and Botterklapper Street, The Willows, Pretoria East. Ecsponent Questco Proprietary Limited (Registration number 2002/005616/07), a private company duly incorporated in accordance with the laws of RSA. Strate Proprietary Limited (registration number 1998/022242/06), a public company with limited liability incorporated in accordance with the company laws of South Africa and registered as a Central Securities Depository in terms of the Financial Markets Act or such additional, alternative or successor Central Securities Depository as may be agreed between the Issuer and the relevant Dealer(s). the JSE Limited (registration number 2005/022939/06), a licensed exchange in terms of the Financial Markets Act or any exchange which operates as a successor exchange to the JSE. GENERAL Authority The Issuer has obtained specific approval from its shareholders to issue Class A Preference Shares, Class B Preference Shares and Class C Preference Shares to public investors who are not related parties, limited to the Programme Amount, for an indefinite period. The Issuer is currently restricted from issuing Class G Preference Shares in excess of its general authority, as obtained at its last annual general meeting and subject to the JSE Listings Requirements, whereby it may issue securities convertible into Shares (see Condition 6 Convertibility in the event of failure to rectify a default event ), up to a limit of 15% of the Shares in issue at the time of the annual general meeting, being Shares or securities convertible into Shares. The Issuer may in the near future seek a specific approval from Shareholders whereby the Class G Preference Shares, as potentially convertible securities, may be issued up to the Programme Amount, as amended form time to time. Should this specific approval not be obtained, the Issuer will be restricted from issuing Class G Preference Shares in excess of its general authority, which is below the Programme Amount. Blocked Rand Blocked Rand may be used to subscribe for, or purchase, Preference Shares, subject to the Exchange Control Regulations. 10

13 GENERAL Clearing and Settlement Denomination Description of Programme Distribution Dividends Each Tranche of Preference Shares which is held in Strate will be issued, cleared and settled in accordance with the Applicable Procedures through the electronic settlement system of Strate. Strate acts as the approved electronic clearing house, and carries on the role of matching, clearing and facilitation of settlement of all transactions carried out on the JSE. Each Tranche of Preference Shares which is held in Strate will be cleared by Participants who will follow the electronic settlement procedures prescribed by the JSE and Strate as set out in the section of this Programme Memorandum headed Settlement, Clearing and Transfers. Preference Shares will be issued in such denominations as may be agreed by the Issuer and as indicated in the Applicable Pricing Supplement, save that the minimum denomination of each Preference Share will be such as may be allowed or required from time to time by the central bank or regulator or any laws or regulations applicable to the Preference Shares. Ecsponent Limited ZAR5,000,000,000 Preference Share Programme, dated 15 December Preference Shares may be distributed by way of offer to the public, private placement or any other means permitted under South African law as may be determined by the Issuer and as reflected in the Applicable Pricing Supplement. Preference Shares may or may not be entitled to cumulative dividends. Dividends (if any) may be calculated with reference to various interest rates, including a fixed rate or a variable rate. The method of calculating dividends will be specified in the Applicable Pricing Supplement. Dividend Period(s)/ Dividend Payment Date(s) Form of Preference Shares Governing Law Guarantee Issue and Transfer Taxes The Dividend Rate, Dividend Payment Date(s) and Dividend Period(s), if any will be specified in the Applicable Pricing Supplement. Preference Shares will be issued in dematerialised form, and will be held electronically in Strate. The holder of a Beneficial Interest may exchange such Beneficial Interest for a Preference Shares in certificated form represented by an Individual Certificate (see condition 2 Form and Denominations ). The Preference Shares will be governed by and construed in accordance with the laws of South Africa in force from time to time. The Preference Shares are not guaranteed or secured. As at the Programme Date, no securities transfer tax or any similar tax is payable in respect of the issue of Preference Shares, or in respect of the conversion of Preference Shares into Ordinary Shares in terms of Condition 6 (Conversion of Preference Shares). Subsequent transfer or redemption of the Preference Shares may trigger securities transfer tax (see section headed South African Taxation ). Any future transfer duties and/or taxes that may be introduced in respect of (or may be applicable to) the transfer of Preference Shares will be for the account of Preference Shareholders. Issue Price Preference Shares may be issued on a fully paid basis and at their nominal amount or at a discount or premium to their nominal amount as specified in the Applicable Pricing Supplement. 11

