THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTIONThe definitions and interpretations commencing on page 6 of this Circular apply throughout this Circular including this cover page.Action required by CAPPREC ShareholdersThis Circular is important and should be read with particular attention to the “Action Required by CAPPREC Shareholders” section of this Circular, which sets out the action required of CAPPREC Shareholders with regard to this Circular. If you are in any doubt as to the action you should take, please consult your Broker, CSDP, banker, attorney, accountant or other professional adviser immediately.If you have disposed of all your CAPPREC Shares, then this Circular should be forwarded to the purchaser to whom, or Broker, CSDP or other agent through whom you disposed of your CAPPREC Shares.CAPPREC does not accept any responsibility and will not be held liable for any failure on the part of the Broker or CSDP of any holder of Dematerialised Shares to notify such CAPPREC Shareholder of this Circular and/or the General Meeting.

CAPITAL APPRECIATION LIMITED(Incorporated in South Africa)

(Registration number 2014/253277/06)JSE ordinary share code: CTA

ISIN: ZAE000208245(“CAPPREC” or the “Company”)

CIRCULAR TO CAPPREC SHAREHOLDERS

regarding:• the approval of the implementation of the Proposed AR-DP Transaction as a Category 1 transaction and the acquisition

of a Viable Asset in terms of the Listings Requirements for purposes of a listing on the Main Board, including, for avoidance of doubt, the allotment and issue of the Consideration Shares, the Restraint Shares and the granting of the Warrants, in connection therewith;

• the approval of the implementation of the Proposed SST Transaction as a Category 1 transaction and the acquisition of a Viable Asset in terms of the Listings Requirements, including, for avoidance of doubt, the allotment and issue of the SST Consideration Shares, in connection therewith;

• the granting of authority to provide financial assistance in terms of section 45 of the Companies Act;• the granting of a general authority to issue Shares for cash in terms of the Listings Requirements;• the granting of authority to amend the Share Plan in terms of schedule 14 to the Listings Requirements;• approving the proposed use and retention of the Residual Capital as envisaged in this Circular in terms of paragraph

4.35(c) of the Listings Requirements; and• the creation of vacancies on the Board,

and incorporating• the Revised Listing Particulars;• the Notice of General Meeting; and• a form of proxy in respect of the General Meeting for use by Certificated Shareholders and Dematerialised Shareholders

with own-name registration only.

Sponsor to CAPPREC Legal counsel to CAPPREC Independent reporting accountant

and auditors to CAPPREC

Legal counsel to African Resonance and Dashpay

Independent reporting accountant and auditors to African Resonance

and DashpayIndependent reporting accountant

to Dashpay

Transfer Secretaries Legal counsel to SynthesisIndependent reporting accountant and

auditors to Synthesis

Date of issue: 31 March 2017This Circular is available in English only. Copies may be obtained during normal business hours from the offices of the Company, Investec Bank Limited and the Transfer Secretaries, whose addresses are set out in the ‘Corporate information and advisers’ section of this Circular. This Circular will be  available from 31 March 2017 until 5 May 2017, both days inclusive. This Circular will also be available in electronic form on the Company’s website (www.capitalappreciation.co.za) from 31 March 2017.

CERTAIN FORWARD-LOOKING STATEMENTS

This Circular contains statements about CAPPREC that are or may be forward-looking statements. All statements, other than statements of historical facts, are, or may be deemed to be, forward looking statements, including, without limitation, those concerning: strategy; the economic outlook and prospects for the payment systems, fin-tech and or financial industry; cash costs, revenues and other operating results; growth prospects and outlook for operations and future opportunities and pipelines, individually or in the aggregate; liquidity and capital resources and expenditure, the future regulatory environment expected to apply at the market and the effects of the Proposed Transactions on the CAPPREC Group and the expected timing of the Completion/s. These forward-looking statements are not based on historical facts, but rather reflect current expectations concerning future results and events and generally may be identified by the use of forward-looking words or phrases such as “believe”, “aim”, “expect”, “anticipate”, “intend”, “envisage”, “view”, “foresee”, “forecast”, “likely”, “should”, “planned”, “may”, “estimated”, “predict”, “project”, “potential” or similar words and phrases.

Examples of forward-looking statements include statements regarding a future financial position or future profits, cash flows, corporate strategy, prospects, opportunities, market and/or industry projections, estimates of capital expenditures, acquisition strategy or future capital expenditure levels and other economic factors, such as, inter alia, growth, interest or exchange rates.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. CAPPREC cautions that forward-looking statements are not guarantees of future performance. Actual results, financial and operating conditions, liquidity and the developments within the industry in which CAPPREC operates (including as a result of a change to the regulatory environment, technology developments, competition in the industry and/or change in the political landscape) may differ materially from those made in, or suggested by, the forward-looking statements contained in this Circular.

All these forward-looking statements are based on estimates and assumptions, all of which estimates and assumptions, although CAPPREC may believe them to be reasonable, are inherently uncertain. Such estimates, assumptions or statements may not eventuate. Many factors (including factors not yet known to CAPPREC, or not currently considered material), could cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in those estimates, statements or assumptions.

CAPPREC Shareholders should keep in mind that any forward-looking statement made in this Circular or elsewhere is applicable only at the date on which such forward-looking statement is made. New factors that could cause the business of the CAPPREC Group or other matters to which such forward-looking statements relate, not to develop as expected may emerge from time to time and it is not possible to predict all of them. Further, the extent to which any factor or combination of factors may cause actual results, performance or achievements to differ materially from those contained in any forward-looking statement are not known. CAPPREC has no duty to, and does not intend to, update or revise the forward-looking statements contained in this Circular after the date of this Circular (whether as a result of new information, future events, developments or otherwise), except as may be required by applicable law.

1

CORPORATE INFORMATION AND ADVISERS

The definitions and interpretations commencing on page 6 of this Circular apply throughout this Circular including this ‘Corporate information and advisers’ section.

Registered office and business address of CAPPREC Company secretary4th Floor, One Vdara Horwath Leveton Boner41 Rivonia Road (Independent auditor registration number 93787)Sandhurst, 2196 3 Sandown Valley CrescentSouth Africa Sandown, 2196

South Africa

Legal counsel to CAPPREC Legal counsel to African Resonance and DashpayWebber Wentzel Hogan Lovells (South Africa) Inc.90 Rivonia Road 22 Fredman DriveSandton, 2196 Sandton, 2196South Africa South Africa(PO Box 61771, Marshalltown, 2107, South Africa) (PO Box 78333, Sandton, 2146, South Africa)

Legal counsel to Synthesis SponsorWerksmans Inc. Investec Bank Limited155 5th Street (Registration number 1969/004763/06)Sandton, 2196 100 Grayston DriveSouth Africa Sandton, 2196(Private Bag 10015, Sandton, 2146, South Africa) South Africa

(PO Box 785700, Sandton, 2146, South Africa)

Independent reporting accountant and auditors to CAPPREC

Independent reporting accountant and auditors to African Resonance and Dashpay

Ernst & Young Incorporated Grant Thornton(Registration number 2005/002308/21) (Practice number 903485)102 Rivonia Road Wanderers Office ParkSandton, 2196 52 Corlett DriveSouth Africa Johannesburg, 2196(Private Bag X14, Sandton, 2146, South Africa) South Africa

Independent reporting accountant to DashpayIndependent reporting accountant and auditors to Synthesis

KPMG Inc. BDO South Africa Incorporated(Registration number: 1999/021543/21) (Registration number 1995/002310/21)85 Empire Road 22 Wellington RoadParktown, 2193 ParktownSouth Africa Johannesburg, 2193(Private Bag 9, Parkview, 2122) South Africa

(Private Bag X60500, Houghton, 2041, South Africa)

Transfer SecretariesComputershare Investor Services Proprietary Limited(Registration number 2004/003647/07)Rosebank Towers15 Biermann AveRosebankJohannesburg, 2196South Africa(PO Box 61051, Marshalltown, 2107, South Africa)

Corporate Banker Corporate BankerAbsa Bank Limited Investec Bank Limited(Registration number 1986/004794/06) (Registration number 1969/004763/06)7th Floor, Barclays Towers West, 100 Grayston Drive15 Troye Street Sandton, 2196Johannesburg, 2001 South AfricaSouth Africa (PO Box 785700, Sandton, 2146, South Africa)(PO Box 7735, Johannesburg, 2000, South Africa)

Date of incorporation of CAPPREC: 3 December 2014 Place of incorporation of CAPPREC: South Africa

2

TABLE OF CONTENTS

Page

CORPORATE INFORMATION AND ADVISERS 1

ACTION REQUIRED BY CAPPREC SHAREHOLDERS 4

SALIENT DATES AND TIMES 5

DEFINITIONS AND INTERPRETATIONS 6

CIRCULAR TO SHAREHOLDERS

1. INTRODUCTION AND PURPOSE OF THIS CIRCULAR 15

2. ACQUISITION OF VIABLE ASSETS 16

3. AFRICAN RESONANCE AND DASHPAY (COMPRISING THE AR-DP TRANSACTION) 18

4. SYNTHESIS (SUBJECT OF THE SST TRANSACTION) 27

5. EXPANSION OPPORTUNITIES ACROSS AFRICA 28

6. RATIONALE FOR THE PROPOSED TRANSACTIONS 28

7. ACQUISITION OF AFRICAN RESONANCE 28

8. ACQUISITION OF RINWELL 30

9. ACQUISITION OF SYNTHESIS 31

10. VOTING ON THE PROPOSED TRANSACTIONS AT THE GENERAL MEETING 33

11. UNDERTAKINGS TO VOTE AT GENERAL MEETING 33

12. PROSPECTS 34

13. ADDITIONAL RESOLUTIONS 34

14. SHARE CAPITAL OF CAPPREC 34

15. FINANCIAL INFORMATION 34

16. GENERAL MEETING 36

17. ELECTRONIC PARTICIPATION IN THE GENERAL MEETING 36

18. DIRECTORS 36

19. OTHER MATERIAL MATTERS 36

20. WORKING CAPITAL STATEMENT 37

21. LITIGATION STATEMENT 37

22. EXPENSES 37

23. DIRECTORS’ RECOMMENDATION 37

24. ADVISERS’ CONSENTS 37

25. DIRECTORS’ RESPONSIBILITY STATEMENT 37

26. DOCUMENTS AVAILABLE FOR INSPECTION 38

27. EXCHANGE CONTROL APPROVAL 38

ANNEXURES

Annexure 1 Pro forma financial information of CAPPREC 39

Annexure 2 Independent Reporting Accountants’ Report on the compilation of the pro forma financial information of the CAPPREC group 45

Annexure 3 Interim Financial Information of CAPPREC 47

Annexure 4 Independent Reporting Accountants’ Report on the interim financial information of CAPPREC 53

Annexure 5 Historical Financial Information of African Resonance 55

3

Page

Annexure 6 Independent Reporting Accountants’ Report on the historical financial information of African Resonance 89

Annexure 7 Interim Financial Information of African Resonance 91

Annexure 8 Independent Reporting Accountants’ Report on the interim financial information of African Resonance 114

Annexure 9 Historical Financial Information of Rinwell for the seven month period ended 30 June 2016 115

Annexure 10 Independent Reporting Accountants’ Report on the historical financial information of Rinwell for the seven month period ended 30 June 2016 130

Annexure 11 Interim Financial Information of Rinwell 132

Annexure 12 Independent Reporting Accountants’ Report on the Interim Financial Information of Rinwell 133

Annexure 13 Historical Financial Information of Dashpay for the years ended 30 June 2016 and 30 June 2015 134

Annexure 14 Independent Reporting Accountants’ Report on the historical financial information of Dashpay for the years ended 30 June 2016 and 30 June 2015 153

Annexure 15 Report of Historical Financial Information of Dashpay for the year ended 30 June 2014 155

Annexure 16 Independent Reporting Accountants’ Report on the historical financial information of Dashpay for the year ended 30 June 2014 170

Annexure 17 Historical Financial Information of Synthesis 172

Annexure 18 Independent Reporting Accountants’ Report on the historical financial information of Synthesis 188

Annexure 19 Interim Financial Information of Synthesis 190

Annexure 20 Independent Reporting Accountants’ Report on the interim financial information of Synthesis 209

Annexure 21 Revised Listing Particulars 211

APPENDIXES TO ANNEXURE 21

Appendix 1 Other directorships 241

Appendix 2 Details of material contracts entered into by CAPPREC 244

Appendix 3 Details of material contracts entered into by African Resonance 246

Appendix 4 Details of material contracts entered into by Rinwell and its wholly-owned subsidiary Dashpay 247

Appendix 5 Details of material contracts entered into by Synthesis 248

Appendix 6 Extracts from the Memorandum of Incorporation of CAPPREC 249

Appendix 7 Extracts from the memorandum of incorporation of African Resonance 253

Appendix 8 Extracts from the memorandum of incorporation of Synthesis 254

Appendix 9 Ordinary Share trading history of CAPPREC 257

NOTICE OF GENERAL MEETING 258

FORM OF PROXY Attached

4

ACTION REQUIRED BY CAPPREC SHAREHOLDERS

The definitions and interpretations commencing on page 6 of this Circular apply throughout this Circular including this “Action required by CAPPREC Shareholders” section.

Please take careful note of the following provisions regarding the action required by CAPPREC Shareholders.

If you have disposed of your CAPPREC Shares (in whole or in part), please forward this Circular to the purchaser of such CAPPREC Shares or to the Broker, CSDP, banker or other agent through which such disposal was effected.

If you are in any doubt as to what action you should take, please consult your Broker, CSDP, accountant, banker, attorney, accountant or other professional adviser immediately.

You should carefully read through this Circular and decide how you wish to vote on the resolutions to be proposed at the General Meeting.

GENERAL MEETING

Notice of General Meeting

CAPPREC Shareholders are invited to attend the General Meeting, convened in terms of the Notice of General Meeting (which is annexed to and forms part of this Circular), to be held at the offices of CAPPREC on the 4th Floor, One Vdara, 41 Rivonia Road, Sandhurst, 2196 at 10:00 on Friday, 5 May 2017 in order to consider, and if deemed fit, approve and adopt the resolutions set out in the Notice of General Meeting forming part of this Circular.

If you hold Dematerialised Shares:

“Own-name” registration

You are entitled to attend, or be represented by proxy, and may vote at the General Meeting. If you are unable to attend the General Meeting, but wish to be represented thereat, you must complete and return the attached form of proxy, in accordance with the instructions contained therein, to be received by the Transfer Secretaries, Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Ave, Rosebank, Johannesburg, 2196, South Africa (PO Box 61051, Marshalltown, 2107, South Africa) by no later than 10:00 on Wednesday, 3 May 2017.

Other than “own-name” registration

If your CSDP or Broker does not contact you, you are advised to contact your CSDP or Broker and provide them with your voting instructions. If your CSDP or Broker does not obtain instructions from you, they will be obliged to vote in accordance with the instructions contained in the custody agreement concluded between you and your CSDP or Broker. You must not complete the attached form of proxy. In accordance with the custody agreement between you and your CSDP or Broker you must advise your CSDP or Broker timeously if you wish to attend, or be represented at the General Meeting. Your CSDP or Broker will be required to issue the necessary Letter of Representation to you to enable you to attend, or to be represented at, the General Meeting.

If you hold Certificated Shares

You are entitled to attend, or be represented by proxy, and may vote at the General Meeting. If you are unable to attend the General Meeting, but wish to be represented thereat, you must complete and return the attached form of proxy, in accordance with the instructions contained therein, to be received by the Transfer Secretaries, Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Ave, Rosebank, Johannesburg, 2196, South Africa (PO Box 61051, Marshalltown, 2107, South Africa) by no later than 10:00 on Wednesday, 3 May 2017.

5

SALIENT DATES AND TIMES

The definitions and interpretations commencing on page 6 of this Circular apply throughout this Circular including the following salient dates and times:

Key action

Posting Record Date to be eligible to receive the Circular Friday, 24 March 2017

Posting of Circular to CAPPREC Shareholders Friday, 31 March 2017

Last Day to Trade to participate in and vote at the General Meeting Monday, 24 April 2017

Voting Record Date to participate in and vote at the General Meeting Friday, 28 April 2017

Last day to lodge forms of proxy in respect of the General Meeting by 10:00 Wednesday, 3 May 2017

General Meeting to be held at 10:00 Friday, 5 May 2017

Results of General Meeting released on SENS Friday, 5 May 2017

Result of General Meeting published in the South African Press Monday, 8 May 2017

Notes:

1. The above dates and times are subject to amendment. Any such material amendment will be released on SENS and published in the South African Press.

2. All times quoted in this Circular are local times in South Africa on a 24-hour basis, unless specified otherwise.

3. No orders to dematerialise or rematerialise Shares will be processed from the Business Day following the Last Day to Trade up to and including the Voting Record Date, but such orders will again be processed from the first Business Day after the Voting Record Date.

4. The Certificated Register will be closed between the Last Day to Trade and the Voting Record Date.

5. CAPPREC Shareholders should note that, as transactions in securities (and thus CAPPREC Shares) are settled in the electronic settlement system operated by Strate, settlement of trade takes place three Business Days after such trade. Therefore, persons who acquire CAPPREC Shares after the Last Date to Trade as detailed in the table referred to above shall not be able to participate and vote at in the General Meeting.

6. If the General Meeting is adjourned or postponed, forms of proxy submitted for the General Meeting will remain valid in respect of any adjournment or postponement of the General Meeting unless the contrary is stated on such form of proxy.

6

DEFINITIONS AND INTERPRETATIONS

In this Circular, unless the context indicates otherwise, references to the singular shall include the plural and vice versa; words denoting one gender include the others; words and expressions denoting natural persons include legal persons and associations of persons; and the following words and expressions have the meanings assigned to them below:

“ Additional Committed Investors”

African Rainbow Capital Proprietary Limited and the Student Support Programme as part of the Capital Appreciation 67 Scheme;

“African Resonance” or “AR” African Resonance Business Solutions Proprietary Limited, registration number 1998/016632/07, a company incorporated in accordance with the laws of South Africa;

“African Resonance Board” or “ African Resonance Directors”

the board of directors of African Resonance;

“ African Resonance Shareholders”

Hanoch Neishlos, Wayne Fagan, Edmund Pieterse and Safika;

“Alan Salomon” Alan Charles Salomon, a South African adult male with identity number 490107 5101 084;

“AR Acquisition” the acquisition by CAPPREC of the AR Shares for the AR Consideration pursuant to the AR Agreement;

“AR Agreement” the sale of shares agreement entered into by CAPPREC and the African Resonance Shareholders in terms of which CAPPREC shall purchase the AR Shares, dated 16 February 2017;

“AR Conditions Precedent” the conditions precedent to which the AR Agreement is subject, a summary of which is set out in paragraph 7.3 of this Circular;

“AR Consideration” the aggregate purchase consideration payable by CAPPREC for the AR Shares in terms of the AR Agreement, comprising an aggregate cash payment of R295 000 000 and the allotment and issue of the AR Consideration Shares;

“AR Consideration Shares” 230 000 000 Ordinary Shares in aggregate;

“AR Shares” 100% of the issued shares of African Resonance;

“AUD” Australian Dollar, the lawful currency of Australia;

“B-BBEE” broad-based black economic empowerment as contemplated in the B-BBEE Act;

“B-BBEE Act” the Broad-Based Black Economic Empowerment Act, No 53 of 2003 and any regulations and codes of good practice published thereunder;

“BDO” BDO South Africa Incorporated, registration number 1995/002310/21, registered auditors, a firm of chartered accountants (CA) and the independent reporting accountant to Synthesis;

“Board” the board of directors of CAPPREC;

“Bradley Sacks” Bradley Jonathan Sacks, an adult male with United States passport number 452079037;

“Broker” any person registered as a broking member in equities in terms of the rules of the JSE in accordance with the provisions of the Financial Markets Act;

“BSP” beneficiary service provider;

“Business Day” any day other than a Saturday, Sunday or official public holiday in South Africa;

“CAET” The Capital Appreciation Empowerment Trust, Master’s reference number IT2296/2015(G), a trust established in accordance with the laws of South Africa;

7

“CAPPREC Director” or “Director”

a director of CAPPREC. Details of the current Directors are set out in paragraph 4.1.1 of the Revised Listing Particulars;

“CAPPREC group” CAPPREC and its subsidiaries from time to time. As of the Last Practicable Date, CAPPREC did not have any subsidiaries;

“CAPPREC Shareholder” a holder of a CAPPREC Share;

“CAPPREC Shares” or “Shares” the Constituent Shares and the Ordinary Shares;

“CAPPREC” or the “Company” Capital Appreciation Limited, registration number 2014/253277/06, a company incorporated in accordance with the laws of South Africa;

“Castledash” Castledash Investment Holdings Limited, registration number HE 353446 and organisation number 501206, a company incorporated in accordance with the laws of the Republic of Cyprus, the entire issued share capital of which is owned by Eitan Neishlos;

“Certificated Shareholders” CAPPREC Shareholders who hold Certificated Shares;

“Certificated Shares” CAPPREC Shares which have not been dematerialised, title to which is represented by a share certificate or other Documents of Title;

“CIPC” the Companies and Intellectual Property Commission, established in terms of the Companies Act;

“Circular” this document, dated Friday, 31 March 2017, including the annexures and appendixes, the Revised Listing Particulars, the Notice of General Meeting and form of proxy;

“Common Monetary Area” South Africa, the Republic of Namibia and the Kingdoms of Lesotho and Swaziland;

“Companies Act” the South African Companies Act No. 71 of 2008, as amended or superseded from time to time;

“Completed” with reference to the acquisition of a Viable Asset by CAPPREC, when such an acquisition has become unconditional and the assets have been transferred into the name of CAPPREC or a wholly-owned subsidiary of CAPPREC and “Complete” and “Completion” shall be construed accordingly;

“Constituent Shares” ordinary shares of no par value in CAPPREC having the rights, preferences and limitations as set out in the MOI;

“CSDP” a “participant” as such term is defined in section 1 of the Financial Markets Act;

“Dashpay” Dashpay Proprietary Limited, registration number 2011/008978/07, a company incorporated in accordance with the laws of South Africa and a wholly owned subsidiary of Rinwell;

“ Dematerialised Shareholders” CAPPREC Shareholders who hold Dematerialised Shares;

“Dematerialised Shares” CAPPREC Shares which have been incorporated into the Strate system and which are no longer evidenced by certificates or other physical Documents of Title;

“Documents of Title” share certificates or any other documents of title to Certificated Shares acceptable to the Company;

“Edmund Pieterse” Edmund Pieterse, an adult male with South African passport number 620801 5068 086;

“EFTPOS” electronic funds transfer point of sale;

“Eitan Neishlos” Eitan Neishlos, an adult male with Israeli passport number 12613733;

8

“Encumbrance” any mortgage, charge (fixed or floating), pledge, cession in security or out and out, lien, assignment, hypothecation, guarantee, trust arrangement, right of set-off, retention of title or other security interest, agreement or arrangement, or other third party right or interest including any reservation of title or other security interest of any kind, howsoever created or arising, or any agreement or arrangement (whether or not subject to any suspensive or resolutive condition) to create any of the above or that has a similar effect (including a sale, subscription and repurchase agreement), as well as any right to acquire, option, right of pre-emption or any similar right, and “Encumber” and “Encumbered” shall have corresponding meanings;

“Escrow Agreement” the escrow agreement entered into between CAPPREC and Bowman Gilfillan Inc., dated 21 September 2015;

“ Exchange Control Regulations” Exchange Control Regulations, 1961, as amended, made in terms of section 9 of the Currency and Exchanges Act, No. 9 of 1933, as amended;

“EY” Ernst & Young Incorporated, registration number 2005/002308/21, registered auditors, a firm of chartered accountants (CA) and the independent reporting accountant to CAPPREC;

“Financial Markets Act” the Financial Markets Act, No. 19 of 2012, as amended or superseded from time to time;

“Firefly” Firefly Investments 275 Proprietary Limited, registration number 2012/048286/07, a company incorporated in accordance with the laws of South Africa which is in the process of de-registration;

“Founders” Michael Pimstein, Bradley Sacks, Motty Sacks, Alan Salomon, CAET and PIC;

“Founders Agreement” the founders agreement entered into between the Founders and CAPPREC pursuant to the Listing, dated 18 September 2015;

“GDP” gross domestic product;

“General Meeting” the general meeting of CAPPREC Shareholders to be held at the offices of CAPPREC on the 4th Floor, One Vdara, 41 Rivonia Road, Sandhurst, 2196 at 10:00 on Friday, 5 May 2017, or any adjournment or postponement thereof, to consider and, if deemed appropriate, approve the resolutions set out in the Notice of General Meeting;

“Grant Thornton” Grant Thornton, registration number 1989/006900/07, registered auditors, a firm of chartered accountants (CA) and the independent reporting accountant to African Resonance and the Rinwell group, respectively;

“Hanoch Neishlos” Professor Hanoch Neishlos, a South African adult male with identity number 470730 5160 083;

“HNS” HN Terminal Systems CC, registration number 2005/075094/23, a close corporation incorporated in accordance with the laws of South Africa;

“IFRS” International Financial Reporting Standards, as issued by the International Accounting Standards Board;

“Ingenico” as the context requires either Ingenico S.A., registration number 317218758, or any of its affiliates;

“Jake Shepherd” Jake Damon Shepherd, a South African adult male with identity number 681103 5039 084;

9

“JS Family Trust” the trustees for the time being of the Jake Shepherd Family Trust (being Jake Shepherd, Aloysius Johannes Heynen and Israel Bender) Master’s reference number 11908/4, a trust established in accordance with the laws of South Africa, the beneficiaries of which are Jake Shepherd, Loren Shepherd, Yakira Shepherd, Gadiel Shepherd and any further children of Jake Shepherd as well as any other relatives within the third degree consanguinity of Jake Shepherd and/or Loren Shepherd and any trust established or which might be established for the benefit of any of the foregoing;

“JSE” as the context requires, either JSE Limited, registration number 2005/022939/06, a public company incorporated in accordance with the laws of South Africa and licensed as an exchange under the Financial Markets Act, or the securities exchange operated by that company;

“KPMG” KPMG Inc., registered accountant and auditor, chartered accountants (SA), a company incorporated under the laws of South Africa, with registration number: 1999/021543/21 and the independent reporting accountant to Dashpay;

“Last Day to Trade” the last Business Day to trade the CAPPREC Shares in order to settle same and reflect in the Register so as to be eligible to vote on the resolutions set out in the Notice of General Meeting;

“Last Practicable Date” the last practicable date prior to the finalisation of this Circular, which was Wednesday, 22 March 2017;

“Letter of Representation” a letter of representation issued by a CSDP or Broker to a CAPPREC Shareholder for the purposes of authorising attendance by the CAPPREC Shareholder at the General Meeting;

“Listing” the listing of CAPPREC on the Main Board as a SPAC on 16 October 2015;

“Listings Requirements” the listings requirements, including the rules, issued by the JSE, as amended from time to time;

“Main Board” the main board of the list maintained by the JSE of securities admitted to listing;

“Mastercard” as the context requires either Mastercard Incorporated, registration number 3390142, a company incorporated in accordance with the laws of the State of Delaware, United States of America, or any of its affiliates;

“Mercantile Bank” as the context requires either Mercantile Bank Limited, registration number 1965/006706/06, a company incorporated in accordance with the laws of South Africa, or any of its affiliates;

“Michael Pimstein” Michael Reuven Pimstein, a South African adult male with identity number 540827 5145 084;

“Michael Shapiro” Michael Brian Shapiro, a South African adult male with identity number 720714 5132 084;

“ MOI” or “Memorandum of Incorporation”

the memorandum of incorporation of CAPPREC in force as of the Last Practicable Date;

“Motty Sacks” Michael (Motty) Ivan Sacks, a South African adult male with identity number 430211 5088 086;

“Notice of General Meeting” the notice of General Meeting annexed to and forming part of this Circular;

“NPS” National Payment System;

“NPS Act” the National Payment System Act, No 78 of 1998, as amended or superseded from time to time;

“Ordinary Shares” redeemable ordinary shares of no par value in CAPPREC having the rights, preferences and limitations as set out in the MOI;

“PASA” the Payment Association of South Africa;

10

“PCI DSS” payment card industry data security standard;

“PIC” The Public Investment Corporation (SOC) Limited, registration number 2005/009094/06, a state-owned company incorporated in accordance with the laws of South Africa;

“Placement Agreement” the placement agreement entered into between CAPPREC and Macquarie First South Capital Proprietary Limited, dated 28 September 2015;

“POS” point of sale;

“Pre-listing Statement” the pre-listing statement issued by CAPPREC in furtherance of the Listing, dated 28 September 2015;

“ Proposed AR-DP Transaction” collectively, the AR Acquisition and the Rinwell Acquisition;

“Proposed SST Transaction” the SST Acquisition;

“Proposed Transactions” collectively, the Proposed AR-DP Transaction and the Proposed SST Transaction or, as the context requires, either one of them;

“Posting Record Date” the date determined by the Board in accordance with Section 59 of the Companies Act for CAPPREC Shareholders to be eligible to receive this Circular;

“Register” the register of Certificated Shareholders of CAPPREC maintained by CAPPREC and each of the sub-registers of Dematerialised Shareholders maintained by the relevant CSDPs in terms of the Financial Markets Act;

“Regulations” the Companies Regulations, 2011, published pursuant to section 223 of the Companies Act;

“Residual Capital” the capital, raised pursuant to the Listing including all interest thereon, less all permitted expenditure, not utilised for the Proposed Transactions;

“Resonance Australia” Resonance Australia Proprietary Limited, registration number ABN 65605087947, a company incorporated in accordance with the laws of Australia;

“ Resonance Australia Escrow Memorandum”

the escrow memorandum entered into between, inter alios, Resonance Australia, CAPPREC and Swaab Attorneys, dated 16 February 2017, in terms of which, inter alia, each of the Resonance Australia Shareholders’ Agreement and the Resonance Australia Loan Agreement are being held in escrow by Swaab Attorneys;

“ Resonance Australia Investment”

CAPPREC subscribing for approximately 17.45% of the fully diluted issued share capital of Resonance Australia pursuant to the Resonance Australia Subscription Agreement and advancing the Resonance Australia Loan pursuant to the Resonance Australia Loan Agreement;

“Resonance Australia Loan” the amount of AUD500 000 to be advanced to Resonance Australia by CAPPREC pursuant to the Resonance Australia Loan Agreement (which amount is equal to the loan amount each existing shareholder of Resonance Australia already advanced to Resonance Australia);

“ Resonance Australia Loan Agreement”

the loan agreement signed by each of CAPPREC and Resonance Australia, in terms of which the Resonance Australia Loan shall be advanced by CAPPREC to Resonance Australia, which agreement is being held in escrow pursuant to the Resonance Australia Escrow Memorandum and will be dated on the Completion date of the Proposed AR-DP Transaction;

“ Resonance Australia Shareholders’ Agreement”

the shareholders’ agreement signed by, inter alios, Resonance Australia and CAPPREC, which agreement is being held in escrow pursuant to the Resonance Australia Escrow Memorandum and will be dated on the Completion date of the Proposed AR-DP Transaction;

“ Resonance Australia Subscription Agreement”

the subscription agreement entered into between, inter alios, Resonance Australia and CAPPREC, dated 16 February 2017, in terms of which CAPPREC subscribes for approximately a 17.45% interest in the issued shares of Resonance Australia;

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“ Restraint and Relationship Agreement”

the restraint and relationship agreement entered into between CAPPREC, Hanoch Neishlos, Eitan Neishlos, Bradley Sacks, Michael Pimstein, Alan Salomon, Motty Sacks, Wayne Fagan and Edmund Pieterse, dated 16 February 2017;

“ Restraint and Warrant Agreement”

the restraint and warrant agreement entered into between, CAPPREC, Eitan Neishlos and Castledash, dated 16 February 2017;

“Restraint Shares” 15 000 000 Ordinary Shares to be issued to Eitan Neishlos pursuant to the Restraint and Warrant Agreement;

“Revised Listing Particulars” the revised listing particulars of CAPPREC, as required by the Listings Requirements and as set out in Annexure 21 (including appendixes) to this Circular, which will only be effective if the Proposed Transactions are Completed;

“Rinwell” Rinwell Investments Proprietary Limited, registration number 2015/175588/07, a company incorporated in accordance with the laws of South Africa;

“Rinwell Acquisition” the acquisition by CAPPREC of the Rinwell Shares for the Rinwell Consideration pursuant to the Rinwell Agreement;

“Rinwell Agreement” the sale of shares agreement entered into by CAPPREC and Castledash in terms of which CAPPREC shall purchase the Rinwell Shares, dated 16 February 2017;

“ Rinwell Conditions Precedent” the conditions precedent to which the Rinwell Agreement is subject, a summary of which is set out in paragraph 8.3 of this Circular;

“Rinwell Consideration” the aggregate purchase consideration payable by CAPPREC for the Rinwell Shares, being R225 000 000 payable in cash;

“Rinwell group” collectively, Rinwell and Dashpay;

“Rinwell Shares” 100% of the issued shares of Rinwelll;

“Safika” Safika Holdings Proprietary Limited, registration number 1996/001693/07, a company incorporated in accordance with the laws of South Africa;

“SAMOS System” the ‘South African Multiple Option Settlement’ system;

“SARB” the South African Reserve Bank which includes both the Financial Surveillance Department and the Banking Supervisory Department;

“SARB Act” South African Reserve Bank Act, No 90 of 1989, as amended or superseded from time to time;

“SARS” the South African Revenue Service;

“SENS” the Stock Exchange News Service of the JSE;

“Services Agreement” the services agreement entered into between Uplink and African Resonance, dated 16 February 2017;

“Share Plan” the “Capital Appreciation Share Option Plan”;

“SME” small and medium-sized enterprises;

“SMME” small, medium and micro-sized enterprises;

“ Software Licence Agreement” the intellectual property and software licence agreement entered into between Uplink, African Resonance, Hanoch Neishlos and Edmund Pieterse, dated 16 February 2017;

“South Africa” the Republic of South Africa;

“South African Press” the national daily newspaper “Business Day”;

“SPAC” ‘Special Purpose Acquisition Company’, as such term is defined in the Listings Requirements;

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“SST” or “Synthesis” Synthesis Software Technologies Proprietary Limited, registration number 2000/007160/07, a company incorporated in accordance with the laws of South Africa;

“SST Acquisition” the acquisition by CAPPREC of the SST Shares and the SST Claims for the SST Consideration pursuant to the SST Agreement;

“SST Adjustment Event” any of the following events occurring in relation to any of the Ordinary Shares: (i) a subdivision or consolidation, (ii) a capitalisation issue, (iii) a distribution or payment of dividend outside the ordinary course of business, (iv) a rights issue, (v) any other event which, in the reasonable opinion of the SST Shareholders, has or will have a diluting effect on the theoretical or actual value of the Ordinary Shares, or (vi) any failure by CAPPREC or SST to comply with the earn-out provisions which negatively affects the PAT. “PAT” means the profit after tax of SST, as reflected in the financial statements of the SST, but normalised so as to exclude any item(s) which would not have been included in the calculation of headline earnings of SST in accordance with full IFRS, provided that: (i) the proceeds from disposals of assets which will not negatively affect the operations of the business of SST shall be included in PAT; (ii) administration and management fees charged by CAPPREC or any of its subsidiaries or affiliates to SST shall be excluded from PAT; and (iii) interest charged by CAPPREC to SST on the first R20 million capital provided by it to SST, shall be excluded from PAT;

“SST Agreement” the sale of shares and claims agreement entered into by CAPPREC and the SST Shareholders in terms of which CAPPREC shall purchase the SST Shares and the SST Claims, dated 16 February 2017;

“ SST Board” or “SST Directors” the board of directors of SST;

“SST Claims” all of the claims of whatsoever nature and however arising which the SST Shareholders (or any of them) have against SST as of the date of Completion date of the SST Agreement, but excluding claims in respect of a pre-completion dividend as referred to in the SST Agreement;

“SST Closing Shares” 60 000 000 Ordinary Shares in aggregate, to be adjusted in the event of the occurrence of an SST Adjustment Event between the signature date of the SST Agreement and the date of closing of the SST Acquisition;

“SST Conditions Precedent” the conditions precedent to which the SST Agreement is subject, a summary of which is set out in paragraph 9.3 of this Circular;

“SST Consideration” the aggregate purchase consideration payable by CAPPREC for the SST Shares and the SST Claims in terms of the SST Agreement, comprising an aggregate cash payment of R82 300 000, the allotment and issue of the SST Consideration Shares and the cash payment of the SST PW Cash;

“SST Consideration Shares” collectively, the SST Closing Shares and the SST PW Shares;

“ SST Executive Employment Contracts”

collectively, the written executive employment contracts entered into between SST and each of the members of the SST Management;

“SST Management” collectively, Michael Shapiro, Jake Shepherd, Tom Wells and Steyn Basson;

“SST PW Cash” the aggregate cash amount to be paid (if any) by CAPPREC to certain SST Shareholders, as part of the SST Consideration, on the terms and subject to the conditions set out in the SST Agreement (including SST achieving certain minimum profits after tax through 31 March 2020);

“SST PW Consideration” collectively, the SST PW Cash and the SST PW Shares;

“SST PW Shares” the number of Ordinary Shares to be issued and allotted (if any) by CAPPREC to the SST Shareholders, as part of the SST Consideration, on the terms and subject to the conditions set out in the SST Agreement (including SST achieving certain minimum profits after tax through 31 March 2020);

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“SST Shareholders” Michael Shapiro, JS Family Trust, Tom Wells and Steyn Basson;

“SST Shares” 100% of the issued shares of SST;

“Steyn Basson” Steyn Nel Basson, a South African adult male with identity number 780714 5148 087;

“Strate” Strate Proprietary Limited, registration number 1998/022242/07, a private company incorporated in accordance with the laws of South Africa, being a registered central security depository in terms of section 1 of the Financial Markets Act and manages the Strate system;

“Strate system” an electronic custody, clearing and settlement environment, managed by Strate, for all share transactions concluded on the JSE and off-market, and in terms of which transactions in securities are settled and transfers of ownership in securities are recorded electronically;

“Sub-Register” the record of Dematerialised Shares administered and maintained by a CSDP and which forms part of the CAPPREC Register, excluding any nominees;

“Swaab Attorneys” Swaab Attorneys, registration number ABN 65605087947, an Australian firm of attorneys and a company incorporated in accordance with the laws of Australia;

“Terminal” an EFTPOS terminal device generally used to facilitate the use of debit and credit cards by customers at retail outlets;

“Traderoot” Traderoot Technologies Proprietary Limited, registration number 2000/005984/07, a company incorporated in accordance with the laws of South Africa;

“Tom Wells” Thomas James Wells, a South African adult male with identity number 800416 5051 081;

“TPPP” Third Party Payment Provider;

“Transfer Secretaries” Computershare Investor Services Proprietary Limited, registration number 2004/003647/07, a private company incorporated in accordance with the laws of South Africa and who are the transfer secretaries of CAPPREC;

“Underwriters” Michael Pimstein, Bradley Sacks, Motty Sacks and Alan Salomon, being the initial underwriters at the time of the Listing;

“Underwriting Agreement” the underwriting agreement entered into between CAPPREC and the Underwriters, dated 8 September 2015;

“Uplink” Uplink Technology Services Proprietary Limited, registration number 2005/005320/07, a company incorporated in accordance with the laws of South Africa;

“VAT” value-added tax levied in terms of the South African Value- Added Tax Act, No. 89 of 1991, as amended from time to time;

“Viable Asset” assets that, if acquired, will enable CAPPREC to qualify for a listing, other than as a SPAC, pursuant to the Listings Requirements;

“VISA” as the context requires either VISA Inc., registration number 4233619, a company incorporated in accordance with the laws of the State of Delaware, United States of America, or any of its affiliates

“Voting Record Date” the date on which CAPPREC Shareholders must be entered in the Register in order to be eligible to vote at the General Meeting, expected to be Friday, 28 April 2017;

“Warrant Shares” the Ordinary Shares to be issued or delivered by CAPPREC to Castledash on the terms and subject to the conditions set out in the Restraint and Warrant Agreement, on exercise of the Warrants, but not exceeding 30 000 000 Ordinary Shares in the aggregate;

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“Warrants” the warrants to be granted by CAPPREC to Castledash which comprise the right and option of Castledash to be issued or delivered the Warrant Shares on the terms and subject to the conditions set out in the Restraint and Warrant Agreement;

“Wayne Fagan” Wayne Brett Fagan, a South African adult male with identity number 720330 5004 080; and

“ZAR”, “Rand” or “R” South African Rand, the lawful currency of South Africa.

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CAPITAL APPRECIATION LIMITED(Incorporated in South Africa)

(Registration number 2014/253277/06)JSE ordinary share code: CTA

ISIN: ZAE000208245

(“CAPPREC” or the “Company”)

DIRECTORS

Executive Independent non-executiveMichael Pimstein (Joint Chief Executive Officer) Bukelwa BuloBradley Sacks (Joint Chief Executive Officer) Jacob Meyer KahnAlan Salomon (Chief Financial Officer) Victor Sekese

Charles ValkinNon-independent non-executiveMichael (Motty) Sacks (Chairperson)Dr Daniel (Dan) MatjilaRoshan Morar

CIRCULAR TO CAPPREC SHAREHOLDERS

1. INTRODUCTION AND PURPOSE OF THIS CIRCULAR

1.1 Introduction

1.1.1 CAPPREC Shareholders are referred to the announcement released on SENS on 16 February 2017 setting out the details of the Proposed Transactions.

1.1.2 The Proposed AR-DP Transaction and the Proposed SST Transaction both, and independently from each other, constitute a Category 1 acquisition in terms of the Listings Requirements and therefore require CAPPREC Shareholder approval by way of ordinary resolutions respectively. Each of the Proposed Transactions, if implemented, will constitute the acquisition of Viable Assets by CAPPREC and the Completion of either of the Proposed AR-DP Transaction or the Proposed SST Transaction will result in CAPPREC no longer being classified as a SPAC and meeting the Main Board entry criteria for a listing on the JSE.

1.1.3 In respect of the Proposed AR-DP Transaction, (i) the salient terms of the AR Agreement are set out in paragraph 7.1 of this Circular; and (ii) the salient terms of the Rinwell Agreement are set out in paragraph 8.1 of this Circular.

1.1.4 The salient terms of the SST Agreement are set out in paragraph 9.1 of this Circular.

1.1.5 In terms of paragraph 4.35(c) of the Listings Requirements, CAPPREC Shareholders are required to approve the use and retention of the Residual Capital by way of an ordinary resolution. The Residual Capital is proposed to be used by the CAPPREC group in order to:

1.1.5.1 make the Resonance Australia Investment; and

1.1.5.2 the Residual Capital not allocated in terms of paragraph 1.1.5.1, be allocated by the Board to source new investments and for working capital purposes.

1.1.6 Pursuant to schedule 14 to the Listings Requirements, it is necessary for CAPPREC to obtain the authority from the CAPPREC Shareholders by way of an ordinary resolution (Ordinary Resolution 7 as referred to in the Notice of General Meeting) to amend the Share Plan in order to make management of the Share Plan more efficient and effective and flexible to the future needs of the CAPPREC group post implementation of the Proposed Transactions.

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1.1.7 Furthermore:

1.1.7.1 to effectively utilise its resources post the Completion of the Proposed Transactions, it is proposed that CAPPREC obtains the authority from the CAPPREC Shareholders by way of a special resolution (Special Resolution 1 as referred to in the Notice of General Meeting), as required in terms of section 45(3)(a)(ii) of the Companies Act, in order to provide direct or indirect financial assistance to related or interrelated entities on the basis envisaged in section 45 of the Companies Act;

1.1.7.2 it is proposed to the CAPPREC Shareholders that CAPPREC obtains a general authority from CAPPREC Shareholders by way of an ordinary resolution (Ordinary Resolution 6 as referred to in the Notice of General Meeting) to issue Ordinary Shares for cash in terms of the Listings Requirements; and

1.1.7.3 it is proposed to the CAPPREC Shareholders that an aggregate of six vacancies will be created on the Board for executive and non-executive directors (equally divided) (Ordinary Resolution 8 as referred to in the Notice of General Meeting) in order to grant the Board the flexibility to manage an effective and balanced Board composition post the Completion of the Proposed Transactions in accordance with strategic imperatives of the business and in compliance with applicable corporate governance regulations. Such vacancies, once created, if filled by the Board, will be subject to confirmation by CAPPREC Shareholders at the next annual general meeting of Shareholders following such appointment by the Board.

1.1.8 The purpose of this Circular is to provide CAPPREC Shareholders with the requisite information in accordance with the Listings Requirements, to enable the CAPPREC Shareholders to make an informed decision in respect of the proposed resolutions, as set out in the Notice of General Meeting forming part of this Circular.

2. ACQUISITION OF VIABLE ASSETS

2.1 Introduction

2.1.1 CAPPREC is a SPAC that was listed on the Main Board of the JSE on 16 October 2015. CAPPREC was established with the purpose of raising capital in order to pursue an acquisition of a Viable Asset, in accordance with and as defined in the Listings Requirements.

2.1.2 The Pre-listing Statement indicated that CAPPREC intends to acquire a Viable Asset that would provide a platform for future growth and expansion in South Africa, Africa and beyond, the preferent commercial nature of such acquisition being a company in the services sector. Since the Listing, CAPPREC evaluated and considered numerous acquisition opportunities, with the Proposed Transactions being a direct result thereof.

2.1.3 African Resonance, Dashpay and Synthesis are three companies that provide a variety of technology solutions, services and related technical support services to financial institutions and others in the financial services sector. Companies that cater to the technology needs of established institutions and new entrants in the financial services sector or support the technology infrastructures used by these institutions to deliver services to their clients, are commonly known as “FinTech” companies.

2.1.4 CAPPREC has concluded that FinTech is an exciting industry sector that satisfies its investment interests and objectives. CAPPREC believes that the sector offers good growth potential as well as further investment and acquisition opportunities to broaden its portfolio of services offered to clients and create shareholder value.

2.2 Payments and Payment Infrastructure

2.2.1 Within the FinTech industry there are several sub-sectors, which include inter alia, “Payments and Payment Infrastructure”. Payments and Payment Infrastructure is a large and growing part of global economies. This is equally relevant in South Africa and increasingly so across the African continent. Factors driving this growth are being stimulated by mobile communications, growing consumer interest in, and exposure to, the benefits of digital currency, as well as a growing choice of applications, including:

2.2.1.1 Increasing Adoption of and Comfort with Card Based and Digital Currency

There is increasing consumer acceptance of and comfort with digital currency and the seamless experience in new forms of payment delivery (including card-based payments).