14 GENERAL Listing The initial registration of the Programme has been approved by the JSE on 8 September 2014, and the first update to the Programme has been approved on 15 December Preference Shares issued under the Programme may be listed on the Main Board of the JSE or on such other or additional financial exchange(s) as may be determined by the Issuer, subject to all Applicable Laws. Unlisted Preference Shares may also be issued under the Programme. Unlisted Preference Shares are not regulated by the JSE. The Applicable Pricing Supplement will specify whether or not a Tranche of Preference Shares will be listed and, if so, on which financial exchange(s). Maturities of Preference Shares Preference Shares Such maturity(ies) as specified in the Applicable Pricing Supplement. The Preference Shares are not subject to any minimum or maximum maturity. Preference Shares may comprise: Class A Fixed Rate Redeemable Preference Shares: Class A Preference Shares will be entitled to dividends calculated with reference to a fixed rate of 10% per annum, payable monthly in arrears on such date or dates as may be determined by the Issuer, as indicated in the Applicable Pricing Supplement, and on redemption will be calculated on the basis of such Day Count Fraction as may be determined by the Issuer. Class A Preference Shares will be redeemed (automatically) on the five year anniversary of the Initial Issue Date at an amount equal to 100% of the Initial Issue Price of a Class A Preference Share. Class B Zero Rate Redeemable Preference Shares: Class B Preference Shares are not entitled to dividends. Class B Preference Shares will be redeemed (automatically) on the five year anniversary of the Initial Issue Date at an amount equal to 170% of the Initial Issue Price of a Class B Preference Share, providing Preference Shareholders with an effective yield of 10.66% nominal, annual, compound monthly. Class C Variable Rate Redeemable Preference Shares: Class C Preference Shares will be entitled to dividends calculated with reference to a variable rate equal to the Prime Rate plus 4% per annum, payable monthly in arrears on such date or dates as may be determined by the Issuer, as indicated in the Applicable Pricing Supplement, and on redemption will be calculated on the basis of such Day Count Fraction as may be determined by the Issuer. Class C Preference Shares will be redeemed (automatically) on the five year anniversary of the Initial Issue Date at an amount equal to 100% of the Initial Issue Price of a Class C Preference Share. Class G Fixed Rate Redeemable Preference Shares: Class G Preference Shares will be entitled to dividends calculated with reference to a fixed rate of 11.2% per annum, payable monthly in arrears on such date or dates as may be determined by the Issuer, as indicated in the Applicable Pricing Supplement, and on redemption will be calculated on the basis of such Day Count Fraction as may be determined by the Issuer. Class G Preference Shares will be redeemed (automatically) on the five year anniversary of the Initial Issue Date at an amount equal to 100% of the Initial Issue Price of a Class G Preference Share. 12

15 GENERAL Preference Shareholders The holders of listed or unlisted issued Preference Shares (as recorded in the Register). Uncertificated form Participants or their nominees will be named in the Register as the Preference Shareholder of each Tranche of Preference Shares which is held in Strate, unless investors elect own-name registration. Certificated form Each holder of Preference Shares which is represented by an Individual Certificate will be named in the Register as the registered Preference Shareholder of such Preference Shares. Rating of Issuer and Preference Shares Redemption Selling Restrictions As at the Programme Date, neither the Issuer, nor the Programme, nor the Preference Shares are rated. After the Programme Date, the Programme may be rated by a rating agency on a national or international scale basis. A Tranche or a Series of Preference Shares may also, on or before the Issue Date, be rated by a rating Agency on a national or international scale basis. If applicable, the rating assigned to the Issuer and/or the Programme and/or the Preference Shares, as the case may be, as well as the rating agency(ies) which assigned such rating(s), will be specified in the Applicable Pricing Supplement. A Tranche of Preference Shares will, subject to the Applicable Pricing Supplement, be redeemed on the Redemption Date, as set out in Condition 5 (Redemption of Preference Shares). The distribution of this Programme Memorandum and/or any Applicable Pricing Supplement and any offering, or sale of, or subscription for a Tranche of Preference Shares may be