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In emerging markets, there is increasing focus on financial inclusion and the promise of more cost effective services brought about through technology. With increasing consumer acceptance, governments recognise that electronic payments reduce corruption, increase accountability, boost financial inclusion, reduce fraud and enhance security. The secular shift away from the use of cash has grown and continues to accelerate.

2.2.1.2 Changes in Consumer Behaviour

Increasing “mobile-f irst” habits, the willingness of consumers to share personal experiences and data, and the desire for highly curated information characterise an increasingly larger portion of consumers. This is driving consumers to demand more from the institutions with whom they interact and on whom they rely for financial transactions. Consumers have increased expectations of immediate and more bespoke experiences.

2.2.1.3 Changes in Retailer Requirements

Retailers and other market participants are seeking more direct and individualised relationships with their customers/patrons. Big data and multi-channel retailing are driving retailers to seek more tailored, cost effective solutions to enhance their customers’ experiences.

2.2.1.4 Regulation and Security Concerns

Regulation and threats to security continue to drive payment infrastructure participants to refresh their systems with more security and more protective technology platforms.

2.2.2 African Resonance and Dashpay, on behalf of and in association with their institutional and other clients, are well positioned to: (i)  respond to changing market and institutional clients’ end-market customer needs; (ii)  help clients to expand the applicability and versatility of electronic and card payments; (iii) innovate; and (iv) deliver cost effective solutions to institutional clients and others in South Africa and across the rest of Africa.

2.3 Financial Services Sector Investment in Technology

2.3.1 Companies in the financial services sector have a commercial imperative to reduce the cost of product delivery, reduce the cost of daily operations, enhance their level of regulatory compliance, respond to the demands of their customers for more satisfying experiences and counteract the competitive threats posed by new market entrants unconstrained by large overhead or legacy systems. Investments in technology are required to address these needs, particularly for institutions with multiple legacy and mainframe IT systems.

2.3.2 According to a report on Moneyweb (19  September 2016), South Africa’s “Big Four” retail and commercial banks (ABSA, First National Bank, Nedbank and Standard Bank) spent more than R30 billion on information technology over the 12 months ended 30 June 2016. This was more than 12% higher than the prior year and indicates that investment in technology in the financial services sector is likely to grow at rates greater than inflation.

2.3.3 Synthesis has established relationships with many of South Africa’s banks and other financial institutions and is well positioned to respond to the demands of their clients.

2.4 B-BBEE Framework

2.4.1 B-BBEE is an integral component of the South African government’s economic transformation strategy. A multi-faceted approach to B-BBEE has been adopted that aims to increase the number of black South Africans that participate in, manage, own and/or control a greater share of South Africa’s economy. The B-BBEE Act and the Generic Codes of Good Practice (“Generic Codes”) issued under the B-BBEE Act constitute the central legislation under which B-BBEE is implemented. Under the Generic Codes, measured entities are assigned a B-BBEE contributor status level ranging from level 1 (which is the highest B-BBEE contributor status level) to level 8 (which is the lowest compliant B-BBEE contributor status level).

2.4.2 CAPPREC recognises the transformational power of financial technology and its potential to effect economic and social change among the economically disadvantaged of the world, particularly on the African continent. In this regard, B-BBEE, and transformation in general, was a deliberate cornerstone imperative in the constitution of CAPPREC and will continue to feature prominently in the future growth and development plans for CAPPREC. The present “inclusive” B-BBEE share ownership is

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approximately 48% and models for further B-BBEE ownership and participation will continue to be prioritised, particularly in the CAPPREC’s enterprise development initiatives and its peripheral mercantile activities.

3. AFRICAN RESONANCE AND DASHPAY (COMPRISING THE AR-DP TRANSACTION)

3.1 Introduction

3.1.1 Each day, South African businesses and individuals make millions of payments through a variety of payment choices, ranging from cash to electronic payments (such as card, debit orders, mobile payments and real time online internet payments). According to PASA, more than R350 billion is settled through the South African NPS every day.1

3.1.2 South Africa has varying requirements for payment systems and payment instruments. In urban areas, sophisticated electronic facilities and instruments are common, while in remote rural areas the predominant requirement is cash.

3.1.3 Over the past few decades, the South African NPS has developed steadily, and is currently undergoing meaningful growth and exciting changes as the country continues to reduce its proportion of cash payments and transition towards cards-based and other forms of electronic payments. The usage of cards has been rapidly increasing due to ongoing improvements in the card acceptance infrastructure nationally and the continuing introduction and take-up of associated products and solutions fuelled by developing business needs.

3.1.4 Between 2010 and 2014 card payments in South Africa grew significantly with the number of cards in circulation and the value of card payments respectively increasing at compound annual growth rates of 11.6% and 19.4%. Furthermore, the number and value of Terminal-based payment transactions has achieved a compound annual growth rate over the same period by 13.1% and 13.5%, respectively, supported by net growth in Terminals from 274 000 (2010) to approximately 368 000 (2014). This growth is consequently driving down the number of new banknotes and coins issued per year and the number and value of cheques issued.2

3.1.5 Continuing growth of the card and Terminal channels over the foreseeable future could be supported by macro-drivers such as a positive economic outlook, an emerging middle class, demand for more sophisticated prepaid/charge card products and new products and regulatory improvements.

3.1.6 Technological development continues to be a driver of the growth of card transactions in South Africa with major players focusing on initiatives to expand the use of advanced platforms for banking and other transactions to cater for customers’ changing needs.

3.2 Participants in South African NPS

3.2.1 The South African NPS encompasses the total payment process, including all the systems, mechanisms, institutions, agreements, procedures, rules and laws that come into play from the moment a business or individual issues an instruction to pay another business or individual, to the final interbank settlement of the transaction in the records of the SARB.

3.2.2 The safety, soundness and efficiency of the South African NPS is regulated by a comprehensive legal framework, including the SARB Act, the NPS Act, PASA’s constitution, payment clearing house agreements and various service level agreements.

3.2.3 The key participants in the South African NPS include the SARB, the clearing network, the settlement network, system operators, third party payment providers, banks operating within South Africa and PASA.

3.2.3.1 South African Reserve Bank – The SARB has responsibility for ensuring the overall effectiveness and integrity of the South African NPS.

3.2.3.2 Clearing Network – Bankserv is the payment clearing house system operator responsible for clearing and determining interbank obligations stemming from the retail payments environment. Visa and Mastercard are also payment clearing house operators.

1 PASA website, available at http://www.pasa.org.za/national-payment-system/overview

2 Bank for International Settlements, “Statistics on payment, clearing and settlement systems in the CPMI countries – figures for 2015”, Committee on Payments and Market Infrastructures, December 2016

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3.2.3.3 Settlement Network – The core of the South African settlement system is the SAMOS system (owned and operated by the SARB) and enables banks to settle their obligations on a real-time or delayed basis. Direct participation in SAMOS system is limited to South African registered banks.

3.2.3.4 System Operators – Payment services are provided either directly by a clearing participant or by means of a system operator. A system operator is a non-bank that provides electronic means to assist payment providers make and/or receive payments.

3.2.3.5 Third Party Payment Providers – There are two types of third party payment providers, namely BSP and TPPP. A BSP is a party that accepts money or the proceeds of payment instructions, as a regular feature of its business, from multiple payers on behalf of a beneficiary, whereas a TPPP is a party that accepts money or the proceeds of payment instructions, as a regular part of its business, as a payer to make payment on behalf of that payer to multiple beneficiaries. A TPPP is typically enabled by a system operator and may hold funds for payment due in its own bank account for a limited period of time.

3.2.3.6 Banks – While there are 32 banking institutions in South Africa,3 there are considered to be four major retail and commercial banks, coined the “Big 4” which are responsible for a large proportion of the EFTPOS transactions in South Africa.

3.2.3.7 PASA – PASA was founded in September 1996 and oversees the South African NPS and the conduct of its participants.

3.3 Regulatory Environment – The NPS Act

3.3.1 The NPS Act provides for, among other things, the management, administration, operation, regulation and supervision of payment systems in South Africa.

3.3.2 Due to the nature of the business it conducts, and in particular that it does not operate a payment system, African Resonance is not regulated under the NPS Act. It does, however, provide Terminals, Terminal estate management services and software to its institutional bank clients and others that participate in the payment card industry.

3.3.3 Dashpay is currently a TPPP (i.e. a third party payment provider). A TPPP accepts money or the proceeds of payment instructions as a regular part of its business, as a payer to make payment on behalf of that payer to multiple beneficiaries. A TPPP must be registered with PASA by its sponsoring bank, being Mercantile Bank in relation to Dashpay.

3.4 Noteworthy Opportunities in South Africa

In addition to the general secular factors driving change in the payment sector identified in paragraph 3.1 above, there are a number of factors that are particularly noteworthy in South Africa today:

3.4.1 National financial inclusion drive opens new opportunities

Financial inclusion aims to provide the large “unbanked” population in South Africa with access to the formal financial system and services such as savings, payments, transfers, credit and insurance. Financial inclusion remains a huge challenge facing South Africa as well as a significant opportunity for enterprises that can offer cost effective and easily deployable products and services on a mass scale.

3.4.2 South African Payment Market Growth

In South Africa during 2014, there were almost 2 billion card payments valued at R829 billion. This represents a 92% increase in the number of card payments since 2010 (or 17.7% annual increase over the 2010 – 2014 period) and a 103% increase in the value of card payments since 2010 levels (or a 19.4% annual increase over the 2010 – 2014 period).4

3 Bank for International Settlements, “Statistics on payment, clearing and settlement systems in the CPMI countries – f igures for 2015”, Committee on Payments and Market Infrastructures, December 2016

4 Bank for International Settlements, “Statistics on payment, clearing and settlement systems in the CPMI countries – figures for 2015”, Committee on Payments and Market Infrastructures, December 2016

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Source: Bank for International Settlements, “Statistics on payment, clearing and settlement systems in the CPMI countries – figures for 2015”, Committee on Payments and Market Infrastructures, December 2016

Source: Bank for International Settlements, “Statistics on payment, clearing and settlement systems in the CPMI countries – figures for 2015”, Committee on Payments and Market Infrastructures, December 2016

In South Africa, there were nearly 90 million cards and 370 000 Terminals in 2014, reflecting strong growth of 55% and 34%, respectively, since 2010.5

While the number of cards and the number (and value) of card payments have experienced very strong growth, the level of banknotes and coins issued has remained relatively flat over the 2010-2014 period and the value of cheque payments has dropped significantly, reflecting the shift to card/Terminal transactions.

5 Bank for International Settlements, “Statistics on payment, clearing and settlement systems in the CPMI countries – figures for 2015”, Committee on Payments and Market Infrastructures, December 2016

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3.4.3 SME’s opportunity

The South African payments system is undergoing a significant transformation towards a card-based payment system, however, there remain potentially several million SMEs that cannot accept card payments. This dynamic creates a substantial opportunity for innovative, nimble, technology-focused payment solutions providers with flexible, cost effective products who can rapidly develop and deploy multi-product solutions to the SME market. This is also consistent with the opportunity created by the South African government’s stated focus on SME’s to drive economic growth.

3.5 Overview of African Resonance (part of the AR-DP Transaction)

3.5.1 Introduction

3.5.1.1 African Resonance is a leading provider of payment infrastructure and related services to established financial institutions, emerging payment service providers, the hospitality industry and retail operators. African Resonance designs, develops and implements end-to-end solutions, including full service device fleet management, to its institutional clients and corporate customers. African Resonance supplies Terminals and like devices, and provides merchants with a single device capable of providing both banking and non-banking products and services.

3.5.1.2 African Resonance was founded in 2003 in order to capitalise on the high growth prospects in the South African payments industry that, at the time, was undergoing a period of transition.

3.5.1.3 The premise behind African Resonance was that the payments sector required fresh ideas and innovation in order to provide not only traditional products, but to develop a business model which enables superior levels of customer service and to develop and implement a range of new products and solutions which African Resonance believed was a large but untapped opportunity in the market.

3.5.1.4 Over a period of 14 years African Resonance has evolved into a well-established, reputable and growing financial technology company with a range of customer and supplier relationships, a highly skilled and motivated team of employees and well established operating processes. This is supported by access to a sophisticated and strategically valuable technology platform utilised to offer their institutional clients secure, cost effective, market-leading customer service levels, as well as innovative products and solutions in the South African payments market.

3.5.2 Established Blue Chip and Emerging Customer Base

Since its formation, African Resonance has concluded supply and service arrangements with most of the leading retail banks in South Africa, for the supply of payment related equipment and services. Collectively these institutions account for the vast majority of payments processed in retail environments in South Africa. African Resonance has also concluded relationships with other smaller financial institutions, the hospitality industry and other participants in the payments value chain.

3.5.3 Established Relationship with Leading, World Class Suppliers

African Resonance has an established and long-standing relationship with the world’s leading manufacturer and supplier of payment devices. Ingenico group, based in France, is the world’s leading manufacturer of Terminals and a provider of seamless payment solutions. African Resonance is regarded and recognised as a centre of excellence for Ingenico, both as distributor and through its skilled and efficient customer service and maintenance capacity, a material differentiating feature of its services platform.

3.5.4 Exclusive Access to Proprietary Technology

African Resonance has invested heavily in its technology platforms and has the exclusive right to use a suite of infrastructure and Terminal fleet enterprise management solutions in South Africa. Forming part of the AR Acquisition, these exclusive rights have been expanded to cover the provision of services throughout Africa. These technologies (collectively referred to as the Resolink Platform) allow African Resonance to manage, within a single workflow management platform, a Terminal estate business covering remote merchant management, contract management, workflow management, asset management, call centre logging, problem resolution management, SLA management, Terminal despatch and activation of banking and non-banking products.

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3.6 African Resonance Products and Services

3.6.1 Supply of Terminals

African Resonance provides Terminals to its institutional banking clients and other customers. Customers can elect to either purchase the Terminals outright or rent them over an extended basis. In most instances the supply of Terminals is accompanied by a services, support and maintenance agreement for which a monthly recurring fee is charged.

3.6.2 Terminal Fleet Management Services

African Resonance has developed and refined its approach to Terminal management including field services and maintenance of these Terminal estates. African Resonance believes its model is the most efficient operating model by which to minimise the response time to merchants while achieving the highest quality of product operational uptime in any location of the country.

3.6.3 Payment Software

Since inception, African Resonance has designed and supported secure payment software for its banking and institutional clients. This service includes end-to-end testing of the respective bank client’s payment software as well as full certification support with Visa and MasterCard directly. African Resonance is a recognised leader in this highly specialised and niche service area forming part of its core competency that will continue to be developed within payment card industry best practice standards.

3.6.4 Innovative Solution Offerings

For several years, African Resonance has been exploiting the Resolink platform, as referred to in paragraph 3.5.4, to develop and implement value-added solutions for corporate customers. Creating corporate solutions involves conceptualisation, design, development, deployment and management, all supported by African Resonance’s business development and technology expertise.

African Resonance has developed an extensive portfolio of products and solutions. These extend well beyond the more traditional products (for example, prepaid products and basic loyalty programs) into a broad and diverse range of verticals. To-date, African Resonance has developed and implemented solutions for over 70 product verticals, including in the following segments:

Channel Description

Banking • Banking software• Bank accreditations• Closed payment systems• Agency banking• Micro-financing

Retail • Retail management• Store-in-a-store solutions• Distribution/supply chain management• Gift and prepaid cards• Donations and philanthropy

Health • Vitality programmes• Electronic prescription• Chronic Medication

Marketing • Consumer profiling• Consumer database management• Voucher campaigns

Corporate • Customised payment solutions• Large scale loyalty programs• Social responsibility

Government • Social and welfare grants• Health benefit distribution• Food coupons

Insurance • Short-term insurance

Entertainment • Events management systems

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3.7 Technology Platform

3.7.1 African Resonance’s business model is made possible by the Resolink platform that is integrated into many aspects of its operations. Resolink has been developed over the last 12 years and represents a source of substantial competitive advantage for African Resonance.

3.7.2 Resolink is a single, integrated platform comprising the following main modules:

3.7.2.1 Resolink Product – rapid development and implementation of generic and bespoke financial and non-financial solutions onto Terminals; and

3.7.2.2 Resolink Operator – sophisticated end-to-end asset and workflow management system supporting African Resonance’s dispatch model for merchant services.

3.7.3 The Resolink platform is device agnostic, supporting a multi-vendor strategy which is currently common practice with South African banks.

3.7.4 The Resolink platform has been developed by and is maintained by Uplink, a company co-located with African Resonance and with a common controlling shareholder, Professor Neishlos. African Resonance has entered into the perpetual, exclusive, royalty-free, irrevocable Software Licence Agreement with Uplink in order to licence certain intellectual property rights throughout Africa.

3.8 Overview of Dashpay (Part of the AR-DP Transaction)

3.8.1 Introduction

3.8.1.1 Dashpay was initially conceived as a traditional merchant acquirer when first established in 2013 as a subsidiary of Telesure. Since that time a significant amount has been invested in the development of Dashpay’s systems and technology, with further resources being allocated to complete its multi-product transacting platform, essentially for the facilitation of Business-to-Business payments and related products in conjunction with its institutional partners.

3.8.1.2 Dashpay presently operates within the South African national payments infrastructure, continually broadening its market reach, while concurrently establishing and securing the transaction capacity of its technology platforms. Dashpay services are ideally suited to serving the rapidly changing needs for secure payment systems, and financial management across Africa. CAPPREC recognises the high demand and potential growth in those destinations.

3.8.1.3 Traditional financial institutions and financial services companies, often constrained by legacy systems and platforms, have for various reasons struggled to respond to changing customer needs or provide innovative payment related services to non-traditional merchants, be they retailers, wholesalers, other independent vendors, and more particularly SMMEs. Dashpay’s technology platforms are adaptable and compatible with Terminals and state of the art switching and processing capabilities. These can be offered directly to SMME retailers and suppliers to SMME retailers to expand this presently underserviced market in which electronic payments, secure recovery and other financial service products, disciplines and controls would build confidence, add efficiency and become extremely helpful and applicable to such enterprises.

3.8.1.4 Dashpay, like African Resonance, has invested heavily in its technology platforms and stands ready to respond to the changing needs in payment processing applications across Africa. Dashpay’s technology platforms, which take advantage of Terminals and state of the art switching and processing capabilities, can be offered directly to retailers and vendors or to existing and emerging financial services institutions and providers, to expand the market in which electronic payments and other related financial services could become helpful and applicable. The growth prospects for intervention by Dashpay and counterparty banking institutions in this sector are compelling.

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3.8.2 Collaboration

A key part of Dashpay’s business strategy is to establish, develop and maintain strong relationships with existing and emerging institutional clients (including regional banks) and key strategic business partners, each of which has a proven track record in the successful delivery, execution and support of large scale acquiring projects.

3.8.2.1 Collaboration with African Resonance

The services African Resonance provides to Dashpay include:

3.8.2.1.1 supply of Terminals manufactured by Ingenico;

3.8.2.1.2 Terminal management, software supply and support including the provision of the banking application that resides on Dashpay’s Terminals, which can be maintained and upgraded remotely;

3.8.2.1.3 management of the distribution of Terminals to merchants including on-boarding services;

3.8.2.1.4 provision of a technical call centre to handle technical queries from Dashpay merchants; and

3.8.2.1.5 repairs and replacement services. In this regard, African Resonance is a security repair lab for Ingenico for Southern Africa.

The above functions are performed under non-exclusive licence and support and maintenance agreements.

3.8.2.2 Mercantile Bank

3.8.2.2.1 Dashpay has a commercial agreement with Mercantile Bank which allows Dashpay to provide acquiring services to merchants under the relevant Visa and MasterCard regulations (payment facilitator/payment service provider) and Dashpay is registered as a third party agent for the purposes of PCI DSS Services in accordance with the Visa and Mastercard Global Registries of Service Providers. Dashpay has a registered Interbank Card Association with MasterCard and Bank Identification Number with VISA, both falling under the Mercantile Bank principal licence. Mercantile Bank is an indirect subsidiary of Portuguese parent company, Caixa Geral de Depositos.

3.8.2.2.2 The key services provided by Mercantile Bank to Dashpay are:

3.8.2.2.2.1 connectivity to the VISA Access Point and MasterCard Direct Exchange interfaces;

3.8.2.2.2.2 the utilisation of their e-Bureau payment system (for merchant settlement);

3.8.2.2.2.3 the use of their authorisation centre for any manual authorisations; and

3.8.2.2.2.4 the provision of card scheme settlement, i.e. receive funds/settle funds from the schemes which are then transferred to a clearing account in Dashpay’s name from which merchants are thereafter settled.

3.8.2.2.3 Dashpay’s access to the VISA and MasterCard international interfaces affords Dashpay the unique position of being a South African TPPP with direct connectivity into these associations. This provides Dashpay with card scheme settlement, i.e. it receives funds/settles funds from the schemes which are then directly transferred to a Dashpay clearing bank account. Merchants are then settled directly by Dashpay utilising the Mercantile Bank e-Bureau payment system.

3.8.2.2.4 Dashpay’s relationship with Mercantile Bank is non-exclusive.

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3.8.2.3 Traderoot

3.8.2.3.1 Traderoot Technologies is a strategic e-commerce company. The Traderoot solution sets are primarily underpinned by the Traderoot E-commerce Platform; robust transactional platforms with validated credentials in a highly regulated sector that are exceptionally valuable propositions and foundation layers for Dashpay to build other opportunities.

3.8.2.3.2 Traderoot’s solutions provide for secure, reliable and immediate electronic transacting. Dashpay has a very strong relationship with Traderoot, which provides substantial customisation and enhancements to meet Dashpay’s specific requirements.

3.8.3 Risk Management

3.8.3.1 Dashpay has in place a thorough and disciplined risk management framework that include:3.8.3.1.1 stringent merchant on-boarding and evaluation processes;3.8.3.1.2 real time risk management monitoring;3.8.3.1.3 well defined adjudication rules pertaining to transaction processing and

merchant settlement;3.8.3.1.4 delayed settlement for international card transaction activity; and3.8.3.1.5 delayed settlement for merchants with limited transaction history.

3.8.3.2 Each merchant that applies to Dashpay undergoes a risk evaluation. Risks associated with chargebacks are managed through sophisticated risk management modules. These modules are consistently enhanced to manage the ongoing risks associated with card processing. Dashpay is subject to the Mastercard Service Provider Global Risk Management program review, which is a tool for assessing a service provider’s current capability to anticipate, manage and protect against inherent internal and external risk in the acquiring portfolio. The review also determines the effectiveness of existing fraud control measures, adherence to Mastercard rules and regulations and (where appropriate) provides industry best practice guidelines.

3.8.3.3 Furthermore Dashpay has implemented a best practice set of adjudication rules, which are defined per client and are applied to transactions before the transactions are settled. If a transaction fails one or more adjudication rules, the transaction will not be processed as normal and an alternative process flow will be triggered to consider and review potential risks. As a result, Dashpay has been highly successful in managing chargebacks to date.

3.9 Management and Employees of African Resonance and Dashpay

3.9.1 African Resonance Founder

3.9.1.1 African Resonance was founded by Professor Hanoch Neishlos. Hanoch has a wealth of experience in the payment and technology industries, holding the title of professor of Computer Science (Dr.  Sc.). Additionally, Hanoch is the former ISM Chair and Head of Computer Science at the University of Witwatersrand, former South African representative to the International Federation for Information Processing (IFIP). Hanoch was also previously a founder of SEPCO Proprietary Limited (sold to Datacor group) and co-founder of Aplitec/Net 1 Limited (listed on the JSE and NASDAQ).

3.9.1.2 Professor Neishlos was an integral member of the acquisition team that acquired Cash Paymaster Services from FNB for Aplitec (now Net 1) in 1999 and is well versed in the technical applications and procedures for the payment, distribution and cash settlement of social grants and welfare payments.

3.9.1.3 Prior to the consolidation of the provincial contracts, African Resonance was the technical contractor for the distribution of welfare payments in the Mpumalanga Province.

3.9.1.4 As part of the Proposed AR-DP Transactions, Hanoch has concluded an employment agreement with African Resonance with an initial term of three years (that could be extended by agreement) and will be responsible for the CAPPREC strategy in the payments sector. Hanoch has also entered into the Restraint and Relationship Agreement, which contains, amongst other things, restraint of trade and non-compete provisions provided by Hanoch in favour of the CAPPREC group, which provisions continue for two years after his involvement with the CAPPREC group terminates.

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3.9.1.5 Hanoch will receive 204  500  000 Ordinary Shares in CAPPREC pursuant to the AR Acquisition and has irrevocably and unconditionally undertaken not to dispose of or Encumber any of his portion of the AR Consideration Shares prior to the first anniversary of the closing date of the AR Agreement and not to dispose of or Encumber more than 50% of his portion of the AR Consideration Shares prior to the second anniversary of the closing date of the AR Agreement.

3.9.1.6 The aforementioned undertakings ensure an alignment of the interests among Hanoch, CAPPREC and CAPPREC Shareholders.

3.9.2 African Resonance Management

3.9.2.1 The day-to-day operations of African Resonance are managed by an experienced management team that have many years of experience with African Resonance and/or with African Resonance’s customers.

3.9.2.1.1 Donn Engelbrecht, Operations Manager – Donn holds a degree in International Marketing Management from the University of the Witwatersrand. Donn, who is responsible for the operations of African Resonance, has 10 years of executive leadership experience in the card and payments industry and has an in depth knowledge and understanding of this industry. Donn has extensive experience in managing card payments businesses as well as complex card projects. Prior to joining African Resonance, Donn held executive roles at The Standard Bank of South Africa Limited as well as Barclays Africa group Limited (formerly Absa Group Limited).

3.9.2.1.2 Tumi Frazier, Human Capital Manager and Director – Tumi holds a BA Psychology degree from the University of Johannesburg (then the Rand Afrikaans University) and is a Certified Executive and Professional Coach, a qualification she obtained from the University of Cape Town Graduate School of Business. Tumi is the leadership and change expert responsible for human capital matters at African Resonance. Tumi combines psychology and coaching disciplines, business-consulting skills with an in-depth understanding of languages, and organisational cultures. Tumi has extensive organisational development and business process re-engineering experience and is an author of four books in the field of personal development.

3.9.2.1.3 Nicci Redford, Legal Manager – Nicci holds an LLB degree from the University of Johannesburg (then the Rand Afrikaans University), is an admitted attorney of the High Court of South Africa and has completed a Certificate in Advanced Commercial Law through Legal Education and Development South Africa, in co-sponsorship with the International Senior Lawyers Program. Nicci is responsible for all legal aspects of the business of African Resonance and its affiliates and is intimately involved and experienced in negotiating high value transactions with African Resonance’s institutional clients.

3.9.2.1.4 Christian van der Merwe, Financial Manager and Director – Christian holds a number of accounting qualifications and is an Associate of the Chartered Institute of Management Accountants (SA), a Chartered Global Management Accountant, through the American Institute of Certified Public Accountants/Chartered Institute of Management Accountants, and a Certified Practicing Accountant (Australia). Christian manages the accounting, financial management and internal reporting functions of African Resonance. He joined African Resonance in 2006. Prior to joining African Resonance, Christian worked for WBHO for a number of years.

3.9.2.2 Other than as provided for in law or detailed in paragraph 8.6, African Resonance management are not subject to any restraints of trade.

3.9.3 Dashpay Management

Yoav Duek, General Manager and Director – Yoav holds a BComm, BAcc (Hons) degree in accounting and taxation from the University of Witwatersrand and is a Fellow of the Institute of Chartered Management Accountants (UK). Yoav is responsible for the general operational management and administration of

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Dashpay. Prior to joining Dashpay, Yoav was previously the Chief Operating Officer for Glocell group, Managing Director of Mobile Data Lab and Mobile Games Company and Chief Executive Officer of CGS – Cheque Guarantee Services.

3.10 African Resonance and Dashpay post the Proposed Transactions

3.10.1 Capital Appreciation aims to augment and promote the existing relationship between African Resonance and Dashpay in order to access the growing market opportunities in the FinTech sector, for which they are both uniquely positioned. African Resonance, in collaboration with Dashpay, has a variety of capabilities, products and solutions which places African Resonance in a strong position to develop and deploy multi-product solutions to the SME market, seize opportunities in the growing South African NPS, participate in the drive towards financial inclusion and consider opportunities outside of South Africa, particularly in the rest of Africa.

3.10.2 Each of African Resonance and Dashpay have a reputation for innovative and quality products and services. The combination of distributing world-class hardware supported by customer-centric service and providing innovative, end-to-end solutions to corporate customers ideally positions African Resonance, in collaboration with Dashpay, to benefit from customer driven demand as well as from demand arising as a result of Terminals being bundled with a broader product and solution offering. The combination of African Resonance and Dashpay, utilising their developed proprietary intellectual property platform and infrastructure, presents a unique, value added and economically viable solution for established clients and new customers. Capital Appreciation views these impressive capabilities as differentiating features for generating demand for the products and services of both African Resonance and Dashpay.

4. SYNTHESIS (SUBJECT OF THE SST TRANSACTION)

4.1 Introduction

Synthesis, founded in 1997, offers highly specialised software development, consulting and integration services and technology based product solutions to banking and other financial institutions in South Africa and other emerging markets. Synthesis’ products and services enable clients to perform business processing functions, meet regulatory requirements, integrate with trading platforms and exchanges and secure sensitive information.

4.2 Synthesis Products and Services

4.2.1 Synthesis’ development and consulting initiatives are responsive to the commercial and technology imperatives of the institutional financial services clients that it serves. Executed in close collaboration with their clients, the Synthesis Digital Channel Initiatives deliver an exceptional end-user customer experience while maintaining information security and transaction integrity.

4.2.2 Synthesis is an accredited AWS Consulting Partner and Synthesis’ “cloud transformation” initiatives assist their clients in becoming “cloud ready”, to execute mass migrations, to harness the benefits of big data analytics and to extract the cost savings and regulatory benefits of compliance. This is an increasing priority for financial services institutions across Africa and Synthesis has already gained recognition for its expertise in this area.

4.2.3 Synthesis’ product solutions for banks and financial services institutions include online banking solutions and regulatory reporting solutions for both SARS (tax) and SARB (balance of payments). There is an increasing regulatory and reporting burden being imposed on financial institutions in the banking, insurance and securities industries. Banks and other providers of consumer facing financial services are increasingly investing in systems and service offerings to respond to ever more demanding customer needs. This presents a compelling growth opportunity for Synthesis. These products also have global application and have led to international expansion opportunities for Synthesis.

4.3 Synthesis Management

4.3.1 The day-to-day operations of Synthesis are managed by an experienced team that have many years of experience with Synthesis or Synthesis’ customers.

4.3.1.1 Michael Shapiro, Director and Synthesis Managing Director – Michael leads the strategy, marketing, sales entrepreneurship and customer satisfaction for the company. Michael obtained a BSc degree in Electrical Engineering degree from the University of the Witwatersrand in 1995. Prior to joining Synthesis he held various positions at Internet Solutions, Dimension Data and Miraculum. Michael is passionate about technology and has been active in the software development domain for the past 20 years.

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4.3.1.2 Jake Shepherd, Director and Synthesis Technical Director – Jake holds a BSc degree in Electrical Engineering from the University of the Witwatersrand and is a co-founder of Synthesis. He has extensive software engineering experience, having consulted to companies in the telecommunications, industrial and financial services sectors. His areas of focus include software design methodologies, software architecture, software design, and development of business-critical applications. In addition Jake has significant experience in various banking fields including regulatory, payments and finance.

4.3.1.3 Thomas Wells, Director – Tom holds a BSc (Hons) (Information Systems) degree in Computer Science from Rhodes University in Grahamstown which he completed in 2000. Tom joined Synthesis in 2004 as divisional director for digital channels. Tom leads the digital channels, cloud adoption and big data strategic business units as well as heads up SynthesisLabs (which is the research and development division of Synthesis) currently researching blockchain technology at Synthesis.

4.3.1.4 Steyn Basson, Divisional Director of Integration – Steyn holds an MSc degree in Computer Science from the University of Johannesburg. Steyn joined Synthesis in 2002 as a software engineer and was appointed to his current role as Divisional Director of Systems Integration in 2007. Steyn has extensive experience in the area of systems integration, with a particular focus on treasury systems, financial exchanges and other regulatory systems.

4.3.2 The restraints to which the Synthesis management are subject are detailed in the SST Executive Employment Contracts.

5. EXPANSION OPPORTUNITIES ACROSS AFRICA

5.1 Africa (excluding South Africa) lags the developed world in terms of the development of its banking services, including payment and infrastructure sectors, thus creating a large market that could emerge over the medium- to- long-term as the continent’s economies continue to post strong GDP growth and African countries develop.

5.2 The absence of legacy systems and populations’ adoption of technology and increasing familiarity with “mobile first” behaviours presents banking institutions with opportunities to leap-frog older technology platforms. This presents compelling partnership opportunities for African Resonance and Dashpay.

5.3 For these, and other reasons, CAPPREC believe that South Africa is likely to continue as the favoured entry point for companies seeking to develop strategies for broader expansion into Africa, which CAPPREC also hopes to capitalise on through African Resonance and Dashpay.

6. RATIONALE FOR THE PROPOSED TRANSACTIONS

6.1 CAPPREC was established for the purpose of pursuing acquisitions of, and investments in, commercial enterprises with good growth potential. African Resonance and Dashpay (in association) are uniquely positioned to capitalise on their technologically innovative products and competencies within the South African payment sector. Both African Resonance and Dashpay are also uniquely placed for expansion into the rest of Africa. SST is equally well positioned to capitalise on the need for financial institutions to invest in innovation, to increase customer reach, to reduce operating costs and to enhance regulatory compliance.

6.2 The Proposed AR-DP Transaction (comprising the AR Acquisition and the acquisition of Dashpay through the Rinwell Acquisition) and the SST Acquisition provide CAPPREC with a real prospect of achieving its stated purpose on listing, the delivery of long-term value for CAPPREC Shareholders.

7. ACQUISITION OF AFRICAN RESONANCE

7.1 Salient terms of the AR Acquisition

In terms of the AR Agreement, CAPPREC will acquire the AR Shares from the African Resonance Shareholders for an aggregate consideration comprising of (i) an aggregate cash payment of R295  000  000, and (ii) the allotment and issue of the AR Consideration Shares (230 000 000 Shares in the aggregate) to each of Hanoch Neishlos (204 500 000 AR Consideration Shares), Edmund Pieterse (12 750 000 AR Consideration Shares) and Wayne Fagan (12 750 000 AR Consideration Shares), respectively. Based on the closing price of the Shares on the Last Practicable Date (R0.85), the total aggregate consideration is R490 500 000. The cash portion of the consideration will be settled from the cash raised on Listing.

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7.2 Completion date

In terms of the AR Agreement, the date of Completion of the AR Acquisition shall be the 5th Business Day after the date upon which the AR Conditions Precedent have been fulfilled or, where applicable, waived, which is expected to be on or about Friday, 12 May 2017.

7.3 AR Conditions Precedent

7.3.1 The AR Agreement is subject to the fulfilment or, where applicable, waiver of the following AR Conditions Precedent:

7.3.1.1 the Rinwell Agreement becoming unconditional in accordance with its terms;

7.3.1.2 the Restraint and Relationship Agreement becoming unconditional in accordance with its terms;

7.3.1.3 the agreement between African Resonance and HNS in terms whereof, inter alia, HNS undertakes to render managerial and administrative services to African Resonance and its affiliates, becoming unconditional in accordance with its terms;

7.3.1.4 the Software Licence Agreement becoming unconditional in accordance with its terms;

7.3.1.5 the Services Agreement becoming unconditional in accordance with its terms;

7.3.1.6 the Resonance Australia Subscription Agreement becoming unconditional in accordance with its terms;

7.3.1.7 written approval for the implementation of the AR Acquisition being obtained as required in terms of the Competition Act;

7.3.1.8 consents from any third parties being obtained, if required in relation to material contracts of African Resonance;

7.3.1.9 no material adverse change having arisen or occurred between the signature date of the AR Agreement and the date upon which all the AR Conditions Precedent are fulfilled or waived, as the case may be;

7.3.1.10 CAPPREC obtaining all approvals of the JSE which are required to implement the AR Agreement, including the listing of the AR Consideration Shares on the Main Board; and

7.3.1.11 the approval by the CAPPREC Shareholders of: (i) the implementation of the AR Agreement; (ii) the allotment and issue of the AR Consideration Shares; and (iii) the release of CAPPREC’s cash held in escrow by Bowman Gilfillan Inc. which is not used to pay the cash portion of the AR Consideration and the Rinwell Consideration, from such escrow and to place such cash under the control of the Board, to the extent required by the Companies Act and/or Listings Requirements and all such resolutions which are special resolutions (if any) and are required to be filed with CIPC, are thereafter filed with CIPC.

7.3.2 The AR Conditions Precedent which relate to regulatory approvals for the AR Acquisition are not capable of waiver although the AR Conditions Precedent may have the date by which they are required to be satisfied extended by mutual agreement.

7.4 Warranties

The African Resonance Shareholders have provided warranties and indemnities to CAPPREC in connection with the AR Acquisition consistent with and customarily provided in transactions of this nature. No performance warranties were given.

7.5 Transfer of AR Shares

The AR Shares will be transferred into the name of CAPPREC on Completion of the Proposed AR-DP Transaction.

7.6 Restrictions on sale of AR Consideration Shares

7.6.1 Each of Hanoch Neishlos, Wayne Fagan and Edmund Pieterse have irrevocably and unconditionally undertaken to, and in favour of CAPPREC, that he will not dispose of or Encumber any of his portion of the AR Consideration Shares prior to the first anniversary of the Completion date of the AR Acquisition.

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7.6.2 Further, Hanoch Neishlos has undertaken to, and in favour of CAPPREC, not to dispose of or Encumber more than 50% of his portion of the AR Consideration Shares prior to the second anniversary of the Completion date of the AR Acquisition, without the prior consent of CAPPREC.

7.6.3 Wayne Fagan and Edmund Pieterse have also undertaken to, and in favour of CAPPREC, not to dispose of or Encumber more than (i) one-third of their respective AR Consideration Shares prior to the second anniversary of the Completion date of the AR Acquisition, and (ii) two-thirds of their respective AR Consideration Shares prior to the third anniversary of the Completion date of the AR Acquisition, without the prior consent of CAPPREC.

7.6.4 If, after these lock-in periods, the relevant African Resonance Shareholders wish to dispose of any of their AR Consideration Shares, they will be obliged to first offer those AR Consideration Shares to CAPPREC who shall have, on the terms and subject to the conditions of the AR Agreement, the right and the option, in its sole discretion, to (i) place or offer the respective AR Consideration Shares on the JSE with a placee/s as determined by CAPPREC, (ii) appoint a nominee to purchase all or part of the respective AR Consideration Shares and/or (iii) repurchase the respective AR Consideration Shares.

7.7 Restraint undertakings

In terms of the Restraint and Relationship Agreement, each of Michael Pimstein, Motty Sacks, Bradley Sacks, Alan Salomon, Wayne Fagan, Hanoch Neishlos and Edmund Pieterse provided restraint undertakings to and in favour of the CAPPREC group within all the countries situated on the continent of Africa (including South Africa), in order to protect the goodwill and the proprietary interests of the CAPPREC group, as of the Completion of the AR Acquisition until two years after the last date on which such person ceases to be a director of, employee of or direct or indirect consultant or contractor to a company forming part of the CAPPREC group.

8. ACQUISITION OF RINWELL

8.1 Salient terms of the Rinwell Agreement

In terms of the Rinwell Agreement, CAPPREC will acquire 100% of the issued shares of Dashpay, through the acquisition of 100% of the issued shares of Rinwell, the holding company of Dashpay, for an aggregate consideration of R225 000 000 payable in cash. The Rinwell Shares will be acquired from Castledash. The consideration will be settled from the cash raised on Listing.

8.2 Completion date

In terms of the Rinwell Agreement, the effective date of the Rinwell Acquisition shall be the 5th Business Day after the date upon which the Rinwell Conditions Precedent have been fulfilled or, where applicable, waived, which is expected to be on or about Friday, 12 May 2017.

8.3 Rinwell Conditions Precedent

8.3.1 The Rinwell Agreement is subject to the fulfilment or, where applicable, waiver of the following Rinwell Conditions Precedent:

8.3.1.1 the AR Agreement becoming unconditional in accordance with its terms;

8.3.1.2 the Restraint and Warrant Agreement becoming unconditional in accordance with its terms;

8.3.1.3 the consultancy agreement between Castlebridge Professional Services Limited (a company incorporated in accordance with the laws of Cyprus, registration number 1903342) and African Resonance becoming unconditional in accordance with its terms;

8.3.1.4 written approval for the implementation of the Rinwell Acquisition being obtained as required in terms of the Competition Act;

8.3.1.5 no material adverse change having arisen or occurred between the signature date of the Rinwell Agreement and the date upon which all the Rinwell Conditions Precedent are fulfilled or waived, as the case may be;

8.3.1.6 the approval by CAPPREC Shareholders of all resolutions required to approve and implement the Rinwell Agreement; and

8.3.1.7 CAPPREC obtaining all approvals of the JSE which are required to implement the Rinwell Agreement.

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8.3.2 The Rinwell Conditions Precedent which relate to regulatory approvals for the Rinwell Acquisition are not capable of waiver although the Rinwell Conditions Precedent may have the date by which they are required to be satisfied extended by mutual agreement.

8.4 Warranties

Castledash has provided warranties and indemnities to CAPPREC in connection with the Rinwell Acquisition consistent with and customarily provided in transactions of this nature. No performance warranties were given.

8.5 Transfer of Rinwell Shares

The Rinwell Shares will be transferred into the name of CAPPREC on Completion of the Proposed AR-DP Transaction.

8.6 Restraint undertakings

8.6.1 In terms of the Restraint and Relationship Agreement, Eitan Neishlos has provided restraint undertakings to, and in favour of the CAPPREC group, within South Africa, in order to protect the goodwill and the proprietary interests of the CAPPREC group, as of the Completion of the Proposed AR-DP Transaction until two years after the latest day he ceases to be a director of, employee of or direct or indirect consultant or contractor to a company forming part of the CAPPREC group.

8.6.2 In terms of the Restraint and Warrant Agreement, Eitan Neishlos has provided restraint undertakings to, and in favour of, the CAPPREC group within all the countries situated on the continent of Africa (excluding South Africa), in order to protect the goodwill and the proprietary interests of the CAPPREC group until two years after the last date he ceases to be a director of, or direct or indirect consultant to a company forming part of the CAPPREC group or Castlebridge or Eitan Neishlos ceasing providing services in terms of the agreement referred to in paragraph 8.3.1.3 above, in consideration for the 15 000 000 Restraint Shares and the Warrants, which comprise the right and option of Castledash to be issued or delivered the 30 000 000 Warrant Shares. The Restraint and Warrant Agreement, including for the avoidance of doubt the issuance of the Restraint Shares and the granting of the Warrants, forms part of the AR-DP Transaction.

8.7 Restrictions on selling Restraint Shares

Eitan Neishlos has irrevocably and unconditionally undertaken to, and in favour of CAPPREC, that he will not dispose of or Encumber any of his Restraint Shares prior to the first anniversary of the closing date of the Restraint and Warrant Agreement, without the prior consent of CAPPREC. If, after this lock-in period, Eitan Neishlos wishes to dispose of any of his Restraint Shares, he is obliged to first offer those Restraint Shares to CAPPREC who shall have, on the terms and subject to the conditions of the Restraint and Warrant Agreement, the right and the option, in its sole discretion, to (i) place or offer the respective Restraint Shares on the JSE with a placee/s as determined by CAPPREC, (ii) appoint a nominee to purchase all or part of the respective Restraint Shares and/or (iii) repurchase the respective Restraint Shares.

9. ACQUISITION OF SYNTHESIS

9.1 Salient terms of the SST Acquisition

In terms of the SST Agreement, CAPPREC will acquire the SST Shares and the SST Claims from the SST Shareholders for (i) an initial cash payment of R82 300 000, (ii) the allotment and issue of the SST Closing Shares (60 000 000 Shares in the aggregate, subject to adjustment if an SST Adjustment Event occurs between the signature date and the date of closing of the SST Acquisition), and (iii) the allotment, issue and payment of the SST PW Consideration should SST achieve certain minimum profits after tax through 31 March 2020 as envisaged in the SST Agreement. Based on the closing price of the Shares on the Last Practicable Date (R0.85), the total aggregate consideration is R133 300 000 (excluding the SST PW Consideration) and R168 800 000 if it assumed that the warranted profits are achieved and the SST PW Consideration is paid, both prior to any SST Adjustment Event. The cash portion of the consideration will be settled from the cash raised on Listing.

9.2 Completion date

In terms of the SST Agreement, the effective date of the SST Acquisition shall be the 5th Business Day after the later of (a) the date upon which the SST Conditions Precedent have been fulfilled or, where applicable, waived, which is expected to be on or about Friday, 12 May 2017; or (b) if a SST Adjustment Event occurs between the date of signature of the SST Agreement and the date of closing of the SST Acquisition, the date on which the number of SST Closing Shares to be allotted and issued to the SST Shareholders is finally agreed or determined in accordance with the SST Agreement.

9.3 SST Conditions Precedent

9.3.1 The SST Agreement is subject to the fulfilment or, where applicable, waiver of the following SST Conditions Precedent:

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9.3.1.1 the approval by the CAPPREC Shareholders of: (i) the implementation of the SST Agreement; (ii) the allotment and issue of the SST Consideration Shares; and (iii) the release of CAPPREC’s cash held in escrow by Bowman Gilfillan Inc. which is not used to pay the cash portion of the SST Consideration, from such escrow and to place such cash under the control of the Board, to the extent required by the Companies Act and/or Listings Requirements and all such resolutions which are special resolutions (if any) and are required to be filed with CIPC, are thereafter being filed with CIPC;

9.3.1.2 CAPPREC notifying the SST Shareholders in writing that CAPPREC is, in its sole discretion, satisfied with the results of the financial, legal, tax and accounting due diligence in relation to SST and its business;

9.3.1.3 the passing by the JS Family Trust of all resolutions required to implement the SST Agreement and the transactions contemplated thereby;

9.3.1.4 the SST Executive Employment Contracts timeously becoming unconditional in accordance with their respective terms;

9.3.1.5 no material adverse change having arisen or occurred between the signature date of the SST Agreement and the date upon which all the SST Conditions Precedent are fulfilled or waived, as the case may be;

9.3.1.6 consents being obtained from any third parties, if required in relation to material contracts of SST;

9.3.1.7 CAPPREC obtaining all approvals of the JSE which are required to implement the SST Agreement and the transactions contemplated thereby, including the listing of the SST Closing Shares on the Main Board;

9.3.1.8 obtaining all regulatory and other third party consents required to implement the SST Agreement and the transactions contemplated thereby;

9.3.1.9 all third party consents that may be identified in the course of the due diligence as referred to in paragraph 9.3.1.2 being obtained; and

9.3.1.10 obtaining written approval or exemption of the Takeover Regulation Panel in terms of section 119(6) of the Companies Act in relation to the SST Agreement and the transactions contemplated thereby, provided that such approval or exemption is unconditional or subject to (i) conditions or qualifications as CAPPREC confirms in writing to the SST Shareholders are acceptable to CAPPREC in its sole and absolute discretion, in so far as such conditions and qualifications are imposed on CAPPREC or SST; and conditions or qualifications as each SST Shareholder confirms in writing to CAPPREC are acceptable to that SST Shareholder in its sole and absolute discretion, in so far as such conditions and qualifications are imposed on that SST Shareholder or SST.

9.3.2 The SST Conditions Precedent which relate to regulatory approvals for the SST Acquisition are not capable of waiver although the SST Conditions Precedents may have the date by which they are required to be satisfied extended by mutual agreement.

9.4 Warranties

The SST Shareholders have provided warranties and indemnities to CAPPREC in connection with the SST Acquisition consistent with and customarily provided in transactions of this nature. No performance warranties were given. Further detail in respect of the SST PW Consideration is set out in paragraph 9.6 below.

9.5 Transfer of SST Shares

The SST Shares will be transferred into the name of CAPPREC on Completion of the SST Acquisition.

9.6 The SST PW Shares and SST PW Cash

In terms of the SST Agreement, CAPPREC and the SST Shareholders have agreed that the SST Shareholders shall be entitled to the SST PW Consideration with the number of SST PW Shares and the amount of SST PW Cash, to be calculated and determined in accordance with the SST Agreement (but absent specified events, the SST PW Shares are not to exceed 30 000 000 Ordinary Shares and the SST PW Cash is not to exceed R10 000 000). A copy of the SST Agreement is available for inspection in accordance with paragraph 7 of the Revised Listing Particulars.

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9.7 Restrictions on sale of SST Consideration Shares

9.7.1 Each of the SST Shareholders have irrevocably and unconditionally undertaken to, and in favour of CAPPREC, that he will not dispose of or Encumber any of his portion of the SST Closing Shares prior to the first anniversary of the closing date of the SST Acquisition.

9.7.2 Further, each of the SST Shareholders has undertaken to, and in favour of CAPPREC, not to dispose of or Encumber more than 50% of his portion of the SST Closing Shares prior to the second anniversary of the closing date of the SST Acquisition, without the prior consent of CAPPREC.

9.7.3 Each of the SST Shareholders have irrevocably and unconditionally undertaken to, and in favour of CAPPREC, that he will not dispose of or Encumber any of his portion of the SST PW Shares, if any, prior to 31 March 2020, without the prior consent of CAPPREC.

9.7.4 If, after these lock-in periods, the relevant SST Shareholders wish to dispose of any of their SST Consideration Shares, they will be obliged to first offer those SST Consideration Shares to CAPPREC who shall have, on the terms and subject to the conditions of the SST Agreement, the right and the option, in its sole discretion, to (i) place or offer the respective SST Consideration Shares on the JSE with a placee/s as determined by CAPPREC, (ii) appoint a nominee to purchase all or part of the respective SST Consideration Shares and/or (iii) repurchase the respective SST Consideration Shares.

10. VOTING ON THE PROPOSED TRANSACTIONS AT THE GENERAL MEETING10.1

10.1.1 In terms of the Listings Requirements, a 50% plus one majority of votes of all CAPPREC Shareholders present or represented by proxy at the General Meeting must be obtained in respect of both ordinary resolutions to approve the Proposed AR-DP Transaction and the Proposed SST Transaction, respectively.

10.1.2 The independent non-executive Directors have unanimously approved the Proposed Transactions and the Directors holding CAPPREC Shares intend to vote their CAPPREC Shares in favour of all resolutions to be proposed at the General Meeting.

10.2 Residual Capital

10.2.1 The total amount raised during the Listing, net of the costs of Listing, was R977 457 000.

10.2.2 As at 30 September 2016, the cash resources of CAPPREC amounted to approximately R1 037 000 000.

10.2.3 On the Last Practicable Date, the aggregate cash components of the AR Consideration (in the amount of R295 000 000), the Rinwell Consideration (in the amount of R225 000 000) and the SST Consideration (in the amount of R82 300 000) amounts to R602 300 000 and the related costs of the Proposed Transactions amounts to R14 823 000 (including VAT).

10.2.4 If the Proposed Transactions are implemented and following settlement of the cash component of the AR Consideration, the Rinwell Consideration, the cash component of the SST Consideration and payment of the related costs (on implementation of the Proposed Transactions), CAPPREC will retain a Residual Capital of approximately R441 122 000.

10.2.5 CAPPREC intends to use the Residual Capital to invest in Resonance Australia (as described herein) and source new investments and for working capital purposes.

10.2.6 The use and retention of the Residual Capital requires the approval of the CAPPREC Shareholders by way of an ordinary resolution.

11. UNDERTAKINGS TO VOTE AT GENERAL MEETING

11.1 Each Founder, and Mr JM Kahn, have undertaken to CAPPREC that he or it will vote the Ordinary Shares that he or it holds in favour of any acquisition of a Viable Asset recommended by the independent non-executive Directors.

11.2 Furthermore, each Founder has undertaken to CAPPREC, and to each of the other Founders, and each of the Additional Committed Investors and Mr JM Kahn have undertaken to CAPPREC, that he or it will vote the Ordinary Shares that he or it holds in favour of any resolution proposed for the use and retention of the Residual Capital.

34

11.3 As a result, CAPPREC has received undertakings representing 51% of aggregate voting rights entitled to be exercised at the General Meeting to vote in favour of the Proposed Transactions and in favour of the resolutions allowing CAPPREC to use and retain the Residual Capital.

12. PROSPECTS

For further information on the operations and strategic positioning of each of African Resonance, Dashpay and Synthesis please refer to paragraphs 2, 3 and 4 above. The commentary on CAPPREC’s prospects below should be read in conjunction with these sections and also Annexure 1.

12.1 African Resonance

For the six-month period ended 31 August 2016 African Resonance generated profit for the period of approximately R25,4  million (reviewed). This compares to profit for the year ended 29 February 2016 of approximately R20,3 million (audited). After tax profit for African Resonance has more than doubled in each of the fiscal years 2015 and 2016. Moreover, the historical financial performance of African Resonance (including for fiscal year 2017) include certain operational overheads that will not re-occur in future periods.

12.2 Dashpay

For the six-month period ended 30 June 2016 the Rinwell group, which includes its wholly owned subsidiary Dashpay, incurred a loss of approximately R5,3 million (reviewed). This compares to a loss for the year ended 30  June 2016 of approximately R9,4 million (audited). Dashpay has been in a development phase and it is anticipated that its financial performance in coming months will begin to reflect the introduction of new products, expected to be launched in the third quarter of calendar year 2017.

12.3 Synthesis

For the six-month period ended 31 August 2016 Synthesis generated profit for the period of approximately R9,6  million (reviewed). This compares to profit for the year ended 29  February 2016 of approximately R14,5 million (audited). After tax profit for Synthesis has grown by more than 25% in each of the fiscal years 2015 and 2016.

12.4 Capital Appreciation

The consolidated financial results of CAPPREC for the ensuing year will accordingly include the consolidated performance of each of CAPPREC, African Resonance, Dashpay and Synthesis and the pro forma financial information has been prepared, and is set out in Annexure 1, to illustrate the impact of the Proposed Transactions on the six month historical financial results of CAPPREC (for the period 1 April 2016 to 30 September 2016) on the assumption that the Proposed Transactions occurred on 1 April 2016.

13. ADDITIONAL RESOLUTIONS

In terms of the Companies Act, a 75% majority of votes of all CAPPREC Shareholders, present or represented by proxy at the General Meeting, must be obtained in respect of the special resolution to authorise any direct or indirect financial assistance in terms of section 45(3)(a)(ii) of the Companies Act.

14. SHARE CAPITAL OF CAPPREC

For further information on the share capital of CAPPREC, please see paragraph 3.1 of the Revised Listing Particulars.

15. FINANCIAL INFORMATION

15.1 Financial information of CAPPREC

15.1.1 The historical financial information of CAPPREC showing the audited results of CAPPREC for the financial year ended 31 March 2016 is available on CAPPREC’s website (www.capitalappreciation.co.za), and is the responsibility of the Directors and is hereby incorporated by reference.

15.1.2 The interim financial information of CAPPREC for the interim period ended 30 September 2016 is annexed as Annexure 3 of this Circular, and is the responsibility of the Directors.

15.1.3 EY’s independent reporting accountants’ report on the interim financial information of CAPPREC appears in Annexure 4 to this Circular.

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15.2 Financial information of African Resonance

15.2.1 The historical financial information of African Resonance for the financial years ended 28 February 2014, 28 February 2015 and 29 February 2016 is annexed as Annexure 5 of this Circular, and is the responsibility of the Directors.

15.2.2 Grant Thornton’s independent reporting accountants’ report on the historical financial information of African Resonance appears in Annexure 6 to this Circular.

15.2.3 The interim financial information of African Resonance for the interim period ended 31 August 2016 is annexed as Annexure 7 of this Circular, and is the responsibility of the Directors.

15.2.4 Grant Thornton’s independent reporting accountants’ report on the interim financial information of African Resonance appears in Annexure 8 to this Circular.

15.3 Financial information of Rinwell and Dashpay

15.3.1 The historical financial information of Rinwell for the financial year ended 30 June 2016 is annexed as Annexure 9 of this Circular, and is the responsibility of the Directors. As Rinwell was incorporated on 27 May 2015, there is no historical financial information of Rinwell for any prior periods.

15.3.2 Grant Thornton’s independent reporting accountants’ report on the historical financial information of Rinwell appears in Annexure 10 to this Circular.

15.3.3 The interim financial information of Rinwell for the six month period ended 30 June 2016 is annexed as Annexure 11 of this Circular, and is the responsibility of the Directors.

15.3.4 Grant Thornton’s independent reporting accountants’ report on the interim information of Rinwell for the six-month period ended 30 June 2016 appears in Annexure 12 to this Circular.

15.3.5 The historical financial information of Dashpay for the financial years ended 30 June 2015 and 30 June 2016 is annexed as Annexure 13 of this Circular, and is the responsibility of the Directors. The audited historical financial information of Dashpay for the financial year ended 30 June 2014 is presented in Annexure 15 of this Circular, and is the responsibility of the Directors.

15.3.6 Grant Thornton’s independent reporting accountants’ report on the historical financial information of Dashpay for the financial years ended 30 June 2015 and 30 June 2016 presented in Annexure 13 appears in Annexure 14 to this Circular. KMPG’s independent reporting accountants’ report on the historical financial information of Dashpay for the financial year ended 30 June 2014 presented in Annexure 15 appears in Annexure 16 to this Circular.

15.4 Financial information of Synthesis

15.4.1 The historical financial information of Synthesis for the financial years ended 28 February 2014, 28 February 2015 and 29 February 2016 is annexed as Annexure 17 of this Circular, and is the responsibility of the Directors.

15.4.2 BDO’s independent reporting accountants’ report on the historical financial information of Synthesis appears in Annexure 18 to this Circular.

15.4.3 The interim financial information of Synthesis for the interim period ended 31 August 2016 is annexed as Annexure 19 of this Circular, and is the responsibility of the Directors.

15.4.4 BDO’s independent reporting accountants’ report on the interim financial information of Synthesis appears in Annexure 20 to this Circular.

15.5 Pro forma financial information on CAPPREC

15.5.1 The pro forma financial information of CAPPREC is set out in Annexure 1 to this Circular, together with the assumptions upon which such information is based, as indicated in the notes thereto in Annexure 1 to this Circular.

15.5.2 The pro forma financial information is the responsibility of the Directors. The pro forma financial information is presented using accounting policies that are consistent with IFRS and in a manner consistent with the basis on which the historical financial information of CAPPREC has been prepared and in terms of CAPPREC’s accounting policies. The pro forma financial information has been presented for illustrative purposes only and, because of their nature, may not give a fair reflection of CAPPREC’s financial position, changes in equity and results of operations, post the implementation

36

of the Proposed Transactions. The pro forma financial information has been prepared in accordance with the Listing Requirements and the Revised Guide on Pro Forma Financial Information issued by the South African Institute of Chartered Accountants (SAICA).

15.5.3 EY’s independent reporting accountants’ report on the pro forma financial information appears in Annexure 2 to this Circular.

16. GENERAL MEETING

A general meeting of the CAPPREC Shareholders has been convened and will be held at 10:00 on Friday, 5 May 2017 at the offices of CAPPREC on the 4th Floor, One Vdara, 41 Rivonia Road, Sandhurst, 2196 for the purpose of considering, and, if deemed fit, approving and adopting, with or without modification, the resolutions set out in the Notice of General Meeting. The resolutions to be put to CAPPREC Shareholders for their approval and adoption are set out in the Notice of General Meeting of CAPPREC Shareholders annexed to this Circular.

17. ELECTRONIC PARTICIPATION IN THE GENERAL MEETING

17.1 CAPPREC intends to make provision for CAPPREC Shareholders, or their proxies, to participate in the General Meeting by way of electronic communication. In terms thereof, CAPPREC intends making a dial-in facility available that will be linked to the venue at which the General Meeting will take place, on the date of, and from the time of commencement of, the General Meeting. The dial-in facility will enable all persons to participate electronically in the General Meeting in this manner and to communicate concurrently with each other without an intermediary, and to participate reasonably effectively in the General Meeting. The Board authorised the participation by electronic means on 13  January 2017, as required and in accordance with the MOI.

17.2 CAPPREC Shareholders wishing to participate electronically in the General Meeting are required to deliver written notice as outlined in the Notice to General Meeting by Wednesday, 3 May 2017. Please note that the cost of the dial in facilities described above will be for the account of the requesting CAPPREC Shareholder.

17.3 CAPPREC Shareholders participating in the General Meeting by electronic participation will still have to appoint a proxy to vote at the General Meeting.

18. DIRECTORS

18.1 Directors’ service contracts

For further information on the Directors’ service contract details, please see paragraph 4.4 of the Revised Listing Particulars.

18.2 Directors’ interests

For further information on the Directors’ interests, please see paragraph 4.8 of the Revised Listing Particulars.

18.3 Directors’ emoluments and incentives

For further information on the Directors’ emoluments and incentives, please see paragraph 4.5 of the Revised Listing Particulars.

19. OTHER MATERIAL MATTERS

19.1 Material loans

Details of material loans of CAPPREC, African Resonance, Rinwell, Dashpay and Synthesis are set out in paragraph 5.11 of the Revised Listing Particulars.

19.2 Material changes

Details of material changes in the financial or trading positions of CAPPREC, African Resonance, Rinwell, Dashpay and Synthesis are set out in paragraph 5.10 of the Revised Listing Particulars.

37

19.3 Material contracts

Details of material contracts of CAPPREC, African Resonance, Rinwell, Dashpay and Synthesis are set out in paragraph 6.1 of the Revised Listing Particulars.

19.4 Major CAPPREC Shareholders

Details of the major CAPPREC Shareholders are set out in paragraph 3.7 of the Revised Listing Particulars.

20. WORKING CAPITAL STATEMENT

The Directors are of the opinion that the working capital available to the CAPPREC group is sufficient for the CAPPREC group’s present working capital requirements and will, post-implementation of the Proposed Transactions and assuming that the proposed resolution regarding the use and retention of the Residual Capital is adopted by the CAPPREC Shareholders at the General Meeting, be adequate for a period of at least 12 months from the date of issue of this Circular.

21. LITIGATION STATEMENT

There are no legal or arbitration proceedings, including any such proceedings that are pending or threatened, of which CAPPREC is aware which may have or have, over the 12 months preceding the date of this Circular, a material effect on the financial position of the current CAPPREC group, African Resonance, Rinwell, Dashpay or Synthesis.

22. EXPENSES

The estimated costs of preparing and distributing this Circular, including the Revised Listing Particulars and all other annexures, holding the General Meeting and implementing the Proposed Transactions, including the fees payable to professional advisers, are set out in paragraph 4.7.1 of the Revised Listing Particulars.

23. DIRECTORS’ RECOMMENDATION

23.1 The Directors have considered the terms and conditions of the Proposed Transactions and are of the opinion that the terms of the Proposed Transactions are in the interests of CAPPREC Shareholders.

23.2 The Directors recommend that CAPPREC Shareholders vote in favour of all the resolutions to be proposed at the General Meeting, as detailed in the Notice of General Meeting. The Directors, in their personal capacity, intend to vote the CAPPREC Shares held by them in favour of the resolutions to be proposed at the General Meeting.

23.3 The Proposed Transactions were approved by all of the disinterested Directors, being B. Bulo, J. Kahn, V. Sekese, D. Matjila, R. Morar and C. Valkin on 13 January 2017.

24. ADVISERS’ CONSENTS

The parties referred to in the Corporate Information section on the inside front cover of this Circular have consented in writing to act in the capacities stated and to their names being stated in the Circular and, in the case of the EY, KPMG, Grant Thornton and BDO, have consented to the inclusion of their reports and to the references to their reports in the form and context in which they appear, and have not withdrawn their consents prior to the publication of this Circular.

25. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors, whose names are given in paragraph 4.1.1 of the Revised Listing Particulars collectively and individually accept full responsibility for the accuracy of the information furnished and certify that, to the best of their knowledge and belief, there are no facts which have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made, and that this Circular contains all information required by the Listings Requirements.

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26. DOCUMENTS AVAILABLE FOR INSPECTION

Details of the documents available for inspection by CAPPREC Shareholders are set out in paragraph 7 of the Revised Listing Particulars.

27. EXCHANGE CONTROL APPROVAL

The required Exchange Control approval in respect of the purchase of the Rinwell Shares by CAPPREC has been obtained in terms of the Excon Control Regulations.

Signed at Johannesburg, South Africa on 24 March 2017 by Michael Sacks on behalf of all the Directors in terms of a resolution signed by such Directors.

By order of the Board

Michael SacksChairman

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Annexure 1

PRO FORMA FINANCIAL INFORMATION OF CAPPREC

Basis of preparation

The definitions and interpretations commencing on page 6 of this Circular apply throughout this Circular including this Annexure 1.

The Pro Forma Financial Information of CAPPREC (“Pro Forma Financial Information”) comprising the pro forma consolidated statement of comprehensive income and the consolidated statement of financial position, has been prepared for illustrative purposes only and because of its nature may not fairly present CAPPREC’s financial position, changes in equity and results of operations or cash flows.

The Pro Forma Financial Information is based on the reviewed historical financial information of CAPPREC as at and for the six months ended 30 September 2016, as presented in the Financial Statements of CAPPREC (“Historical Financial Information”).

The pro forma consolidated statement of comprehensive income and the pro forma consolidated statement of financial position (together, the “Pro Forma financial information”) have been prepared to show the financial effects of:

• the Proposed Transactions – collectively the Proposed AR-DP Transaction and the Proposed SST Transaction;

• the Restraint and Warrant Agreement;

• the Resonance Australia Subscription Agreement; and

• the transaction costs associated with the Proposed Transactions.

(collectively the “Pro Forma Adjustments”).

The Pro Forma Financial Information has been prepared to illustrate the impact of the Proposed Transactions on the Historical Financial Information on the assumption that, with respect to the pro forma statement of financial position, the Proposed Transactions occurred on 30 September 2016, and, with respect to the pro forma statement of comprehensive income, the Proposed Transactions occurred on 1 April 2016 and shows CAPPREC’s performance for the six-month period then ended. African Resonance and Synthesis each have a financial year ending 28 February, while the Rinwell and Dashpay financial year end is 30 June. Accordingly, the Pro Forma Financial Information incorporates an appropriately comparable six month period for each entity. For each of African Resonance and Synthesis the Pro Forma Financial Information includes the financial performance for the first six months from 1 March through 31 August 2016. For each of Rinwell and Dashpay the Pro Forma Financial Information includes the six months from 1 January through 30  June 2016. The historical information has been extracted from the companies’ accounts as of the dates specified, in each case audited or reviewed, except for Resonance Australia, as applicable, by the respective company’s independent reporting accountants.

The Pro Forma Financial Information has been prepared using the accounting policies of CAPPREC which comply with IFRS and are consistent with those applied in the Historical Financial Information. The Pro Forma Financial Information has been prepared in accordance with the JSE Listing Requirements and the Revised Guide on Pro Forma Financial Information issued by the South African Institute of Chartered Accountants (SAICA).

The Pro Forma Financial Information is the responsibility of the Directors.

EY’s independent reporting accountants’ report on the Pro Forma Financial Information is set out in Annexure 2 to the Circular.

40 41

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43

Preamble to Pro Formas

The pro forma consolidated statement of financial information has been prepared to show the financial effects of the Proposed Acquisitions. These pro forma financial effects are prepared for illustrative purposes only, to provide information about how the Proposed Acquisitions might have affected the financial information presented by CAPPREC and, because of their pro forma nature, may not give a fair reflection of CAPPREC’s financial position, changes in equity, results of operations or cash flows after the Proposed Acquisitions. The pro forma statement of financial position and the pro forma statement of comprehensive income have been prepared on the basis as if the Proposed Acquisition took place on 30 September 2016 for the CAPPREC’s financial position, and at 1 April 2016 for CAPPREC’s financial performance for the six month period then ended.

The directors of Capital Appreciation Limited are responsible for the preparation of the pro forma financial information. The pro forma financial information has been prepared using accounting policies that are consistent with IFRS and the accounting policies adopted by Capital Appreciation Limited. The pro forma financial information has been prepared in accordance with the Listings Requirements and the revised Guide on Pro Forma Financial Information issued by SAICA.

The independent reporting accountants’ assurance report on the abovementioned pro forma financial information is included as Annexure 2 to this Circular.

1. The financial information in the “CAPPREC Prior to Proposed Transactions” column has been extracted without adjustment from the reviewed interim financial information of CAPPREC as at 30 September 2016. The interim financial statements of CAPPREC were reviewed by Ernst & Young Inc. who issued an ISRE 2410 review report. These are available for inspection as detailed in paragraph 7 of the Revised Listing Particulars.

2. The financial information in the “Proposed Acquisition African Resonance” column has been extracted without adjustment from the reviewed interim financial information of African Resonance as at 31 August 2016 which is set out in Annexure 3. The interim financial statements of African Resonance were reviewed by Grant Thornton who issued an ISRE 2410 review report. These are available for inspection as detailed in paragraph 7 of the Revised Listing Particulars.

3. The “Consolidation Entries for Acquisition African Resonance” column represents the acquisition of the business of African Resonance for a purchase price of R490.5 million, with R295 million settled in cash and 230 million CAPPREC shares which have been valued at 85 cents being the price at Last Practicable Date and the elimination of pre-acquisition profits and share capital. The acquisition has been accounted for in terms of IFRS 3 – Business Combinations. Management has performed a provisional purchase price allocation (‘PPA’) to determine the fair value of the assets and liabilities acquired. Following this provisional assessment, R86.3 million has been allocated to Intangible Assets and the balance of excess purchase price over acquired net asset value to goodwill. Goodwill represents the value paid in excess of the provisional fair value of net assets and consists largely of synergies and economies of scale expected from the operations of the acquired companies into the Group. Management’s initial estimation of the useful life of the African Resonance’s software is seven years. The intangible amortisation has been raised in the “Amortisation of Intangible Assets” line item. Per IFRS 3 final PPA exercise will be done during the course of the 2018 financial year.

4. The statement of comprehensive income in the “Proposed Acquisition Rinwell Group” column has been extracted without adjustment from the financial statements as at 30 June 2016 reported on in terms of ISRE 2410 by Grant Thornton. These are available for inspection as detailed in paragraph 17 of the circular. The statement of financial position in “Proposed Acquisition Rinwell” column has been extracted without adjustment from the annual audited financial statements – refer to paragraph 15.3.3 for additional information.

5. The “Consolidation Entries for Acquisition Rinwell Group” column represents the acquisition of the business of Rinwell Group for a purchase price of R225 million settled in cash and the elimination of pre-acquisition profits and share capital. The acquisition has been accounted for in terms of IFRS 3 – Business Combinations. Management has performed a provisional purchase price allocation (PPA) to determine the fair value of the assets and liabilities acquired. Following this provisional assessment, R34.7 million has been allocated to Intangible Assets and the balance of excess purchase price over acquired net asset value to goodwill. Goodwill represents the value paid in excess of the provisional fair value of net assets and consists largely of synergies and economies of scale expected from the operations of the acquired companies into the Group. Management’s initial estimation of the useful life of the Rinwell Group’s software is seven years. The intangible amortisation has been raised in the “Amortisation of Intangible Assets” line item. Per IFRS 3 final PPA exercise will be done during the course of the 2018 financial year.

6. The column entitled “Proposed Acquisition of Resonance Australia” represents the 17.45% investment in the associate, Resonance Australia. The investment in the associate is made up of the cost of investment of AUD2.97 million and a AUD0.5 million working capital loan, both of which were paid in cash. According to IAS 28, the working capital loan forms part of the net investment. An exchange rate of AUD1 = R9.59 was assumed, being the rate at the Last Practicable Date.

The Equity accounted loss from associate represents the 17.45% share of the loss of AUD231,869 from Resonance Australia Proprietary Limited for the six months ended 30 June 2016. An average exchange rate of AUD1 = R11.31 was assumed. The shareholders are cautioned that the information relating to Resonance Australia for the purpose of calculating the Equity accounted loss from associate, has been obtained from the management accounts. As the company falls below the Australian statutory required audit thresholds and has been deemed to be a non-reporting entity, the financial information has not been subject to a review or an audit. Management of CAPPREC have satisfied themselves with the quality of those management accounts for inclusion in the pro forma financial information.

7. The column entitled “Consolidation Entries” represents the elimination of inter-company loans between African Resonance and Rinwell Group.

8. The column entitled “Restraint of Trade Agreement on African Resonance” reflects the 15 million shares granted in connection with the restraint of trade entered into with the owner of Rinwell. For the purposes of the pro forma financial information, it has been assumed that these 15 million shares are valued at the market price of 85 cents at Last Practicable Date.

9. The column entitled “Settlement of Shareholder Loans” represents the settlement of loans to shareholders as required by the African Resonance Agreement and Synthesis Agreement and the impact of the related interest.

10. The financial information in the “Proposed Acquisition Synthesis” column has been extracted without adjustment from the reviewed interim financial information of Synthesis as at 31 August 2016 which is set out in Annexure 10. The interim financial statements of Synthesis were reviewed by BDO South Africa Incorporated who issued an ISRE 2410 review report. These are available for inspection as detailed in paragraph 7 of the Revised Listing Particulars.

11. The “Consolidation Entries for Acquisition Synthesis” column represents the acquisition of the business of Synthesis for a purchase price of R133.3 million, with R82.3 million settled in cash and 60 million CAPPREC shares which have been valued at 85 cents being the price at Last Practicable Date and the elimination of pre-acquisition profits and share capital. The acquisition has been accounted for in terms of IFRS 3 – Business Combinations. Management has performed a provisional purchase price allocation (‘PPA’) to determine the fair value of the assets and liabilities acquired. Following this provisional assessment, R30 million has been allocated to Intangible Assets and the balance of excess purchase price over acquired net asset value to goodwill. Goodwill represents the value paid in excess of the provisional fair value of net assets and consists largely of synergies and economies of scale expected from the operations of the acquired companies into the Group. Management’s initial

44

estimation of the useful life of the Synthesis’s software/licence is 10 years. The intangible amortisation has been raised in the “Amortisation of Intangible Assets” line item. Per IFRS 3 final PPA exercise will be done during the course of the 2018 financial year. Should Synthesis achieve its profit warranty, as included in the SST Agreement, the Synthesis shareholders will receive R10 million cash and an issue of 30 million shares. The period of the warranty is 37 months. For the purposes of the pro forma financial information, it has been assumed that the profit warranty targets will be met and these 30 million shares are valued at the market price of 85 cents at Last Practicable Date and the cash portion is included in other Financial Liabilities at present value of R8.2 million. The Synthesis PW Consideration has been included as part of purchase consideration.

12. “Impact of transactions on Income Received” comprises the reversal of the income received and related tax effect as a result of the reduction in cash resources. It is based on the assumptions that the cash for the Proposed Acquisitions was paid on 1 April 2016. As a result of the transactions cash resources will reduce by R635.5 million and the foregone interest has been calculated at a rate of 7.5% per annum.

13. “Transaction costs” represents non-continuing transaction costs related to the acquisitions of African Resonance, Rinwell Group and Synthesis. These are outlined in more detail in paragraph 4.7.1 of the Revised Listing Particulars. These transaction costs are deemed to be capital in nature and not to be deductible for income tax.

14. “Amortisation of Intangible Assets” represents amortisation of intangible assets related to the acquisitions of African Resonance, Rinwell Group and Synthesis. The useful life of the intangible assets of African Resonance, Rinwell Group and Synthesis is seven years, seven years and 10 years, respectively. These charges are of a continuing nature.

15. For the purposes of the pro forma financial information, all share transactions as part of the acquisitions are valued at the market price of 85 cents as at Last Practicable Date. Deferred tax has been raised on the intangible asset at the tax rate of 28%.

16. No other material post-balance sheet date events have taken place which would require adjustment to the pro forma statement of financial position presented.

45

Annexure 2

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE COMPILATION OF THE PRO FORMA FINANCIAL INFORMATION OF THE CAPPREC GROUP

The DirectorsCapital Appreciation Limited4th Floor, One Vdara41 Rivonia RoadSandhurst, 2196South Africa

INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE COMPILATION OF THE PRO FORMA FINANCIAL INFORMATION OF CAPITAL APPRECIATION LIMITED

The definitions and interpretations commencing on page 6 of the Circular apply throughout the Circular including this report.

We have completed our assurance engagement to report on the compilation of the Pro Forma financial information of Capital Appreciation Limited (“CAPPREC”) by the Directors. The Pro Forma financial information, as set out in Annexure 1 of the Circular relating to the Proposed Transactions consists of the statement of comprehensive income for the interim six month period ended 30 September 2016, the statement of financial position at 30 September 2016 and the Pro Forma financial effects and related notes (collectively the “Pro Forma financial information”). The Pro Forma financial information has been compiled by the Directors on the basis of the applicable criteria specified in the JSE Limited (JSE) Listings Requirements.

The Pro Forma financial information has been compiled by the Directors to illustrate the impact of the Proposed Transactions, described in paragraph 6 of the Circular, on CAPPREC’s financial position as at 30 September 2016, and CAPPREC’s financial performance for the six month period then ended, as if the corporate actions had taken place at 1 April 2016. As part of this process, information about CAPPREC’s financial position and financial performance has been extracted by the Directors from CAPPREC’s interim financial results for the period ended 30 September 2016, on which a review report has been published.

Directors’ responsibility for the Pro Forma Financial Information

The Directors are responsible for compiling the Pro Forma financial information on the basis of the applicable criteria as detailed in paragraphs 8.15 to 8.34 of the JSE Listings Requirements and the Guide on Pro Forma Financial Information revised and issued by the South African Institute of Chartered Accountants (SAICA) in September 2014 (“Applicable Criteria”). The Directors are also responsible for the financial information from which the Pro Forma financial information has been prepared.

Our independence and quality control

We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants and the Code of Professional Conduct for Registered Auditors issued by the Independent Regulatory Board for Auditors, which includes independence and other requirements founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

The firm applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountant’s responsibility

Our responsibility is to express an opinion, as required by the JSE Listings Requirements, about whether the Pro Forma financial information has been compiled, in all material respects, by the Directors on the basis of the Applicable Criteria based on our procedures performed. We conducted our engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus which is applicable to an engagement of this nature. This standard requires that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether the Directors have compiled the Pro Forma financial information, in all material respects, on the basis of the Applicable Criteria.

46

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Pro Forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Pro Forma financial information.

The purpose of Pro Forma financial information included in the Circular is solely to illustrate the impact of the Proposed Transactions on the unadjusted financial information of the entity as if the Proposed Transactions had occurred or had been undertaken as at 30 September 2016 for the CAPPREC’s financial position, and at 1 April 2016 for CAPPREC’s financial performance for the six month period then ended for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Proposed Transactions, subsequent to their implementation would have been as presented.

A reasonable assurance engagement to report on whether the Pro Forma financial information has been compiled, in all material respects, on the basis of the Applicable Criteria involves performing procedures to assess whether the Applicable Criteria used by the Directors in the compilation of the Pro Forma financial information provides a reasonable basis for presenting the significant effects directly attributable to the Proposed Transactions, and to obtain sufficient appropriate evidence about whether:

• The related pro forma adjustments give appropriate effect to the Applicable Criteria; and

• The Pro Forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on our judgement, having regard to our understanding of the nature of the company, the Proposed Transactions in respect of which the Pro Forma financial information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Pro Forma financial information. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the Pro Forma financial information has been compiled, in all material respects, on the basis of the Applicable Criteria specified by the Listings Requirements and described on in paragraph 15.5 of the Circular.

Ernst & Young Inc.Director: Roger Hillen CA(SA)

Registered AuditorReporting Accountant Specialist

24 March 2017

47

Annexure 3

INTERIM FINANCIAL INFORMATION OF CAPPREC

STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2016

Reviewed Audited30 September 2016 31 March 2016

R R

AssetsNon-current assetsProperty, plant and equipment 175 046 172 685

175 046 172 685

Current assetsAccounts receivable and prepayments 591 145 479 640Cash and cash equivalents 1 037 033 673 1 008 020 404

1 037 624 818 1 008 500 044

Total assets 1 037 799 864 1 008 672 729

Equity and liabilitiesEquityRedeemable ordinary share capital 1 000 002 500 1 000 002 500Constituent ordinary share capital 4 000 000 4 000 000Constituent costs (22 543 311) (22 543 311)Accumulated profit 49 052 784 22 158 579

1 030 511 973 1 003 617 768

LiabilitiesCurrent liabilitiesAccounts payable 1 132 680 4 969 177Tax liability 6 155 211 85 784

7 287 891 5 054 961

Total equity and liabilities 1 037 799 864 1 008 672 729

48

STATEMENT OF COMPREHENSIVE INCOME

Reviewed Auditedsix months to 12 months to

30 September 2016 31 March 20161

Notes R R

Revenue 2 39 745 134 32 995 626Operating expenses 3 (2 384 623) (2 214 856)

Profit before taxation 37 360 511 30 780 770Taxation (10 466 306) (8 622 191)

Profit for the period 26 894 205 22 158 579Other comprehensive income – –

Total comprehensive profit for the period 26 894 205 22 158 579

Earnings per share (cents)Basic and headline earnings per share (cents) 2.15 1.77Redeemable ordinary shares in issue 1 250 000 000 1 250 000 000

1 refer to note 8

49

STATEMENT OF CHANGES IN EQUITY

Redeemable ordinary

share capital

Constituent ordinary

share capital

Constituent costs

Accumulated profit

Total equity

R R R R R

Issue of ordinary share capital * *

Balance at 1 March 2015 * *Conversion of ordinary share capital to constituent ordinary share capital (*) *Issue of redeemable ordinary share capital 1 000 000 000 1 000 000 000Issue of founders’ initial ordinary share capital 7 500 7 500Issue of constituent ordinary share capital 4 000 000 4 000 000Redemption of founders’ initial ordinary share capital (5 000) (5 000)Redemption of constituent ordinary share capital * *Constituent costs (22 543 311) (22 543 311)Total comprehensive profit for the period 22 158 579 22 158 579

Balance at 31 March 2016 1 000 002 500 4 000 000 (22 543 311) 22 158 579 1 003 617 768

Total comprehensive profit for the six months ended 30 September 2016 26 894 205 26 894 205

Balance at 31 March 2016 1 000 002 500 4 000 000 (22 543 311) 49 052 784 1 030 511 973

*Less than R1

50

STATEMENT OF CASH FLOWS

Reviewed Auditedsix months to 12 months to

30 September 2016 31 March 2016R R

Cash flows from operating activities (6 223 058) 2 283 658Interest income 39 745 134 32 995 626Tax paid (4 396 897) (8 536 407)

Net cash from operating activities 29 125 197 26 742 877Cash flows from investing activitiesProperty, plant and equipment (111 928) (181 662)

Net cash from investing activities (111 928) (181 662)Cash flows from financing activitiesIssue of redeemable ordinary share capital 1 000 000 000Issue of founders’ initial ordinary share capital 2 500Issue of constituent ordinary share capital 4 000 000Payment of constituent costs (22 543 311)

Net cash from financing activities 981 459 189

Total cash movement for the period 29 013 269 1 008 020 404

Total cash at beginning of the year 1 008 020 404

Total cash at end of the period 1 037 033 673 1 008 020 404

51

NOTES TO THE FINANCIAL STATEMENTS

1. BASIS OF PREPARATION

The condensed interim financial statements have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (“IFRS”), disclosure as required by IAS 34 Interim Financial Reporting Standards, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the South African Companies Act, 71 of 2008, as amended and the Listings Requirements of the JSE Limited. The accounting policies and methods of computation used in the preparation of this report are consistent with those of the previous period and with those applied in the financial statements for the period ended 31 March 2016.

2. REVENUE

Reviewed Auditedsix months to 12 months to

30 September 2016 31 March 2016R R

Bank – interest income 39 745 134 32 995 626

Total interest income is calculated and received at the negotiated interest rates with Absa Bank and Investec Bank on cash held on call and notice deposits.

3. OPERATING EXPENSES

The following items are included within operating expenses:

Reviewed Auditedsix months to 12 months to

30 September 2016 31 March 2016R R

Depreciation of property, plant and equipment 32 962 8 977Directors emoluments 145 000 120 000Operating lease straight line expense 497 952 331 968Staff costs 370 803 142 688

4. RELATED PARTIES

In terms of International Accounting Standards (IAS 24) the Company is obliged to disclose parties that directly or indirectly fall within the scope and definition of a Related Party.

Other than the directors’ emoluments disclosed in note 5 there were no related party transactions.

The Company has established the Capital Appreciation Empowerment Trust (“the Trust”) with the object of facilitating economic empowerment of and advancing the interests of Black Persons, by conferring vested interests in redeemable ordinary shares held by the Trust. The Trust initially subscribed for 50  000  000 redeemable ordinary shares and 25 000 000 founders initial ordinary shares. These shares are currently held by CAET Holdings Proprietary Limited of which the Trust is a 100% shareholder. The funding for the initial subscription was facilitated through facilities granted by CAET Holdings Proprietary Limited. The Trust is included as a Related Party as the Chairman of the Company serves as a Trustee of the Trust. The Company is indebted to the Trust to the sum of R11 584 related to certain administrative expenses.

In terms of the undertakings by the constituent shareholders set out in the Pre-Listing Statement, the constituent shareholders subscribed for 4 constituent ordinary shares in the Company in the amount of R4 million. The proceeds thereof were used as a contribution towards the constituent costs. The constituent shareholders, B Sacks, M Sacks, M Pimstein and A Salomon consequently and collectively fall within the definition of a Related Party.

52

5. DIRECTOR’S EMOLUMENTS

Executive

Executive directors received no remuneration for services rendered to the company during the current period. The executive directors are also considered to be the key management personnel.

Non-executive

Fees for services as directors

Reviewed Auditedsix months to 12 months to

30 September 2016 31 March 2016R R

Non-executive DirectorsB Bulo 35 000 20 000J Kahn 20 000 20 000Dr D Matjila 20 000 20 000R Morar – 20 000M Sacks – –V Sekese 35 000 20 000C Valkin 35 000 20 000

Total 145 000 120 000

6. FAIR VALUES

The fair values of the recognised financial instruments are not materially different from the carrying amounts reflected in the statement of financial position.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

At 30 September 2016 AND 31 March 2016, the Company had no financial instruments carried at fair value.

7. EVENTS AFTER THE REPORTING PERIOD

Subsequent to the interim period end, a non-binding term sheet was approved by the Directors of Capital Appreciation Limited, to acquire 100% of the shares in three separate financial technology companies (i) African Resonance Business Solutions Proprietary Limited, (ii) Rinwell Investments Proprietary Limited, the sole shareholder of Dashpay Proprietary Limited, and (iii) Synthesis Software Technologies Proprietary Limited.  These enterprises provide a variety of technology solutions, services and related technical support services to financial institutions and others in the financial services sector. At the date of finalisation of these financial statements no agreements have been signed.

8. COMPARATIVE FINANCIALS

No comparative financial data is prepared for the statement of comprehensive Income for the six months ended 30 September 2015 as there were no transactions. The comparative financial data included in these interim financial statements relates to a five and a half month period being from date of commencement of business, 16 October 2015 to 31 March 2016.

9. INTERIM DIVIDEND

No dividend was declared during the interim period.

53

Annexure 4

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE INTERIM FINANCIAL INFORMATION OF CAPPREC

The DirectorsCapital Appreciation Limited4th Floor, One Vdara41 Rivonia RoadSandhurst, 2196South Africa

24 March 2017

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE INTERIM FINANCIAL INFORMATION OF CAPITAL APPRECIATION LIMITED

Introduction

At your request, we present our Reporting Accountant’s Report on the interim financial information of Capital Appreciation Limited for the six months ended 30 September 2016 (the ‘Historical Financial Information’) for inclusion in the Circular to shareholders to be dated on or about 31 March 2017 (‘the Circular’). This report is required for the purposes of complying with Section 8.48 of the Listings Requirements of the JSE Limited (the ‘JSE Listings Requirements’) (the ‘Listings Requirements’) and is given for the purpose of complying with those requirements and for no other purpose. We are the independent auditors of Capital Appreciation Limited.

To the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with the Listings Requirements and consenting to its inclusion in the Circular.

Responsibility of the directors

The Directors are responsible for the fair presentation in accordance with International Financial Reporting Standards (“IFRS”) of the interim financial information contained therein to which this Independent Reporting Accountant’s Report relates, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

Interim financial information subjected to review

We have reviewed the interim financial information for the six months ended 30 September 2016, attached as Annexure 3 to the Circular to be dated on or about 31 March 2017, prepared in accordance with IFRS and in compliance with the JSE Listings Requirements.

Responsibility of the independent reporting accountant’s on the interim financial information for the six months ended 30 September 2016

Our responsibility is to express a conclusion on the interim Financial Information for the six months ended 30 September 2016 included in Annexure 3 to the Circular based on our review.

We conducted our review of the interim financial information for the six months ended 30 September 2016 in accordance with the International Standard on Review Engagements (ISRE) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity.

ISRE2410 requires us to conclude whether anything has come to our attention that causes us to believe that the interim financial information are not prepared in all material respects in accordance with the applicable reporting framework. This standard also requires us to comply with relevant ethical requirements. A review of financial information in accordance with ISRE2410 is a limited assurance engagement. We perform procedures primarily consisting of making inquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluate the evidence obtained. The procedures performed in a review are substantially less than and differ in nature from those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly we do not express an audit opinion on this Interim Financial Information.

54

Review conclusion on Interim Financial Information for the six months ended 30 September 2016

Based on our review, nothing has come to our attention that causes us to believe that the interim financial information of Capital Appreciation Limited for the six months ended 30 September 2016 included in the circular, is not fairly presented, in all material respects, in accordance with International Financial Reporting Standards, the requirements of the South African Companies Act and the JSE Listings Requirements.