restricted by law in certain jurisdictions. This Programme Memorandum is restricted by law in the United States of America, the United Kingdom, the European Economic Area and other jurisdictions (see section headed Subscription and Sale ). Any other or additional restrictions which are applicable to the placing of a Tranche of Preference Shares will be set out in the Applicable Pricing Supplement. Persons who come into possession of this Programme Memorandum and/or any Applicable Pricing Supplement must inform themselves about and observe all applicable selling restrictions. Size of the Programme Specified Currency As at the Programme Date, the Programme Amount is ZAR5,000,000,000. This Programme Memorandum will only apply to Preference Shares issued under the Programme in an aggregate nominal amount which does not exceed the Programme Amount. The Issuer may increase the Programme Amount in the manner set out in the section of this Programme Memorandum headed General Description of the Programme. The Programme Amount at the time of the issue of any Tranche of Preference Shares will be set out in the Applicable Pricing Supplement. All Preference Shares will be issued in South African Rand. 13

16 GENERAL Stabilisation In connection with the issue and distribution of any Tranche of Preference Shares under the Programme, the Dealer(s), if any, that are specified in the Applicable Pricing Supplement as the stabilising manager (or any person acting for the stabilising manager) may, if specified in that Applicable Pricing Supplement and only if such stabilising is permitted by the JSE Debt Listings Requirements and approved by the JSE, over-allot or effect transactions with a view to supporting the market price of the Preference Shares at a level higher than that which might otherwise prevail for a limited period. However, there will be no obligation on the stabilising manager (or any agent of the stabilising manager) to do this. Such stabilising, if commenced, may be discontinued at any time and must be brought to an end after a limited period. Such stabilising shall be in compliance with all Applicable Laws. Status and Characteristics The Preference Shares constitute direct, unconditional, unsecured and subordinated obligations of the Issuer. Subject to Applicable Law, in the event of the dissolution of the Issuer or if the Issuer is placed into liquidation or wound up or is subject to business rescue proceedings, then and in any such event the claims of the persons entitled to be paid amounts due in respect of the Preference Shares shall be subordinated to all other claims in respect of any other indebtedness of the Issuer except for Ordinary Shares of the Issuer, to the extent that, in any such event, and provided as aforesaid, no amount shall be eligible for setting-off or shall be payable to any or all of the persons entitled to be paid amounts due in respect of the Preference Shares in respect of the obligations of the Issuer thereunder until all other indebtedness of the Issuer which is admissible in any such dissolution, liquidation, winding-up or business rescue proceedings has been paid or discharged in full. Class A Preference Shares, Class B Preference Shares and Class C Preference Shares will rank pari passu among themselves and will rank at least pari passu with all other present and future unsecured preference shares issued by the Issuer. Class A Preference Shares, Class B Preference Shares and Class C Preference Shares will rank in priority to Class G Preference Shares and ordinary shares of the Issuer. Class G preference shares will rank in priority to ordinary shares of the Issuer. Taxation A summary of the applicable tax legislation in respect of the Preference Shares, as at the Programme Date, is set out in the section of this Programme Memorandum headed South African Taxation. The summary does not constitute tax advice. Potential investors in the Preference Shares should, before making an investment in the Preference Shares, consult their own professional advisers as to the potential tax consequences of, and their tax positions in respect of, an investment in the Preference Shares. 14

17 GENERAL Terms and Conditions Use of Proceeds Withholding Taxes The terms and conditions of the Preference Shares are set out in the section of this Programme Memorandum headed Terms and Conditions of the Preference Shares. The Applicable Pricing Supplements may specify other terms and conditions (which may replace, modify or supplement the Terms and Conditions) in relation to specific terms and conditions of the Preference Shares of any Tranche of Preference Shares issued. Any amendments to Preference Shares must be approved in the manner set out in Condition 19 (Variation in the rights and amendment of conditions). The Issuer will use the issue proceeds of the Preference Shares for its general corporate purposes and for reasons further detailed in the section headed Use of Proceeds, or as may otherwise be described in the Applicable Pricing Supplement. All payments (whether in respect of capital, dividends or otherwise) in respect of the Preference Shares will be made free and clear of and without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by, or on behalf of, South Africa or any political subdivision of, or any authority or agency in or of, South Africa having power to tax, unless (where applicable) the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. In that event, the Issuer shall make such payments after such withholding or deduction has been made (where applicable) and shall account to the relevant authorities for the amount so required to be withheld or deducted. The Issuer shall not be obliged to make any additional payments to Preference Shareholders in respect of such withholding or deduction 15

18 TERMS AND CONDITIONS OF THE PREFERENCE SHARES Words used in this section headed Terms and Conditions of the Preference Shares shall bear the same meanings as used in the section headed Definitions and Interpretations and as defined elsewhere in this Programme Memorandum, except to the extent that they are separately defined in this section or the context otherwise requires. Any reference in these Conditions to Strate shall, wherever the context permits, be deemed to include a reference to its successor in terms of the Financial Markets Act (or any successor Act thereto), and any additional or alternate depository approved by the Issuer and the JSE. Any reference in these Terms and Conditions to the JSE shall, wherever the context permits, be deemed to include any exchange which operates as a successor exchange to the JSE. 1. Issue 1.1 The Issuer may, from time to time (without the consent of any Preference Shareholder), issue multiple Tranches of Preference Shares pursuant to the Programme, provided that the aggregate outstanding nominal amount of all of the Preference Shares issued under the Programme from time to time does not exceed the Programme Amount. No minimum amount is applicable to the issue of the Preference Shares. 1.2 The Issuer has obtained specific approval from shareholders to issue Class A Preference Shares, Class B Preference Shares and Class C Preference Shares up to the Programme Amount for an indefinite period. 1.3 It should be noted that the Issuer is currently restricted from issuing Class G Preference Shares in excess of its general authority, as obtained at its last annual general meeting and subject to the JSE Listings Requirements, whereby it may issue securities convertible into Shares (see Condition 6 Convertibility in the event of failure to rectify a default event ), up to a limit of 15% of the Shares in issue at the time of the annual general meeting, being Shares or securities convertible into Shares. 1.4 No preference shares will be issued to related parties. 1.5 The Issuer may in the near future seek a specific approval from Shareholders whereby the Class G Preference Shares, as potentially convertible securities, may be issued up to the Programme Amount, as amended form time to time. 1.6 Should this specific approval not be obtained, the Issuer will be restricted from issuing Class G Preference Shares in excess of its general authority, which is below the Programme Amount. 1.7 Subject to the approvals above, the total preference shares issued, listed and unlisted, is limited only by the authorised share capital of the Issuer. 1.8 Preference Shares will be issued in individual Tranches which, together with other Tranches, may form a Series of Preference Shares. A Tranche of Preference Shares will be issued on, and subject to, the applicable Terms and Conditions of a Tranche of Preference Shares which are the Terms and Conditions, as replaced, amended and/or supplemented by the terms and conditions of that Tranche of Preference Shares set out in the Applicable Pricing Supplement relating to that Tranche of Preference Shares. 1.9 The applicable Terms and Conditions of a Tranche of Preference Shares are incorporated by reference into the Individual Certificate(s) (if any) representing the Preference Shares in that Tranche. The Applicable Pricing Supplement relating to a Tranche of Preference Shares issued in certificated form will be attached to the Individual Certificate(s) representing the Preference Shares in that Tranche. 16