Ernst & Young Inc.Director: Lance Ian Neame Tomlinson CA(SA)

Registered AuditorReporting Accountant

24 March 2017

55

An

nex

ure

5

HIS

TO

RIC

AL

FIN

AN

CIA

L I

NF

OR

MA

TIO

N O

F A

FR

ICA

N R

ES

ON

AN

CE

Sta

tem

ent

of F

inan

cial

Po

siti

on

as a

t 29

Feb

ruar

y 20

16

Gro

up

Co

mp

any

Fig

ure

s in

Ran

dN

ote

s20

1620

1520

1420

1620

1520

14

Ass

ets

Non

-cur

rent

ass

ets

Prop

erty

, pla

nt a

nd e

quip

men

t3

17 9

43 3

6628

321

492

23 4

89 4

9317

943

366

28 3

21 4

9223

489

493

Inta

ngib

le a

sset

s4

6 74

5 09

31

745

093

Inve

stm

ent

in s

ubsid

iary

55

000

000

Inve

stm

ent

in a

ssoc

iate

61

020

000

1 02

0 00

0D

efer

red

tax

736

8 56

618

1 39

111

8 31

036

8 56

618

1 39

111

8 31

0

18 3

11 9

3228

502

883

31 3

72 8

9618

311

932

28 5

02 8

8331

372

896

Cu

rren

t as

sets

Inve

ntor

ies

83

536

574

8 53

8 73

416

5 45

13

536

574

8 53

8 73

416

5 45

1Lo

an t

o sh

areh

olde

r9

538

485

538

485

Loan

s to

dire

ctor

s, m

anag

ers

and

empl

oyee

s10

469

409

388

208

469

409

388

208

Trad

e an

d ot

her

rece

ivab

les

117

779

911

5 01

3 50

913

609

566

7 77

9 91

15

013

509

13 6

09 5

66C

urre

nt t

ax r

ecei

vabl

e1

302

740

659

460

1 30

2 74

065

9 46

0C

ash

and

cash

equ

ival

ents

1243

169

349

17 5

01 4

113

972

336

43 1

69 3

4917

501

411

3 97

2 33

6

56 3

27 0

5932

182

523

18 1

35 5

6156

327

059

32 1

82 5

2318

135

561

To

tal a

sset

s74

638

991

60 6

85 4

0649

508

457

74 6

38 9

9160

685

406

49 5

08 4

57

Eq

uit

y an

d lia

bili

ties

Equi

tySh

are

capi

tal

1410

010

010

010

010

010

0R

etai

ned

inco

me

33 4

36 0

2213

151

209

3 51

8 12

733

436

022

13 1

51 2

093

518

127

33 4

36 1

2213

151

309

3 51

8 22

733

436

122

13 1

51 3

093

518

227

56

Gro

up

Co

mp

any

Fig

ure

s in

Ran

dN

ote

s20

1620

1520

1420

1620

1520

14

Lia

bili

ties

No

n-c

urr

ent

liab

iliti

esO

ther

fin

anci

al li

abili

ties

1512

978

515

23 0

92 9

8732

135

952

12 9

78 5

1523

092

987

32 1

35 9

52

Cu

rren

t lia

bili

ties

Trad

e an

d ot

her

paya

bles

1615

664

315

12 9

41 0

424

508

822

15 6

64 3

1512

941

042

4 50

8 82

2Lo

ans

from

sha

reho

lder

s9

2 56

7 44

122

6 21

02

567

441

226

210

Oth

er f

inan

cial

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ilitie

s15

12 5

60 0

398

931

979

7 80

7 33

212

560

039

8 93

1 97

97

807

332

Cur

rent

tax

pay

able

1 31

1 85

31

311

853

Bank

ove

rdra

ft12

648

6164

861

28 2

24 3

5424

441

110

13 8

54 2

7828

224

354

24 4

41 1

1013

854

278

To

tal l

iabi

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s41

202

869

47 5

34 0

9745

990

230

41 2

02 8

6947

534

097

45 9

90 2

30

To

tal e

quit

y an

d lia

bilit

ies

74 6

38 9

9160

685

406

49 5

08 4

5774

638

991

60 6

85 4

0649

508

457

57

Sta

tem

ent

of P

rofi

t o

r L

oss

an

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ther

Co

mp

reh

ensi

ve I

nco

me

Gro

up

Co

mp

any

Fig

ure

s in

Ran

dN

ote

s20

1620

1520

1420

1620

1520

14

Rev

enue

1818

4 50

4 98

913

5 38

7 78

543

161

566

184

504

989

135

387

785

43 1

61 5

66C

ost

of s

ales

19(6

9 35

9 27

2)(5

4 40

8 65

7)(1

0 42

7 56

3)(6

9 35

9 27

2)(5

4 40

8 65

7)(1

0 42

7 56

3)

Gro

ss p

rofi

t11

5 14

5 71

780

979

128

32 7

34 0

0311

5 14

5 71

780

979

128

32 7

34 0

03O

ther

inco

me

2015

476

742

11 2

89 3

977

982

362

15 4

76 7

4211

289

397

7 98

2 36

2O

pera

ting

expe

nses

(98

438

906)

(72

544

776)

(31

406

966)

(98

438

906)

(72

544

776)

(31

406

966)

Ope

rati

ng p

rofi

t21

32 1

83 5

5319

723

749

9 30

9 39

932

183

553

19 7

23 7

499

309

399

Inve

stm

ent

reve

nue

222

186

696

565

710

201

432

2 18

6 69

656

5 71

020

1 43

2Fi

nanc

e co

sts

23(5

947

882

)(4

535

536

)(2

554

661

)(5

947

882

)(4

535

536

)(2

554

661

)

Pro

fit

befo

re t

axat

ion

28 4

22 3

6715

753

923

6 95

6 17

028

422

367

15 7

53 9

236

956

170

Taxa

tion

24(8

137

554

)(6

120

841

)(2

438

573

)(8

137

554

)(6

120

841

)(2

438

573

)

Pro

fit

for

the

year

20 2

84 8

139

633

082

4 51

7 59

720

284

813

9 63

3 08

24

517

597

Oth

er c

ompr

ehen

sive

inco

me

To

tal c

om

preh

ensi

ve in

com

e fo

r th

e ye

ar20

284

813

9 63

3 08

24

517

597

20 2

84 8

139

633

082

4 51

7 59

7

58 59

Statement of changes in equity

Figures in RandShare

capitalEquity

loanRetained

incomeTotal

equity

Group

Balance at 1 March 2013 100 11 628 897 (999 470) 10 629 527

Profit for the year – – 4 517 597 4 517 597Other comprehensive income – – – –

Total comprehensive income for the year – – 4 517 597 4 517 597

Decrease in equity loans – (11 402 687) – (11 402 687)

Total changes for the year – 226 210 – 226 210Reclassified to liability – (226 210) – (226 210)

Balance at 1 March 2014 100 – 3 518 127 3 518 227

Profit for the year – – 9 633 082 9 633 082Other comprehensive income – – – –

Total comprehensive income for the year – – 9 633 082 9 633 082

Balance at 1 March 2015 100 – 13 151 209 13 151 309

Profit for the year – – 20 284 813 20 284 813Other comprehensive income – – – –

Total comprehensive income for the year – – 20 284 813 20 284 813

Balance at 29 February 2016 100 – 33 436 022 33 436 122

Notes 14CompanyBalance as at 1 March 2013 100 11 828 897 (999 470) 10 829 527

Profit for the year – – 4 517 597 4 517 597

Other comprehensive income – – – –

Total comprehensive income for the year – – 4 517 597 4 517 597

Decrease in equity loans – (11 402 687) – (11 402 687)

Total changes for the year – 226 210 – 226 210Reclassified to liability – (226 210) – (226 210)

Balance at 1 March 2014 100 – 3 518 127 3 518 227

Profit for the year – – 9 633 082 9 633 082

Other comprehensive income – – – –

Total comprehensive income for the year – – 9 633 082 9 633 082

Balance at 1 March 2015 100 – 13 151 209 13 151 309

Profit for the year – – 20 284 813 20 284 813Other comprehensive income – – – –

Total comprehensive income for the year – – 20 284 813 20 284 813

Balance at 29 February 2016 100 – 33 436 022 33 436 122

Notes 14

58 59

Sta

tem

ent

of c

ash

flow

s

Gro

up

Co

mp

any

Fig

ure

s in

Ran

dN

ote

s20

1620

1520

1420

1620

1520

14

Cas

h fl

ow

s fr

om

ope

rati

ng

acti

viti

esC

ash

gene

rate

d fr

om o

pera

tions

2651

111

123

44 7

40 5

117

599

972

51 1

11 1

2344

740

511

7 59

9 97

2In

tere

st in

com

e2

186

696

565

710

201

432

2 18

6 69

656

5 71

020

1 43

2Fi

nanc

e co

sts

(5 9

47 8

82)

(4 5

35 5

36)

(2 5

54 6

61)

(5 9

47 8

82)

(4 5

35 5

36)

(2 5

54 6

61)

Tax

paid

27(8

968

009

)(8

155

235

)(1

184

371

)(8

968

009

)(8

155

235

)(1

184

371

)

Net

cas

h fr

om

op

erat

ing

acti

viti

es38

381

928

32 6

15 4

504

062

372

38 3

81 9

2832

615

450

4 06

2 37

2

Cas

h fl

ow

s fr

om

inve

stin

g ac

tivi

ties

Purc

hase

of p

rope

rty,

plan

t an

d eq

uipm

ent

3(7

142

259

)(1

7 83

3 70

9)(2

6 04

1 26

8)(7

142

259

)(1

7 83

3 70

9)(2

6 04

1 26

8)Sa

le o

f pro

pert

y, pl

ant

and

equi

pmen

t3

3 55

1 84

63

385

035

1 93

5 24

93

551

846

3 38

5 03

51

935

249

Busin

ess

com

bina

tions

29(5

000

000

)Sa

le o

f ass

ocia

te1

020

000

1 02

0 00

0In

vest

men

t in

sub

sidia

ry(5

000

000

)In

vest

men

t In

ass

ocia

te(1

020

000

)(1

020

000

)

Net

cas

h fr

om

inve

stin

g ac

tivi

ties

(3 5

90 4

13)

(13

428

674)

(30

126

019)

(3 5

90 4

13)

(13

428

674)

(30

126

019)

Cas

h fl

ow

s fr

om

fina

ncin

g ac

tivi

ties

(Rep

aym

ent)

/pro

ceed

s fr

om

othe

r fin

anci

al li

abili

ties

(6 4

86 4

12)

(7 9

18 3

18)

39 9

43 2

84(6

486

412

)(7

918

318

)39

943

284

Mov

emen

t in

loan

s to

dire

ctor

s, m

anag

ers

and

empl

oyee

s46

9 40

9(8

1 20

1)83

446

9 40

9(8

1 20

1)83

4(R

epay

men

t)/p

roce

eds

of s

hare

hold

ers

loan

(3 1

05 9

26)

2 34

1 23

1(1

1 40

2 68

7)(3

105

926

)2

341

231

(11

402

687)

Net

cas

h fr

om

fin

anci

ng a

ctiv

itie

s(9

122

929

)(5

658

288

)28

541

431

(9 1

22 9

29)

(5 6

58 2

88)

28 5

41 4

31

Tota

l cas

h m

ovem

ent

for

the

year

25 6

68 5

8613

528

488

2 47

7 78

425

668

586

13 5

28 4

882

477

784

Cas

h at

the

beg

inni

ng o

f the

yea

r17

500

763

3 97

2 27

51

494

491

17 5

00 7

633

972

275

1 49

4 49

1

To

tal c

ash

at e

nd o

f the

yea

r12

43 1

69 3

4917

500

763

3 97

2 27

543

169

349

17 5

00 7

633

972

275

60

Accounting Policies

1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS

The annual financial statements have been prepared in accordance with International Financial Reporting Standards, and the Companies Act 71 of 2008. The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in South African Rand.

These financial statements have been prepared for the purposes of the circular on historical information for the periods ended 29 February 2016, 28 February 2015 and 28 February 2014 in compliance with the JSE Limited (“JSE”) Listings Requirements.

1.1 Consolidation

Basis of consolidation

The consolidated annual financial statements incorporate the annual financial statements of the group and all investees which are controlled by the group.

The group has control of an investee when it has power over the investee; it is exposed to or has rights to variable returns from involvement with the investee; and it has the ability to use its power over the investee to affect the amount of the investor’s returns.

The results of subsidiaries are included in the consolidated annual financial statements from the effective date of acquisition to the effective date of disposal.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the group’s interest therein, and are recognised within equity. Losses of subsidiaries attributable to non-controlling interests are allocated to the non-controlling interest even if this results in a debit balance being recognised for non-controlling interest.

Transactions which result in changes in ownership levels, where the group has control of the subsidiary both before and after the transaction are regarded as equity transaction and are recognised directly in the statement of changes in equity.

The difference between the fair value of consideration paid or received and the movement in non-controlling interest for such transactions is recognised in equity attributable to the owners of the parent.

Where a subsidiary is disposed of and a non-controlling shareholding is retained, the remaining investment is measured to fair value with the adjustment to fair value recognised in profit or loss as part of the gain or loss on disposal of the controlling interest.

Business combinations

The group accounts for business combinations using the acquisition method of accounting. The cost of the business combination is measured as the aggregate of the fair values of assets given, liabilities incurred or assumed and equity instruments issued. Costs directly attributable to the business combination are expensed as incurred, except the costs to issue debt which are amortised as part of the effective interest and costs to issue equity which are included in equity.

Contingent consideration is included in the cost of the combination at fair value as at the date of acquisition. Subsequent changes to the assets, liability or equity which arise as a result of the contingent consideration are not affected against goodwill, unless they are valid measurement period adjustments.

The acquiree’s identifiable assets, liabilities and contingent liabilities which meet the recognition conditions of IFRS 3 Business combinations are recognised at their fair values at acquisition date, except for non-current assets (or disposal group) that are classified as held-for-sale in accordance with IFRS 5 Non-current assets held-for-sale and discontinued operations, which are recognised at fair value less costs to sell.

Contingent liabilities are only included in the identifiable assets and liabilities of the acquiree where there is a present obligation at acquisition date.

On acquisition, the group assesses the classification of the acquiree’s assets and liabilities and reclassifies them where the classification is inappropriate for group purposes. This excludes lease agreements and insurance contracts, whose classification remains as per their inception date.

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Non-controlling interests arising from a business combination, which are present ownership interests, and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation, are measured either at the present ownership interests’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets or at fair value. The treatment is not an accounting policy choice but is selected for each individual business combination and disclosed in the note for business combinations. All other components of non-controlling interests are measured at their acquisition date fair values, unless another measurement basis is required by IFRS’s.

In cases where the group held a non-controlling shareholding in the acquiree prior to obtaining control, that interest is measured to fair value as at acquisition date. The measurement to fair value is included in profit or loss for the year. Where the existing shareholding was classified as an available-for-sale financial asset, the cumulative fair value adjustments recognised previously to other comprehensive income and accumulated in equity are recognised in profit or loss as a reclassification adjustment.

Goodwill is determined as the consideration paid, plus the fair value of any shareholding held prior to obtaining control, plus non-controlling interest and less the fair value of the identifiable assets and liabilities of the acquiree.

Goodwill is not amortised but is tested on an annual basis for impairment. If goodwill is assessed to be impaired, that impairment is not subsequently reversed.

Goodwill arising on acquisition of foreign entities is considered an asset of the foreign entity. In such cases the goodwill is translated to the functional currency of the group at the end of each reporting period with the adjustment recognised in equity through to other comprehensive income.

1.2 Significant Judgements and sources of estimation uncertainty

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include:

Allowance for slow moving, damaged and obsolete Inventory

An allowance for inventory to write inventory down to the lower of cost or net realisable value. Management have made estimates of the selling price and direct cost to sell on certain inventory items. The write down is included in the operating profit note.

Impairment testing

The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that the assumption may change which may then impact our estimations and may then require a material adjustment to the carrying value of goodwill and tangible assets.

Taxation

Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated tax audit Issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred Income tax assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable Income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.

Residual values and useful lives

The useful lives of assets are based on management’s estimation. The estimation of residual values of assets is based on management’s judgement of whether the assets will be sold and what condition they will be at the time.

Residual values and useful lives of assets are assessed on an annual basis.

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Other

The carrying value less Impairment provision for trade receivables and payables are assumed to approximate fair values.

1.3 Property, plant and equipment

Property, plant and equipment is initially measured at cost.

Property, plant and equipment is subsequently stated at cost less accumulated depreciation and any accumulated impairment losses.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Depreciation method Average useful life

Motor vehicles Straight line five yearsIT equipment Straight line three yearsTerminals Straight line three yearsOffice equipment Straight line six years

The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting year. If the expectations differ from previous estimates, the change is accounted for prospectively as a change in accounting estimate.

The depreciation charge for each year is recognised in profit or loss unless it is included in the carrying amount of another asset.

1.4 Intangible assets

Intangible assets are initially recognised at cost.

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item Useful life

Licence rights 10 years

1.5 Interests in subsidiaries

Company annual financial statements

In the company’s separate annual financial statements, investment in subsidiary are carried at cost less any accumulated impairment.

1.6 Investment In associate

Company annual financial statements

An investment in an associate is carried at cost less any accumulated impairment.

1.7 Financial instruments

Classification

The group classifies financial assets and financial liabilities into the following categories:

• Loans and receivables

• Financial liabilities measured at amortised cost

Classification depends on the purpose for which the financial instruments were obtainedIincurred and takes place at Initial recognition. Classification is re-assessed on an annual basis, except for derivatives and financial assets designated as at fair value through profit or loss, which shall not be classified out of the fair value through profit or loss category.

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Initial recognition and measurement

Financial instruments are recognised initially when the group becomes a party to the contractual provisions of the instruments.

The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial instruments are measured initially at fair value, except for equity investments for which a fair value is not determinable, which are measured at cost and are classified as available-for-sale financial assets.

For financial instruments which are not at fair value through profit or loss, transaction costs are included in the initial measurement of the instrument.

Subsequent measurement

Loans and receivables are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses. Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest method.

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership.

Loans to (from) group companies

These Include loans to and from holding companies, follow subsidiaries, subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs.

Loans to group companies are classified as loans and receivables.

Loans from group companies are classified as financial liabilities measured at amortised cost.

Loans to shareholders, directors, managers and employees

These financial assets are classified as loans and receivables.

Trade and other receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written oft are credited against operating expenses in profit or loss.

Trade and other receivables are classified as loans and receivables.

Trade and other payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective Interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially measured at fair value and subsequently at amortised cost.

Bank overdraft and borrowings

Bank overdrafts and borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the group’s accounting policy for borrowing costs.

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1.8 Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities

A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Tax expenses

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

• a transaction or event which is recognised. in the same or a different period, to other comprehensive income, or

• a business combination.

Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to Items that are credited or charged, in the same or a different period, to other comprehensive income.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

1.9 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset. This liability is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.10 Inventories

Inventories are measured at the lower of cost and net realisable value on the first-in-first-out basis.

1.11 Impairment of assets

The group assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset.

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Irrespective of whether there is any indication of impairment, the group also:

• tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same lime every period.

• tests goodwill acquired in a business combination for impairment annually.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If It Is not possible to estimate the recoverable amount of the Individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase.

1.12 Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Ordinary shares are classified as equity.

1.13 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.

1.14 Revenue

Revenue from the sale of terminals is recognised when all the following conditions have been satisfied:

• the group has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the group and company; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax.

Interest is recognised, in profit or loss, using the effective interest rate method.

Maintenance and support service fees are included in the price of the product are recognised as revenue over the period during which the service is performed.

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Operating leases – lessor

Operating lease income from terminals are recognised as an income when invoiced as per the contract.

Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income.

Income for leases is disclosed under revenue in profit or loss.

1.15 Cost of sales

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

The related cost of providing services recognised as revenue in the current period is included in cost of sales.

1.16 Borrowing costs

All other borrowing costs are recognised as an expense in the period in which they are incurred.

1.17 Translation of foreign currencies

Functional and presentation currency

Items included in the annual financial statements of each of the group entities are measured using the currency of the primary economic environment in which the entity operates (functional currency).

The consolidated annual financial statements are presented in Rand which is the group functional and presentation currency.

Foreign currency transactions

A foreign currency transaction is recorded, on initial recognition in Rand, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

At the end of the reporting period:

• foreign currency monetary items are translated using the closing rate;

• non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and

• non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous annual financial statements are recognised in profit or loss in the period in which they arise.

When a gain or loss on a non-monetary item is recognised to other comprehensive income and accumulated in equity, any exchange component of that gain or loss is recognised to other comprehensive income and accumulated in equity. When a gain or loss on a non -monetary item is recognised in profit or loss, any exchange component of that gain or loss is recognised in profit or loss.

Cash flows arising from transactions in a foreign currency are recorded in Rand by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash flow.

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS

2. NEW STANDARDS AND INTERPRETATIONS

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published by the IASB but are not yet effective and have not been adopted early by the group. Management anticipates that all of the relevant pronouncements will be adopted in the accounting policies for the first period beginning after the effective date of the pronouncement. Information about new standards, amendments and interpretations that are expected to be relevant to the group’s financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have any impact on the group’s financial statements.

Disclosure Initiative: Amendment to IAS 1: Presentation of Financial Statements

The amendment provides new requirements when an entity presents subtotals in addition to those required by IAS in its annual financial statements. It also provides amended guidance concerning the order of presentation of the notes in the annual financial statements, as well as guidance for Identifying which accounting policies should be included. It further clarifies that an entity’s share of comprehensive income of an associate or joint venture under the equity method shall be presented separately into its share of items that a) will not be reclassified subsequently to profit or loss and b) that will be reclassified subsequently to profit or loss.

The effective date of the group is for years beginning on or after 1 January 2016.

The group expects to adopt the amendment for the first time in the 2017 annual financial statements.

It is unlikely that the amendment will have a material impact on the group’s annual financial statements.

Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

If a parent loses control of a subsidiary which does not contain a business, as a result of a transaction with an associate or joint venture, then the gain or loss on the loss of control is recognised in the parents profit or loss only to the extent of the unrelated Investors interest in the associate or joint venture. The remaining gain or loss Is eliminated against the carrying amount of the investment In the associate or joint venture. The same treatment is followed for the measurement to fair value of any remaining investment which Is Itself an associate or joint venture. If the remaining investment is accounted for in terms of IFRS 9, then the measurement to fair value of that interest is recognised in full in the parents profit or loss.

The effective date of the amendment is for years beginning on or after 1 January 2017.

It is unlikely that the amendment will have a material impact on the group’s annual financial statements.

IFRS 16 Leases

IFRS 16 Leases is a new standard which replaces IAS 17 Leases, and introduces a single lessee accounting model. The main changes arising from the Issue of IFRS 16 which are likely to impact the group are as follows:

Group as lessee:

• Lessees are required to recognise a right-of-use asset and a lease liability for all leases, except short-term leases or leases where the underlying asset has a low value, which are expensed on a straight line or other systematic basis.

• The cost of the right-of-use asset includes, where appropriate, the initial amount of the lease liability; lease payments made prior to commencement of the lease less incentives received; Initial direct costs of the lessee; and an estimate for any provision for dismantling, restoration and removal related to the underlying asset.

• The lease liability takes into consideration, where appropriate, fixed and variable lease payments; residual value guarantees to be made by the lessee; exercise price of purchase options; and payments of penalties for terminating the lease.

• The right-of-use asset is subsequently measured on the cost model at cost less accumulated depreciation and impairment and adjusted for any re-measurement of the lease liability. However, right-of-use assets are measured at fair value when they meet the definition of investment property and all other Investment property is accounted for on the fair value model. If a right-of-use asset relates to a class of property, plant and equipment which is measured on the revaluation model, then that right-of-use asset may be measured on the revaluation model.

• The lease liability is subsequently increased by interest, reduced by lease payments and re-measured for reassessments or modifications.

• Re-measurements of lease liabilities are affected against right-of-use assets, unless the assets have been reduced to nil, in which case further adjustments are recognised in profit or loss.

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• The lease liability is re-measured by discounting revised payments at a revised rate when there is a change in the lease term or a change in the assessment of an option to purchase the underlying asset.

• The lease liability is re-measured by discounting revised lease payments at the original discount rate when there is a change in the amounts expected to be paid in a residual value guarantee or when there is a change In future payments because of a change in Index or rate used to determine those payments.

• Certain lease modifications are accounted for as separate leases. When lease modifications which decrease the scope of the lease are not required to be accounted for as separate leases, then the lessee re-measures the lease liability by decreasing the carrying amount of the right of lease asset to reflect the full or partial termination of the lease. Any gain or Joss relating to the full or partial termination of the lease is recognised in profit or loss. For all other lease modifications which are not required to be accounted for as separate leases, the lessee re-measures the lease liability by making a corresponding adjustment to the right-of-use asset.

• Right-of-use assets and lease liabilities should be presented separately from other assets and liabilities. If not, then the line item in which they are included must be disclosed. This does not apply to right-of-use assets meeting the definition of investment property which must be presented within investment property. IFRS 16 contains different disclosure requirements compared to IAS 17 leases.

Group as lessor:

• Accounting for leases by lessors remains similar to the provisions of IAS 17 in that leases are classified as either finance leases or operating leases. Lease classification is reassessed only if there has been a modification.

• A modification is required to be accounted for as a separate lease if it both increases the scope of the lease by adding the right to use one or more underlying assets; and the increase in consideration is commensurate to the stand alone price of the increase in scope.

• If a finance lease is modified, and the modification would not qualify as a separate lease, but the lease would have been an operating lease if the modification was in effect from inception, then the modification is accounted for as a separate lease. In addition, the carrying amount of the underlying asset shall be measured as the net investment in the lease immediately before the effective date of the modification. IFRS 9 is applied to all other modifications not required to be treated as a separate lease.

• Modifications to operating leases are required to be accounted for as new leases from the effective date of the modification.

• Changes have also been made to the disclosure requirements of leases in the lessor’s financial statements.

The effective date of the standard is for years beginning on or after 1 January 2019.

The group expects to adopt the standard for the first time in the 2020 annual financial statements.

The impact of this standard is currently being assessed.

IFRS 9 Financial instruments

IFRS 9 issued in November 2009 introduced new requirements for the classification and measurements of financial assets. IFRS 9 was subsequently amended in October 2010 to include requirements for the classification and measurement of financial liabilities and for derecognition, and in November 2013 to include the new requirements for general hedge accounting. Another revised version of IFRS 9 was issued in July 2014 mainly to include a)impairment requirements for financial assets and b) limited amendments to the classification and measurement requirements by introducing a “fair value through other comprehensive income” (FVTOCI) measurement category for certain simple debt instruments.

Key requirements of IFRS 9:

• All recognised financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement are required to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the outstanding principal are generally measured at amortised cost at the end of subsequent reporting periods. Debt instruments that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and that have contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on outstanding principal, are measured at FVTOCI. All other debt and equity investments are measured at fair value at the end of subsequent reporting periods. In addition, under IFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income with only dividend income generally recognised In profit or loss.

• With regard to the measurement of financial liabilities designated as at fair value through profit or loss, IFRS 9 requires that the amount of change in the fair value of the financial liability that is attributable to changes in the credit

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risk of the liability is presented in other comprehensive income, unless the recognition of the effect of the changes of the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Under IAS 39, the entire amount of the change in fair value of a financial liability designated as at fair value through profit or loss is presented in profit or Joss.

• In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under IAS 39. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. It is therefore no longer necessary for a credit event to have occurred before credit losses are recognised.

• The new general hedge accounting requirements retain the three types of hedge accounting mechanisms currently available in IAS 39. Under IFRS 9, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been replaced with the principal of an “economic relationship”. Retrospective assessment of hedge effectiveness is also no longer required. Enhanced disclosure requirements about an entity’s risk management activities have also been introduced.

The effective date of the standard is for years beginning on or after 1 January 2018.

The group expects to adopt the standard for the first time in the 2019 annual financial statements.

It is unlikely that the standard will have a material impact on the group’s annual financial statements.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 supersedes IAS 11 Construction contracts; IAS 18 Revenue; IFRIC 13 Customer Loyalty Programmes; IFRIC 15 Agreements for the construction of Real Estate; IFRIC 18 Transfers of Assets from Customers and SIC 31 Revenue – Barter Transactions Involving Advertising Services.

The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps:

• Identify the contract(s) with a customer

• Identify the performance obligations in the contract

• Determine the transaction price

• Allocate the transaction price to the performance obligations in the contract

• Recognise revenue when (or as) the entity satisfies a performance obligation.

IFRS 15 also includes extensive new disclosure requirements.

The effective date of the standard is for years beginning on or after 1 January 2018.

The group expects to adopt the standard for the first time in the 2019 annual financial statements.

The impact of this standard is currently being assessed.

Amendments to IAS 7: Disclosure initiative

The amendment requires entities to provide additional disclosures for changes in liabilities arising from financing activities. Specifically, entities are now required to provide disclosure of the following changes in liabilities arising from financing activities:

• changes from financing cash flows;

• changes arising from obtaining or losing control of subsidiaries or other businesses;

• the effect of changes in foreign exchanges;

• changes in fair values; and

• other changes.

The effective date of the amendment is for years beginning on or after 1 January 2017.

The group expects to adopt the amendment for the first time in the 2018 annual financial statements.

It is unlikely that the amendment will have a material impact on the group’s annual financial statements.

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Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation

The amendment clarifies that a depreciation or amortisation method that is based on revenue that is generated by an activity that includes the use of the asset is not an appropriate method. This requirement can be rebutted for intangible assets in very specific circumstances as set out in the amendments to IAS 38.

The effective date of the amendment is for years beginning on or after 1 January 2016.

The group expects to adopt the amendment for the first time in the 2017 annual financial statements.

It is unlikely that the amendment will have a material impact on the group’s annual financial statements.

Amendment to IAS 27: Equity Method in Separate Financial Statements

The amendment adds the equity method to the methods of accounting for investments in subsidiaries associates and joint ventures in the separate annual financial statements of an entity.

The effective date of the amendment is for years beginning on or after 1January 2016.

The group expects to adopt the amendment for the first time in the 2017 annual financial statements.

It is unlikely that the amendment will have a material impact on the group’s annual financial statements.

Amendments to IFRS 10, 12 and IAS 28: Investment Entitles. Applying the consolidation exemption

The amendment clarifies the consolidation exemption for investment entities. It further specifies that an investment entity which measures all of its subsidiaries at fair value is required to comply with the “investment entity” disclosures provided in IFRS 12. The amendment also specifies that if an entity is itself not an investment entity and it has an investment in an associate or joint venture which is an investment entity, then the entity may retain the fair value measurement applied by such associate or joint venture to any of their subsidiaries.

The effective date of the group is for years beginning on or after 1 January 2016.

The group expects to adopt the amendment for the first time in the 2017 annual financial statements.

It is unlikely that the amendment will have a material impact on the group’s annual financial statements.

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Reconciliation of intangible assets – group – 2016

Opening balance Amortisation

Impairment loss Total

Licence rights – – – –

Reconciliation of intangible assets – group – 2015

Opening balance Amortisation Impairment loss Total

Licence rights 6 745 093 (349 019) (6 396 074) –

Reconciliation of intangible assets – group – 2014

Opening balance

Additions through business

combinations AmortisationImpairment

loss Total

Licence rights 2 094 112 5 000 000 (349 019) – 6 745 093

Reconciliation of intangible assets – company – 2016

Opening balance

Additions through business

combinations AmortisationImpairment

loss Total

Licence rights – – – – –

Reconciliation of intangible assets – company – 2015

Opening balance

Additions through business

combinations AmortisationImpairment

loss Total

Licence rights 1 745 093 – (349 019) (1 396 074) –

Reconciliation of intangible assets – company – 2014

Opening balance

Additions through business

combinations AmortisationImpairment

loss Total

Licence rights 2 094 112 – (349 019) – 1 745 093

The rights to purchase and trade lngenico stock was impaired in 2015. The rights and the stock attached were purchased over 11 years ago. The field stock has since been recalled, written off and replaced over the years and thus no longer holds any value and therefore management impaired to nil.

On a group level, the Investment in Firefly is eliminated and an intangible asset was raised. Management believes there to be no value in the asset and thus this was also impaired in 2015 to nil. The investment is non-trading, and is in the process of deregistration as of 20 May 2016.

74

5. INVESTMENT IN SUBSIDIARY

The following table lists the entities which are controlled by the group, either directly or indirectly through subsidiaries.

Company

Name of company%

holding%

holding%

holdingCarrying amount

Carrying amount

Carrying amount

2016 2015 2014 2016 2015 2014

Firefly Proprietary Limited 100.00 100.00 100.00 – – 5 000 000

The entity is incorporated in South Africa and share the year-end of the group. The carrying amounts of subsidiaries are shown net of impairment losses.

The investment in Firefly has been impaired down to a nil value in 2015, as it is non-trading, and is in the process of deregistration as of 20 May 2016.

6. INVESTMENT IN ASSOCIATE

The following table lists all of the associates in the group:

Group

Name of company%

holding%

holding%

holdingCarrying amount

Carrying amount

Carrying amount

2016 2015 2014 2016 2015 2014

Uplink Technology Services Proprietary Limited – – 34.00 – – 1 020 000

The entity is incorporated in South Africa and shares the year end of the company.

This investment in associate was disposed at cost in February 2015.

No equity profit has been accounted for in February 2014 as an immaterial loss was made by the associate.

Summarised Financial Information of associate

Summarised statement of profit or loss and other comprehensive income

Uplink Technology Services Proprietary Limited

2014

Revenue 3 559 695Other income and expenses (3 622 861)

Loss before tax (63 166)Tax expense 17 686

Loss for the year (45 480)

Total comprehensive loss (45 480)

Summarised statement of Financial Position

Uplink Technology Services Proprietary Limited

2014

AssetsNon-current 87 245Current 385 830Total assets 473 075

LiabilitiesCurrent 455 290

Total liabilities 455 290

Total net 17 785

75

7. DEFERRED TAX

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Deferred taxAccelerated allowances for tax purposes 368 566 181 391 118 310 368 566 181 391 118 310Reconciliation of deferred tax assetI(liability)At beginning of year 181 391 118 310 140 043 181 391 118 310 140 043Prior year adjustment – 110 129 22 954 – 110 129 22 954Temporary differences on allowance for doubtful debts (12 405) 39 716 (61 966) (12 405) 39 716 (61 966)Temporary differences on income received in advance 163 773 (116 098) 4 768 163 773 (116 098) 4 768Temporary differences on provision for leave pay 35 807 29 334 12 511 35 807 29 334 12 511

368 566 181 391 118 310 368 566 181 391 118 310

8. INVENTORIES

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Prepaid airtime 218 835 134 822 165 451 218 835 134 822 165 451Inventory 367 490 – – 367 490 – –Goods in transit 2 950 249 8 403 912 – 2 950 249 8 403 912 –

3 536 574 8 538 734 165 451 3 536 574 8 538 734 165 451

9. LOANS FROM SHAREHOLDERS

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

H Neishlos 538 485 (2 567 441) (226 210) 538 485 (2 567 441) (226 210)

In terms of the Shareholder’s Agreement the loans are repayable at the instance of African Resonance Business Solutions Proprietary Limited in proportion to the amounts thereof out of the first available funds accruing to the company in excess of its then current and foreseeable requirements. The loans bear interest at the prime rate.

For purposes of the asset loan in 2016 the intention is for the amount to be settled in the foreseeable future and the loan has thus been classified as a financial asset. The loan is classified as current.

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Current assets 538 485 538 485Current liabilities (2 567 441) (226 210) (2 567 441) (226 210)

538 485 (2 567 441) (226 210) 538 485 (2 567 441) (226 210)

76

10. LOANS TO DIRECTORS, MANAGERS AND EMPLOYEES

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Loans to directors, managers and employeesAt beginning of the year 469 409 388 208 389 042 469 409 388 208 389 042Staff loans (repaid) advanced (469 409) 81 201 (834) (469 409) 81 201 (834)

– 469 409 388 208 – 469 409 388 208

11. TRADE AND OTHER RECEIVABLES

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Deposits 533 023 77 820 – 533 023 77 820 –Other receivable – 1 691 – – 1 691 –Trade receivables 7 246 888 4 006 682 13 609 566 7 246 888 4 006 682 13 609 566VAT – 927 316 – – 927 316 –

7 779 911 5 013 509 13 609 566 7 779 911 5 013 509 13 609 566

Trade and other receivables past due but not Impaired

Trade and other receivables which are less than one month past due are not considered to be impaired. At 29 February 2016, R223 847 (2015: R149 566; 2014: R31 860) were past due but not impaired.

The ageing of amounts past due but not impaired is as follows:

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

60 days 56 206 36 047 9 138 56 206 36 047 9 13890 days 36 928 31 704 1 955 36 928 31 704 1 955120 days 130 713 81 815 20 767 130 713 81 815 20 767

223 847 149 566 31 860 223 847 149 566 31 860

Trade and other receivables Impaired

As of 29 February 2016, trade and other receivables of R130 051 (2015: R189 126; 2014: R Nil) were impaired and provided for.

The amount of the provision was R130 051 as of 29 February 2016 (2015: R189 126; 2014: R Nil).

The ageing of these receivables were above 120 days.

12. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of:

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Bank balances 43 165 927 17 498 782 3 975 566 43 165 927 17 498 782 3 975 566Bank overdraft (648) (61) (648) (61)Cash on hand 3 422 2 629 (3 230) 3 422 2 629 (3 230)

43 169 349 17 500 763 3 972 275 43 169 349 17 500 763 3 972 275

Current assets 43 169 349 17 501 411 3 972 336 43 169 349 17 501 411 3 972 336Current liabilities (648) (61) (648) (61)

43 169 349 17 500 763 3 972 275 43 169 349 17 500 763 3 972 275

77

13. FINANCIAL ASSETS BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Loans and receivablesCash and cash equivalents 43 169 349 17 501 411 3 972 336 43 169 349 17 501 411 3 972 336Loans to directors, managers and employees 469 409 388 208 469 409 388 208Loans to shareholders 538 485 538 485Trade and other receivables (excluding VAT) 7 779 911 4 086 193 13 609 566 7 779 911 4 086 193 13 609 566

51 437 745 22 057 013 17 970 110 51 487 745 22 057 013 17 970 110

The carrying value is a reasonable approximation of fair value.

14. SHARE CAPITAL AUTHORISED

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Authorised1 000 Ordinary shares of R1 each 1 000 1 000 1 000 1 000 1 000 1 000

900 unissued ordinary shares are under the control of the directors in terms of a resolution of members passed at the last annual general meeting.

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Issued100 Ordinary shares of R1 each 100 100 100 100 100 100

15. OTHER FINANCIAL LIABILITIES

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Held at amortised costSasfin Bank Limited 25 538 554 32 024 966 39 943 284 25 538 554 32 024 966 39 943 284

Rental income to the value of the loan has been ceded to Sasfin bank.

The cession range from between 45-59 months as per the agreements and the corresponding schedules. The liability is a securitisation transaction with Sasfin Bank. The agreement framework consists of a master cession agreement with corresponding schedules signed for each securitisation transaction.

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Non-current liabilitiesAt amortised cost 12 978 515 23 092 987 32 135 952 12 978 515 23 092 987 32 135 952

Current liabilitiesAt amortised cost 12 560 039 8 931 979 7 807 332 12 560 039 8 931 979 7 807 332

25 538 554 32 024 966 39 943 284 25 538 554 32 024 966 39 943 284

Rental income to the value of the loan has been ceded to Sasfin Bank.

78

16. TRADE AND OTHER PAYABLES

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Trade payables 9 786 019 9 617 453 1 136 102 9 786 019 9 617 453 1 136 102Accrued expense 1 896 027 1 585 096 986 036 1 896 027 1 585 096 986 036Accrued leave pay 599 367 471 484 366 721 599 367 471 484 366 721Income received In advance 2 291 070 1 149 891 1 850 242 2 291 070 1 149 891 1 850 242Deposits received (28 647) (33 882) 17 650 (28 647) (33 882) 17 650Accrual for audit fee 151 000 151 000 151 000 151 000 151 000 151 000Value added tax 969 479 1 071 969 479 1 071

15 664 315 12 941 042 4 508 822 15 664 315 12 941 042 4 508 822

17. FINANCIAL LIABILITIES BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Financial liabilities at amortised costBank overdraft – 648 61 – 648 61Loans from shareholders – 2 567 441 226 210 – 2 567 441 226 210Other financial liabilities – non-current 12 978 515 23 092 987 32 135 952 12 978 515 23 092 987 32 135 952Other financial liabilities – current 12 560 039 8 931 979 7 807 332 12 560 039 8 931 979 7 807 332Trade and other payables (excluding VAT) 14 694 836 12 941 042 4 507 751 14 694 836 12 941 042 4 507 751

40 233 390 47 534 097 44 677 306 40 233 390 47 534 097 44 677 306

The carrying value is a reasonable approximation of fair value.

18. REVENUE

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Rental Income 89 712 136 81 260 090 42 945 803 89 712 136 81 260 090 42 945 803Maintenance and support services fee 22 487 017 2 742 269 34 082 22 487 017 2 742 269 34 082Sale of terminals 72 305 836 51 385 426 181 681 72 305 836 51 385 426 181 681

184 504 989 135 387 785 43 161 566 184 504 989 135 387 785 43 161 566

79

19. COST OF SALES

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Sale of goodsCost of sales – Terminal local sales 50 465 350 36 464 557 326 154 50 465 350 36 464 557 326 154Terminal rentals and maintenance and support costCost of sales – rentals and maintenance and support 18 893 922 17 944 100 10 101 409 18 893 922 17 944 100 10 101 409

69 359 272 54 408 657 10 427 563 69 359 272 54 408 657 10 427 563

20. OTHER INCOME

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Sundry income 12 805 304 7 702 621 5 731 799 12 805 304 7 702 621 5 731 799Prepaid airtime and electricity sales 859 327 652 467 677 603 859 327 652 467 677 603Profit and loss on exchange differences – – 505 609 – – 505 609Profit and loss on sale of property, plant and equipment 1 804 562 2 904 309 1 062 654 1 804 562 2 904 309 1 062 654Bad debts recovered 7 549 30 000 4 697 7 549 30 000 4 697

15 476 742 11 289 397 7 982 362 15 476 742 11 289 397 7 982 362

Sundry income is a combination of coincidental, loyalty subscriptions, software licence applications, project fees and terminal repairs.

21. OPERATING PROFIT

Operating profit for the year is stated after accounting for the following:

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Operating lease chargesPremises• Contractual amounts 4 784 459 3 436 999 1 953 413 4 784 459 3 436 999 1 953 413

Amortisation on intangible assets – 349 019 349 019 – 349 019 349 019Impairment of investment – – – – 5 000 000Depreciation on property, plant and equipment 15 773 101 12 520 984 6 245 971 15 773 101 12 520 984 6 245 971Employee costs excluding ex gratia payment 20 974 841 15 365 513 8 911 098 20 805 758 15 365 513 8 911 098Ex gratia payment 40 000 000 20 000 000 40 000 000 20 000 000 –Impairment of intangible assets 6 396 074 1 396 074 –(Profit)Iloss on exchange differences 203 038 328 845 (505 609) 203 038 328 845 (505 609)Profit on sale of property, plant and equipment 1 804 562 2 904 309 1 062 654 1 804 562 2 904 309 1 062 654

80

22. INVESTMENT REVENUE

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Interest revenueBank 1 316 294 329 274 201 432 1 316 294 329 274 201 432Shareholder 858 170 236 436 858 170 236 436SARS 12 232 12 232

2 186 696 565 710 201 432 2 186 696 565 710 201 432

23. FINANCE COSTS

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Sasfin 5 947 882 4 515 946 1 953 239 5 947 882 4 515 946 1 953 239Shareholder 19 590 601 422 19 590 601 422

5 947 882 4 535 536 2 554 661 5 947 882 4 535 536 2 554 661

24. TAXATION

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Major components of the tax expenseCurrentLocal income tax – current period 8 145 437 6 183 922 2 416 840 8 145 437 6 183 922 2 416 840Prior year under provision 179 292 179 292

8 324 729 6 183 922 2 416 840 8 324 729 6 183 922 2 416 840

DeferredArising from prior period adjustments – (110 129) 22 954 (110 129) 22 954Originating and reversing temporary differences (187 175) 47 048 44 687 (187 175) 47 048 44 687

(187 175) (63 081) 67 641 (187 175) (63 081) 67 641

8 137 554 6 120 841 2 484 481 8 137 554 6 120 841 2 484 481

Reconciliation of the tax expenseReconciliation between accounting profit and tax expenseAccounting profit 28 422 367 15 753 923 6 956 170 28 422 367 15 753 923 6 956 170Tax at the applicable tax rate of 28% 7 958 263 4 411 099 1 947 728 7 958 263 4 411 099 1 947 728Tax effect of adjustments on taxable IncomePrior year tax adjustment 179 291 (266 747) 22 954 179 291 (266 747) 22 954

Non-taxable/non-deductible expenses 1 976 489 513 799 1 976 489 513 799

8 137 554 6 120 841 2 484 481 8 137 554 6 120 841 2 484 481

81

25. AUDITORS REMUNERATION

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Fees 219 130 185 923 171 090 219 130 185 923 171 090

26. CASH GENERATED FROM OPERATIONS

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Profit before taxation 28 422 367 15 753 923 6 956 170 28 422 367 15 753 923 6 956 170Adjustments for:Depreciation and amortisation 15 773 101 12 870 003 6 594 990 15 773 101 12 870 003 6 594 990Profit on sale of assets (1 804 562) (2 904 309) (1 062 654) (1 804 562) (2 904 309) (1 062 654)Interest received – investment (2 186 696) (565 710) (201 432) (2 186 696) (565 710) (201 432)Finance costs 5 947 882 4 535 536 2 554 661 5 947 882 4 535 536 2 554 661lmpairment loss – 6 396 074 – – 6 396 074 –Scrapped assets – – 3 767 628 – – 3 767 628Changes in working capital:Inventories 5 002 160 (8 373 283) 38 348 5 002 160 (8 373 283) 38 348Trade and other receivables (2 766 402) 8 596 057 (12 115 337) (2 766 402) 8 596 057 (12 115 337)Trade and other payables 2 723 273 8 432 220 1 067 598 2 723 273 8 432 220 1 067 598

51 111 123 44 740 511 7 599 972 51 111 123 44 740 511 7 599 972

27. TAX PAID

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Balance at beginning of the year 659 460 (1 311 853) (79 384) 659 460 (1 311 853) (79 384)Current tax for the year

recognised in profit or loss (8 324 729) (6 183 922) (2 416 840) (8 324 729) (6 183 922) (2 416 840)Balance at end of the year (1 302 740) (659 460) 1 311 853 (1 302 740) (659 460) 1 311 853

(8 968 009) (8 155 235) (1 184 371) (8 968 009) (8 155 235) (1 184 371)

28. COMMITMENTS

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Operating leases – as lessee (expense)Minimum lease payments due – within one year 3 842 385 3 541 368 – 3 842 385 3 541 368 – – in second to fifth year

inclusive 11 046 217 14 888 602 – 11 046 217 14 888 602 –

14 888 602 18 429 970 – 14 888 602 18 429 970 –

Operating lease payments represent rentals payable by the group for certain of its office properties. No contingent rent is payable.

82

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Operating leases – as lessor (Income)Minimum lease payments due – within one year 55 801 289 55 801 289 46 131 319 55 801 289 55 801 289 46 131 319 – in second to fifth year

inclusive 92 811 076 148 612 365 174 168 653 92 811 076 148 612 365 174 168 653

148 612 385 204 413 654 220 299 972 148 612 365 204 413 654 220 299 972

Operating lease receipts represents rentals receivable by the company for the terminals, where there are long-term signed contracts in place, and excludes month to month arrangements. The rentals receivable represents the minimum rentals before CPI increases.

29. BUSINESS COMBINATIONS

Firefly Investments 275 Proprietary Limited

On 29 January 2014 African Resonance Proprietary Limited acquired Firefly Investments 275 Proprietary Limited which resulted in the group obtaining control over Firefly Investments 275 Proprietary Limited. Trading rights of R5 000 000 arising from the acquisition consists largely of the synergies and economies of sale expected.

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Fair value of assets acquired and liabilities assumedTrading rights – – 5 000 000 – – –Acquisition date fair value of consideration paid

Cash – – (5 000 000) – – –

30. RELATED PARTIES

RelationshipsShareholder with significant influence H NeishlosShareholders, directors and members of key management H Neishlos

Safika Holdings Proprietary LimitedClose family member of key management E NeishlosCompanies with common directors HN Terminal Systems CC

Uplink Technology Services Proprietary Limited

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Related party balancesLoan accounts – Owing (to) by related partiesH Neishlos 538 485 (2 567 441) (226 210) 538 485 (2 567 441) (226 210)

83

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Amounts included in trade receivable (Trade payable) regarding related partiesUplink Technology Services Proprietary Limited (2 402 383) – (34 860) (2 402 383) - (34 860)

Related party transactionsInterest paid to (received from) related party loansH Neishlos 915 186 19 590 601 422 915 186 19 590 601 422H Neishlos (57 016) (236 436) – (57 016) (236 436) –

858 170 (216 846) 601 422 858 170 (216 846) 601 422

Consultation fees paid to related partiesUplink Technology Services Proprietary Limited 9 804 086 9 701 176 – 9 804 086 9 701 176 –HN Terminal Systems CC 3 783 352 3 799 364 3 649 643 3 783 352 3 799 364 3 649 643E Neishlos 1 409 616 92 166 – 1 409 616 92 166 –

14 897 054 13 592 706 3 649 643 14 997 054 13 592 706 3 649 643

31. DIRECTORS’ EMOLUMENTS

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

ExecutiveFor group and companyH Neishlos 40 000 000 20 000 000 – 40 000 000 20 000 000 –

32. RISK MANAGEMENT

Capital risk management

The group’s objectives when managing capital are to safeguard the group’s ability continue as a going concern In order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the group consists of debt, which includes the borrowings (excluding derivative financial liabilities) disclosed in notes 9 and 15 cash and cash equivalents disclosed in note 12, and equity as disclosed in the statement of financial position.