19 2. Form and Denominations 2.1 General A Tranche of Preference Shares may be issued in the form of listed or unlisted Preference Shares, as specified in the Applicable Pricing Supplement Each Preference Share may be a variable rate Preference Share, a fixed rate Preference Share or a zero rate Preference Share, and/or such combination of any of the foregoing or such other type of Preference Share as permitted from time to time in terms of the MOI and as may be determined by the Issuer and specified in an Applicable Pricing Supplement. 2.2 Denominations Preference Shares will be issued subject to a minimum subscription amount of ZAR per applicant, or otherwise for such minimum subscription amounts as may be determined by the Issuer and as specified in the Applicable Pricing Supplement. 2.3 Main Board A Tranche of Preference Shares may be listed on the Main Board of the JSE but subject to the Debt Listings Requirements or on such other or further exchange(s) as may be determined by the Issuer, subject to any Applicable Laws and Applicable Procedures. 2.4 Form of Preference Shares Each Tranche of Preference Shares which is listed will be issued in dematerialised form (uncertificated), and will be held in Strate, in terms of section 33 of the Financial Markets Act. Preference Shares issued in dematerialised form will not be represented by any certificate or written instrument. Investors who subscribe for Preference Shares in dematerialised form will become the holders of Beneficial Interests Beneficial Interests in Preference Shares held in Strate Strate will hold Preference Shares subject to the Financial Markets Act and the Applicable Procedures All amounts to be paid and all rights to be exercised in respect of dematerialised Preference Shares held in Strate will be paid to and may be exercised only by the Participants or their nominees, on half of the holders of Beneficial Interests A holder of a Beneficial Interest may exchange such Beneficial Interest for a certificated Preference Share, represented by an Individual Certificate, in accordance with Condition 15 (Exchange of Beneficial Interests and Replacement of Individual Certificates) Preference Shares not listed may be issued in certificated or dematerialised form. 17

20 3. Title 3.1 Preference Shares issued in certificated form Each holder of Preference Shares represented by an Individual Certificate will be named in the Register as the registered holder of such Preference Shares Title to Preference Shares represented by an Individual Certificate will pass upon registration of transfer in the Register in accordance with Condition 19 (Transfer of Preference Shares) The Issuer, the Transfer Secretaries and the Paying Agent shall recognise a Preference Shareholder as the sole and absolute owner of the Preference Shares registered in that Preference Shareholder s name in the Register (notwithstanding any notice of ownership or writing thereon or notice of any previous loss or theft thereof) and shall not be bound to enter any trust in the Register or to take notice of or to accede to the execution of any trust, express, implied or constructive, to which any Preference Share may be subject. 3.2 Preference Shares issued in dematerialised form Participants, or their nominees, will be named in the Register as the registered holder of a Preference Share which is issued in dematerialised form, unless investors have elected own-name registration Strate maintains central securities accounts only for Participants. Beneficial Interests which are held by Participants, on behalf of their clients, will be held directly through Strate, and Strate will hold such Beneficial Interests, on behalf of such Participants, through the central securities accounts maintained by Strate for such Participants The Participants are in turn required to maintain securities accounts for their clients. Beneficial Interests which are held by clients of Participants will be held indirectly through such Participants, and such Participants will hold such Beneficial Interests, on behalf of such clients, through the securities accounts maintained by such Participants for such clients. The clients of Participants may include the holders of Beneficial Interests or their custodians. The clients of Participants, as the holders of Beneficial Interests or as custodians for such holders, may exercise their rights in respect of the Preference Shares held by them in Strate only through their Participants In relation to each person shown in the records of Strate or the relevant Participant, as the case may be, as the holder of a Beneficial Interest, a certificate or other document issued by Strate or the relevant Participant, as the case may be, as to the aggregate nominal amount of such Preference Shares standing to the account of such person shall be prima facie proof of such Beneficial Interest. Participants, or their nominees, will be treated by the Issuer, the Paying Agent, and the Transfer Secretaries as the holder of that aggregate nominal amount of such Preference Shares for all purposes Beneficial Interests may be transferred only in accordance with the Applicable Procedures Any reference in the Terms and Conditions to the relevant Participant shall, in respect of a Beneficial Interest, be a reference to the Participant appointed to act as such by the holder of such Beneficial Interest. 18