There are no externally imposed capital requirements.

There have been no changes to what the entity manages as capital, the strategy for capital maintenance or externally imposed capital requirements from the previous year.

Financial risk management

The group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the group’s financial performance.

84

Liquidity risk

The group’s risk to liquidity is a result of the funds available to cover future commitments. The group manages liquidity risk through an ongoing review of future commitments and credit facilities.

Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored.

The table below analyses the group’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

Group and company Less than one yearBetween one

and two years

At 29 February 2016Trade and other payables 14 694 835 –Other financial liabilities 12 560 039 12 978 515At 28 February 2015Bank overdraft 648Trade and other payables 12 941 041Other financial liabilities 8 931 979 23 092 987Loans from shareholder 2 567 441At 28 February 2014Bank overdraft 61 –Trade and other payables 4 507 751 –Other financial liabilities 7 807 332 32 135 952Loan from shareholder 226 210 –

Interest rate risk

As the group has no significant interest-bearing assets, the group’s income and operating cash flows are substantially independent of changes in market interest rates.

At 29 February 2016, if interest rates on shareholder loans borrowings had been 1% higher/lower with a other variables held constant, post-tax profit for the year would have been R92 118 (2015: R26 354; 2014: R75 155) lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings.

Credit risk

Credit risk is managed on a group basis.

Credit risk consists mainly of cash deposits, cash equivalents and trade debtors. The company only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.

Risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.

Financial assets exposed to credit risk at year end were as follows:

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Financial instrumentTrade and other receivables 7 779 911 4 086 193 13 609 566 7 779 911 4 086 193 13 609 566Cash and cash equivalents 43 169 349 17 501 411 3 872 336 43 169 349 17 501 411 3 872 336

Foreign exchange risk

At 29 February 2016, if the currency had weakened/strengthened by 5% against the Euro with all other variables held constant, post-tax profit for the year would have been R147 264 (2015: R61 018; 2014: R585 115) higher/lower, mainly as a result of foreign exchange gains or losses on translation of Euro denominated trade payables.

85

Foreign currency exposure at the end of the reporting period

Group Company

2016 2015 2014 2016 2015 2014

LiabilitiesTrade creditors, Euro 168 680 (2015: Euro Nil) (2014: Euro Nil) 2 945 290 – – – – –

Exchange rates used for conversion of foreign Items were:

Group Company

2016 2015 2014 2016 2015 2014

Euro 17.46

33. GOING CONCERN

The annual financial statements have been prepared on the basis of accounting policies applicable to a going-concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

34. FIRST-TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

The group and company has applied IFRS  1, First-time adoption of International Financial Reporting Standards, to provide a starting point for the reporting under International Financial Reporting Standards, and for purposes of the Circular on historical information for the periods ended 29 February 2016, 28 February 2015, and 28 February 2014 in compliance with the JSE Limited (“JSE”) Listing Requirements. On principle these standards have been applied retrospectively and the comparatives contained in these annual financial statements differ from those published in the annual financial statements published for the year ended 29 February 2016. Refer to reclassification note 35.

The date of transition was 1 March 2013.

No reconciliation of equity has been provided, as the first-time adoption of IFRS had no impact on equity.

35. RECLASSIFICATION

Depreciation on rental terminals and sim costs have been reclassified from operating expenses to cost of sales as these expenses are directly attributable to the production of revenue.

Additional reclassification for 2014 also includes the reclassification of profit and loss on disposal of property, plant and equipment, which also resulted in a reclassification on the cash flow statement in 2014.

The impact of the reclassification was as follows:

Group Company

Figures in Rand 2016 2015 2014 2016 2015 2014

Statement of comprehensive income

Increase in cost of sales 18 893 922 17 944 100 9 238 608 18 893 922 17 944 100 9 238 608Decrease in operating expenses (18 893 922) 17 944 100) (10 101 409) (18 893 922) (17 944 100) (10 101 409)Decrease in revenue – – 1 891 373 – – 1 891 373Decrease in other income – – (1 028 572) – – (1 028 572)Statement of cash flowsIncrease in cash from operating activities – – 1 062 653 – – 1 062 653Decrease in cash flow from investing activities – – (1 062 653) – – 1 062 653

86 87

Det

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of f

inan

cial

per

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Gro

up

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mp

any

Fig

ure

s in

Ran

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ote

s20

1620

1520

1420

1620

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14

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enu

e

Sale

of t

erm

inal

s72

305

836

51 3

85 4

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1 68

172

305

836

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85 4

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1 68

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ome

89 7

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42 9

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945

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487

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2 74

2 26

934

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22 4

87 0

172

742

269

34 0

82

1818

4 50

4 98

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5 38

7 78

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161

566

184

504

989

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387

785

43 1

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(69

359

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(54

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(10

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(69

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(64

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(10

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ss p

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5 14

5 71

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32 7

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7 54

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4 69

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1 43

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1 80

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904

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91

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s50

5 60

950

5 60

9

17 6

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3811

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107

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3 79

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663

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11 8

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183

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Exp

ense

s (r

efer

to

pag

e 87

)(9

8 43

8 90

6)(7

2 54

4 77

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1 40

6 96

6)(9

8 43

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2 54

4 77

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1 40

6 96

6)

Op

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pro

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2134

370

249

20 2

89 4

599

510

831

34 3

70 2

4920

289

459

9 51

0 83

1Fi

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23(5

947

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)(4

535

536

)(2

554

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)(5

947

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)(4

535

536

)(2

554

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)

Pro

fit

bef

ore

tax

atio

n28

422

367

15 7

53 9

236

956

170

28 4

22 3

6715

753

923

6 95

6 17

0

Taxa

tion

24(8

137

554

)(6

120

841

)(2

438

573

)(8

137

554

)(6

120

841

)(2

438

573

)

Pro

fit

for

the

year

20 2

84 8

139

633

082

4 51

7 59

720

284

813

9 63

3 08

24

517

597

The

supp

lem

enta

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form

atio

n pr

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does

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ann

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and

is u

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86 87

Gro

up

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mp

any

Fig

ure

s in

Ran

dN

ote

s20

1620

1520

1420

1620

1520

14

Op

erat

ing

exp

ense

sA

ccou

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g fe

es(2

168

)(1

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0)(5

504

)(2

168

)(1

1 05

0)(5

504

)A

dver

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g(2

4 72

8)(7

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)(2

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ion

25(2

19 1

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(185

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)(1

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(219

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)(1

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(171

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d de

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(58

222)

(455

126

)(5

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(58

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(455

126

)(5

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cha

rges

(191

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)(1

56 9

59)

(170

287

)(1

91 9

01)

(156

959

)(1

70 2

87)

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g(1

113

)(4

658

)–

(1 1

13)

(4 6

58)

–C

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n pa

id(1

850

700

)(4

39 7

08)

(595

924

)(1

850

700

)(4

39 7

08)

(595

924

)C

ompu

ter

expe

nses

(1 6

24 7

83)

(1 4

56 7

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(510

131

)(1

624

783

)(1

456

777

)(5

10 1

31)

Con

sulti

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nd p

rofe

ssio

nal f

ees

(6 0

64 0

05)

(23

979

314)

(3 2

77 8

45)

(6 0

64 0

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(23

979

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(3 2

77 8

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Del

iver

y ex

pens

es(2

340

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)(2

472

267

)(1

164

536

)(2

340

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)(2

472

267

)(1

164

536

)D

epre

ciat

ion

and

amor

tisat

ion

–(6

745

093

)(3

49 0

19)

–(6

745

093

)(3

49 0

19)

Disc

ount

allo

wed

(74

759)

(86

899)

(94

709)

(74

759)

(86

899)

(94

709)

Don

atio

ns(7

97 6

32)

(142

333

)(2

0 80

0)(7

97 6

32)

(142

333

)(2

0 80

0)ET

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510

––

5 51

0–

–Em

ploy

ee c

osts

(60

805

758)

(15

365

513)

(8 9

11 0

98)

(60

805

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(15

365

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(8 9

11 0

98)

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expe

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(10

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––

(10

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––

Ente

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t(2

67 3

99)

(330

063

)(2

47 4

06)

(267

399

)(3

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63)

(247

406

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nes

and

pena

lties

(200

)(2

00)

Gen

eral

exp

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s(2

3 69

5)(5

0 18

5)(3

939

817

)(2

3 69

5)(5

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5)(3

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817

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ifts

(10

100)

(163

296

)(3

97 9

36)

(10

100)

(163

296

)(3

97 9

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39 6

48(6

79 2

24)

(20

950)

39 6

48(6

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(20

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e(1

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(47

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(40

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(172

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7 07

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3)Le

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als

on o

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leas

e(4

784

459

)(3

436

999

)(1

953

413

)(4

784

459

)(3

436

999

)(1

953

413

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ses

(and

sec

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wri

te-o

ff)

(975

526

)(3

60 7

70)

(461

714

)(9

75 5

26)

(360

770

)(4

61 7

14)

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ical

exp

ense

s(1

61 2

56)

––

(161

256

)–

–M

otor

veh

icle

exp

ense

s(2

63 0

54)

(269

518

)(2

34 7

38)

(263

054

)(2

69 5

18)

(234

738

)Pa

ckag

ing

(47

011)

(31

164)

(15

903)

(47

011)

(31

164)

(15

903)

Prin

ting

and

stat

ione

ry(2

39 6

95)

(240

216

)(7

7 18

6)(2

39 6

95)

(240

216

)(7

7 18

6)Pr

ofit

and

loss

on

exch

ange

di

ffere

nces

(203

038

)(3

28 8

45)

–(2

03 0

38)

(328

845

)–

Rec

ruitm

ent

fees

(217

203

)(2

42 2

80)

(98

306)

(217

203

)(2

42 2

80)

(98

306)

Rep

airs

and

mai

nten

ance

(943

449

)(9

37 3

71)

(662

809

)(9

43 4

49)

(937

371

)(6

62 8

09)

88

Gro

up

Co

mp

any

Fig

ure

s in

Ran

dN

ote

s20

1620

1520

1420

1620

1520

14

Secr

etar

ial f

ees

(7 3

79)

–(3

8 10

0)(7

379

)–

(38

100)

Secu

rity

(136

858

)(5

6 92

0)(1

53 7

60)

(136

858

)(5

6 92

0)(1

53 7

60)

Staf

f wel

fare

(182

104

)(9

8 55

7)(4

5 67

1)(1

82 1

04)

(98

557)

(45

671)

Subs

crip

tions

(4 3

70)

(14

564)

(3 3

67)

(4 3

70)

(14

564)

(3 3

67)

Tele

phon

e an

d fa

x(1

376

612

)(8

58 1

31)

(563

458

)(1

376

612

)(8

58 1

31)

(563

458

)Tr

aini

ng(6

07 9

13)

(144

312

)(2

18 9

82)

(607

913

)(1

44 3

12)

(218

982

)Tr

avel

– lo

cal

(305

915

)(1

91 8

83)

(293

047

)(3

05 9

15)

(191

883

)(2

93 0

47)

Trav

el –

ove

rsea

s(3

475

428

)(2

919

996

)(2

465

471

)(3

475

428

)(2

919

996

)(2

465

471

)U

plin

k re

tain

er(1

0 03

9 14

9)(9

617

055

)(3

649

643

)(1

0 03

9 14

9)(9

617

055

)(3

649

643

)

(98

438

906)

(72

544

776)

(31

406

966)

(98

4389

06)

(72

544

776)

(31

406

966)

The

supp

lem

enta

ry in

form

atio

n pr

esen

ted

does

not

form

par

t of

the

ann

ual f

inan

cial

sta

tem

ents

and

is u

naud

ited.

89

Annexure 6

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF AFRICAN RESONANCE

24 March 2017

The DirectorsCapital Appreciation Limited4th Floor, One Vdara41 Rivonia RoadSandhurst, 2196South Africa

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF AFRICAN RESONANCE BUSINESS SOLUTIONS PROPRIETARY LIMITED (“AR”) FOR THE YEARS ENDED 29 FEBRUARY 2016, 28 FEBRUARY 2015 AND 28 FEBRUARY 2014.

At your request and for the purposes of the circular to be dated on or about 31 March 2017 (the “Circular”) we present our report on the historical financial information of AR for the years ended 29 February 2016, 28 February 2015 and 28 February 2014 in compliance with the Listings Requirements of the JSE (“Listings Requirements”).

Responsibilities

Directors’ responsibility for the financial statements

The directors of Capital Appreciation Limited (“Capital Appreciation”) (the “Directors”) are responsible for the compilation, contents and preparation of the Circular, including the historical financial information of AR in accordance with the Listings Requirements. The directors of AR are responsible for the preparation and fair presentation of the historical financial information in accordance with the International Financial Reporting Standards and the Listing Requirements, and for such internal control as the directors of AR determine is necessary to enable the preparation of historical financial information that is free from material misstatement, whether due to fraud or error.

Reporting accountant’s responsibility

Our responsibility is to express an opinion on the historical financial information of AR for the periods ended 29 February 2016, 28 February 2015 and 28 February 2014 included in the Circular, based on our audit of the financial information for the years then ended.

Scope of the audit

We conducted our audit of the historical financial information for the years ended 29 February 2016, 28 February 2015, and 28 February 2014 in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial information. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial information, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial information.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Audit opinion

In our opinion, the historical financial information of AR for the years ended 29 February 2016, 28 February 2015, and 28 February 2014 presents fairly, in all material respects, for the purposes of the Circular, the financial position of AR at that date and the results of its operations and cash flows for the periods then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa and the Listings Requirements.

90

Consent

We consent to the inclusion of this report and the reference to our opinion in the Circular in the form and context in which it appears.

Yours faithfully

Grant Thornton C Pretorius @Grant ThorntonChartered Accountants (SA) Partner Wanderers Office ParkRegistered Auditors Chartered Accountant (SA) 52 Corlett DrivePractice number: 903485 Registered Auditors Illovo

2196

91

Annexure 7

INTERIM FINANCIAL INFORMATION OF AFRICAN RESONANCE

The interim financial information of African Resonance presented in this Annexure 7 should be read in conjunction with paragraph 12.1 of the Circular.

Statement of Financial Position as at 31 August 2016

Figures in Rand Notes 31 August 2016 29 February 2016

AssetsNon-current assetsProperty, plant and equipment 3 14 365 323 17 943 366Intangible assets 4

Deferred tax 8 363 444 368 566

14 728 767 18 311 932

Current assetsInventories 9 13 371 776 3 536 574Loan to shareholder 6 10 418 557 538 485Trade and other receivables 10 1 872 320 7 779 911Other financial assets 7 4 674 291Current tax receivable 591 875 1 302 740

Cash and cash equivalents 11 42 435 723 43 169 349

73 364 542 56 327 059

Total assets 88 093 309 74 638 991

Equity and liabilitiesEquityShare capital 13 100 100

Retained income 58 875 926 33 436 024

58 876 026 33 436 124

LiabilitiesNon-current liabilitiesOther financial liabilities 14 8 367 286 12 978 515

Current liabilitiesTrade and other payables 15 8 583 772 15 664 313Other financial liabilities 14 12 266 225 12 560 039

20 849 997 28 224 352

Total liabilities 29 217 283 41 202 867

Total equity and liabilities 88 093 309 74 638 991

92

Statement of profit or loss and other comprehensive income

Figures in Rand NotesSix months ended

31 August 201612 months ended 29 February 2016

Revenue 17 82 670 461 184 504 989Cost of sales 18 (24 851 105) (69 359 272)

Gross profit 57 819 356 115 145 717Other income 19 8 332 009 15 476 742Operating expenses (31 071 277) (98 438 906)

Operating profit 20 35 080 088 32 183 553Investment revenue 21 1 565 239 2 186 696Finance costs 22 (1 312 130) (5 947 882)

Profit before taxation 35 333 197 28 422 367Taxation 23 (9 893 295) (8 137 554)

Profit for the six months 25 439 902 20 284 813Other comprehensive income – –

Total comprehensive income for the six months 25 439 902 20 284 813

Statement of changes in equity

Figures in RandShare

capitalRetained

incomeTotal

equity

Balance at 1 March 2015 100 13 151 211 13 151 311

Profit for the year 20 284 813 20 284 813Other comprehensive income – – –

Total comprehensive income for the year 20 284 813 20 284 813

Balance at 1 March 2016 100 33 436 024 33 436 124

Profit for the six months 25 439 902 25 439 902Other comprehensive income – – –

Total comprehensive income for the six months 25 439 902 25 439 902

Balance at 31 August 2016 100 58 875 926 58 876 026

Notes 13

93

Statement of cash flows

Figures in Rand NotesSix months ended

31 August 201612 months ended 29 February 2016

Cash flows from operating activitiesCash generated from operations 24 30 366 889 51 111 123Interest income 1 565 239 2 186 696Finance costs (1 312 130) (5 947 882)Tax paid 25 (9 177 309) (8 968 009)

Net cash from operating activities 21 442 689 38 381 928

Cash flows from investing activitiesPurchase of property, plant and equipment 3 (4 971 550) (7 142 259)Sale of property, plant and equipment 3 2 254 641 3 551 846Movement in financial assets (4 674 291) –

Net cash from investing activities (7 391 200) (3 590 413)

Cash flows from financing activitiesProceeds from other financial liabilities (4 905 043) (6 486 412)Movement in loans to directors, managers and employees – 469 409Advance of shareholders loan (9 880 072) (3 105 926)

Net cash from financing activities (14 785115) (9 122 929)

Total cash movement for the six months (733 626) 25 668 586Cash at the beginning of the six months 43 169 349 17 500 763

Total cash at end of the six months 11 42 435 723 43 169 349

94

Accounting Policies

1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS

The annual financial statements have been prepared in accordance with International Financial Reporting Standards, and the Companies Act 71 of 2008. The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in South African Rand.

These financial statements have been prepared for the purposes of the circular on pro-forma information for the periods ended 31 August 2016 in compliance with the JSE Limited (“JSE”) Listings Requirements.

These accounting policies are consistent with the previous period.

1.1 Significant judgements and sources of estimation uncertainty

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include:

Allowance for slow moving, damaged and obsolete inventory

An allowance for inventory to write inventory down to the lower of cost or net realisable value. Management have made estimates of the selling price and direct cost to sell on certain inventory items. The write down is Included in the operating profit note.

Impairment testing

The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions.

Taxation

Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due.

Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The company recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the company to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction.

To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the company to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.

Residual values and useful lives

The useful lives of assets are based on management’s estimation. The estimation of residual values of assets is based on management’s judgement of whether the assets will be sold and what condition they will be at the time.

Residual values and useful lives of assets are assessed on an annual basis.

Other

The carrying value less impairment provision for trade receivables and payables are assumed to approximate fair values.

95

1.2 Property, plant and equipment

Property, plant and equipment is initially measured at cost.

Property, plant and equipment is subsequently stated at cost less accumulated depreciation and any accumulated impairment losses.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Depreciation method Average useful life

Motor vehicles Straight line Five yearsIT equipment Straight line Three yearsTerminals Straight line Three yearsOffice equipment Straight line Six years

The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting period. If the expectations differ from previous estimates, the change is accounted for prospectively as a change in accounting estimate.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

1.3 Intangible assets

Intangible assets are initially recognised at cost.

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item Useful life

Licence rights 10 years

1.4 Interests in subsidiaries

Investments in subsidiaries are carried at cost less any accumulated impairment.

1.5 Financial instruments

Classification

The company classifies financial assets and financial liabilities into the following categories:

• Loans and receivables

• Financial liabilities measured at amortised cost

Classification depends on the purpose for which the financial instruments were obtainedIincurred and takes place at initial recognition. Classification is re-assessed on an annual basis, except for derivatives and financial assets designated as at fair value through profit or loss, which shall not be classified out of the fair value through profit or loss category.

Initial recognition and measurement

Financial instruments are recognised initially when the company becomes a party to the contractual provisions of the instruments.

The company classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial instruments are measured initially at fair value, except for equity investments for which a fair value is not determinable, which are measured at cost and are classified as available-for-sale financial assets.

For financial instruments which are not at fair value through profit or loss, transaction costs are included in the initial measurement of the instrument.

96

Subsequent measurement

Loans and receivables are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses.

Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest method. Financial liabilities are subsequently measured at amortised cost, using the effective interest method.

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the company has transferred substantially all risks and rewards of ownership.

Loans to (from) group companies

These include loans to and from holding companies, fellow subsidiaries, subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs.

Loans to group companies are classified as loans and receivables.

Loans from group companies are classified as financial liabilities measured at amortised cost.

Trade and other receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss.

Trade and other receivables are classified as loans and receivables.

Trade and other payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid Investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially measured at fair value and subsequently at amortised cost.

1.6 Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities

A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

97

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Tax expenses

Current and deferred taxes are recognised as Income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

• a transaction or event which Is recognised, in the same or a different period, to other comprehensive Income; or

• a business combination.

Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

1.7 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset. This liability is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.8 Inventories

Inventories are measured at the lower of cost and net realisable value on the first-in-first-out basis.

1.9 Impairment of assets

The company assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the company also:

• tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period.

• tests goodwill acquired in a business combination for impairment annually.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash generating unit to which the asset belongs is determined.

The recoverable amount of an asset or a cash generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease.

98

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase.

1.10 Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Ordinary shares are classified as equity.

1.11 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.

1.12 Revenue

Revenue from the sale of terminals is recognised when all the following conditions have been satisfied:

• the company has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the company; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax.

Interest is recognised, in profit or loss, using the effective interest rate method.

Maintenance and support service fees included in the price of the product are recognised as revenue over the period during which the service is performed.

Operating leases – lessor

Operating lease income from terminals are recognised as an income when invoiced as per the contract.

Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income.

Income for leases is disclosed under revenue in profit or loss.

1.13 Cost of sales

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

The related cost of providing services recognised as revenue in the current period is included in cost of sales.

99

1.14 Borrowing costs

All other borrowing costs are recognised as an expense in the period in which they are incurred.

1.15 Translation of foreign currencies

Foreign currency transactions

A foreign currency transaction is recorded, on initial recognition in Rand, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

At the end of the reporting period:

• foreign currency monetary items are translated using the closing rate;

• non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and

• non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous annual financial statements are recognised in profit or loss in the period in which they arise.

When a gain or loss on a non-monetary item is recognised to other comprehensive income and accumulated in equity, any exchange component of that gain or loss is recognised to other comprehensive income and accumulated in equity. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is recognised in profit or loss.

Cash flows arising from transactions in a foreign currency are recorded in Rand by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash flow.

2. NEW STANDARDS AND INTERPRETATIONS

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published by the IASB but are not yet effective and have not been adopted early by the group. Management anticipates that all of the relevant pronouncements will be adopted in the accounting policies for the first period beginning after the effective date of the pronouncement Information about new standards, amendments and interpretations that are expected to be relevant to the group’s financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have any impact on the group’s financial statements.

2.1 Standards and interpretations not yet effective

The company has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the company’s accounting periods beginning on or after 1 March 2017 or later periods:

Disclosure Initiative: Amendment to IAS 1: Presentation of Financial Statements

The amendment provides new requirements when an entity presents subtotals in addition to those required by IAS 1 in Its annual financial statements. It also provides amended guidance concerning the order of presentation of the notes in the annual financial statements, as well as guidance for identifying which accounting policies should be included. It further clarifies that an entity’s share of comprehensive income of an associate or joint venture under the equity method shall be presented separately into its share of items that a) will not be reclassified subsequently to profit or loss and b) that will be reclassified subsequently to profit or loss.

The effective date of the company is for years beginning on or after 1 January 2016.

The company expects to adopt the amendment for the first time in the 2017 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

100

IFRS 16 Leases

IFRS 16 Leases is a new standard which replaces IAS 17 Leases, and introduces a single lessee accounting model. The main changes arising from the issue of IFRS 16 which are likely to impact the company are as follows:

Company as lessee:

• lessees are required to recognise a right-of-use asset and a lease liability for all leases, except short term leases or leases where the underlying asset has a low value, which are expensed on a straight line or other systematic basis.

• The cost of the right-of-use asset includes, where appropriate, the initial amount of the lease liability; lease payments made prior to commencement of the lease less incentives received; initial direct costs of the lessee; and an estimate for any provision for dismantling, restoration and removal related to the underlying asset.

• The lease liability takes into consideration, where appropriate, fixed and variable lease payments; residual value guarantees to be made by the lessee; exercise price of purchase options; and payments of penalties for terminating the lease.

• The right-of-use asset is subsequently measured on the cost model at cost less accumulated depreciation and impairment and adjusted for any re-measurement of the lease liability. However, right-of-use assets are measured at fair value when they meet the definition of investment property and all other investment property is accounted for on the fair value model. If a right-of-use asset relates to a class of property, plant and equipment which is measured on the revaluation model, then that right-of-use asset may be measured on the revaluation model.

• The lease liability is subsequently increased by interest, reduced by lease payments and re-measured for reassessments or modifications.

• Re-measurements of lease liabilities are affected against right-of-use assets, unless the assets have been reduced to nil, in which case further adjustments are recognised in profit or loss.

• The lease liability is re-measured by discounting revised payments at a revised rate when there is a change in the lease term or a change in the assessment of an option to purchase the underlying asset.

• The lease liability is re-measured by discounting revised lease payments at the original discount rate when there is a change in the amounts expected to be paid in a residual value guarantee or when there is a change in future payments because of a change in index or rate used to determine those payments.

• Certain lease modifications are accounted for as separate leases. When lease modifications which decrease the scope of the lease are not required to be accounted for as separate leases, then the lessee re-measures the lease liability by decreasing the carrying amount of the right of lease asset to reflect the full or partial termination of the lease. Any gain or loss relating to the full or partial termination of the lease is recognised in profit or loss. For all other lease modifications which are not required to be accounted for as separate leases, the lessee re-measures the lease liability by making a corresponding adjustment to the right-of-use asset.

• Right-of-use assets and lease liabilities should be presented separately from other assets and liabilities. If not, then the line item in which they are included must be disclosed. This does not apply to right-of-use assets meeting the definition of Investment property which must be presented within investment property. IFRS 16 contains different disclosure requirements compared to IAS 17 leases.

Company as lessor:

• Accounting for leases by lessors remains similar to the provisions of IAS 17 in that leases are classified as either finance leases or operating leases. Lease classification is reassessed only if there has been a modification.

• A modification is required to be accounted for as a separate lease if it both increases the scope of the lease by adding the right to use one or more underlying assets; and the increase in consideration is commensurate to the stand alone price of the increase in scope.

• If a finance lease is modified, and the modification would not qualify as a separate lease, but the lease would have been an operating lease if the modification was in effect from inception, then the modification is accounted for as a separate lease. In addition, the carrying amount of the underlying asset shall be measured as the net investment in the lease immediately before the effective date of the modification. IFRS 9 is applied to all other modifications not required to be treated as a separate lease.

• Modifications to operating leases are required to be accounted for as new leases from the effective date of the modification. Changes have also been made to the disclosure requirements of leases in the lessor’s financial statements.

101

The effective date of the standard is for years beginning on or after 1 January 2019.

The company expects to adopt the standard for the first time in the 2020 annual financial statements.

The impact of this standard is currently being assessed.

IFRS 9 Financial Instruments

IFRS 9 issued in November 2009 introduced new requirements for the classification and measurements of financial assets. IFRS 9 was subsequently amended In October 2010 to include requirements for the classification and measurement of financial liabilities and for derecognition, and in November 2013 to Include the new requirements for general hedge accounting. Another revised version of IFRS 9 was issued in July 2014 mainly to include a) impairment requirements for financial assets and b) limited amendments to the classification and measurement requirements by introducing a “fair value through other comprehensive income” (FVTOCI) measurement category for certain simple debt instruments.

Key requirements of IFRS 9:

• All recognised financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement are required to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the outstanding principal are generally measured at amortised cost at the end of subsequent reporting periods. Debt instruments that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and that have contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on outstanding principal, are measured at FVTOCI. All other debt and equity investments are measured at fair value at the end of subsequent reporting periods. In addition, under IFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income with only dividend Income generally recognised in profit or loss.

• With regard to the measurement of financial liabilities designated as at fair value through profit or loss, IFRS 9 requires that the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of the liability is presented in other comprehensive income, unless the recognition of the effect of the changes of the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch In profit or loss. Under IAS 39, the entire amount of the change in fair value of a financial liability designated as at fair value through profit or loss is presented in profit or loss.

• In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under IAS 39. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. It is therefore no longer necessary for a credit event to have occurred before credit losses are recognised.

• The new general hedge accounting requirements retain the three types of hedge accounting mechanisms currently available in IAS 39.Under IFRS 9, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been replaced with the principal of an “economic relationship”. Retrospective assessment of hedge effectiveness is also no longer required. Enhanced disclosure requirements about an entity’s risk management activities have also been introduced.

The effective date of the standard is for years beginning on or after 1 January 2018.

The company expects to adopt the standard for the first time in the 2019 annual financial statements.

It is unlikely that the standard will have a material impact on the company’s annual financial statements.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 supersedes IAS 11 Construction contracts; IAS 18 Revenue; IFRIC 13 Customer Loyalty Programmes; IFRIC 15 Agreements for the construction of Real Estate; JFRJC 18 Transfers of Assets from Customers and SIC 31 Revenue – Barter Transactions Involving Advertising Services.

102 103

The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps:

• Identify the contract(s) with a customer

• Identify the performance obligations in the contract

• Determine the transaction price

• Allocate the transaction price to the performance obligations in the contract

• Recognise revenue when (or as) the entity satisfies a performance obligation.

IFRS 15 also includes extensive new disclosure requirements.

The effective date of the standard is for years beginning on or after 1 January 2018.

The company expects to adopt the standard for the first time in the 2019 annual financial statements.

The impact of this standard is currently being assessed.

Amendments to IAS 7: Disclosure Initiative

The amendment requires entities to provide additional disclosures for changes in liabilities arising from financing activities. Specifically, entities are now required to provide disclosure of the following changes in liabilities arising from financing activities:

• changes from financing cash flows;

• changes arising from obtaining or losing control of subsidiaries or other businesses;

• the effect of changes in foreign exchanges;

• changes in fair values; and

• other changes.

The effective date of the amendment is for years beginning on or after 1 January 2017.

The company expects to adopt the amendment for the first time in the 2018 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation

The amendment clarifies that a depreciation or amortisation method that is based on revenue that is generated by an activity that includes the use of the asset is not an appropriate method. This requirement can be rebutted for intangible assets in very specific circumstances as set out in the amendments to IAS 38.

The effective date of the amendment is for years beginning on or after 1 January 2016.

The company expects to adopt the amendment for the first time in the 2017 annual financial statements.

It is unlikely that the amendment will have a material impact on the company’s annual financial statements.

102 103

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4. INTANGIBLE ASSETS

31 August 2016 29 February 2016

CostAccumulated depreciation

Carrying value Cost

Accumulated depreciation

Carrying value

Licence rights – – – 3 490 186 (3 490 186) –

Reconciliation of Intangible assets – 2016

Opening balance Total

Licence rights – –

The rights to purchase and trade Ingenico stock have been impaired in 2015. The rights and the stock attached were purchased over 11 years ago. The field stock has since been recalled, written off and replaced over the years and thus no longer holds any value and therefore management impaired to nil and scrapped these assets.

5. INTERESTS IN SUBSIDIARY

Name of company

% holding 31 August

2016

% holding 29 February

2016

Carrying amount

31 August 2016

Carrying amount

29 February 2016

Firefly Investments 275 Proprietary Limited 100.00% 100.00% – –

The entity is incorporated in South Africa and shares the year-end of the group. The carrying amounts of subsidiaries are shown net of impairment losses.

The Investment in Firefly has been impaired down to a nil value in 2015, as it is non-trading, and is in the process of deregistration as of 20 May 2016.

Figures in Rand31 August

201629 February

2016

6. LOANS TO (FROM) SHAREHOLDERS

H Neishlos 10 418 557 538 485

The intention is for the amount to be repaid within the next 12 months and thus the loan has been classified as a financial asset. The loan is classified as current. The loan bears interest at the prime rate.

7. OTHER FINANCIAL ASSETS

Loans and receivables

Dashpay Proprietary Limited 4 674 291 –The loan is current in nature due to trading activities between the company.

Current assetsLoans and receivables 4 674 291 –

105

Figures in Rand31 August

201629 February

2016

8. DEFERRED TAX

Deferred tax

Accelerated allowances for tax purposes 363 444 368 566

Reconciliation of deferred tax asset I (liability)At beginning of year 368 566 181 391Temporary differences on allowance for doubtful debts – (12 405)Temporary differences on income received in advance (53 017) 163 773Temporary differences on provision for leave pay 47 895 35 807

363 444 368 566

Deferred tax liability 363 444 368 566

9. INVENTORIES

Prepaid airtime 114 319 218 835Inventory 13 257 457 367 490Goods in transit – 2 950 249

13 371 776 3 536 574

10. TRADE AND OTHER RECEIVABLES

Trade receivables 1 525 642 6 979 741Allowance for doubtful debts (130 051) (130 051)Deposits 254 668 533 023Prepaid airtime debtors 222 061 397 198

1 872 320 7 779 911

Trade and other receivables past due but not impaired

Trade and other receivables which are less than three months past due are not considered to be impaired. At 31 August 2016, R554 743 (2016: R223 847) were past due but not impaired.

The ageing of amounts past due but not impaired is as follows:

60 days 50 077 56 20690 days 61 718 36 928120 days 442 948 130 713

554 743 223 847

106

Figures in Rand31 August

201629 February

2016

Trade and other receivables impaired

As of 31 August 2016, trade and other receivables of R130 051 (2016: R130 051) were impaired and provided for.

The amount of the provision was R130 051 as of 31 August 2016 (2016: R130 051).

The ageing of these receivables were above 120 days.

11. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of:Bank balances 42 432 301 43 165 927Cash on hand 3 422 3 422

42 435 723 43 169 349

12. FINANCIAL ASSETS BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

Loans and receivablesCash and cash equivalents 42 435 723 43 169 349Loan to shareholder 10 418 557 538 485Other financial assets 4 674 291Trade and other receivables 1 872 320 7 779 911

59 400 891 51 487 745

The carrying value is a reasonable approximation of fair value.

13. SHARE CAPITAL

Authorised

1 000 Ordinary shares of R1 each 1 000 1 000

900 unissued ordinary shares are under the control of the directors in terms of a resolution of members passed at the last annual general meeting.

Issued

100 Ordinary shares of R1 each 100 100

14. OTHER FINANCIAL LIABILITIES

Held at amortised cost

Sasfin Bank Limited 20 633 511 25 538 554

Rental income to the value of the loan has been ceded to Sasfin bank.

The cessions range from between 45-59 months as per the agreements and the corresponding schedules. The liability is a securitisation transaction with Sasfin Bank. The agreement framework consists of a master cession agreement with corresponding schedules signed for each securitisation transaction.

Non-current liabilitiesAt amortised cost 8 367 286 12 978 515

Current liabilitiesAt amortised cost 12 266 225 12 560 039

20 633 511 25 538 554

107

Figures in Rand31 August

201629 February

2016

15. TRADE AND OTHER PAYABLES

Trade payables 5 004 281 9 786 017Accrued expense 257 701 1 896 027Accrued leave pay 770 426 599 367Income received in advance 1 339 232 2 291 070Deposits received (31 382) (28 647)Accrual for audit fee 151 000 151 000Value added tax 1 092 514 969 479

8 583 772 15 664 313

16. FINANCIAL LIABILITIES BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:Financial liabilities at amortised costOther financial liabilities 20 633 511 25 538 554Trade and other payables (excluding VAT) 7 491 258 14 694 838

28 124 769 40 233 392

The carrying value is a reasonable approximation of fair value.

17. REVENUE

Rental income 45 114 929 89 712 136Maintenance and support services fee 16 740 311 22 487 017Sale of terminals 20 815 221 72 305 836

82 670 461 184 504 989

18. COST OF SALES

Sale of goodsCost of sales – Terminal local sales 15 761 178 50 465 350Terminal rentals and maintenance and support costCost of sales – rentals and maintenance and support 9 089 927 18 893 922

24 851 105 69 359 272

19. OTHER INCOME

Sundry income 5 073 945 12 805 304Prepaid airtime and electricity sales 366 005 859 327Profit and loss on exchange differences 941 331 –Profit and loss on sale of property, plant and equipment 1 950 728 1 804 562Recoveries – 7 549

8 332 009 15 476 742

Sundry income is a combination of coincidental, loyalty subscriptions, software licence applications, project fees and terminal repairs.

108

Figures in Rand31 August

201629 February

2016

20. OPERATING PROFIT

Operating profit for the year is stated after accounting for the following:

Operating lease charges

Premises

• Contractual amounts 2 414 917 4 784 459

Depreciation on property, plant and equipment 8 245 680 15 773 101Employee costs excluding ex gratia payment 7 745 656 20 974 481Ex gratia payment – 40 000 000(Profit) I Loss on exchange differences (941 331) 203 038Profit on sale of property, plant and equipment (1 950 728) (1 804 562)

21. INVESTMENT REVENUE

Interest revenue

Bank 1 038 197 1 316 294Shareholders 527 042 858 170SARS – 12 232

1 565 239 2 186 696

22. FINANCE COSTS

Sasfin 1 312 130 5 947 882

23. TAXATION

Major components of the tax expense

Current

Local income tax- current period 9 888 174 8 145 437Prior year under provision 179 292

9 888 174 8 324 729

DeferredOriginating and reversing temporary differences 5 121 (187 175)

9 893 295 8 137 554

Reconciliation of the tax expenseReconciliation between accounting profit and tax expense.Accounting profit 35 333 197 28 422 367Tax at the applicable tax rate of 28% 9 893 295 7 958 263Tax effect of adjustments on taxable incomePrior year tax adjustment 179 291

9 893 295 8 137 554

109

Figures in Rand31 August

201629 February

2016

24. CASH GENERATED FROM OPERATIONS

Profit before taxation 35 333 197 28 422 367Adjustments for:Depreciation and amortisation 8 245 680 15 773 101Net loss on disposal of property, plant and equipment (1 950 728) (1 804 562)Interest received- investment (1 565 239) (2 186 696)Finance costs 1 312 130 5 947 882Changes In working capital:Inventories (9 835 202) 5 002 160Trade and other receivables 5 907 591 (2 766 402)Trade and other payables (7 080 540) 2 723 273

30 366 889 51 111 123

25. TAX PAID

Balance at beginning of the six months 1 302 740 659 460Current tax for the year recognised in profit or loss (9 888 174) (8 324 729)Balance at end of the six months (591 875) (1 302 740)

(9 177 309) (8 968 009)

26. COMMITMENTS

Operating leases – as lessee (expense)

Minimum lease payments due

– within one year 3 999 028 3 842 385– in second to fifth year inclusive 9 046 703 11 046 217

13 045 731 14 888 602

Operating lease payments represent rentals payable by the company for certain of its office properties. No contingent rent is payable.

Operating leases – as lessor (Income)

Minimum lease payments due

–within one year 54 932 503 55 801 289– in second to fifth year inclusive 65 779 217 92 811 076

120 711 720 148 612 365

Operating lease receipts represents rentals receivable by the company for the terminals, where there are long term signed contracts in place, and excludes month to month arrangements. The rentals receivable represents the minimum rentals before CPI increases.

27. RELATED PARTIES

Relationships

Shareholder with significant influence H Neishlos

Shareholders, directors and members of key management H Neishlos

Safika Holdings Proprietary Limited

Close family member of key management E Neishlos

Companies with common directors HN Terminal Systems CC

Uplink Technology Services Proprietary Limited

Company with close family member of key management Castlebridge Professional Services Limited

110

Figures in Rand31 August

201629 February

2016

Related party balances

Loan accounts – Owing (to) by related parties

H Neishlos 10 418 557 538 485

Amounts included in Trade receivable (Trade Payable) regarding related partiesUplink Technology Services Proprietary Limited (1 377 896) (2 402 383)

Related party transactionsInterest paid to (received from) related party loansH Neishlos 527 042 858 170

Consultation fees paid to related partiesHN Terminal Systems CC 4 339 985 3 783 352E Neishlos – 1 409 616Uplink Technology Services 3 449 553 9 804 086Castlebridge Professional Services Limited 4 691430 –

12 480 968 14 997 054

28. DIRECTORS’ EMOLUMENTS

Executive

H Neishlos – 40 000 000

29. RISK MANAGEMENT

Capital risk management

The company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the company consists of debt, which includes the borrowings (excluding derivative financial liabilities) disclosed in notes 6 and 14 cash and cash equivalents disclosed in note 11, and equity as disclosed in the statement of financial position.

There are no externally imposed capital requirements.

There have been no changes to what the entity manages as capital, the strategy for capital maintenance or externally imposed capital requirements from the previous year.

Financial risk management

The company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the company’s financial performance.

Liquidity risk

The company’s risk to liquidity is a result of the funds available to cover future commitments. The company manages liquidity risk through an ongoing review of future commitments and credit facilities.

Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored.

111

The table below analyses the company’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

At 31 August 2016 Less than one yearBetween one

and two years

Trade and other payables 7 244 541 –Other financial liabilities 8 367 286 12 266 225

At 29 February 2016 Less than one yearBetween one

and two years

Trade and other payables 15 664 313 –Other financial liabilities 12 560 039 12 978 515

Interest rate risk

As the company has no significant interest-bearing assets, the company’s income and operating cash flows are substantially independent of changes in market interest rates.

At 31 August 2016, if interest rates on Rand-denominated borrowings had been 1% higher/lower with all other variables held constant, post-tax profit for the six months would have been R57 994 (2016: R92 118) lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings.

Credit risk

Credit risk consists mainly of cash deposits, cash equivalents and trade debtors. The company only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.

Risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.

Financial assets exposed to credit risk at six months end were as follows:

Financial instrument 2016 2016

Cash and cash equivalents 42 435 723 43 169 349Loan to shareholder 10 418 557 538 485Other financial assets 4 674 291 –Trade and other receivables 1 872 320 7 779 911

Foreign exchange risk

At 31 August 2016, if the currency had weakened/strengthened by 5% against the Euro with all other variables held constant, post-tax profit for the year would have been R4 202 (2016: R147 264) higher/lower, mainly as a result of foreign exchange gains or losses on translation of Euro denominated trade payables.

Foreign currency exposure at the end of the reporting period

Liabilities

Trade creditors, Euro 5 032 (2016: Euro 168 680) 84 038 2 945 290

Exchange rates used for conversion of foreign items were:

Euro 16.70 17.46

112

30. GOING CONCERN

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

Detailed Statement of Financial Performance

Figures in Rand NotesSix months ended

31 August 201612 months ended 29 February 2016

RevenueSale of terminals 20 815 221 72 305 836Rental Income 45 114 929 89 712 136

Prepaid airtime sales 16 740 311 22 487 017

17 82 670 461 184 504 989

Cost of sales 18 (24 851 105) (69 359 272)

Gross profit 57 819 356 115 145 717Other incomeRecoveries 7 549Other income 366 005 859 327Sundry Income 5 073 945 12 805 304Interest received 21 1 565 239 2 186 696Gains on disposal of assets 1 950 728 1 804 562Profit and loss on exchange differences 941 331

9 897 248 17 663 438

Expenses (refer to page 113) (31 071 277) (98 438 906)

Operating profit 20 36 645 327 34 370 249

Finance costs 22 (1 312 130) (5 947 882)

Profit before taxation 35 333 197 28 422 367

Taxation 23 (9 893 295) (8 137 554)

Profit for the six months 25 439 902 20 284 813

113

Figures in Rand NotesSix months ended

31 August 201612 months ended 29 February 2016

Operating expensesAccounting fees – (2 168)Auditor’s remuneration (302 699) (219 130)Bad debts (66 529) (58 222)Bank charges (82 891) (191 901)Cleaning – (1 113)Commission paid (352 339) (1 850 700)Computer expenses (756 803) (1 624 783)Consulting and professional fees (9 880 137) (6 064 005)Delivery expenses (1 226 231) (2 340 278)Discount allowed (32 814) (74 759)Donations (5 000) (797 632)Employee costs (7 745 656) (60 805 758)Entertainment (159 894) (267 399)General expenses (20 537) (23 695)Uplink retainer (3 459 478) (10 039 149)Recruitment fees (21 984) (217 203)Enterprise Development expenses (60 000) (10 000)ETI 8 061 5 510Fines and penalties (250) –Gifts (60 543) (10 100)Hire (39 245) 39 648Insurance (27 241) (172 002)Lease rentals on operating lease (2 414 917) (4 784 459)Legal expenses (and secondment write off) (565 316) (975 526)Medical expenses – (161 256)Motor vehicle expenses (133 514) (263 054)Packaging (22 017) (47 011)Printing and stationery (277 093) (239 695)Profit and loss on exchange differences – (203 038)Repairs and maintenance (533 928) (943 449)Secretarial fees – (7 379)Security (8 959) (136 858)Staff welfare (136 876) (182 104)Subscriptions – (4 370)Telephone and fax (775 258) (1 376 612)Training (106 236) (607 913)Travel- local (101 705) (305 915)Travel – overseas (1 703 248) (3 475 428)

(31 071 277) (98 438 906)

114

Annexure 8

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE INTERIM FINANCIAL INFORMATION OF AFRICAN RESONANCE

24 March 2017

The DirectorsCapital Appreciation Limited4th Floor, One Vdara41 Rivonia RoadSandhurst, 2196South Africa

REPORT OF THE INDEPENDENT REPORTING ACCOUNTANT’S ON THE INTERIM FINANCIAL INFORMATION OF AFRICAN RESONANCE BUSINESS SOLUTIONS PROPRIETARY LIMITED (“AR”) FOR THE SIX MONTHS ENDED 31 AUGUST 2016

At your request and for the purposes of the circular to be dated on or about 31 March 2017 (the “Circular”) we present our report on the interim financial information of AR for the six months ended 31 August 2016 in compliance with the Listings Requirements of the JSE Limited (“Listings Requirements”).

Directors’ responsibility

The directors of Capital Appreciation Limited (“Capital Appreciation”) (the “Directors”) are responsible for the compilation, contents and preparation of the Circular, including the interim financial information of AR in accordance with the Listings Requirements. The directors of AR are responsible for the preparation and fair presentation of the interim financial information in accordance with the International Accounting Standard 34: Interim Financial Reporting and the Listing Requirements, and for such internal control as the directors of AR determine is necessary to enable the preparation of interim financial information that is free from material misstatement, whether due to fraud or error.

Reporting accountant’s responsibility

Our responsibility is to express a review conclusion on the interim financial information for the six months ended 31 August 2016.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, “Review of Interim Financial Information performed by the Independent Auditor of the Entity”. A review of preliminary financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying financial information for the six months ended 31 August 2016, is not prepared, in all material respects, in accordance with International Accounting Standard 34, the requirements of the Companies Act of South Africa and the Listings Requirements.