21 4. Status of Preference Shares 4.1 Subject to Applicable Law, in the event of the Issuer commencing business rescue proceedings (whether voluntarily or otherwise) or in the event of the dissolution of the Issuer or if the Issuer is placed into liquidation or wound-up the claims of the persons entitled to payment of amounts due in respect of the Preference Shares, shall be subordinated to all other claims in respect of any other indebtedness of the Issuer to the extent that, in any such event, and provided as aforesaid, no amount shall be eligible for setting-off or shall be payable to any or all of the persons entitled to payment of amounts due in respect of the Preference Shares in respect of the obligations of the Issuer thereunder until all other indebtedness of the Issuer which is admissible in any such business rescue, dissolution, insolvency or winding-up (other than Subordinated Indebtedness) has been paid or discharged in full. 4.2 Class A Preference Shares, Class B Preference Shares and Class C Preference Shares rank pari passu, but in priority to Class G Preference Shares and Ordinary Shares with regards to capital and dividend payments. 4.3 Class G Preference Shares rank in priority to Ordinary Shares with regards to capital and dividend payments. 4.4 Ecsponent currently has no other senior debt and has no other debt securities listed. 4.5 No covenants apply to Ecsponent in terms of issuing these Preference Shares. 5. Redemption of Preference Shares 5.1 All classes of Preference Shares are automatically redeemable by the Issuer on the fifth anniversary of the Initial Issue Date, at a price equal to: % of the Initial Issue Price for Class A Preference Shares % of the Initial Issue Price for Class B Preference Shares % of the Initial Issue Price for Class C Preference Shares % of the Initial Issue Price for Class G Preference Shares 5.2 Should the Redemption Amount remain outstanding for a period of three months, the conversion provisions of Preference Shares in Condition 6 ( Convertibility in the event of failure to rectify a default event ) below will come into effect. 5.3 The redemption of Preference Shares shall take place in accordance with the Applicable Procedures and the Financial Markets Act. 5.4 Redemption Amounts will be payable on the Redemption Payment Date to all Preference Shareholders named in the Register on the Redemption Record Date. The last day on which Preference Shares can be traded before redemption will be Redemption Last Day to Trade. Preference Shares due for redemption will be suspended from trading on the JSE from Redemption Suspension Date and will be finally delisted on Listing Termination Date, and thereafter cancelled. 5.5 Finalisation information regarding Redemption amounts will be published on SENS on the Redemption Finalisation Date. 19

22 6. Convertibility in the event of failure to rectify a default event 6.1 If the Issuer fails to rectify a default event in respect of a class of Preference Shares within 3 (three) months of the event of default, a default event being: non-payment of the Redemption Amount on the Redemption Payment Date; or non-payment of 3 (three) consecutive Dividend Amounts on Class A Preference Shares, Class C Preference Shares or Class G Preference Shares, the Preference Shares of that class shall become convertible into ordinary Shares 6.2 Save in the event of non-rectification of a default event as set out above, the Preference Shares are not convertible. 6.3 Upon date of conversion all outstanding Preference Shares, stated capital, premium and any Dividend Amounts still outstanding to the Preference Shareholders shall convert into ordinary Shares. 6.4 The conversion rate into ordinary Shares shall be calculated at the fair and reasonable price of the ordinary Shares as determined by the weighted average closing price of the Company, calculated over the last twenty days of trading on the JSE prior to the first day of default. 6.5 In the event that the calculation set out in this clause 5 gives rise to a fraction of an ordinary Share becoming due to a shareholder, the number of ordinary Shares arising shall be rounded up or down to the nearest whole number in compliance with the JSE s rounding convention. 7. Cancellation All Preference Shares which are redeemed in full will forthwith be cancelled. All Preference Shares so cancelled and the Preference Shares purchased and cancelled pursuant to Condition 9 (Purchases), shall be held by the Issuer and cannot be re-issued or resold. The Issuer shall notify Strate and the JSE of any cancellation of the Preference Shares so that such entities can record the reduction in the aggregate nominal amount of the Preference Shares in issue. 8. Notice of payments The Issuer shall, publish notification on SENS for as long as the Preference Shares are listed and if not listed, notify Preference Shareholders, Strate and the JSE, and Preference Shareholders registered as such on each Dividend Record Date / Redemption Record Date of the Dividend Amount / Redemption Amount payable on the following Dividend Payment Date / Redemption Payment Date. 9. Purchases The Issuer may, from time to time, repurchase Preference Shares, subject to the JSE Listings Requirements and the Act. Such Preference Shares shall be cancelled and will thereafter not have any voting or other rights. 20