Consent

We consent to the inclusion of this report and the reference to our opinion in the Circular in the form and context in which it appears.

Yours faithfully

Grant Thornton C Pretorius @Grant ThorntonChartered Accountants (SA) Partner Wanderers Office ParkRegistered Auditors Chartered Accountant (SA) 52 Corlett DrivePractice number: 903485 Registered Auditors Illovo

2196

115

Annexure 9

HISTORICAL FINANCIAL INFORMATION OF RINWELL FOR THE SEVEN MONTH PERIOD ENDED 30 JUNE 2016

STATEMENT OF FINANCIAL POSITION

Figures in Rand Notes

Group30 June

2016

ASSETSNon-current assetsProperty, plant and equipment 3 3 026 273Intangible assets 4 481 844

3 508 117

Current assetsTrade and other receivables 5 4 403 671Cash and cash equivalents 6 13 859 686

18 263 357

Total assets 21 771 474

Equity and liabilitiesEquityStated capital 10 6 000 000Retained income 1 803 135

7 803 135

LIABILITIESCurrent liabilitiesTrade and other payables 9 3 022 985Other financial liabilities 8 9 250 000Bank overdraft 6 1 695 354

13 968 339

Total liabilities 13 968 339

Total equity and liabilities 21 771 474

116

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Group

Figures in Rand Notes

7 months ended

30 June 2016

Revenue 12 7 251 429Cost of sales (3 149 641)

Gross profit 4 101 788Other incomeOperating expenses (10 698 673)Gain on bargain purchase 16 8 352 325

Operating profit 13 1 755 440Interest received 55 030Finance costs 14 (7 335)

Profit before taxation 1 803 135Taxation

Profit for the period 1 803 135Other comprehensive income

Total comprehensive income for the period 1 803 135

STATEMENT OF CHANGES IN EQUITY

Figures in RandStatedcapital

Retainedincome

Totalequity

GroupBalance at 27 November 2015 – – –

Issue of shares 6 000 000 6 000 000Profit for the period 1 803 135 1 803 135

Total comprehensive income for the period – 1 803 135 1 803 135

Balance at 30 June 2016 6 000 000 1 803 135 7 803 135

Note(s) 10

117

STATEMENT OF CASH FLOWS

Group

Figures in Rand Notes

7 months ended

30 June 2016

Cash flows from operating activitiesCash generated from operations 20 (2 506 161)Interest income 55 030Finance costs (7 335)

Net cash from operating activities (2 458 466)

Cash flows from investing activitiesPurchase of property, plant and equipment 3 (153 941)Purchase of intangible assets 4 (21 838)Business combinations 21 (451 423)Loans advanced to group companies

Net cash from investing activities (627 202)

Cash flows from financing activitiesProceeds on share issue 10 6 000 000Proceeds from other financial liabilities 9 250 000

Net cash from financing activities 15 250 000

Total cash movement for the period 12 164 332

Total cash at end of the period 9 12 164 332

118

ACCOUNTING POLICIES

1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS

The annual financial statements have been prepared in accordance with International Financial Reporting Standards, and the Companies Act of South Africa. The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in South African Rand.

1.1 Significant judgements and sources of estimation uncertainty

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include:

Trade receivables

The group assesses its trade receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in profit or loss, the group makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

The impairment for trade receivables is calculated on a portfolio basis, based on historical loss ratios, adjusted for national and industry-specific economic conditions and other indicators present at the reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period.

Impairment testing

The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions.

The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities.

If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of tangible and intangible assets are inherently uncertain and could materially change over time.

Taxation

Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable Income differ significantly from estimates, the ability of the group to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.

1.2 Property, plant and equipment

Property, plant and equipment is initially measured at cost.

Subsequent to initial measurement property, plant and equipment is measured at cost less accumulated depreciation and accumulated impairment.

119

Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Average useful life

Furniture and fixtures Six yearsComputer equipment Three yearsComputer servers Five yearsTerminals Five years

The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting period.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

Depreciation begins when the asset is available for use.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

1.3 Intangible assets

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

The amortisation period and the amortisation method for intangible assets are reviewed every period-end.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item Useful life

Computer software, developed Three yearsCustomer web portal Three years

1.4 Interests in subsidiaries group annual financial statements

The group annual financial statements include those of the holding company and its subsidiaries who are those entities which the group controls. The results of the subsidiaries are included from the effective date of acquisition. Subsidiaries are deconsolidated on the date that the group ceases to control.

The acquisition method of accounting Is used to account for the acquisition of subsidiaries. All acquisition related costs are expensed when incurred.

On acquisition the group recognises the subsidiary’s identifiable assets, liabilities and contingent liabilities at fair value.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. In the company’s separate annual financial statements, investments in subsidiaries are carried at cost less any accumulated impairment.

An adjustment to the cost of a business combination contingent on future events is included in the cost of the combination if the adjustment is probable and can be measured reliably.

1.5 Financial Instruments

Initial recognition and measurement

The group classifies financial instruments on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement

Financial assets and financial liabilities are recognised on the company’s statement of financial position when the company becomes party to the contractual provision of the instrument.

120

A financial asset or financial liability is measured at fair value plus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue. If the fair value of the financial asset or financial liability at initial recognition differs from the transaction price an entity shall recognise the deferred day one gain difference as a gain or loss only to the extent that it arises from a change in a factor (including time) that market participants would take into account when pricing the asset or liability.

Derecognition

The company derecognises an asset:

• when the contractual rights to the cash flow from the asset expire;

• where there is a transfer of contractual rights to receive cash flows on the asset in a transaction in which substantially all the risks and rewards of ownership of assets are transferred; or

• when it neither transfers nor retains substantially all the risks and rewards of ownership and does not retain control over the transferred asset.

Where the company retains substantially all the risks and rewards of ownership of the financial asset, the company continues to recognise the asset.

The company derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

Loans to (from) group companies

This includes the loan to/(from) the holding company/subsidiary and is recognised initially at fair value plus direct transaction costs.

Loans from group companies are classified as financial liabilities measured at amortised cost.

Trade and other receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Trade and other receivables are classified as loans and receivables.

Trade and other payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise of a current account and short-term deposits with and original maturity of less than three months and is subject to an insignificant risk of changes in value. These are initially and subsequently measured at amortised cost.

1.6 Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities

A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

121

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Tax expenses

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

• a transaction or event which is recognised, in the same or a different period, to other comprehensive income,  or

• a business combination.

Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

1.7 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease liability. This liability is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.8 Impairment of assets

The group assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss.

1.9 Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

122

1.10 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits are recognised in the period in which the service is rendered and are not discounted.

Leave pay accrual

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

1.11 Revenue

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period.

Service revenue comprises of commission, set-up fees and terminal rentals.

Service revenue is recognised by reference to the stage of completion of the transaction at the end of the reporting period. Stage of completion is determined by services performed to date as a percentage of total services to be performed.

1.12 Cost of sales

The related cost of providing services recognised as revenue in the current period is included in cost of sales.

1.13 Finance Income

Investment returns comprises of interest received and is recognised, in profit or loss. Interest received is measured using the effective interest method.

2. NEW STANDARDS AND INTERPRETATIONS

At the date of authorisation of these financial statements the following standards and interpretations were in issue, but not yet effective.

Standard/Interpretation Details of amendment

Effective date – annual period beginning on or after

IFRS9 Financial Instruments

A final version of IFRS 9 has been issued which replaces lAS 39 Financial Instruments: Recognition and Measurement. The completed standard comprises guidance on Classification and Measurement, Impairment Hedge Accounting and Derecognition:

– IFRS 9 introduces a new approach to the classification of financial assets, which is driven by the business model in which the asset is held and their cash flow characteristics. A new business model was introduced which does allow certain financial assets to be categorised as “fair value through other comprehensive income” in certain circumstances. The requirements for financial liabilities are mostly carried forward unchanged from lAS 39.

However, some changes were made to the fair value option for financial liabilities to address the issue of own credit risk.

– The new model introduces a single impairment model being applied to all financial instruments, as well as an “expected credit loss” model for the measurement of financial assets.

– IFRS 9 carries forward the derecognltion requirements of financial assets and liabilities from lAS 39

1 January 2018

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Standard/Interpretation Details of amendment

Effective date – annual period beginning on or after

IFRS 15Revenue from Contracts with Customers

New standard that requires entities to recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is achieved through a five step methodology that is required to be applied to all contracts with customers.

The new standard will also result in enhanced disclosure about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements.

The new standard supersedes:

– lAS 18 Revenue;

1 January 2018

IFRS 16 Leases

This standard replaces IFRS 17 Leases and related interpretations. The standard sets out the principals for the recognition, measurement, presentation and disclosure of leases for both parties to the contract.

The standard has one model for leases and will result in almost all leases being included in the statement of financial position.

1 January 2019

lAS 1Presentation of Financial Statements

Disclosure Initiative: Amendments designed to encourage entities to apply professional judgement in determining what information to disclose in their financial statements.

For example, the amendments make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can Inhibit the usefulness of financial disclosures. Furthermore, the amendments clarify that entities should use professional judgement in determining where and in what order information is presented in the financial disclosures.

1 January 2016

lAS 16Property, Plant and Equipment

Amendment to both lAS 16 and lAS 38 establishing the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset. Clarifying that revenue is generally presumed to be an inappropriate basis for measuring the consumption of economic benefits in such assets.

1 January 2016

IAS38Intangible Assets

Amendments to lAS 16 and lAS 38 to clarify the basis for the calculation of depreciation and amortisation ,as being the expected pattern of consumption of the future economic benefits of an asset.

1 January 2016

Amendment to both lAS 16 and lAS 38 establishing the principle 1 January 2016 for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset. Clarifying that revenue is generally presumed to be an inappropriate basis for measuring the consumption of economic benefits in such assets.

1 January 2016

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NOTES OF THE ANNUAL FINANCIAL STATEMENTS

3. PROPERTY, PLANT AND EQUIPMENT

Group 2016

Figures in Rand CostAccumulateddepreciation

Carrying value

Furniture and fixtures 68 444 68 444Computer equipment 107 368 (13 243) 94 125Computer servers 942 925 (140 669) 802 256Terminals 4 303 868 (2 242 420) 2 061 448

Total 5 422 606 (2 396 332) 3 026 273

Reconciliation of property, plant and equipment – group – 2016

Openingbalance Additions

Additionsthroughbusiness

combina-tions Write-off

Depre-ciation Total

Furniture and fixtures 68 444 68 444Computer equipment 80 368 27 000 (13 243) 94 125Computer servers 5 129 937 796 (140 669) 802 256Terminals 2 681 003 (64 730) (554 825) 2 061 448

153 941 3 645 799 (64 730) (708 737) 3 026 273

4. INTANGIBLE ASSETS

Group – 2016Figures in Rand Cost

Accumulatedamortisation

Carryingvalue

Computer software, developed 3 978 637 (3 509 058) 469 579Customer Web portal 424 685 (412 420) 12 265

Total 4 403 322 (3 921 478) 481 844

Reconciliation of Intangible assets – group – 2016

Openingbalance Additions

Additionsthroughbusiness

combina-tions

Amor-tisation Total

Computer software, developed 10 238 2 393 660 (1 934 319) 469 579Customer Web portal 11 600 226 021 (225 356) 12 265

21 838 2 619 681 (2159 675) 481 844

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5. TRADE AND OTHER RECEIVABLES

Figures in RandGroup

2016

Trade receivables 4 391 870Prepayments 11 801

4 403 671

Trade and other receivables past due but not impairedTrade and other receivables past due not but not impaired amounted to R Nil.

Reconciliation of allowance for doubtful trade and other receivablesOpening balanceRaised during the period 768 112

Closing balance 768 112

6. CASH AND CASH EQUIVALENTS OF

Figures in RandGroup

2016

Cash and cash equivalents consist of:Bank balances 13 334 964Short-term deposits 524 722Bank overdraft (1 695 354)

12 164 332

Current assets 13 859 686Current liabilities (1 695 354)

12 164 332

7. STATED CAPITAL

Group2016

Authorised1 000 Ordinary no par value shares 1 000

IssuedStated capital 6 000 000

8. OTHER FINANCIAL LIABILITIES

Group2016

Held at amortised cost 6 000 000H NeishlosThe loan is unsecured, interest free and is repayable on demand but has to be repaid by no later than 27 November 2035.African Resonance Business Solutions Proprietary Limited 3 250 000The loan is unsecured, interest free and is repayable on demand.

9 250 000

Current liabilitiesAt amortised cost 9 250 000

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9. TRADE AND OTHER PAYABLES

Figures in RandGroup

2016

Trade payables 2 270 868VAT 43 886Accrued leave pay 142 059Accrual – Audit Fees 240 000Accrued employee remuneration expense 74 945Accrual – Creditors 251 227

3 022 985

10. FINANCIAL ASSETS BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

Group 2016Figures in Rand

Loans andreceivables

Non-financialasset Total

Trade and other receivables 4 391 870 11 801 4 403 671Cash and cash equivalents 13 859 686 13 859 686

18 251 556 11 801 18 263 357

11. FINANCIAL LIABILITIES BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

Group 2016Figures in Rand

Financialliabilities at

amortisedcost

Non-financialliabilities Total

Other financial liabilities 9 250 000 9 250 000Trade and other payables 2 762 095 260 890 3 022 985Bank overdraft 1 695 354 1 695 354

13 707 449 260 890 13 968 339

12. REVENUE

Figures in RandGroup

2016

Commission income – Merchant set-up fee – Merchant terminal rentalCommission income 5 258 723Merchant set-up fee 166 418Merchant terminal rental 1 826 288

7 251 429

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13. OPERATING PROFIT

Figures in RandGroup

2016

Operating profit for the year is stated after accounting for the following:Operating lease chargesPremises•Contractualamounts 319 298Equipment•Contractualamounts 32 895

352 193

Scrapping of property, plant and equipment 64 730Amortisation on intangible assets 2 159 675Depreciation on property, plant and equipment 708 737Employee costs 2 501 425Deferred day one gainGain on bargain purchase (8 352 325)

14. FINANCE COST

Figures in RandGroup

2016

Interest paid 7 335

15. CASH USED IN OPERATIONS

Figures in RandGroup

2016

Profit before taxationAdjustments for: 1 803 135Depreciation and amortisation 2 868 412Scrapping of property, plant and equipment 64 730Interest received – investment (55 030)Finance costs 7 335Deferred day one gainGain on bargain purchase (8 352 325)Changes in working capital:Trade and other receivables 3 273 949Trade and other payables (2 116 367)

(2 506 161)

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16. BUSINESS COMBINATIONS

Figures in RandGroup

2016

Business Combination – Gain on Bargain purchaseProperty, plant and equipment 3 645 799Intangible assets 2 657 681Trade and other receivables 7 677 621Cash and cash equivalents 4 748 577Trade and other payables (5 177 353)

NAV 13 552 325Purchase price 5 200 000

Gain on bargain purchase 8 352 326Net cash outflow on acquisitionCash consideration paid (5 200 000)Cash acquired 4 748 577

(451 423)

Dashpay Proprietary Limited

On 27 November 2015 the group acquired 100% of the voting equity interest of Dashpay Proprietary Limited which resulted in the group obtaining control over Dashpay Proprietary Limited.

17. COMMITMENTS

Figures in RandGroup

2016

Operating leases – as lessee (expense)Minimum lease payments due– within one year 298 370– in second to fifth year inclusive 734 299

1 032 669

18. RELATED PARTIES

Relationships Country of incorporation

Ultimate holding company South Africa Castledash LimitedSubsidiary South Africa Dashpay Proprietary LimitedDirectors Yoav DuekRelated party balancesLoan accounts – Owing (to) by related partiesPlease refer to note 6

19. DIRECTORS’ EMOLUMENTS

No emoluments were paid to the director or any individuals holding a prescribed office during the period.

20. RISK MANAGEMENT FINANCIAL RISK MANAGEMENT

The groups activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk.

The purpose of the company’s risk management strategy Is to identify the risks and ensure that the overall risk profile remains at acceptable levels. The risk management policy provides reasonable, but not absolute, assurance that risks are being adequately managed.

Liquidity risk

Liquidity risk is the risk that the company will not have sufficient financial resources to meet its obligations when they fall due, or will have to do so at excessive cost. This risk can arise from mismatches in the timing of cash flows from revenue

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and operational outflows. The company’s approach to managing liquidity risks is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under normal and stressed conditions, without incurring unacceptable losses or risking damage to its reputation .

Group At 30 June 2016

Less than one year Total

LiabilitiesOther financial liabilities 9 250 000 9 250 000Trade and other payables 2 762 095 2 762 095Bank overdraft 1 695 354 1 695 354

Market riskMarket risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices will affect the value of the company’s financial assets and the amount of the company’s liabilities. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk

The group does not have any material transactions in foreign currency and does not hold assets and liabilities denominated in a currency other than in Rand. Consequently the group had no material foreign currency exposure at year-end.

Credit risk

The company has exposure to credit risk, which is the risk that a counterparty will not be able to pay amounts in full when due. A key area where the company is exposed to credit risk is cash and cash equivalents.

Management evaluates credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal and external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored.

The company assets subject to credit risk comprise the balances below which are rated as follows:

Financial instrument

Group2016

Trade and other receivables 4 391 870Cash and cash equivalents 13 859 868Loans to group companies

21. GOING CONCERN

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

22. EVENTS AFTER THE REPORTING PERIOD

The company is currently in discussion with a 3rd party, with an intention to sell Rinwell Investments Proprietary Limited, together with its subsidiary, Dashpay Proprietary Limited.

The director is not aware of any other matter or circumstance arising since the end of the financial year.

23. COMPARATIVE FIGURES

No comparative figures have been presented as these are the first annual financial statements of the group.

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Annexure 10

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF RINWELL FOR THE SEVEN MONTH PERIOD ENDED 30 JUNE 2016

24 March 2017

The DirectorsCapital Appreciation Limited4th Floor, One Vdara41 Rivonia RoadSandhurst, 2196South Africa

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION FOR THE SEVEN MONTH PERIOD ENDED 30 JUNE 2016 OF RINWELL INVESTMENTS PROPRIETARY LIMITED AND ITS SUBSIDIARY (“RINWELL GROUP”).

At your request and for the purposes of the Circular to be dated on or about 31 March 2017 (the “Circular”) we present our report on the historical financial information for the seven month period ended 30 June 2016 of Rinwell group in compliance with the Listings Requirements of the JSE (“Listings Requirements”).

Responsibilities

Directors responsibility for the financial statements

The directors of Capital Appreciation Limited (“Capital Appreciation”) (the “Directors”) are responsible for the compilation, contents and preparation of the Circular, including the historical financial information of Rinwell in accordance with the Listings Requirements. The directors of Rinwell group are responsible for the preparation and fair presentation of the historical financial information in accordance with the International Financial Reporting Standards and the Listing Requirements, and for such internal control as the directors of Rinwell determine is necessary to enable the preparation of historical financial information that is free from material misstatement, whether due to fraud or error.

Reporting accountant’s responsibility

Our responsibility is to express an opinion on the historical financial information of Rinwell group for the seven month period ended 30 June 2016 respectively, included in the Circular, based on our audit of the financial information for the period then ended.

Scope of the audit

We conducted our audit of the historical financial information for the seven month period ended 30 June 2016 in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial information. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial information, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial information.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Audit opinion

In our opinion, the historical financial information of Rinwell group for the seven month period ended 30 June 2016, presents fairly, in all material respects, for the purposes of the Circular, the financial position of Rinwell group at that date and the results of its operations and cash flows for the periods then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa and the Listings Requirements.

Consent

We consent to the inclusion of this report and the reference to our opinion in the Circular in the form and context in which it appears.

Yours faithfully

Grant Thornton C Pretorius @Grant ThorntonChartered Accountants (SA) Partner Wanders Office ParkRegistered Auditors Chartered Accountant (SA) 52 Corlett DrivePractice number: 903485 Registered Auditors Illovo

2196

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Annexure 11

INTERIM FINANCIAL INFORMATION OF RINWELL

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Figures in Rand

Groupsix months

ended 30 June

2016

Revenue 6 143 854Cost of sales (2 851 316)

Gross profit 3 292 538Operating expenses (8 583 884)

Operating loss (5 291 346)Interest received 46 609Finance costs (7 335)

Loss for the six months (5 252 072)Other comprehensive income

Total comprehensive loss for the six months (5 252 072)

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Annexure 12

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE INTERIM FINANCIAL INFORMATION OF RINWELL

24 March 2017

The DirectorsCapital Appreciation Limited4th Floor, One Vdara41 Rivonia RoadSandhurst, 2196South Africa

REPORT OF THE INDEPENDENT REPORTING ACCOUNTANT’S ON THE INTERIM FINANCIAL INFORMATION FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2016 OF RINWELL INVESTMENTS PROPRIETARY LIMITED AND ITS SUBSIDIARY (“RINWELL GROUP”).

At your request and for the purposes of the circular to be dated on or about 31 March 2017 (the “Circular”) we present our report on the interim financial information for the six month period ended 30 June 2016 of Rinwell group in compliance with the Listings Requirements for the JSE Limited (“Listings Requirements”).

Directors’ responsibility

The directors of Capital Appreciation Limited (“Capital Appreciation”) (the “Directors”) are responsible for the compilation, contents and preparation of the Circular, including the interim financial information for the six month period ended 30 June 2016 of Rinwell group, in accordance with the Listings Requirements. The directors of Rinwell group are responsible for the preparation and fair presentation of the interim financial information in accordance with the International Accounting Standard 34: Interim Financial Reporting, as issued by the International Accounting Standards Board, and for such internal control as the directors of Rinwell group determine is necessary to enable the preparation of historical financial information that is free from material misstatement, whether due to fraud or error.

Reporting accountant’s responsibility

Our responsibility is to express a review conclusion on the interim financial information for the six months ended 30 June 2016.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, “Review of Interim Financial Information performed by the Independent Auditor of the Entity”. A review of preliminary financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying financial information for the six months ended 30 June 2016, is not prepared, in all material respects, in accordance with International Accounting Standard 34, the requirements of the Companies Act of South Africa and the Listings Requirements.

Consent

We consent to the inclusion of this report and the reference to our opinion in the Circular in the form and context in which it appears.

Yours faithfully

Grant Thornton C Pretorius @Grant ThorntonChartered Accountants (SA) Partner Wanders Office ParkRegistered Auditors Chartered Accountant (SA) 52 Corlett DrivePractice number: 903485 Registered Auditors Illovo

2196

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Annexure 13

HISTORICAL FINANCIAL INFORMATION OF DASHPAY FOR THE YEARS ENDED 30 JUNE 2016 AND 30 JUNE 2015

The historical financial information of Dashpay set out in this Annexure 13 should be read in conjunction with the reviewed financial information of Dashpay for the year ended the 30 June 2014, and KPMG’s audit report in respect thereof, as set out in Annexure 15.

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016

Figures in Rand Notes 2016 2015 2014

AssetsNon-current assetsProperty, plant and equipment 3 3 026 273 3 020 903 1 921 676Intangible assets 4 481 844 2 987 151 3 140 996

3 508 117 6 008 054 5 062 672

Current assetsLoans to group companies 5 – 26 896 38 857Trade and other receivables 7 4 403 672 5 384 456 901 941Cash and cash equivalents 8 7 059 686 1 158 157 2 202 627

11 463 358 6 569 509 3 143 425

Total assets 14 971 475 12 577 563 8 206 097

Equity and liabilitiesEquityShare capital 9 100 100 100Accumulated loss (34 650 785) (25 226 405) (16 168 962)

(34 650 685) (25 226 305) (16 168 862)

LiabilitiesCurrent liabilitiesTrade and other payables 11 3 022 985 1 928 077 1 204 652Loans from group companies 5 41 653 821 35 875 791 23 169 950Other financial liabilities 10 3 250 000 – –Current tax payable 8 – – 357Bank overdraft 10 1 695 354 – –

49 622 160 37 803 868 24 374 959

Total equity and liabilities 14 971 475 12 577 563 8 206 097

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STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Figures in Rand Notes 2016 2015

Revenue 14 11 641 740 5 312 805Cost of sales (5 465 315) (3 780 342)

Gross profit 6 176 425 1 532 463Other income – 116 603Operating expenses (15 683 073) (10 777 974)Profit on foreign exchange differences – 8 166

Operating loss 15 (9 506 648) (9 120 742)Interest received 89 603 62 941Finance costs 16 (7 335) –

Loss before taxation (9 424 380) (9 057 801)Taxation 17 – 357

Loss for the year (9 424 380) (9 057 444)Other comprehensive income – –

Total comprehensive loss for the year (9 424 380) (9 057 444)

STATEMENT OF CHANGES IN EQUITY

Figures in RandShare

capitalAccumulated

lossTotal

equity

Opening balance as previously reported 100 (15 510 229) (15 510 129)Adjustments – (658 732) (658 732)Prior period error (note 21)

Balance at 1 July 2014 as restated 100 (16 168 961) (16 168 861)

Loss for the year – (9 057 444) (9 057 444)

Total comprehensive loss for the year – (9 057 444) (9 057 444)

Opening balance as previously reported 100 (24 301 689) (24 301 589)Adjustments – (924 716) (924 716)Prior period error (note 21)

Balance at 1 July 2015 as restated 100 (25 226 405) (24 301 689)

Loss for the year – (9 424 380) (9 424 380)

Total comprehensive loss for the year – (9 424 380) (9 424 380)

Balance at 30 June 2016 100 (34 650 785) (34 650 685)

Note(s) 9

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STATEMENT OF CASH FLOWS

Figures in Rand Notes 2016 2015

Cash flows from operating activitiesCash used in operations 18 (3 790 442) (11 377 317)Interest income 89 603 62 941Finance costs (7 335) –

Net cash from operating activities (3 708 174) (11 314 376)

Cash flows from investing activitiesPurchase of property, plant and equipment 3 (1 118 739) (1 818 852)Purchase of other intangible assets 4 (21 838) (629 044)Proceeds from loans from group companies 5 804 926 12 717 802

Net cash from investing activities 4 664 349 10 269 906

Cash flows from financing activitiesProceeds from other financial liabilities 3 250 000 –

Net cash from financing activities 3 250 000 –

Total cash movement for the year 4 206 175 (1 044 470)Cash at the beginning of the year 1 158 157 2 202 627

Total cash at end of the year 8 5 364 332 1 158 157

1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS

The annual financial statements have been prepared in accordance with International Financial Reporting Standards, and the Companies Act of South Africa. The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in South African Rand.

The company is a payment facilitator and operates in South Africa.

These accounting policies are consistent with the previous period, except for the changes set out in note 20 Change in estimate.

1.1 Significant judgements and sources of estimation uncertainty

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include:

Trade receivables

The company assesses its trade receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in profit or loss, the company makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

The impairment for trade receivables is calculated on a portfolio basis, based on historical loss ratios, adjusted for national and industry-specific economic conditions and other indicators present at the reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period.

Impairment testing

The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions.

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The company reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities.

If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of tangible and intangible assets are inherently uncertain and could materially change over time.

Taxation

Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The company recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the company to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the company to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.

1.2 Property, plant and equipment

The cost of an item of property, plant and equipment is recognised as an asset when:

• it is probable that future economic benefits associated with the item will flow to the company; and

• the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

Subsequent to initial measurement property, plant and equipment is measured at cost less accumulated depreciation and accumulated impairment.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Average useful life

Furniture and fixtures Six yearsComputer equipment Three yearsComputer servers Five yearsTerminals Five years

The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting  year.

The depreciation charge for each year is recognised in profit or loss unless it is included in the carrying amount of another asset.

Depreciation begins when the asset is available for use.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

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1.3 Intangible assets

An intangible asset is recognised when:

• it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and

• the cost of the asset can be measured reliably.

Intangible assets are initially recognised at cost.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred. An intangible asset arising from development (or from the development phase of an internal project) is recognised when:

• it is technically feasible to complete the asset so that it will be available for use or sale;

• there is an intention to complete and use or sell it;

• there is an ability to use or sell it;

• it will generate probable future economic benefits;

• there are available technical, financial and other resources to complete the development and to use or sell the asset; and

• the expenditure attributable to the asset during its development can be measured reliably.

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

The amortisation period and the amortisation method for intangible assets are reviewed every period-end.

Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.

During the current year the depreciation on computer software changed from five years to three years.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item Useful life

Computer software, developed Three yearsCustomer Web portal Three years

1.4 Financial instruments

Initial recognition and measurement

The company classifies financial instruments on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial assets and financial liabilities are recognised on the company’s statement of financial position when the company becomes party to the contractual provision of the instrument.

A financial asset or financial liability is measured at fair value plus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue.

Derecognition

The company derecognises an asset:

• when the contractual rights to the cash flow from the asset expire;

• where there is a transfer of contractual rights to receive cash flows on the asset in a transaction in which substantially all the risks and rewards of ownership of assets are transferred; or

• when it neither transfers nor retains substantially all the risks and rewards of ownership and does not retain control over the transferred asset.

Where the company retains substantially all the risks and rewards of ownership of the financial asset, the company continues to recognise the asset.

The company derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

139

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position only when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Loan from group company

This includes the loan from the holding company and is recognised initially at fair value plus direct transaction costs and subsequently measured at amortised cost.

Trade and other receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Trade and other receivables are classified as loans and receivables.

Trade and other payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise of a current account and short-term deposits with an original maturity of less than three months and is subject to an insignificant risk of changes in value. These are initially and subsequently measured at amortised cost.

1.5 Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities

A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

140

Tax expenses

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

• a transaction or event which is recognised, in the same or a different period, to other comprehensive income; or

• a business combination.

Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

1.6 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease liability. This liability is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.7 Impairment of assets

The company assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss.

1.8 Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

1.9 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits are recognised in the period in which the service is rendered and are not discounted.

Leave pay accrual

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

141

1.10 Revenue

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period.

Revenue comprises of commission, set-up fees and terminal rentals.

Service revenue is recognised by reference to the stage of completion of the transaction at the end of the reporting period. Stage of completion is determined by services performed to date as a percentage of total services to be performed.

1.11 Cost of sales

The related cost of providing services recognised as revenue in the current period is included in cost of sales.

1.12 Finance income

Investment returns comprises of interest received and is recognised, in profit or loss. Interest received is measured using the effective interest method.

2. NEW STANDARDS AND INTERPRETATIONS

At the date of authorisation of these financial statements the following standards and interpretations were in issue, but not yet effective.

Standard/Interpretation Details of amendment

Effective date – annual period beginning on or after

IFRS 9Financial Instruments

A final version of IFRS 9 has been issued which replaces IAS 39 Financial Instruments: Recognition and Measurement. The completed standard comprises guidance on

Classification and Measurement, Impairment Hedge Accounting and Derecognition:

– FRS 9 introduces a new approach to the classification of financial assets, which is driven by the business model in which the asset is held and their cash flow characteristics. A new business model was introduced which does allow certain financial assets to be categorised as “fair value through other comprehensive income” in certain circumstances. The requirements for financial liabilities are mostly carried forward unchanged from IAS 39.

However, some changes were made to the fair value option for financial liabilities to address the issue of own credit risk.

– The new model introduces a single impairment model being applied to all financial instruments, as well as an “expected credit loss” model for the measurement of financial assets.

– IFRS 9 carries forward the derecognition requirements of financial assets and liabilities from IAS 39

1 January 2018

142 143

Standard/Interpretation Details of amendment

Effective date – annual period beginning on or after

IFRS 15Revenue from Contracts with Customers

New standard that requires entities to recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is achieved through a five step methodology that is required to be applied to all contracts with customers.

The new standard will also result in enhanced disclosure about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements.

The new standard supersedes:

– IAS 18 Revenue;

1 January 2018

IFRS 16Leases

This standard replaces IFRS 17 Leases and related interpretations. The standard sets out the principals for the recognition, measurement, presentation and disclosure of leases for both parties to the contracts.

The standard has one model for leases and will result in almost all leases being included in the statement of financial position.

1 January 2019

IAS 1Presentation of Financial Statements

Disclosure Initiative: Amendments designed to encourage entities to apply professional judgement in determining what information to disclose in their financial statements.

For example, the amendments make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can inhibit the usefulness of financial disclosures. Furthermore, the amendments clarify that entities should use professional judgement in determining where and in what order information is presented in the financial disclosures.

1 January 2016

IAS 16Property, Plant and Equipment

Amendment to both IAS 16 and IAS 38 establishing the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset. Clarifying that revenue is generally presumed to be an inappropriate basis for measuring the consumption of economic benefits in such assets.

1 January 2016

IAS 38Intangible Assets

Amendments to IAS 16 and IAS 38 to clarify the basis for the calculation of depreciation and amortisation, as being the expected pattern of consumption of the future economic benefits of an asset.

Amendment to both IAS 16 and IAS 38 establishing the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset. Clarifying that revenue is generally presumed to be an inappropriate basis for measuring the consumption of economic benefits in such assets.

1 January 2016

142 143

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5. LOANS TO/(FROM) GROUP COMPANIES

Holding company

Telesure Investment Holdings Proprietary Limited – (35 765 402) (23 150 000)

The loan was unsecured, interest-free and had no fixed repayment terms. This loan had been subordinated in favour of other creditors until such time that the assets of the company, fairly valued, exceed its liabilities.

Rinwell Investment Proprietary Limited acquired Dashpay Proprietary Limited on 27 November 2015 from Telesure Investment Holdings Proprietary Limited, the loan was transferred as a result.

Rinwell Investments Proprietary Limited (41 653 821) – –

The loan is unsecured, interest-free and is repayable on demand. This loan has been subordinated for the amount of R36 453 821 in favour of other creditors until such time that the assets of the company, fairly valued, exceed its liabilities.

(41 653 821) (35 765 402) (23 150 000)

Prior fellow subsidiariesIS Services Proprietary Limited – 26 896 –Telesure Group Services Proprietary Limited – (108 827) (19 950)Upstream Advertising Proprietary Limited – (1 562) –Budget Insurance Company Limited – – 38 857

– (83 493) 18 907

The above loans are unsecured, interest-free and have no fixed repayment terms.Current assets – 26 896 38 857Current liabilities (41 653 821) (35 875 791) (23 169 950)

(41 653 821) (35 848 895) (23 131 093)

6. DEFERRED TAX

Deferred tax asset/(liability)Originating temporary differences on plant and equipment (390 627) (1 101 417) –Leave pay provision 39 777 57 515 –Provision for management bonuses – 50 156 –Provision for commission earner bonus – 8 191 –Provision for OID – 1 502 –Deferred tax asset recognised on assessed loss 350 850 984 053 –

– – –

The deferred tax asset of R350 850 (2015: R984 053) was recognised to the extent that there was sufficient deferred tax liabilities to utilise the deferred tax asset in the current year, thus utilising a portion of the assessed loss of R1 253 036 (2015: R3 514 475).

The remaining assessed loss of R32 733 286 (2015: R23 112 279) was not recognised as a deferred tax asset as the utilisation is dependent of future taxable profits in excess of the profits arising from the reversal of existing taxable temporary differences.

146

7. TRADE AND OTHER RECEIVABLES

Trade receivables 4 391 871 5 022 333 901 941Prepayments 11 801 – –VAT – 362 123 –

4 403 672 5 384 456 901 941

Trade and other receivables past due but not impairedTrade and other receivables past due not but not impaired amounted to R Nil (2015: R Nil).

Reconciliation of provision for impairment of trade and other receivablesOpening balance 226 471 346 480 –Movements 541 641 (120 009) 346 480

Closing balance 768 112 226 471 346 480

8. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of:Bank balances 6 534 964 647 636 1 952 627Short-term deposits 524 722 510 521 250 000Bank overdraft (1 695 354) – –

5 364 332 1 158 157 2 202 627

Current assets 7 059 686 1 158 157 2 202 627Current liabilities (1 695 354) – –

5 364 332 1 158 157 2 202 627

9. SHARE CAPITAL

Authorised1000 Ordinary no par value shares 1 000 1 000 1 000

Issued100 Ordinary no par value shares 100 100 100

10. OTHER FINANCIAL LIABILITIES

Held at amortised costAfrican Resonance Business Solutions Proprietary Limited 3 250 000 – –

The loan is unsecured, interest-free and is repayable on demand.Current liabilitiesAt amortised cost 3 250 000 – –

147

11. TRADE AND OTHER PAYABLES

Trade payables 2 270 868 1 294 090 602 675VAT 43 886 – 109 518Accrued leave pay 142 059 205 410 246 632Accrued bonus – 179 128 121 203Accrual – Audit Fees 240 000 90 000 38 000Accrued employee remuneration expense 74 945 159 449 86 624Accrual – Creditors 251 227 – –

3 022 985 1 928 077 1 204 652

12. FINANCIAL ASSETS BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

2016Loans and

receivables Total

Trade and other receivables 4 403 671 4 403 671Cash and cash equivalents 7 059 686 7 059 686

11 463 357 11 463 357

2015Loans and

receivablesNon-financial

assets Total

Loans to group companies 26 896 – 26 896Trade and other receivables 5 022 333 362 123 5 384 456Cash and cash equivalents 1 158 157 – 1 158 157

6 207 386 362 123 6 569 509

2014Loans and

receivables Total

Trade and other receivables 901 941 901 941Cash and cash equivalents 2 202 627 2 202 627

3 104 568 3 104 568

148

13. FINANCIAL LIABILITIES BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

2016

Financial liabilities at

amortised cost

Non-financial liabilities Total

Loans from group companies 41 653 821 – 41 653 821Other financial liabilities 3 250 000 – 3 250 000Trade and other payables 2 762 095 260 890 3 022 985Bank overdraft 1 695 354 – 1 695 354

49 361 270 260 890 49 622 160

2015

Financial liabilities at

amortised cost

Non-financial liabilities Total

Loans from group companies 35 848 895 – 35 848 895Trade and other payables 1 294 090 633 987 1 928 077

37 142 985 633 987 37 776 972

2014

Financial liabilities at amortised

costNon-financial

liabilities Total

Loans from group companies 23 169 950 – 23 169 950Trade and other payables 602 675 601 977 1 204 652

23 772 625 601 977 24 374 602

14. REVENUE

Commission income 8 480 174 3 766 854Merchant set up fee 250 561 145 018Merchant terminal rental 2 911 005 1 400 933

11 641 740 5 312 805

15. OPERATING LOSS

Operating loss for the year is stated after accounting for the following:

Operating lease chargesPremises•Contractualamounts 319 298 15 576Equipment•Contractualamounts 34 779 62 620Loss on sale of property, plant and equipment 64 730 53 236Amortisation on intangible assets 2 527 144 782 889Depreciation on property, plant and equipment 1 048 639 666 389Employee costs 4 249 728 3 797 352Administration and management fees 5 465 315 3 868 336Consulting and professional fees 103 450 4 694

149

16. FINANCE COSTS

Interest paid 7 335 –

17. TAXATION

Major components of the tax incomeCurrentLocal income tax – recognised in current tax for prior periods – (357)Reconciliation of the tax expenseReconciliation between accounting profit and tax expense.Accounting loss (9 424 380) (9 057 801)Tax at the applicable tax rate of 28% (2015: 28%) (2 638 826) (2 536 184)Tax effect of adjustments on taxable incomeNon-deductible expenses 10 052 1 579Prior year adjustment – (357)Tax loss not utilised 2 628 774 3 649 808Other income – (1 115 203)

– (357)

No provision has been made for 2016 tax as the company has no taxable income. The estimated tax loss available for set-off against future taxable income is R33 986 322 (2015: R26 626 754).

18. CASH USED IN OPERATIONS

Loss before taxation (9 424 380) (9 057 801)Adjustments forDepreciation and amortisation 3 575 784 1 449 278Net loss on disposal of property, plant and equipment 64 730 53 236Interest received – investment (89 603) (62 941)Finance costs 7 335 –Changes in working capitalTrade and other receivables 980 784 (4 482 514)Trade and other payables 1 094 908 723 425

(3 790 442) (11 377 317)

19. TAX REFUNDED

Balance at beginning of the year – (357)Current tax for the period recognised in profit or loss – 357

– –

20. CHANGE IN ESTIMATE

Intangible assets

Management performed an assessment of the useful lives of intangible assets. Based on this assessment, management concluded that the useful life of computer software developed is three years. The amortisation period on Computer software developed was therefore changed from five years to three years in the current year. The effect of the change in estimate has increased the amortisation charge in the current year and the net loss by R1 648 173.

150

21. PRIOR PERIOD ERROR

Terminals were not depreciated previously.

The correction of the error results in adjustments as follows:

2016 2015 2014

Statement of financial positionProperty, plant and equipment – (265 984) (658 733)Statement of comprehensive incomeDepreciation expense – 265 984 658 733

22. COMPARATIVE FIGURES

Certain comparative figures have been reclassified.

The effects of the reclassification are as follows:

2016 2015

Statement of comprehensive incomeRevenue – 1 400 933Cost of sales – (3 797 646)Administration and management fees received – (1 400 933)Operating expenses – 3 797 646

23. COMMITMENTS

Operating leases – as lessee (expense)Minimum lease payments due:Within one year 298 370 –In second to fifth year inclusive 734 299 –

1 032 669 –

24. RELATED PARTIES

Relationships Country of incorporation

Ultimate holding company South Africa Castledash Limited

Holding company South AfricaRinwell Investments Proprietary Limited (from 27 November 2015)

Former holding company South AfricaTelesure Investment Holdings Proprietary Limited (until 27 November 2015)

Director Y Duek

Related party balances

Loan from related parties

Please refer to note 5.

25. DIRECTORS’ EMOLUMENTS

No emoluments were paid to the directors or any individuals holding a prescribed office during the year.

26. RISK MANAGEMENT

Financial risk management

The company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk.

The purpose of the company’s risk management strategy is to identify the risks and ensure that the overall risk profile remains at acceptable levels. The risk management policy provides reasonable, but not absolute, assurance that risks are being adequately managed.

151

Liquidity risk

Liquidity risk is the risk that the company will not have sufficient financial resources to meet its obligations when they fall due, or will have to do so at excessive cost. This risk can arise from mismatches in the timing of cash flows from revenue and operational outflows. The company’s approach to managing liquidity risks is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under normal and stressed conditions, without incurring unacceptable losses or risking damage to its reputation.

At 30 June 2016Within 1 year

Within 2 and 5 years Total

LiabilitiesLoans from group companies 41 653 821 – 41 653 821Other financial liabilities 3 250 000 – 3 250 000Trade and other payables 2 762 095 – 2 762 095

At 30 June 2015Within 1 year Total

LiabilitiesLoans from group companies 35 875 791 35 875 791Trade and other payables 1 294 090 1 294 090

Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices will affect the value of the company’s financial assets and the amount of the company’s liabilities. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Interest rate risk

Interest rate risk is the risk that the company may suffer a financial loss as a result of changes in market interest rates. The company is exposed to interest rate cash flow risk to the extent that it holds variable interest rate instruments in the form of cash.

The average and year-end effective interest rates for cash and cash equivalent financial assets were as follows

2016 2015

Average effective interest rate, % 1.53 3.75Year end effective interest rate, % 1.50 3.76

The sensitivity analysis for interest rate risk illustrates how changes in the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates at the reporting date.

An increase in 100 basis points in interest yields would result in a loss before taxation for the year of R9 374 646 (2015: R9 025 685). The company’s equity would be R34 593 619 (2015: R23 509 744).

A decrease in 100 basis points in interest yields would result in a loss before taxation for the year of R9 478 217 (2015: R8 546 771). The company’s equity would be R34 704 622 (2015: 24 055 872).

The company does not have any material transactions in foreign currency and does not hold assets and liabilities denominated in a currency other than in Rand. Consequently the company had no material foreign currency exposure at year-end.

Credit risk

The company has exposure to credit risk, which is the risk that a counterparty will not be able to pay amounts in full when due. A key area where the company is exposed to credit risk is cash and cash equivalents.

Management evaluates credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal and external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored.

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The company assets subject to credit risk comprise the balances below which are rated as follows:

Financial instrument 2016 2015

Trade and other receivables 4 403 671 5 022 333Cash and cash equivalents 7 059 686 1 158 157

27. GOING CONCERN

We draw attention to the fact that at 30 June 2016, the company had accumulated losses of R34 650 785 and that the company’s total liabilities exceed its assets by R34 650 685.

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

The ability of the company to continue as a going concern is dependent on a number of factors. The most significant of these is that the directors continue to procure funding for the ongoing operations for the company and that the subordination agreement referred to in note 5 of these annual financial statements will remain in force for so long as it takes to restore the solvency of the company. Rinwell Investments Proprietary Limited agrees to subordinate its loan to Dashpay Proprietary Limited amounting to R36 453 821 as per the terms set out in the subordination agreement.

The fact that the total liabilities exceed the assets has not hindered the company’s ability to pay its debts as they become due in the normal course of business.

28. EVENTS AFTER THE REPORTING PERIOD

The company’s holding company, Rinwell Investments Proprietary Limited, is currently in discussion with a third party, with an intention to possibly sell Rinwell Investments Proprietary Limited, together with its subsidiary, Dashpay Proprietary Limited.

The director is not aware of any other matter or circumstance arising since the end of the financial year.

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Annexure 14

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF DASHPAY FOR THE YEARS ENDED 30 JUNE 2016 AND 30 JUNE 2015

24 March 2017

The DirectorsCapital Appreciation Limited4th Floor, One Vdara41 Rivonia RoadSandhurst, 2196South Africa

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF DASHPAY PROPRIETARY LIMITED (“DASHPAY”) FOR THE YEARS ENDED 30 JUNE 2016 AND 30 JUNE 2015

At your request and for the purposes of the circular to be dated on or about 31 March 2017 (the “Circular”) we present our report on the historical financial information of Dashpay for the years ended 30 June 2016 and 30 June 2015 in compliance with the Listings Requirements of the JSE Limited (“Listings Requirements”).

RESPONSIBILITIES

Directors responsibility for the financial statements

The directors of Capital Appreciation Limited (“Capital Appreciation”) (the “Directors”) are responsible for the compilation, contents and preparation of the Circular, including the historical financial information of Dashpay in accordance with the Listings Requirements. The directors of Dashpay are responsible for the preparation and fair presentation of the historical financial information in accordance with the International Financial Reporting Standards and the Listings Requirements, and for such internal control as the directors of Dashpay determine is necessary to enable the preparation of historical financial information that is free from material misstatement, whether due to fraud or error.

Reporting accountant’s responsibility

Our responsibility is to express an opinion on the historical financial information of Dashpay for the periods ended 30 June 2016 and 30 June 2015 included in the Circular, based on our audit of the financial information for the years the ended.

SCOPE OF THE AUDIT

We conducted our audit of the historical financial information for the years ended 30 June 2016, and 30 June 2015 in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial information. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial information, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial information.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

AUDIT OPINION

In our opinion, the historical financial information of Dashpay for the years ended 30 June 2016 and 30 June 2015 presents fairly, in all material respects, for the purposes of the Circular, the financial position of Dashpay at that date and the results of its operations and cash flows for the periods then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa and the Listings Requirements.

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CONSENT

We consent to the inclusion of this report and the reference to our opinion in the Circular in the form and context in which it appears.

Yours faithfully

Grant Thornton C Pretorius @Grant ThorntonChartered Accountants (SA) Partner Wanderers Office ParkRegistered Auditors Chartered Accountant (SA) 52 Corlett DrivePractice number: 903485 Registered Auditors Illovo

2196

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Annexure 15

REPORT OF HISTORICAL FINANCIAL INFORMATION OF DASHPAY FOR THE YEAR ENDED 30 JUNE 2014

INTRODUCTION

The definitions commencing on page 6 of the Circular apply, mutatis mutandis, to this report.

BASIS OF PREPARATION

The statement of profit or loss and other comprehensive income, statement of cash flows and the statement of changes in equity for the year ended 30 June 2014, the statement of financial position as at 30 June 2014, accounting policies and the notes thereto (“Historical Financial Information of Dashpay (Pty) Limited (“Dashpay”)) have been extracted, from the audited financial statements of Dashpay for the year ended 30 June 2014 (“Audited Financial Statements”). The Audited Financial Statements were prepared in accordance with IFRS and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and the Financial Pronouncements as issued by Financial Reporting Standards Council.

The Historical Financial Information of Dashpay has been prepared for the purposes of providing financial information to satisfy the requirements of section 8 of the JSE Listings Requirements in respect of the circular, incorporating revised listing particulars, to Capital Appreciation Limited shareholders and for no other purpose.

The additional disclosures required in terms of paragraph 8.11 and 8.12 of the JSE Listings Requirements have been included in the Report of Historical Financial Information of Dashpay.

The Audited Financial Statements have been audited by KPMG Inc. and an unqualified audit opinion has been issued thereon. KPMG Inc. is also the independent reporting accountant to Dashpay and has issued the reporting accountant’s report, including our unqualified review conclusion, on this Report of Historical Financial Information of Dashpay which is included as Annexure 16 to this Circular.

The directors of Capital Appreciation Limited (“Capital Appreciation”) are responsible for the Report of Historical Financial Information of Dashpay included in this Circular.

DIRECTORS’ COMMENTARY

Dashpay is a payment facilitator and operates in South Africa.

Revenue comprises of Merchant Commission R651 631, Merchant Set-Up Fees R49 566 and Merchant Terminal Rental R336 254 and totalled R1 037 451 for the year ended 30 June 2014.

As at 30 June 2014, Dashpay had accumulated losses of R16 168 962 and the Dashpay’s total liabilities exceed its assets by R16 168 862.

The Historical Financial Information of Dashpay has been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

The ability of the Dashpay to continue as a going concern is dependent on a number of factors. The most significant of these is that the directors continue to procure funding for the ongoing operations for Dashpay and that the subordination agreement referred to in note 6 of this Historical Financial Information of Dashpay will remain in force as long as it takes to restore the solvency of the Dashpay. Telesure Investment Holdings Proprietary Limited agrees to subordinate its loan to Dashpay as per the terms set out in the subordination agreement.

The fact that the total liabilities exceed the assets has not prevented Dashpay from paying its debts as they become due in the norman course of business.

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STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014

Figures in Rand Notes 2014

AssetsEquipment 4 1 921 676Intangible assets 5 3 140 996Loans to group companies 6 38 857Trade and other receivables 7 901 941Cash and cash equivalents 8 2 202 627

Total assets 8 206 097

Equity and liabilitiesEquityShare capital 9 100Accumulated loss (16 168 962)

Total equity (16 168 862)

LiabilitiesLoans from group companies 6 23 169 950Current tax payable 357Trade and other payables 10 1 204 652

Total liabilities 24 374 959

Total equity and liabilities 8 206 097

Net asset value per share (cents) (16 168)Net tangible asset per share (cents) 19 309 958Number of shares in issue 100

STATEMENT OF COMPREHENSIVE INCOME

Figures in Rand Notes 2014

RevenueMerchant commission 651 631Merchant set-up fee 49 566Merchant terminal rental 336 254

1 037 451

Cost of sales (960 178)

Gross profit 77 273

Finance income 11 35 758Expenses (8 929 573)

Loss before taxation 12 (8 816 542)Taxation 13 –

Loss for the year (8 816 542)Other comprehensive income –

Total comprehensive loss for the year (8 816 542)

Earnings/(loss) per shares (cents) (8 816 542Diluted earnings/(loss) per share (cents) (8 816 542)

Headline earnings/(loss) per share (cents) 19 7 423 318Diluted headline earnings/(loss) per share (cents) 7 423 318

Weighted average number of shares in issue 100

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STATEMENT OF CHANGES IN EQUITY

Figures in RandShare

capitalAccumulated

lossTotal

equity

Balance at 1 July 2013 100 (7 352 420) (7 352 320)Comprehensive loss for the year – (8 816 542) (8 816 542)

Balance at 30 June 2014 100 (16 168 962) (16 168 862)

STATEMENT OF CASH FLOWS

Figures in Rand Notes 2014

Cash flows used in operating activitiesCash used in operations 14 (7 147 634)Finance income 11 35 758Tax paid 15 (1 132)

Net cash used in operating activities (7 113 008)

Cash flows generated from investing activitiesPurchase of equipment 4 (1 120 704)Purchase of intangible assets 5 (1 105 642)Loans advanced to group companies (44 211)Proceeds from loans from group companies 11 150 000

Net cash generated from investing activities 8 879 443

Total cash movement for the year 1 766 435Cash and cash equivalents at the beginning of the year 436 192

Total cash at the end of the year 8 2 202 627

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ACCOUNTING POLICIES

1. PRESENTATION OF HISTORICAL FINANCIAL INFORMATION

BASIS OF PREPARATION

(a) Statement of compliance

The Historical Financial Information of Dashpay has been prepared in accordance with International Financial Reporting Standards. The Historical Financial Information of Dashpay has been prepared on a going-concern basis. The Historical Financial Information of Dashpay is prepared for the special purpose of providing financial information to the JSE for JSE accreditation.

(b) Basis of measurement

The Historical Financial Information of Dashpay has been prepared on the historical cost basis except where assets and liabilities have been disclosed at fair value or amortised cost, and incorporate the principal accounting policies set out below. These accounting policies are consistent with the previous period.

(c) Main business and operations

Dashpay is a payment facilitator and operates in South Africa.

(d) Events after the reporting period

The directors are not aware of any matter or circumstance arising since the end of the financial year that will impact the results reported in the Historical Financial Information of Dashpay.

(e) Dividends

No dividends were declared or paid to the shareholder during the year.

(f ) Going concern

We draw attention to the fact that at 30 June 2014, Dashpay had accumulated losses of R16 168 962 and that Dashpay’s total liabilities exceed its assets by R16 168 862.

The Historical Financial Information of Dashpay has been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

The ability of Dashpay to continue as a going concern is dependent on a number of factors. The most significant of these is that the directors continue to procure funding for the ongoing operations for Dashpay and that the subordination agreement referred to in note 6 of the Historical Financial Information of Dashpay will remain in force as long as it takes to restore the solvency of Dashpay.

Telesure Investment Holdings Proprietary Limited agrees to subordinate its loan to Dashpay as per the terms set out in the subordination agreement.

The fact that the total liabilities exceed the assets has not prevented Dashpay from paying its debts as they become due in the normal course of business.

1.1 Equipment

The cost of an item of equipment is recognised as an asset when:

• it is probable that future economic benefits associated with the item will flow to Dashpay; and

• the cost of the item can be measured reliably.

Equipment is initially measured at cost.

Subsequent to initial measurement equipment is measured at cost less accumulated depreciation and accumulated impairment.

Costs include costs incurred initially to acquire or construct an item of equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of equipment, the carrying amount of the replaced part is derecognised.

The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of equipment.

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Equipment is depreciated on the straight-line basis over its expected useful life to its estimated residual value. The useful lives of items of equipment have been assessed as follows:

Item Average useful life

Office equipment Five yearsComputer equipment Five years

The residual value and useful life of each asset are reviewed at the end of each financial year-end.

Each part of an item of equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

The gain or loss arising from the derecognition of an item of equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

1.2 Intangible assets

An intangible asset is recognised when:

• it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and

• the cost of the asset can be measured reliably.

Intangible assets are initially recognised at cost.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.

An intangible asset arising from development (or from the development phase of an internal project) is recognised when:

• it is technically feasible to complete the asset so that it will be available for use or sale;

• there is an intention to complete and use or sell it;

• there is an ability to use or sell it;

• it will generate probable future economic benefits;

• there are available technical, financial and other resources to complete the development and to use or sell the asset; and

• the expenditure attributable to the asset during its development can be measured reliably.

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses. The amortisation period and the amortisation method for intangible assets are reviewed annually.

Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.

Amortisation is provided to write down the intangible assets, on a straight-line basis, to its residual values as follows:

Item Useful life

Computer software, developed Five yearsIntangible assets under development Five years

1.3 Financial instruments

Initial recognition and measurement

Dashpay classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

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Financial assets and financial liabilities are recognised on Dashpay’s statement of financial position when Dashpay becomes party to the contractual provision of the instrument.

Derecognition of financial assets and financial liabilities

Dashpay derecognises an asset:

• when the contractual rights to the cash flows from the asset expire;

• where there is a transfer of contractual rights to receive cash flows on the asset in a transaction in which substantially all the risks and rewards of ownership of the assets are transferred; or

• when it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset.

Where Dashpay retains substantially all the risks and rewards of ownership of the financial asset, Dashpay continues to recognise the asset.

Dashpay derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position only when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Loans to/from group companies

These include loans from the holding company and fellow subsidiaries and are recognised initially at fair value plus direct transaction costs.

Subsequently these loans are measured at amortised cost using the effective interest method, less any impairment loss recognised to reflect irrecoverable amounts.

For loans to group companies an impairment loss is recognised in profit or loss when there is objective evidence that it is impaired. The impairment is measured as the difference between the investment’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Impairment losses are reversed in subsequent periods when an increase in the investment’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the investment at the date the impairment is reversed shall not exceed what the amortised cost would have been had the impairment not been recognised.

Loans to group companies are classified as loans and receivables. Loans from group companies are classified as financial liabilities measured at amortised cost.

Trade and other receivables

Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Trade and other receivables are classified as loans and receivables.

Trade and other payables

Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method.

Cash and cash equivalents

Cash and cash equivalents comprise of current accounts and short-term deposits with an original maturity of less than three months and is subject to an insignificant risk of changes in value. These are initially recorded at fair value, and are subsequently measured at amortised cost.

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1.4 Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities

A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised. Deferred tax assets are reviewed at each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

Dashpay does not expect immediate future taxable profit to offset the deferred tax asset, because it is uncertain when Dashpay will make a taxable profit. As a result of uncertainty management has concluded not to raise the deferred tax assets.

Tax expenses

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

• a transaction or event which is recognised, in the same or a different period, to other comprehensive income;

• a transaction or event which is recognised, in the same or a different period, directly in equity; or

• a business combination.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

1.5 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessors are classified as operating leases.

Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability. This asset or liability is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.6 Impairment of assets

Dashpay assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, Dashpay estimates the recoverable amount of the asset.

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Irrespective of whether there is any indication of impairment, Dashpay also tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase.

No impairment indicators are present at time as the business only launched in August 2013. Management evaluated at year-end whether there were any impairment indicators relating to the software and considered that they are comfortable that none existed due to the software only generating revenue since August 2013.

1.7 Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

1.8 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits are recognised in the period in which the service is rendered and are not discounted.

Termination benefits

Termination benefits are recognised as an expense in the statement of comprehensive income and a liability in the statement of financial position when Dashpay has a present obligation relating to termination.

Leave pay accrual

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

Management bonus

The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

Defined contribution plans

A defined contribution plan is a plan under which Dashpay and employees of Dashpay pays fixed contributions into a separate fund. Dashpay has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefit relating to employee service in the current and prior periods.

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Payments to defined contribution retirement benefit plans are charged as an expense as they fall due.

Employees are required to belong to the Telesure Group Provident Fund. Employees bear the full portion of contributions made to the defined contribution provident fund.

Contributions to a defined contribution plan that are due more than 12 months after the end of the period in which the employees render the service are discounted to their present value.

1.9 Revenue

Revenue comprises commission, set-up fees and terminal rentals.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable.

Service revenue is recognised by reference to the stage of completion of the transaction at the end of the reporting period. Stage of completion is determined by services performed to date as a percentage of total services to be performed.

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax.

1.10 Other income

Other income is measured at the fair value of the consideration received or receivable and represents the amounts receivable for services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax.

1.11 Cost of sales

The related cost of providing services recognised as revenue in the current period is included in cost of sales.

1.12 Finance income

Investment returns comprises of interest received and fair value gains and is recognised, in profit or loss. Interest received is measured using the effective interest method.

1.13 Segmental reporting

Dashpay only has one operating segment and as such does not apply segmental reporting.

2. SIGNIFICANT JUDGEMENT

In preparing the Historical Financial Information of Dashpay, management is required to make estimates and assumptions that affect the amounts represented in the Historical Financial Information of Dashpay and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the Historical Financial Information of Dashpay. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Significant judgements include:

Impairment testing

Dashpay reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of goodwill and intangible assets are inherently uncertain and could materially change over time. They are significantly affected by a number of factors including significant financial difficulty of the issuer or debtor; a breach of contract, such as default or delinquency in payments; adverse changes in the payment status of issuers or debtors in Dashpay or national or local economic conditions that correlate with defaults on assets in Dashpay.

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3. NEW STANDARDS AND INTERPRETATIONS

At the date of authorisation of the Historical Financial Information of Dashpay the following standards and interpretations were in issue, but not yet effective.

Effective date:Standard/Interpretation: Years beginning on or after

• IAS 7 Disclosure Initiative 1 January 2017• IFRS 9 Financial Instruments 1 January 2018• IFRS 16 Leases 1 January 2019• IFRS 15 Revenue from Contracts with Customers 1 January 2018

All standards will be implemented by the effective date except for those standards that are not applicable to the entity. Management has assessed the impact of these new and revised standards on Dashpay not to be material.

4. EQUIPMENT

2014

Figures in Rand CostAccumulateddepreciation

Carryingvalue

Computer equipment 2 703 456 (781 780) 1 921 676

Reconciliation of equipment – 2014

Opening balance Additions Depreciation Total

Computer equipment 1 582 752 1 120 704 (781 780) 1 921 676

5. INTANGIBLE ASSETS

2014

Figures in Rand CostAccumulatedamortisation

Carryingvalue

Computer software, developed 3 339 355 (541 628) 2 797 727Customer Web portal 413 085 (69 816) 343 269

Total 3 752 440 (611 444) 3 140 996

Reconciliation of intangible assets – 2014

Figures in RandOpening balance Additions Amortisation Total

Computer software, developed 2 274 589 1 064 766 (541 628) 2 797 727Customer Web portal 372 209 40 876 (69 816) 343 269

2 646 798 1 105 642 (611 444) 3 140 996

6. LOANS TO/(FROM) GROUP COMPANIES

Holding company

2014

Telesure Investment Holdings Proprietary Limited (23 150 000)

The loan is unsecured, interest-free and has no fixed repayment terms. This loan has been subordinated in favour of other creditors until such time that the assets of Dashpay, fairly valued, exceed its liabilities.

Fellow subsidiaries

Budget Insurance Company Limited 38 857Telesure Group Services Proprietary Limited (19 950)

18 907

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The above loans are unsecured, interest-free and have no fixed repayment terms.

Set out below is Dashpay’s reconciliation on the movement in the amounts payable/receivable:

Figures in Rand 2014

Loans at nominal value at the beginning of the year (12 000 000)New loans advanced (11 150 000)

(23 150 000)

Assets 38 857Liabilities (23 169 950)

(23 131 093)

7. TRADE AND OTHER RECEIVABLES

Merchant fees receivable 344 823Visa and Mastercard receivable 903 598Impairment on fees receivable (34 482)Impairmant on Visa and Mastercard receivable (311 998)

All debtors are current within i.e. 12 months

8. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of:

Bank balances 1 952 627Short-term deposits 250 000

2 202 627

9. SHARE CAPITAL

Authorised

1 000 ordinary no par value shares 1 000

Issued

100 ordinary no par value shares 100

10. TRADE AND OTHER PAYABLES

Trade payables 602 675VAT 109 518Accrued audit fees 38 000Accrued bonus 121 203Accrued employee remuneration expense 86 624Accrued leave pay 246 632

1 204 652

11. FINANCE INCOME

Interest income

Bank 35 758

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12. LOSS BEFORE TAXATION

Loss before taxation for the year is stated after accounting for the following:

Figures in Rand 2014

Operating lease chargesPremises• Rental expense 25 338Equipment• Rental expense 47 923Impairment on visa and mastercard receivable 311 998Impairment on fee receivable 34 482Amortisation on intangible assets 611 444Depreciation on equipment 781 780Administration and management fees 718 253Auditors’ remuneration – for services as auditor 38 000Advertising 1 086Consulting and professional fees 39 545Employee costs 4 865 663

13. TAXATION

Reconciliation of the tax expense

Reconciliation between accounting loss and tax expense.

Accounting loss (8 816 542)Tax at the applicable tax rate of 28% (2 468 632)Tax effect of adjustments on taxable incomePre-trade expenditure recognised in current year 1 777 481Deferred tax asset not being recognised 4 246 113

–

No provision has been made for 2014 tax as Dashpay has no taxable income. The estimated tax loss available for set off against future taxable income is R14 040 826.

Deferred Tax

Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable profit will be available against which Dashpay can use the benefits therefrom.

Leave pay provision 69 057Provision for management bonuses 33 937Provision for 13th cheque 2 065Provision for COID 890Provision for bad debts 72 761Assessed loss 1 777 481Deferred tax asset not being recognised 4 067 403

4 246 113

14. CASH USED IN OPERATIONS

Loss before taxation (8 816 542)Adjustments for:Depreciation and amortisation 1 393 224Finance income (35 758)Changes in working capital:Trade and other receivables (265 411)Trade and other payables 576 853

(7 147 634)

167

15. TAX PAID

Balance at beginning of the period (1 489)Balance at end of the period 357

(1 132)

16. RELATED PARTIES

RelationshipsCountry of incorporation

Ultimate holding company

Guernsey Budget Holdings Limited

Holding company South Africa Telesure Investment Holdings Proprietary Limited

Fellow subsidiaries South Africa 1 Life Insurance LimitedAuto and General Insurance Company Limited Budget Insurance Brokers Proprietary Limited Budget Insurance Company LimitedDial Direct Insurance LimitedDirect Integrated Systems Corporation (SA) Proprietary LimitedDouw Steyn Properties Proprietary Limited and its subsidiariesFirst for Women Insurance Company (RF) Limited Hippo Comparative Services Proprietary Limited Jenus Health Proprietary LimitedMotowise Proprietary Limited Napier Gardens Proprietry Limited and its subsidiary No 1 Queens Road Property Proprietary Limited Ponte Vendra Warehousing Proprietary Limited Telesure Financial Services Proprietary Limited Telesure Group Services Proprietary Limited Upstream Advertising Proprietary Limited

Entities controlled by common directors

South Africa Elected Investments Proprietary Limited and its subsidiary

First for Women TrustFirstprize Solutions Proprietary LimitedFramich Investments Proprietary LimitedOne Call Insurance Brokers Proprietary Limited Shambala Game Reserve Proprietary Limited and its subsidiaryDie Virseker Trust 1 Life Trust

Director A De SousaL VermarkJ W Wilken

Related party balances

Loan accounts – Owing (to)/by related parties

Please refer to note 6.

17. RISK MANAGEMENT

General

The board has overall responsibility for Dashpay’s system of internal control and is accountable for reviewing its effectiveness. Internal control systems are designed to manage risks within the business rather than totally eliminate the potential failure to achieve Dashpay’s objectives. Inevitably, they can provide only reasonable and not absolute assurance against material misstatement or loss. The board is conscious of the importance of Dashpay’s system of internal controls and attach a high priority to monitoring their effectiveness and developing them in line with best practice.

168

Financial risk management

Dashpay’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk.

The purpose of Dashpay’s risk management strategy is to identify the risks and ensure that the overall risk profile remains at acceptable levels. The risk management policy provides reasonable, but not absolute, assurance that risks are being adequately managed.

Liquidity risk

Liquidity risk is the risk that Dashpay will not have sufficient financial resources to meet its obligations when they fall due, or will have to do so at excessive cost. This risk can arise from mismatches in the timing of cash flows from revenue and operational outflows. Dashpay’s approach to managing liquidity risks is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under normal and stressed conditions, without incurring unacceptable losses or risking damage to its reputation.

The table below analyses Dashpay’s financial liabilities relevant maturity groupings based on the remaining period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

At 30 June 2014

Within 12 months

R

Greater than 12 months

RTotal

R

AssetsLoans to group companies 38 857 – 38 857Trade and other receivables 901 941 – 901 941Cash and cash equivalents 2 202 627 – 2 202 627LiabilitiesLoans from group companies 23 169 950 – 23 169 950Trade payables 602 675 – 602 675

Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices will affect the value of Dashpay’s financial assets and the amount of Dashpay’s liabilities. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Interest rate risk

Interest rate risk is the risk that Dashpay may suffer a financial loss as a result of changes in market interest rates. Dashpay is exposed to interest rate cash flow risk to the extent that it holds variable interest rate instruments in the form of cash.

The average and year-end effective interest rates for cash and cash equivalent financial assets were as follows:

2014

Average effective interest rate (%) 2.95Year-end effective interest rate (%) 3.24

Sensitivity analysis – interest rate risk

The sensitivity analysis for interest rate risk illustrates how changes in the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates at the reporting date.

An increase in 100 basis points in interest yields would result in a loss before taxation for the year of (R8 803 348). Dashpay’s equity would increase to (R16 155 668).

A decrease in 100 basis points in interest yields would result in a loss before taxation for the year of (R8 829 736). Dashpay’s equity would decrease to (R16 182 056).

Currency risk

Dashpay does not have any material transactions in foreign currency and does not hold assets and liabilities denominated in a currency other than in Rand. Consequently Dashpay had no material foreign currency exposure at year-end.

169

Credit risk

Dashpay has exposure to credit risk, which is the risk that a counterparty will not be able to pay amounts in full when due. A key area where Dashpay is exposed to credit risk is cash and cash equivalents and trade receivables.

Management evaluates credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal and external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored.

Credit exposure

Dashpay assets subject to credit risk comprise the balances below which are rated as follows:

2014

AA^ No rating Carrying valueFinancial instrument % % R

Trade and other receivables 100 100 901 941Cash and cash equivalents – – 2 202 627

^ – Fitch’s national long-term bank ratings.

18. CLASSES AND CATEGORIES OF FINANCIAL INSTRUMENTS

Company

2014 Notes

Financial assets and

liabilities at amortised

cost

Other non-financial

assets and liabilities

Total carrying amount

Non-current

AssetsEquipment 4 – 1 921 676 1 921 676 1 921 676Intangible assets 5 – 3 140 996 3 140 996 3 140 996Loans to group companies 6 38 857 – 38 857 –Trade and other receivables 7 901 941 – 901 941 –Cash and cash equivalents 8 2 202 627 – 2 202 627 –

Total assets 3 143 425 5 062 672 8 206 097 5 062 672

LiabilitiesLoans from group companies 6 23 169 950 – 23 169 950Current tax liabilities – 357 357 –Trade and other payables 10 602 675 601 977 1 204 652 –

Total liabilities 23 772 625 602 334 24 374 959

Equity (20 629 200) 4 460 338 (16 168 862)

19. HEADLINE EARNINGS

Figures in Rand 2014

Weighted average number of sharesWeighted average number of shares in issue for basic earnings per share and headline earnings per share calculations 100

Headline earningsTotal comprehensive loss for the year to ordinary equity holders (8 816 542)Adjustments: Depreciation and Amortisation 1 393 224

Headline earnings   (7 423 318)

170

Annexure 16

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF DASHPAY FOR THE YEAR ENDED 30 JUNE 2014

The DirectorsCapital Appreciation Limited4th FloorOne Vdara41 Rivonia RoadSandhurst, 2196

24 March 2017

Dear Sirs

Independent Reporting Accountant’s Report on the Report of Historical Financial Information of Dashpay Proprietary Limited (“Dashpay”) for the year ended 30 June 2014

The definitions commencing on page 6 of the Circular to which this letter is attached apply, mutatis mutandis, to this report.

Introduction

At your request, and for the purposes of the Circular, we have reviewed the historical financial information of Dashpay for the year ended 30 June 2014 presented in the Report of Historical Financial Information of Dashpay for the year ended 30 June 2014 (collectively “Historical Financial Information”).

The Historical Financial Information, presented in Annexure 15 to the Circular, comprises the statement of financial position, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year ended 30 June 2014. The Historical Financial Information has been prepared in compliance with International Financial Reporting Standards, the SAICA Financial Reporting Guides, as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards Council and section 8 of the Listings Requirements.

KPMG Inc. is the independent reporting accountant to Dashpay in respect of the Historical Financial Information.

Responsibility of the directors

The directors of Capital Appreciation Limited (“Capital Appreciation”) (“Directors”) are responsible for the compilation, contents and preparation of the Circular including the Historical Financial Information in accordance with the Listings Requirements.

The directors of Dashpay are responsible for the preparation and fair presentation of the Historical Financial Information in accordance with the IFRS and the Listings Requirements, and for such internal control as the directors of Dashpay determine is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error.

Responsibility of the Independent Reporting Accountants

Our responsibility is to express review conclusions on the Historical Financial Information based on our review in accordance with International Standard on Review Engagements ISRE 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity. ISRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the Historical Financial Information, taken as a whole, is not prepared in all material respects in accordance with the applicable financial reporting framework. This Standard also requires us to comply with relevant ethical requirements.

Scope of review

A review of the Historical Financial Information in accordance with ISRE 2410 is a limited assurance engagement in terms of which we perform procedures, primarily consisting of making enquiries of management and other within the entity, as appropriate, and applying analytical procedures and evaluating the evidence obtained.

171

The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with  International Standards on Auditing. Accordingly, we do not express an audit opinion on the Historical Financial Information.

Conclusion on the Historical Financial Information

Based on our reviews, nothing has come to our attention that causes us to believe that the Historical Financial Information, as set out in Annexure 15 to the Circular is not prepared, in all material respects, in accordance with the requirements of ISRE 2410 and the Listings Requirements.

Yours faithfully

KPMG Inc.Per Paul FayChartered Accountant (SA)Registered AuditorDirector

172

Annexure 17

HISTORICAL FINANCIAL INFORMATION OF SYNTHESIS

STATEMENT OF FINANCIAL POSITION AS AT 29 FEBRUARY 2016

Figures in Rand Note(s) 2016 2015 2014

AssetsNon-current assetsProperty, plant and equipment 2 792 049 572 994 290 970Goodwill 3 1 294 696 1 294 696 1 294 696Intangible assets 4 – 5 5Deferred tax 7 66 085 22 486 –

2 152 830 1 890 181 1 585 671

Current assetsLoans to shareholders 5 7 295 690 – –Trade and other receivables 9 5 553 157 9 368 485 8 092 021Cash and cash equivalents 10 5 039 679 5 733 611 7 454 931

17 888 526 15 102 096 15 546 952

Total assets 20 041 356 16 992 277 17 132 623

Equity and liabilitiesEquityShare capital 11 1 000 1 000 1 000Retained income 12 296 080 12 011 462 12 485 199

12 297 080 12 012 462 12 486 199

LiabilitiesCurrent liabilitiesLoans from shareholders 5 388 457 – 56 974Short term loans 8 3 006 318 – –Current tax payable 1 959 234 1 534 310 608 871Operating lease liability 236 018 80 307 –Trade and other payables 12 2 154 249 3 365 198 3 980 579

7 744 276 4 979 815 4 646 424

Total equity and liabilities 20 041 356 16 992 277 17 132 623

173

STATEMENT OF COMPREHENSIVE INCOME

Figures in Rand Note(s) 2016 2015 2014

Revenue 14 51 906 785 46 075 527 41 610 369Cost of sales (2 343 800) (3 120 603) (6 158 104)

Gross profit 49 562 985 42 954 924 35 452 265

Other income 15 4 125 386 79 492 81 079Operating expenses (34 434 831) (27 450 052) (23 113 269)

Operating profit 16 19 253 540 15 584 364 12 420 075Investment revenue 17 367 789 343 738 264 501Finance costs 18 (6 319) (1 000) (14)

Profit before taxation 19 615 010 15 927 102 12 684 562Taxation 19 (5 164 883) (4 449 537) (3 551 677)

Profit for the year 14 450 127 11 477 565 9 132 885Other comprehensive income – – –

Total comprehensive income for the year 14 450 127 11 477 565 9 132 885

STATEMENT OF CHANGES IN EQUITY

Figures in RandShare

capitalRetained

incomeTotal

equity

Balance at 1 March 2014 1 000 12 485 199 12 486 199

Profit for the year – 11 477 565 11 477 565Other comprehensive income – – –

Total comprehensive income for the year – 11 477 565 11 477 565Dividends – (11 951 302) (11 951 302)

Balance at 1 March 2015 1 000 12 011 462 12 012 462

Profit for the year – 14 450 127 14 450 127Other comprehensive income – – –

Total comprehensive income for the year – 14 450 127 14 450 127Dividends – (14 165 509) (14 165 509)

Balance at 29 February 2016 1 000 12 296 080 12 297 080

Note(s) 11

174

STATEMENT OF CASH FLOWS

Figures in Rand Note(s) 2016 2015 2014

Cash flows from operating activitiesCash generated from operations 20 22 421 579 13 976 235 11 102 845Interest income 367 789 343 738 264 501Finance costs (6 319) (1 000) (14)Tax paid 21 (4 783 558) (3 546 584) (3 087 568)

Net cash from operating activities 17 999 491 10 772 389 8 279 764

Cash flows from investing activitiesPurchase of property, plant and equipment 2 (644 386) (543 285) (315 651)Sale of property, plant and equipment 2 17 387 57 852 40 476Loans advanced to shareholders (7 295 690) – –

Net cash from investing activities 7 922 689 (485 433) (275 175)

Cash flows from financing activitiesProceed from shareholders loans 3 394 775 – –Repayment of shareholders loans – (56 974) (2 091 233)Dividends paid 22 (14 165 509) (11 951 302) (3 839 203)

Net cash from financing activities (10 770 734) (12 008 276) (5 930 436)

Total cash movement for the year (693 932) (1 721 320) 2 074 153Cash at the beginning of the year 5 733 611 7 454 931 5 380 778

Total cash at end of the year 10 5 039 679 5 733 611 7 454 931

175

ACCOUNTING POLICIES

1. PRESENTATION OF FINANCIAL STATEMENTS

The financial statements have been prepared in accordance with International Financial Reporting Standards, and the Companies Act. The financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below.

Property, plant and equipment

The cost of an item of property, plant and equipment is recognised as an asset when:

• it is probable that future economic benefits associated with the item will flow to the company; and

• the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, or replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories.

Major spare parts and stand by equipment which are expected to be used for more than one period are included in property, plant and equipment. In addition, spare parts and stand by equipment which can only be used in connection with an item of property, plant and equipment are accounted for as property, plant and equipment.

Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection costs from the previous inspection are derecognised.

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.

Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Average useful life

Furniture and fixtures Six yearsOffice equipment Five yearsComputer equipment Two to three years

The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting period. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

Goodwill

Goodwill is initially measured at cost, being the excess of the business combination over the company’s interest of the net fair value of the identifiable assets, liabilities and contingent liabilities.

Subsequently goodwill is carried at cost less any accumulated impairment.

176

The excess of the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of the business combination is immediately recognised in profit or loss.

Internally generated goodwill is not recognised as an asset.

Intangible assets

An intangible asset is recognised when:

• it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and

• the cost of the asset can be measured reliably. Intangible assets are initially recognised at cost.

Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.

An intangible asset arising from development (or from the development phase of an internal project) is recognised when:

• it is technically feasible to complete the asset so that it will be available for use or sale;

• there is an intention to complete and use or sell it;

• there is an ability to use or sell it;

• it will generate probable future economic benefits;

• there are available technical, financial and other resources to complete the development and to use or sell the asset; and

• the expenditure attributable to the asset during its development can be measured reliably.

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight line basis over their useful life.

The amortisation period and the amortisation method for intangible assets are reviewed every period-end.

Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.

Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item Useful life

Computer software Two years

FINANCIAL INSTRUMENTS

Initial recognition and measurement

The company classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial assets and financial liabilities are recognised on the company’s balance sheet when the company becomes party to the contractual provisions of the instrument.

Loans to shareholders, directors, managers and employees

These financial assets are initially recognised at fair value plus direct transaction costs.

Subsequently these loans are measured at amortised cost using the effective interest rate method, less any impairment loss recognised to reflect irrecoverable amounts.

177

Trade and other receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Trade and other receivables are classified as loans and receivables.

Trade and other payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.

TAX

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date.

Tax expenses

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

• a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or

• a business combination.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

If the company reacquires its own equity instruments, those instruments are deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the company’s own equity instruments. Consideration paid or received shall be recognised directly in equity.

Revenue

Revenue from the sale of goods is recognised when all the following conditions have been satisfied:

• the company has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the company; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

178

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the company;

• the stage of completion of the transaction at the end of the reporting period can be measured reliably; and

• the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable.

Revenue from licensing agreements is recognised in accordance with the substance of the agreements.

Service revenue is recognised by reference to the stage of completion of the transaction at the end of the reporting period. Stage of completion is determined by services performed to date as a percentage of total services to be performed.

179

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181

5. LOANS TO (FROM) SHAREHOLDERS

2016 2015

JD Shepherd 1 807 510 (6 892)JE Cohen – (1 244)MB Shapiro 1 771 523 (36 628)T Wells 3 716 657 (6 105)S Basson (388 457) (6 105)

6 907 233 (56 974)

Loans from shareholders bear interest at rates linked to prime, are unsecured and have no fixed terms of repayment.

2016 2015

Current assets 7 295 690 –Current liabilities (388 457) (56 974)

6 907 233 (56 974)

6. FINANCIAL ASSETS BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

Loans and receivables Total

2016Loans to shareholders 7 295 690 7 295 690Trade and other receivables 5 553 157 5 553 157Cash and cash equivalents 5 039 679 5 039 679

17 888 526 17 888 526

2015Trade and other receivables 9 368 485 9 368 485Cash and cash equivalents 5 733 611 5 733 611

15 102 096 15 102 096

2014Trade and other receivables 8 092 021 8 092 021Cash and cash equivalents 7 454 931 7 454 931

15 546 952 15 546 952

7. DEFERRED TAX

Figures in Rand 2016 2015 2014

Deferred tax assetOperating leaseTax losses available for set off against future taxable income 66 085 22 486 –

– – –

Total deferred tax asset 66 085 22 486 –Reconciliation of deferred tax asset/(liability)At beginning of year 22 486 – –Movement for the period 43 599 22 486 –

66 085 22 486 –

182

8. SHORT-TERM LOANS

Figures in Rand 2016 2015 2014

J Shepherd (1 503 370) – –M Shapiro (1 502 948) – –

(3 006 318) – –

These loans bear interest at rates linked to prime, are unsecured and have no fixed terms of repayment.

9. TRADE AND OTHER RECEIVABLES

Figures in Rand 2016 2015 2014

Trade receivables 5 320 064 9 147 105 7 927 281Other receivables 233 093 221 380 164 740

5 553 157 9 368 485 8 092 021

The debtors have been ceded to the bank as security for agreed banking facilities.

Fair value of trade and other receivables

Due to the short term nature of trade and other receivables, the carrying amount approximates fair value.

Trade and other receivables past due but not impaired

Trade and other receivables which are less than 30 days past due are not considered to be impaired. At 29 February 2016, R625 945 (2015: R1 060 491 ; 2014: R307 668) were past due but not impaired.

The ageing of amounts past due but not impaired is as follows:

Figures in Rand 2016 2015 2014

One month past due 399 229 121 206 163 582Two months past due 183 025 631 738 –Three months past due 43 691 307 547 144 086

Trade and other receivables impaired

As of 29 February 2016 and as at 28 February 2015 & 2014, trade and other receivables were neither impaired nor were they provided for.

10. CASH AND CASH EQUIVALENTS

Figures in Rand 2016 2015 2014

Cash and cash equivalents consist of:Bank balances 4 719 679 5 413 611 7 391 573Standard Bank Guarantee 320 000 320 000 63 358

5 039 679 5 733 611 7 454 931

The guarantee held by Standard Bank is in favour of Entelect Solutions.

The debtors have been ceded to the bank as security for agreed banking facilities.

11. SHARE CAPITAL

Figures in Rand 2016 2015 2014

Authorised10 000 ordinary shares 1 000 1 000 1 000

Issued10 000 ordinary shares 1 000 1 000 1 000

183

12. TRADE AND OTHER PAYABLES

Figures in Rand 2016 2015 2014

Trade payables 258 916 1 593 476 2 261 303VAT 405 882 575 674 760 050Other payables 212 771 128 690 57 415Payroll accruals 1 276 680 1 067 358 901 811

2 154 249 3 365 198 3 980 579

13. FINANCIAL LIABILITIES BY CATEGORY

The accounting policies for financial instruments have been applied to the items below:

Figures in Rand 2016 2015 2014

Financialliabilities

atamortised

cost Total

Financialliabilities

atamortised

cost Total

Financialliabilities

at amortised

cost Total

Trade and other payables (excluding VAT and payroll accrual) 471 687 471 687 1 722 166 1 722 166 2 318 718 2 318 718Loans from shareholders 338 457 338 457 – – 56 974 56 974Short-term loans 3 006 319 3 006 319 – – – –

3 816 463 3 816 463 1 722 166 1 722 166 2 375 692 2 375 692

14. REVENUE

Figures in Rand 2016 2015 2014

Services rendered and sales of goods 51 906 785 46 075 527 41 610 369

15. OTHER INCOME

Figures in Rand 2016 2015 2014

Profit on exchange differences 589 305 9 640 81 079Sundry income 3 500 000 – –Recoveries 36 081 12 000 –

4 125 386 21 640 81 079

16. OPERATING PROFIT

Operating profit for the year is stated after accounting for the following:

Figures in Rand 2016 2015 2014

Operating lease chargesPremisesContractual amounts on a straight line basis 1 460 112 1 111 416 670 385(Loss)/Profit on sale of property, plant and equipment (16 387) 57 852 (4 878)Depreciation on property, plant and equipment 407 944 261 261 217 834Employee costs 26 087 463 19 619 990 16 898 241

184

17. INVESTMENT REVENUE

Figures in Rand 2016 2015 2014

Interest revenueBank 358 846 343 738 264 501Unsecured loans 8 943 – –

367 789 343 738 264 501

18. FINANCE COSTS

Figures in Rand 2016 2015 2014

Bank – 1 000 14Unsecured loans 6 319 – –

6 319 1 000 14

19. TAXATION

Figures in Rand 2016 2015 2014

Major components of the tax expenseCurrentLocal income tax – current period 5 208 482 4 472 023 3 551 677DeferredOriginating and reversing temporary differences (43 599) (22 486) –

5 164 883 4 449 537 3 551 677

Reconciliation of the tax expenseReconciliation between applicable tax rate and average effective tax rate.Applicable tax rate (%) 28.00 28.00 28.00Deductible permanent difference (%) (1.67) – –Temporary differences (%) – (0.06) –

26.33 27.94 28.00

20. CASH GENERATED FROM OPERATIONS

Figures in Rand 2016 2015 2014

Profit before taxation 19 615 010 15 927 102 12 684 562Adjustments for:Depreciation and amortisation 407 944 261 261 217 834Loss on sale of assets 16 387 (57 852) 4 878Profit on foreign exchange (589 305) (9 640) (81 079)Interest received (367 789) (343 738) (264 501)Finance costs 6 319 1 000 14Movements in operating lease assets and accruals 155 711 80 307 –Changes in working capital:Trade and other receivables 4 379 881 (1 266 824) (2 935 198)Trade and other payables (1 202 579) (615 381) 1 476 335

22 421 579 13 976 235 11 102 845

185

21. TAX PAID

Figures in Rand 2016 2015 2014

Balance at beginning of the year (1 534 310) (608 871) (144 762)Current tax for the year recognised in profit or loss (5 208 482) (4 472 023) (3 551 677)Balance at end of the year 1 959 234 1 534 310 608 871

(4 783 558) (3 546 584) (3 087 568)

22. DIVIDENDS PAID

Figures in Rand 2016 2015 2014

Dividends (14 165 509) (11 951 302) (3 839 203)

23. COMMITMENTS

Figures in Rand 2016 2015 2014

Operating leases – as lessee (expense)Minimum lease payments due– within one year 1 226 320 1 134 451 –– in second to fifth year inclusive 3 632 777 4 859 097 –

4 859 097 5 993 548 –

24. RELATED PARTIES

Figures in Rand 2016 2015 2014

RelationshipsCommon directorships – Xiref Systems Inc.Related party balancesAmounts included in trade receivable (trade payable) regarding related partiesXiref Systems Inc. – 1 058 686 –Related party transactionsConsulting fees paid to related partiesXiref Systems Inc. 1 030 414 1 829 819 1 709 136

25. DIRECTORS’ EMOLUMENTS

2016 2015 2014

Executive Emoluments Total Emoluments Total Emoluments TotalFor services as directors 3 888 000 3 888 000 3 609 618 3 609 618 3 744 120 3 744 120

26. RISK MANAGEMENT

Liquidity risk

The company’s risk to liquidity is a result of the funds available to cover future commitments. The company manages liquidity risk through an ongoing review of future commitments and credit facilities.

The table below analyses the company’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

186

Less than one year

At 29 February 2016Trade and other payables (excluding VAT and payroll accrual) 471 691Loans from shareholders 388 457Short term loans 3 006 318

At 28 February 2015Trade and other payables (excluding VAT and payroll accrual) 1 722 166

At 28 February 2014Trade and other payables (excluding VAT and payroll accrual) 2 318 718Loans from shareholders 56 974

Interest rate risk

The shareholders loans bear interest at rates linked to prime. The bank balance bears interest at market related rates.

As the company has no significant interest-bearing assets, the company’s income and operating cash flows are substantially independent of changes in market interest rates.

Credit risk

Credit risk consists mainly of cash deposits, cash equivalents, and trade debtors. The company only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.

Trade receivables does not comprise of a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored.

No credit limits were exceeded during the reporting period, and management does not expect any losses from non- performance by these counterparties.

27. GOING CONCERN

The directors believe that the company has adequate financial resources to continue in operation for the foreseeable future and accordingly the annual financial statements have been prepared on a going concern basis. The directors have satisfied themselves that the company is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of any new material changes that may adversely impact the company. The directors are also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the company.

28. EVENTS AFTER THE REPORTING PERIOD

The directors are not aware of any significant matter or circumstance arising since the end of the financial year, not otherwise dealt with in this report or the annual financial statements, which significantly affects the financial position of the company or the results of its operations to the date of this report.

187

DETAILED INCOME STATEMENT

Figures in Rand Note(s) 2016 2015 2014

RevenueServices rendered and sale of goods 51 906 785 46 075 527 41 610 369

Cost of salesPurchases (2 343 800) (3 120 603) (6 158 104)

Gross profit 49 562 985 42 954 924 35 452 265Other incomeSundry income 3 500 000 – –Recoveries 36 081 12 000 –Interest received 17 367 789 343 738 264 501Gains on disposal of assets – 57 852 –Profit on exchange differences 589 305 9 640 81 079

4 493 175 423 230 345 580

Expenses (refer to page 24) (34 434 831) (27 450 052) (23 113 269)

Operating profit 16 19 621 329 15 928 102 12 684 576Finance costs 18 (6 319) (1 000) (14)

Profit before taxation 19 615 010 15 927 102 12 684 562

DETAILED INCOME STATEMENT

Figures in Rand 2016 2015 2014

Operating expensesAccounting fees (440) (375) (6 563)Administration and management fees (218 556) (48 516) (66 366)Advertising (200 774) (164 655) (71 976)Auditors remuneration (45 000) (42 000) (35 000)Bank charges (32 661) (34 774) (25 558)Computer expenses (687 919) (332 229) (270 252)Consulting and professional fees (2 988 639) (3 662 878) (2 855 240)Depreciation, amortisation and impairments (407 944) (261 261) (217 834)Donations (77 217) (182 643) (137 500)Employee costs (26 087 463) (19 619 990) (16 898 241)Entertainment (50 752) (55 185) (49 827)Fines and penalties – – (2 500)Insurance (218 461) (205 180) (178 642)Lease rentals on operating lease (1 640 447) (1 405 344) (873 117)Legal expenses (154 864) (105 858) (138 810)Placement fees (675 270) (407 700) (390 960)Postage (3 692) (1 539) (1 286)Printing and stationery (20 709) (29 135) (12 902)Loss on sale of assets (16 387) – (4 878)Repairs and maintenance (220 235) (276 986) (55 604)Security (9 196) (51 763) (54 488)Staff welfare (134 374) (104 988) (158 801)Subscriptions (31 970) (36 370) (19 300)Telephone and fax (196 937) (169 058) (187 752)Training (81 459) (28 528) (113 803)Travel (233 465) (223 097) (286 069)

(34 434 831) (27 450 052) (23 113 269)

188

Annexure 18

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF SYNTHESIS

The DirectorsSynthesis Software Technologies Proprietary LimitedMelrose ArchNo 3 Melrose BoulevardGautengSouth Africa

24 March 2017

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF SYNTHESIS SOFTWARE TECHNOLOGIES PROPRIETARY LIMITED (‘SYNTHESIS’)

Introduction

At your request, we present our Reporting Accountant’s Report on the Historical Financial Information of Synthesis for the three years ended 28 February 2014, 28 February 2015, and 29 February 2016, (the “Historical Financial Information”) for inclusion in the Circular to shareholders to be dated on or about 31 March 2017 (“the Circular”). This report is required for the purposes of complying with Section 8.48 of the Listings Requirements of the JSE Limited (“the JSE”) (the “Listings Requirements”) and is given for the purpose of complying with those requirements and for no other purpose. We are the independent auditors of Synthesis.

To the fullest extent permitted by law neither we nor the directors of Synthesis assume any responsibility or accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with the Listings Requirements and consenting to its inclusion in the Circular.

Responsibility of the Directors

The directors of Capital Appreciation Limited (“Capital Appreciation”) (the “Directors”) are responsible for the compilation, contents and preparation of the Circular, including the historical financial information of Synthesis in accordance with the Listings Requirements. The directors of Synthesis are responsible for the preparation and fair presentation of the historical financial information in accordance with International Financial Reporting Standards (“IFRS”), and for such internal control as the directors of Synthesis determine is necessary to enable the preparation of historical financial information that is free from material misstatement, whether due to fraud or error.

Historical Financial Information subjected to audit

We have audited the historical financial information for the three years ended 28 February 2014, 28 February 2015, and 29 February 2016, attached as Annexure 17 to the Circular to be dated on or about 31 March 2017, prepared in accordance with IFRS and in compliance with the Listings Requirements.

Responsibility of the Independent Reporting Accountant’s on the Historical Financial Information for the three years ended 28 February 2014, 28 February 2015, and 29 February 2016

Our responsibility is to express an audit opinion on the Historical Financial Information for the three years ended 28 February 2014, 28 February 2015, and 29 February 2016 included in Annexure 17 to the Circular based on our audit.

We conducted our audit of the Historical Financial Information for the three years ended 28 February 2014, 28 February 2015, and 29 February 2016 in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

189

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Historical Financial Information for the three years ended 28 February 2014, 28 February 2015, and 29 February 2016. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the Historical Financial Information for the three years ended 28 February 2014, 28 February 2015, and 29 February 2016 in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Historical Financial Information for the three years ended 28 February 2014, 28 February 2015, and 29 February 2016.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion on Historical Financial Information for the three years ended 28 February 2014, 28 February 2015, and 29 February 2016

In our opinion, the Historical Financial Information for the three years ended 28 February 2014, 28 February 2015, and 29 February 2016 consisting of the financial position of Synthesis Software Technologies Proprietary Limited and its financial performance and its cash flows for the three years ended 28 February 2014, 28 February 2015, and 29 February 2016 included in the Circular has been prepared, in all material respects, in accordance with IFRS, the requirements of the Companies Act of South Africa and the Listings Requirements.

Consent

We consent to the inclusion of this report and reference to our opinion in the Circular in the form and context in which it appears.

BDO South Africa IncorporatedPer: Heemal Bhaga MuljeeDirectorRegistered AuditorReporting Accountant Specialist

24 March 2017

190

Annexure 19

INTERIM FINANCIAL INFORMATION OF SYNTHESIS

The interim financial information of Synthesis presented in this Annexure 19 should be read in conjunction with paragraph 12.3 of the Circular.

STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2016

Figures in Rand Note(s)31 August

201629 February

2016

AssetsNon-current assetsProperty, plant and equipment 2 731 435 792 049Goodwill 3 1 294 696 1 294 696Deferred tax 6 791 710 66 085

2 817 841 2 152 830

Current assetsLoans to shareholders 4 12 738 422 7 295 690Trade and other receivables 7 9 561 622 5 553 157Cash and cash equivalents 8 11 760 535 5 039 679

34 060 579 17 888 526

Total assets 36 878 420 20 041 356

Equity and liabilitiesEquityShare capital 9 1 000 1 000Retained income 16 985 746 12 296 080

16 986 746 12 297 080

LiabilitiesNon-current liabilitiesDeferred income 11 1 214 583 –Borrowings 12 9 586 268 –

10 800 851 –

Current liabilitiesLoans from shareholders 4 – 388 457Current tax payable 18 2 810 691 1 959 234Short term loans 10 – 3 006 318Operating lease liability 287 954 236 018Trade and other payables 13 2 639 279 2 154 249Deferred income 11 1 325 000 –Borrowings 12 2 027 899 –

9 090 823 7 744 276

Total liabilities 19 891 674 7 744 276

Total equity and liabilities 36 878 420 20 041 356

191

STATEMENT OF COMPREHENSIVE INCOME

Figures in Rand Note(s)

6 monthperiod ended

31 August2016

12 monthperiod ended29 February

2016

Revenue 15 35 240 468 51 906 785Cost of sales (3 925 286) (2 343 800)

Gross profit 31 315 183 49 562 985

Other income 16 24 671 4 125 386Operating expenses (18 225 025) (34 434 831)

Operating profit/(loss) 17 13 114 829 19 253 540

Investment revenue 867 468 367 789Finance costs (632 672) (6 319)

Profit/(loss) before taxation 13 349 625 19 615 010

Taxation 18 (3 737 895) (5 164 883)

Profit/(loss) for the six month period 9 611 730 14 450 127

Other comprehensive income – –

Total comprehensive income/(loss) for the six month period 9 611 730 14 450 127

STATEMENT OF CHANGES IN EQUITY

Figures in RandShare

capitalRetained

incomeTotal

equity

Balance at 28 February 2015 1 000 12 011 462 12 012 462Profit for the six month period – 14 450 127 14 450 127Other comprehensive income – – –

Total comprehensive income for the six-month period – 14 450 127 14 450 127

Dividends – (14 165 509) (14 165 509)

Total contributions by and distributions to owners of company recognised directly in equity – (14 165 509) (14 165 509)

Balance at 29 February 2016 1 000 12 296 080 12 297 080Profit for the six month period – 9 611 730 9 611 730Other comprehensive income – – –

Total comprehensive income for the six-month period – 9 611 730 9 611 730

Dividends – (4 922 064) (4 922 064)Total contributions by and distributions to owners of company recognised directly in equity – (4 922 064) (4 922 064)

Balance at 31 August 2016 1 000 16 985 746 16 986 746

Note(s) 9

192

STATEMENT OF CASH FLOWS

Figures in Rand Note(s)

6 month period ended

31 August 2016

12 month period ended 29 February

2016

Cash flows from operating activitiesCash generated from operations 19 12 429 050 22 421 579Interest income 867 468 367 789Finance costs (632 672) (6 319)Tax paid 20 (3 612 063) (4 783 558)

Net cash from operating activities 9 051 783 17 999 491

Cash flows from investing activitiesPurchase of property, plant and equipment 2 (185 521) (644 386)Sale of property, plant and equipment 2 – 17 387Loans advanced to shareholders (5 442 733) (7 295 690)

Net cash from investing activities (5 628 254) (7 922 689)

Cash flows from financing activitiesProceeds from borrowings 11 614 167 –Proceed from Shareholders Loans – 3 394 775Repayment of shareholders loans (3 394 776) –Dividends paid (4 922 064) (14 165 509)

Net cash from financing activities 3 297 327 (10 770 734)

Total cash movement for the six month period 6 720 856 (693 932)

Cash at the beginning of the six month period 5 039 679 5 733 611

Total cash at end of the six month period 8 11 760 535 5 039 679

193

1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS

The annual financial statements have been prepared in accordance with International Financial Reporting Standards, and the Companies Act. The financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below.

1.1 Property, plant and equipment

The cost of an item of property, plant and equipment is recognised as an asset when:

• it is probable that future economic benefits associated with the item will flow to the company; and

• the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, or replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories.

Major spare parts and stand by equipment which are expected to be used for more than one period are included in property, plant and equipment. In addition, spare parts and stand by equipment which can only be used in connection with an item of property, plant and equipment are accounted for as property, plant and equipment.

Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection costs from the previous inspection are derecognised.

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.

Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Average useful life

Furniture and fixtures Six yearsOffice equipment Five yearsComputer equipment Two to three years

The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting period. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

1.2 Goodwill

Goodwill is initially measured at cost, being the excess of the business combination over the company’s interest of the net fair value of the identifiable assets, liabilities and contingent liabilities.

Subsequently goodwill is carried at cost less any accumulated impairment.

The excess of the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of the business combination is immediately recognised in profit or loss.

Internally generated goodwill is not recognised as an asset.

194

1.3 Intangible assets

An intangible asset is recognised when:

• it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and

• the cost of the asset can be measured reliably. Intangible assets are initially recognised at cost.

Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.

An intangible asset arising from development (or from the development phase of an internal project) is recognised when:

• it is technically feasible to complete the asset so that it will be available for use or sale;

• there is an intention to complete and use or sell it;

• there is an ability to use or sell it;

• it will generate probable future economic benefits;

• there are available technical, financial and other resources to complete the development and to use or sell the asset; and

• the expenditure attributable to the asset during its development can be measured reliably.

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight line basis over their useful life.

The amortisation period and the amortisation method for intangible assets are reviewed every period-end.

Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.

Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item Useful life

Computer software Two years

1.4 Financial instruments

Initial recognition and measurement

The company classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial assets and financial liabilities are recognised on the company’s balance sheet when the company becomes party to the contractual provisions of the instrument.

Loans to shareholders, directors, managers and employees

These financial assets are initially recognised at fair value plus direct transaction costs.

Subsequently these loans are measured at amortised cost using the effective interest rate method, less any impairment loss recognised to reflect irrecoverable amounts.

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Trade and other receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Trade and other receivables are classified as loans and receivables.

Trade and other payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.

1.5 Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets and liabilities

A deferred tax asset is recognised for the carry forward of unused tax losses and unused STC credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused STC credits can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Tax expenses

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

• a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or

• a business combination.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

1.6 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Finance leases – lessee

Finance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease.

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The lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate on the remaining balance of the liability.

Operating leases – lessor

Operating lease income is recognised as an income on a straight-line basis over the lease term.

Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income.

Income for leases is disclosed under revenue in profit or loss.

Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset. This liability is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.7 Impairment of assets

The company assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the company also:

• tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period.

• tests goodwill acquired in a business combination for impairment annually.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase.

1.8 Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

If the company reacquires its own equity instruments, those instruments are deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the company’s own equity instruments. Consideration paid or received shall be recognised directly in equity.

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1.9 Revenue

Revenue from the sale of goods is recognised when all the following conditions have been satisfied:

• the company has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the company; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the company;

• the stage of completion of the transaction at the end of the reporting period can be measured reliably; and

• the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable.

Revenue from licensing agreements is recognised in accordance with the substance of the agreements.

Service revenue is recognised by reference to the stage of completion of the transaction at the end of the reporting period. Stage of completion is determined by services performed to date as a percentage of total services to be performed.

1.10 Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset until such time as the asset is ready for its intended use. The amount of borrowing costs eligible for capitalisation is determined as follows:

• Actual borrowing costs on funds specifically borrowed for the purpose of obtaining a qualifying asset less any temporary investment of those borrowings.

• Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of obtaining a qualifying asset. The borrowing costs capitalised do not exceed the total borrowing costs incurred.

The capitalisation of borrowing costs commences when:

• expenditures for the asset have occurred;

• borrowing costs have been incurred, and

• activities that are necessary to prepare the asset for its intended use or sale are in progress.

Capitalisation is suspended during extended periods in which active development is interrupted.

Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

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1.11 New standards and interpretations

1.11.1 Standards issued not yet effective

At the date of the authorisation of these financial statements for the year ended 31 August 2016, the following standards were issued but not yet effective:

IFRS 9 Financial Instruments

A final version of IFRS 9 has been issued which replaces IAS 39 Financial Instruments: Recognition and Measurement. The completed standard comprises guidance on Classification and Measurement, Impairment Hedge Accounting and Derecognition:

• IFRS9introducesanewapproachtotheclassificationoffinancialassets, which is driven by the business model in which the asset is held and their cash flow characteristics. A new business model was introduced which does allow certain financial assets to be categorised as “fair value through other comprehensive income” in certain circumstances. The requirements for financial liabilities are mostly carried forward unchanged from IAS 39. However, some changes were made to the fair value option for financial liabilities to address the issue of own credit risk.

•Thenewmodelintroducesasingleimpairmentmodelbeingapplied to all financial instruments, as well as an “expected credit loss” model for the measurement of financial assets.

• IFRS9containsanewmodelforhedgeaccountingthatalignsthe accounting treatment with the risk management activities of an entity, in addition enhanced disclosures will provide better information about risk management and the effect of hedge accounting on the financial statements. IFRS 9 carries forward the derecognition requirements of financial assets and liabilities from IAS 39.

1 January 2018

* IFRS 9 (2014) supersedes any previous versions of IFRS 9, but earlier versions of IFRS 9 remain available for application if the relevant date of application is before 1 February 2015*

IFRS 15 Revenue from Contracts from Customers

New standard that requires entities to recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is achieved through a five-step methodology that is required to be applied to all contracts with customers.

The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements. The new standard supersedes:

(a) IAS 11 Construction Contracts;

(b) IAS 18 Revenue;

(c) IFRIC 13 Customer Loyalty Programmes;

(d) IFRIC 15 Agreements for the Construction of Real Estate;

(e) I FRIC 18 Transfers of Assets from Customers; and

(f) SIC-31 Revenue – Barter Transactions Involving Advertising Services.

1 January 2018

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IFRS 16 Leases New standard that introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. A lessee measures right-of-use assets similarly to other nonfinancial assets (such as property, plant and equipment) and lease liabilities similarly to other financial liabilities. As a consequence, a lessee recognises depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of the lease liability into a principal portion and an interest portion and presents them in the statement of cash flows applying IAS 7 Statement of Cash Flows.

IFRS 16 contains expanded disclosure requirements for lessees. Lessees will need to apply judgement in deciding upon the information to disclose to meet the objective of providing a basis for users of financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of the lessee.

IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.

IFRS 16 also requires enhanced disclosures to be provided by lessors that will improve information disclosed about a lessor’s risk exposure, particularly to residual value risk.

IFRS 16 supersedes the following Standards and Interpretations:

(a) IAS 17 Leases.

(b) IFRIC 4 Determining whether an Arrangement contains a Lease.

(c) SIC-15 Operating Leases – Incentives.

(d) SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

1 January 2019

1.11.2 Standards effective and adopted:

During the current year, the Company adopted all new and revised Standards and Interpretations issued by the International Accounting Standards Board (“IASB”) and the IFRS Interpretations Committee (“IFRIC”) that are relevant to its operations and effective for the annual reporting period. The adoption of these new and revised Standards and Interpretations has not resulted in changes to the Company’s accounting policies nor did it have a material effect on the financial results of the company.

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At the date of authorisation of these financial statements for the year ended 31 August 2016, the following standards were adopted:

Standard Details of amendment

Annual periods beginning on or after

IFRS 7 Financial Instruments: Disclosures

Annual Improvements 2012 – 2014 Cycle: Amendment clarifying under what circumstances an entity will have continuing involvement in a transferred financial asset as a result of servicing contracts.

Annual Improvements 2012 – 2014 Cycle: Amendment clarifying the applicability of previous amendments to IFRS 7 issued in December 2011 with regard to offsetting financial assets and financial liabilities in relation to interim financial statements prepared under IAS 34.

1 January 2016

IAS 1, Presentation of Financial Statements

Disclosure Initiative: Amendments designed to encourage entities to apply professional judgement in determining what information to disclose in their financial statements. For example, the amendments make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can inhibit the usefulness of financial disclosures. Furthermore, the amendments clarify that entities should use professional judgement in determining where and in what order information is presented in the financial disclosures.

1 January 2016

IAS 16 Property, Plant and Equipment

Amendment to both IAS 16 and IAS 38 establishing the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset. Clarifying that revenue is generally presumed to be an inappropriate basis for measuring the consumption of economic benefits in such assets.

1 January 2016

Amendment to IAS 16 and IAS 41 which defines bearer plants and includes bearer plants in the scope of IAS 16 Property, plant and equipment, rather than IAS 41, allowing such assets to be accounted for after initial recognition in accordance with IAS 16.

1 January 2016

2. PROPERTY, PLANT AND EQUIPMENT

CostAccumulateddepreciation

Carryingvalue Cost

Accumulateddepreciation

Carryingvalue

Furniture and fixtures 332 268 (75 520) 256 748 455 212 (213 204) 242 008Office equipment 38 351 (14 969) 23 382 38 351 (10 556) 27 795Computer equipment 1 145 521 (694 216) 451 305 1 001 391 (479 145) 522 246

Total 1 516 140 (784 705) 731 435 1 494 954 (702 905) 792 049

Reconciliation of property, plant and equipment – 31 August 2016

Opening balance Additions Depreciation Total

Furniture and fixtures 242 008 41 390 (26 650) 256 748Office equipment 27 795 – (4 413) 23 382Computer equipment 522 246 144 131 (215 072) 451 305

792 049 185 521 (246 135) 731 435

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Reconciliation of property, plant and equipment – 29 February 2016

Openingbalance Additions Disposals Depreciation Total

Furniture and fixtures 218 590 65 905 (2 543) (39 944) 242 008Office equipment 29 712 9 025 (1 661) (9 281) 27 795Computer equipment 324 692 569 456 (13 183) (358 719) 522 246

572 994 644 386 (17 387) (407 944) 792 049

A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at the registered office of the company.

3. GOODWILL

CostAccumulated depreciation

Carrying value Cost

Accumulated depreciation

Carrying value

Goodwill 1 294 696 – 1 294 696 1 294 696 – 1 294 696

Reconciliation of goodwill – 31 August 2016

Openingbalance Total

Goodwill 1 294 696 1 294 696

Reconciliation of goodwill – 29 February 2016

Openingbalance Total

Goodwill 1 294 696 1 294 696

Impairment test for goodwill

The recoverable amount of goodwill is determined based on the residual income model. These calculations use pre-tax profit projections covering a three-year period. The discount rates used are pre-tax. The key assumptions used for the value in use calculations are as follows:

Growth rate

A growth rate of 8% for the three-year budget period was used.

Discount rate

The pre-tax discount rate applied to the cash flow projection was 18.40%.

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4. LOANS TO/(FROM) SHAREHOLDERS

JD Shepherd 2 768 167 –This loan bears interest at rates linked to prime, plus 0.95%JD Shepherd 288 612 1 807 721This loan bears interest at rates linked to prime, minus 5%MB Shapiro 3 625 835 –This loan bears interest at rates linked to prime, plus 0.95%MB Shapiro 251 427 1 771 312This loan bears interest at rates linked to prime, minus 5%S Basson 552 021 –This loan bears interest at rates linked to prime, plus 0.95%S Basson 8 396 (388 457)This loan bears interest at rates linked to prime, minus 5%T Wells 2 993 077 –This loan bears interest at rates linked to prime, plus 0.95%T Wells 2 250 886 3 716 657This loan bears interest at rates linked to prime, minus 5%

12 738 421 6 907 233

Loans to shareholders are unsecured and have no fixed terms of repayment. The company has the intention to call these loans in the current financial year.

5. FINANCIAL ASSETS BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

Loans and receivables Total

31 August 2016Loans to shareholders 12 738 421 12 738 421Trade and other receivables 9 561 622 9 561 622Cash and cash equivalents 11 760 535 11 760 535

34 060 578 34 060 578

29 February 2016Loans to shareholders 7 295 690 7 295 690Trade and other receivables 5 553 157 5 553 157Cash and cash equivalents 5 039 679 5 039 679

17 888 526 17 888 526

6. DEFERRED TAX

Deferred tax asset 791 710 66 085Reconciliation of deferred tax asset/(liability)Operating lease 80 627 66 085Deferred revenue 711 083 –

791 710 66 085

Recognition of deferred tax asset

Deferred tax assets have been recognised in respect of temporary differences giving rise to deferred tax assets where the directors believe it is highly probable that these assets will be recovered in the foreseeable future.

The deferred tax asset of R791 710 (29 February 2016: R66 085), arose from the recognition of the deferred income referred to in note 11 and the operating lease referred to in note 23.

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7. TRADE AND OTHER RECEIVABLES

Trade receivables 8 902 523 5 320 064Prepayments 173 448 –Staff loans 455 651 233 093Short-term loans 30 000 –

9 561 622 5 553 157

The debtors have been ceded to the bank as security for agreed banking facilities.

Fair value of trade and other receivables

Due to the short-term nature of trade and other receivables, the carrying amount approximates fair value.

Trade and other receivables past due but not impaired

Trade and other receivables which are less than three months past due are not considered to be impaired. At 31 August 2016, R1 810 777 (29 February 2016: R625 945) were past due but not impaired.

The ageing of amounts past due but not impaired is as follows:

One month past due 1 320 259 399 229Two months past due 236 783 183 025Three months past due 253 735 43 691

8. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of:Bank balances 11 440 535 4 719 679Standard Bank Guarantee 320 000 320 000

11 760 535 5 039 679

The guarantee held by Standard Bank is in favour of Entelect Solutions.

The debtors have been ceded to the bank as security for agreed banking facilities.

9. SHARE CAPITAL

Authorised10 000 ordinary shares 1 000 1 000

Issued10 000 ordinary shares 1 000 1 000

10. SHORT-TERM LOANS

JD Shepherd (1 503 370)MB Shapiro (1 502 948)

(3 006 318)

These loans bear interest at rates linked to prime, are unsecured and have no fixed terms of repayment.

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11. DEFERRED INCOME

Deferred income non-current portion 1 214 583 –Deferred income – current portion 1 325 000 –

2 539 583 –

Deferred income relates to the delivering of licensed software and maintenance services, over a period of eight years.

12. BORROWINGS

Non-current portionStandard Bank of South Africa Limited 9 586 268 –Current portionStandard Bank of South Africa Limited 2 027 899 –

11 614 167 –

This loan bears interest at rates linked to prime rate plus 0.95% and has a fixed minimum capital repayment of R211,167 per month.

The loan has a repayment term of five years and is secured as follows:

– Unrestricted cession of book debts.

– Guarantee limited to R4 300 000 from MB Shapiro

– Guarantee limited to R4 300 000 from JD Shepherd

– Guarantee limited to R4 300 000 from TJ Wells

– Subordination agreements for the respective shareholder loan accounts is not to be reduced below the value initially held for R4 300 000 each.

13. TRADE AND OTHER PAYABLES

Trade payables 696 202 258 916VAT 923 912 405 882Other payables 298 755 212 771Payroll accruals 720 411 1 276 680

2 639 280 2 154 249

14. FINANCIAL LIABILITIES BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

Financial liabilities at

amortised cost Total

31 August 2016Trade and other payables(excluding VAT and Payroll accrual) 994 957 994 95729 February 2016Loans from shareholders 338 457 338 457Trade and other payables(excluding VAT and Payroll accrual) 471 687 471 687Short-term loans 3 006 318 3 006 318

3 816 462 3 816 462

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15. REVENUE

Sale of goods and rendering of services 35 240 468 51 906 785

16. OTHER INCOME

Profit on exchange differences 4 934 589 305Sundry income 16 240 3 500 000Recoveries 3 497 36 081

24 671 4 125 386

17. OPERATING LEASE CHARGES

Operating profit/(loss) for the year is stated after accounting for the following:

Operating lease chargesPremises• Contractualamountsonastraight-linebasis 694 754 1 460 112(Loss)/profit on sale of property, plant and equipment – (16 387)Depreciation on property, plant and equipment 246 135 407 944Employee costs 15 344 489 26 087 463

18. TAXATION

Major components of the tax expenseCurrentLocal income tax – current period 4 463 520 5 208 482DeferredMovement in deferred tax (725 625) (43 599)

3 737 895 5 164 883

Reconciliation of the tax expenseReconciliation between applicable tax rate and average effective tax rate.Applicable tax rate (%) 28.00 28.00Deductible permanent differences (%) – (1.67)Temporary differences (%) (5.44) –

22.56 26.33

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19. CASH GENERATED FROM OPERATIONS

Profit before taxation 13 349 625 19 615 010Adjustments forDepreciation and amortisation 246 136 407 944Loss on sale of assets – 16 387Loss on foreign exchange – (589 305)Interest received (867 468) (367 789)Finance costs 632 672 6 319Movements in operating lease assets and accruals 51 936 155 711Movement in deferred income 2 539 583 –Changes in working capitalTrade and other receivables (4 008 465) 4 379 881Trade and other payables 485 031 (1 202 579)

12 429 050 22 421 579

20. TAX PAID

Balance at beginning of the six-month period (1 959 234) (1 534 310)Current tax for the six-month period recognised in profit or loss (4 463 520) (5 208 482)Balance at end of the six-month period 2 810 691 1 959 234

(3 612 063) (4 783 558)

21. COMMITMENTS

Operating leases – as lessee (expense)Minimum lease payments due– within one year 1 274 355 1 226 320– in second to fifth year inclusive 2 991 597 3 632 777

4 265 952 4 859 097

22. RISK MANAGEMENT

Liquidity risk

The company’s risk to liquidity is a result of the funds available to cover future commitments. The company manages liquidity risk through an ongoing review of future commitments and credit facilities.

Less than one year

Between one and

two years

Between two and

five years

At 31 August 2016Trade and other payables (excluding VAT and payroll accrual) 994 957 – –Standard Bank Long-Term loan 2 027 899 2 397 408 7 188 861

At 29 February 2016Trade and other payables (excluding VAT and payroll accrual) 471 687 – –Loans from shareholders 388 457 – –Short-term loans 3 006 318 – –

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Interest rate risk

The shareholders loans bear interest at rates linked to prime. The bank balance bears interest at market related rates.

As the company has no significant interest-bearing assets, the company’s income and operating cash flows are substantially independent of changes in market interest rates.

Credit risk

Credit risk consists mainly of cash deposits, cash equivalent and trade debtors. The company only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.

Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored. Credit guarantee insurance is purchased when deemed appropriate.

No credit limits were exceeded during the reporting period, and management does not expect any losses from non- performance by these counterparties.

23. GOING CONCERN

The directors believe that the company has adequate financial resources to continue in operation for the foreseeable future and accordingly the annual financial statements have been prepared on a going-concern basis. The directors have satisfied themselves that the company is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of any new material changes that may adversely impact the company. The directors are also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the company.

24. EVENTS AFTER THE REPORTING PERIOD

The directors are not aware of any significant matter or circumstance arising since the end of the financial year, not otherwise dealt with in this report or the annual financial statements, which significantly affects the financial position of the company or the results of its operations to the date of this report.

Figures in Rand Note(s)

Six-month period ended

31 August 2016

12-month period ended 29 February

2016

RevenueServices rendered and sale of goods 35 240 468 51 906 785Cost of salesPurchases (3 925 286) (2 343 800)

Gross profit 31 315 182 49 562 985

Other incomeSundry income 16 240 3 500 000Recoveries 3 497 36 081Interest received 867 468 367 789Profit on exchange differences 4 934 589 305

892 139 4 493 175

Expenses (refer to page 27) (18 225 025) (34 434 831)

Operating profit 17 13 982 296 19 621 329Finance costs (632 672) (6 319)

Profit before taxation 13 349 624 19 615 010Taxation 18 (3 737 895) (5 164 883)

Profit for the 6 month period 9 611 729 14 450 127

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Figures in Rand Note(s)

Six-month period ended

31 August 2016

12-month period ended 29 February

2016

Operating expensesAccounting fees – (440)Administration and management fees (190 752) (218 556)Advertising (41 598) (200 774)Auditors’ remuneration (48 500) (45 000)Bank charges (15 439) (32 661)Computer expenses (534 645) (687 919)Consulting and professional fees (76 140) (2 988 639)Depreciation, amortisation and impairments (246 136) (407 944)Donations (44 279) (77 217)Employee costs (15 344 489) (26 087 463)Entertainment (40 490) (50 752)Insurance (114 932) (218 461)Lease rentals on operating lease (839 375) (1 640 447)Legal expenses (40 942) (154 864)Placement fees (185 757) (675 270)Postage (6 002) (3 692)Printing and stationery (17 629) (20 709)Loss on sale of assets – (16 387)Repairs and maintenance (63 366) (220 235)Security (4 491) (9 196)Staff welfare (78 602) (134 374)Subscriptions – (31 970)Telephone and fax (105 623) (196 937)Training (9 275) (81 459)Travel (176 563) (233 465)

(18 225 025) (34 434 831)

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Annexure 20

INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE INTERIM FINANCIAL INFORMATION OF SYNTHESIS

The DirectorsSynthesis Software Technologies Proprietary LimitedMelrose ArchNo 3 Melrose BoulevardGautengSouth Africa

24 March 2017

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE INTERIM FINANCIAL INFORMATION OF SYNTHESIS SOFTWARE TECHNOLOGIES PROPRIETARY LIMITED (‘SYNTHESIS’)

Introduction

At your request, we present our Reporting Accountant’s Report on the Interim Financial Information of Synthesis for the six months ended 31 August 2016 (the ‘Interim Financial Information’) for inclusion in the circular to shareholders to be dated on or about 31 March 2017 (‘the Circular’). This report is required for the purposes of complying with Section 8.48 of the Listings Requirements of the JSE Limited (‘the JSE’) (the ‘Listings Requirements’) and is given for the purpose of complying with those requirements and for no other purpose. We are the independent auditors of Synthesis.

To the fullest extent permitted by law neither we nor the directors of Synthesis assume any responsibility or accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with the Listings Requirements and consenting to its inclusion in the Circular.

Responsibility of the directors

The directors of Capital Appreciation Limited (‘Capital Appreciation’) (the ‘directors’) are responsible for the compilation, contents and preparation of the Circular, including the Interim Financial Information of Synthesis, in accordance with the Listings Requirements. The directors of Synthesis are responsible for the preparation and fair presentation of the Interim Financial Information in accordance with International Financial Reporting Standards (‘IFRS’), and for such internal control as the directors of Synthesis determine is necessary to enable the preparation of Interim Financial Information that is free from material misstatement, whether due to fraud or error.

Historical financial information subjected to review

We have reviewed the Interim Financial Information for the six months ended 31 August 2016, attached as Annexure 19 to the Circular to be dated on or about 31 March 2017, prepared in accordance with IFRS and in compliance with the Listings Requirements.

Responsibility of the Independent Reporting Accountant’s on the Interim Financial Information for the six months ended 31 August 2016

Our responsibility is to express a review opinion on the Interim Financial Information for the six months ended 31 August 2016 included Annexure 19 to the Circular based on our review.

We conducted our review of the Interim Financial Information for the six months ended 31 August 2016 in accordance with the International Standard on Review Engagements 2400.

This standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial information for the six months ended 31 August 2016 are free of material misstatement. A review is limited primarily to enquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit of the above mentioned financial information and, accordingly, we do not express an audit opinion thereon.

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Review opinion on interim financial information for the six months ended 31 August 2016

Based on our review, nothing has come to our attention that causes us to believe that the Interim Financial Information of Synthesis for the six months ended 31 August 2016 included in the circular, is not fairly presented, in all material respects, in accordance with International Financial Reporting Standards and the Listings Requirements.

BDO South Africa IncorporatedPer: Heemal Bhaga MuljeeDirectorRegistered AuditorReporting Accountant Specialist

24 March 2017

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Annexure 21

CAPITAL APPRECIATION LIMITED(Incorporated in South Africa)

(Registration number 2014/253277/06)JSE ordinary share code: CTA

ISIN: ZAE000208245(“CAPPREC” or the “Company”)

REVISED LISTING PARTICULARS

The definitions and interpretations commencing on page 6 of the Circular apply throughout the Circular including these Revised Listing Particulars.

These Revised Listing Particulars have been prepared on the assumption that the resolutions proposed in the Notice of General Meeting, forming part of the Circular, to which these Revised Listing Particulars are annexed, will be approved and adopted at the General Meeting to be held on Friday, 5 May 2017, and that the Proposed Transactions as detailed in the Circular will be implemented.

These Revised Listing Particulars are not an invitation or solicitation to the public to subscribe for or acquire securities, but are issued in compliance with the Listings Requirements, for the purpose of providing information to the public and CAPPREC Shareholders with regard to CAPPREC following the implementation of the Proposed Transactions.

As of the date of these Revised Listing Particulars the authorised share capital of CAPPREC consists of 10 000 000 000 Ordinary Shares and 4 000 Constituent Shares. The issued share capital of CAPPREC consists of 1 250 000 000 Ordinary Shares and 4 Constituent Shares. All Ordinary Shares rank pari passu with each other. CAPPREC does not have any treasury shares in issue.

Assuming the Proposed Transactions are approved by CAPPREC Shareholders and implemented, the Proposed Transactions will further involve the allotment and issue by CAPPREC, in dematerialised form, of (i) the AR Consideration Shares, (ii) the Restraint Shares and (iii) the SST Closing Shares collectively constituting 19.6% of CAPPREC’s issued share capital following such issue, cash payments of (i) R295 000 000 in relation to the AR Acquisition, (ii) R225 000 000 in relation to the Rinwell Acquisition and (iii) R82 300 000 in relation to the SST Acquisition, respectively, the creation and granting of the Warrants in relation to the Proposed AR-DP Transaction and, if applicable, the allotment and issue of the SST PW Shares and the payment of the SST PW Cash in relation to the SST Acquisition. The AR Consideration Shares, the Restraint Shares and the SST Consideration Shares will rank pari passu with CAPPREC’s existing Ordinary Shares and, without derogating from the generality of the aforesaid, will rank together with the existing Ordinary Shares for distributions. No convertibility provisions are applicable to the AR Consideration Shares, the Restraint Shares nor the SST Consideration Shares. The redemption provisions that apply generally to all Ordinary Shares (as envisaged in the MOI) in the event that CAPPREC fails to acquire a Viable Asset will no longer be applicable on Completion of the Proposed AR-DP Transaction or the Completion of the Proposed SST Transaction. Accordingly, on Completion of the Proposed AR-DP Transaction and/or the Proposed SST Transaction, the Ordinary Shares will no longer be capable of redemption.

Following the Proposed Transactions, the issued share capital of CAPPREC will consist of 1 555 000 000 Ordinary Shares and four Constituent Shares.

CAPPREC Shareholders are advised that their Ordinary Shares can only be traded on the JSE in dematerialised form and accordingly all CAPPREC Shareholders who hold their Ordinary Shares in certificated form will have to dematerialise their share certificates in order to trade their Ordinary Shares on the JSE. Such CAPPREC Shareholders must make the necessary arrangements with their CSDP or Broker, in terms of the custody agreement with their CSDP or Broker.

The current Directors whose names are given in paragraph 4 of these Revised Listing Particulars collectively and individually accept full responsibility for the accuracy of the information furnished relating to CAPPREC group, respectively and certify that, to the best of their knowledge and belief, there are no facts which have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made, and that these Revised Listing Particulars contain all information required by the Listings Requirements.

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Sponsor to CAPPREC Legal counsel to CAPPREC

Independent Reporting Accountant and Auditors to

CAPPREC

Legal counsel to African Resonance and Dashpay

Independent reporting accountant and auditors to

African Resonance and Dashpay Legal counsel to Synthesis

Transfer Secretaries

Independent reporting accountant and auditors to

Synthesis

Date of issue: 31 March 2017.

Copies of these Revised Listing Particulars are available in English only and may, from 31 March 2017 until 5 May 2017 (both days inclusive), be obtained from the registered office of CAPPREC, Investec Bank Limited and the Transfer Secretaries, at the addresses set out in the “Corporate Information and Advisers” section of the Circular. These Revised Listing Particulars will also be available in electronic form on CAPPREC’s website (www.capitalappreciation.co.za) from 31 March 2017.

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CAPITAL APPRECIATION LIMITED(Incorporated in South Africa)

(Registration number 2014/253277/06)JSE ordinary share code: CTA

ISIN: ZAE000208245(“CAPPREC” or the “Company”)

DIRECTORS

Executive Independent non-executiveMichael Pimstein (Joint Chief Executive Officer) Bukelwa BuloBradley Sacks (Joint Chief Executive Officer) Jacob Meyer KahnAlan Salomon (Chief Financial Officer) Victor Sekese Charles Valkin

Non-independent non-executiveMichael (Motty) Sacks (Chairperson)Dr Daniel (Dan) MatjilaRoshan Morar

REVISED LISTING PARTICULARS

1. INTRODUCTION AND PURPOSE OF REVISED LISTING PARTICULARS

1.1 The purpose of these Revised Listing Particulars is to provide the current and future CAPPREC Shareholders with information on:

1.1.1 the CAPPREC group, including its assets, liabilities and Directors post the successful Completion of the Proposed Transactions; and

1.1.2 CAPPREC’s strategy and vision for the CAPPREC group, post the successful Completion of the Proposed Transactions and following CAPPREC no longer being categorised as a SPAC.

1.2 In terms of the AR Acquisition, it is proposed that CAPPREC will acquire African Resonance for the AR Consideration pursuant to the AR Agreement. The salient details of the proposed AR Acquisition are set out in paragraph 7 of the Circular.

1.3 In terms of the Rinwell Acquisition, it is proposed that CAPPREC will acquire the Rinwell Shares for the Rinwell Consideration pursuant to the Rinwell Agreement. The salient details of the proposed Rinwell Acquisition are set out in paragraph 8 of the Circular.

1.4 In terms of the SST Acquisition, it is proposed that CAPPREC will acquire the SST Shares and the SST Claims for the SST Consideration pursuant to the SST Agreement. The salient details of the proposed SST Acquisition are set out in paragraph 9 of the Circular.

1.5 If the Proposed Transactions are successfully Completed, it is intended, subject to the approval by the JSE, that CAPPREC will no longer be listed on the JSE as a SPAC. The successful Completion of the Proposed Transactions will enable CAPPREC to qualify, in accordance with the Listings Requirements, for a listing on the Main Board.

1.6 It is proposed that the AR Consideration Shares and the Restraint Shares will be listed with effect from the Completion date of the Proposed AR-DP Transaction as set out and further described in paragraphs 7.2 and 8.2, respectively, of the Circular. It is furthermore proposed that the SST Closing Shares will be listed with effect from the Completion date of the SST Acquisition as set out and further described in paragraph 9.2 of the Circular.

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2. OVERVIEW OF THE COMPANIES

2.1 Introduction

2.1.1 CAPPREC was incorporated as a private company on 3 December 2014 under the name “Firefly Investments 285 Proprietary Limited” in accordance with the laws of South Africa. On 2 June 2015, CAPPREC was converted under the laws of South Africa into a public company and its name was changed to “Capital Appreciation Limited”.

2.1.2 As of the Last Practicable Date, CAPPREC did not have any subsidiaries. Subsequent to the Completion of the Proposed Transactions, African Resonance and SST will constitute major subsidiaries (as such term is defined in the Listings Requirements) of CAPPREC and Rinwell and Dashpay will constitute subsidiaries (as such term is defined in the Listings Requirements) of CAPPREC.

2.2 Business overviews

2.2.1 CAPPREC business overview

CAPPREC was incorporated for the purposes of being listed on the Main Board as a SPAC in order to raise capital to pursue the acquisition of a Viable Asset that would provide a platform for future growth and expansion in South Africa, Africa and beyond, with the preferred commercial nature of such acquisitions being one in the services industries. As a result, as of the Last Practicable Date, CAPPREC has not traded and has not conducted any business, other than in connection with the preparation for the Listing, the pursuit and investigation of potential Viable Assets and negotiations of the Proposed Transactions.

2.2.2 African Resonance business overview

2.2.2.1 African Resonance was incorporated as a private company on 24 August 1998 under the name “Friedland 005 Investments” in accordance with the laws of South Africa. On 9 November 1998, African Resonance changed its name to “Haney Investment Holding (Proprietary) Limited”. On 23 October 2003, African Resonance changed its name to “African Resonance Business Solutions Proprietary Limited”.

2.2.2.2 As of the Last Practicable Date, the authorised share capital of African Resonance comprises of 1 000 ordinary shares, with a par value of R1 each, of which 100 ordinary shares are in issue. The shares in African Resonance are not listed on the JSE.

2.2.2.3 As of the Last Practicable Date, African Resonance has one subsidiary, being “Firefly Investments 275 Proprietary Limited”, which subsidiary is wholly-owned and is in the process of being deregistered.

2.2.2.4 As of the Last Practicable Date, African Resonance is a leading provider of payment infrastructure and related services to established financial institutions, emerging payment service providers, the hospitality industry and retail operators. African Resonance designs, develops and implements end-to-end solutions, including full service device fleet management, to its institutional clients and corporate customers. African Resonance supplies electronic point-of-sale and like devices, and provides merchants with a single device capable of providing both banking and non-banking products and services.

2.2.2.5 Further information on African Resonance and its operations is contained in paragraph 2 of the Circular.

2.2.3 Synthesis business overview

2.2.3.1 The business of Synthesis was founded in 1997 and was originally conducted as a sole proprietorship and later conducted in the name of an entity called “Synthesis Software Engineering Proprietary Limited”. Such business was then acquired by the CQS Technology Group (“CQS”). In 2004, the business was acquired from CQS by Synthesis (previously named ZAX Computers Proprietary Limited) and introduced to the market as a stand-alone enterprise, specialising in financial services software development, integration and regulatory reporting products and consulting services.

2.2.3.2 As of the Last Practicable Date, the authorised share capital of Synthesis comprises of 10 000 ordinary shares and 10 000 class B shares each, with a par value of R0.10 per share,

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of which 10 000 ordinary shares and 10 000 class B shares are in issue. The shares in SST are not listed on the JSE.

2.2.3.3 As of the Last Practicable Date, Synthesis does not have any subsidiaries.

2.2.3.4 As of the Last Practicable Date, Synthesis conducts the business of software development, technology consulting and integration services and technology based product solutions to banking and other financial services institutions in South Africa and other emerging markets.

2.2.3.5 Further information on Synthesis and its operations is contained in paragraph  4 of the Circular.

2.2.4 Government protection and investment encouragement law

As of the Last Practicable Date, there is no government protection or investment encouragement law affecting the current business of the CAPPREC group.

2.3 Prospects of the business

2.3.1 Refer to paragraph 12 of the Circular for the Directors’ opinion as to the prospects of the businesses of the CAPPREC group post implementation of the Proposed Transactions.

2.3.2 There has been no change in the trading objects of CAPPREC since its incorporation, nor has there been a change in the trading objects of African Resonance or Synthesis in the five years preceding the date of these Revised Listing Particulars.

2.3.3 There has been no change in the controlling Shareholders of CAPPREC or African Resonance or, save for paragraph 3.2.2.1.2, Synthesis, in the five years preceding the date of these Revised Listing Particulars.

2.4 Material acquisitions

2.4.1 None of CAPPREC, African Resonance or Dashpay has undertaken any material acquisitions in the three years preceding the Last Practicable Date, respectively, and, save for the Proposed Transactions, none of them are currently contemplating any potential material acquisitions.

2.4.2 Rinwell acquired 100% of the shares in and claims against Dashpay from Telesure Investment Holdings Proprietary Limited (with registered address 1 Telesure Lane, Riverglen, Dainfern, South Africa and registration number 1998/013847/07) (“TIH”), which acquisition became effective on 30 October 2015. The shares acquired were free from any encumbrances. Following the acquisition of the shares and claims by Rinwell, Rinwell and Dashpay entered into a loan facility agreement in terms of which it was recorded that Rinwell had made and was willing to make a facility available to Dashpay for drawdown to fund its business working capital requirements. The first draw down under the facility comprised of the sale claims acquired by Rinwell from TIH. The purchase price payable amounted to six million Rand in the aggregate, which purchase price was settled in cash. On 30 June 2016, TIH and Rinwell settled any and all claims under the acquisition agreement, resulting in TIH paying to Rinwell an aggregated amount of eight hundred thousand Rand. TIH did not guarantee the book debts or other assets of Dashpay. The warranties provided by TIH to Rinwell in terms of the sale agreement were usual and customary representations, warranties and indemnities normally given in connection with the sale of private companies in similar circumstances. No performance warranties were given. TIH is precluded from carrying on business in competition with Rinwell for a period of two years from 30 October 2015. Save in respect of the aforementioned acquisition, Rinwell has not undertaken any material acquisitions in the three years preceding the Last Practicable date and is not contemplating any potential material acquisitions. The shares in Dashpay have been transferred into the name of Rinwell and have not been ceded or pledged.

No promotor, Director or director of Rinwell or Dashpay had any beneficial interest, direct or indirect, in the aforementioned acquisition and none of the aforegoing persons received any commissions.

2.4.3 Neither CAPPREC, African Resonance, Rinwell, Dashpay nor Synthesis has disposed of any material property in the three years preceding the Last Practicable Date, respectively, and is not currently contemplating any potential material disposals.

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2.5 Litigation statement

2.5.1 There are no legal or arbitration proceedings, including any proceedings that are pending or threatened, of which CAPPREC is aware that may have or have had, over the previous 12 months, a material effect on the CAPPREC group’s financial position.

3. CAPITAL STRUCTURE

3.1 Share capital of CAPPREC

3.1.1 The share capital of CAPPREC, as of the Last Practicable Date, is set out below:

Number

Authorised share capitalOrdinary Shares 10 000 000 000Constituent Shares 4 000Issued share capitalOrdinary Shares 1 250 000 000Constituent Shares 4

1 250 000 004

3.1.2 CAPPREC does not have any treasury shares in issue.

3.1.3 On the Last Practicable Date, all of the CAPPREC Shares rank pari passu in all respects with all existing issued CAPPREC Shares (other than the Constituent Shares), including with respect to voting and distribution rights. The CAPPREC Shares do not carry any exchange rights or preferential conversion rights but they may be redeemed as described in paragraph 3.2.1.7 of these Revised Listing Particulars in accordance with the relevant provisions of the MOI. These provisions will no longer be applicable on Completion of the Proposed Transactions.

3.1.4 As of the Last Practicable Date, no debentures have been created or issued by CAPPREC.

3.1.5 The salient provisions of the MOI relating to the variation of rights attaching to the Constituent Shares and the Ordinary Shares are set out in Appendix 6 to these Revised Listing Particulars.

3.1.6 The share capital of CAPPREC after the successful Completion of the Proposed Transactions and the issuance of the AR Consideration Shares, the Restraint Shares and the SST Closing Shares is expected to be as follows:

Number

Authorised share capitalOrdinary Shares 10 000 000 000Constituent Shares 4 000Issued share capitalOrdinary Shares 1 555 000 000Constituent Shares 4

1 555 000 004

3.2 History of share issuance and repurchase

3.2.1 CAPPREC

3.2.1.1 On incorporation, CAPPREC’s authorised shares consisted of 4 000 ordinary shares with no par value. CAPPREC was incorporated as a shelf company with one issued ordinary share. That ordinary share was transferred to Alan Salomon on 24 March 2015.

3.2.1.2 On 4 August 2015, all of the ordinary shares (including the single ordinary share held by Alan Salomon) were converted into Constituent Shares and CAPPREC’s authorised shares were increased by the creation of 10 000 000 000 Ordinary Shares. The conversion of the ordinary shares and the increase of CAPPREC’s authorised shares was approved by a special resolution passed in terms of section 36(2)(a) of the Companies Act on 31 July 2015.

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3.2.1.3 On 21 September 2015, CAPPREC issued an aggregate of four Constituent Shares to Michael Pimstein, Bradley Sacks, Motty Sacks and Alan Salomon, respectively, at a subscription price of R1 000 000 per share with the result that, following the issue of those shares, CAPPREC had five Constituent Shares in issue. On 21 September 2015, CAPPREC further issued 750  000  000 Ordinary Shares to the Founders for the aggregate subscription price of R7 500. The issue of the four Constituent Shares and the 750 000 000 Ordinary Shares was approved by a special resolution passed in terms of section 41 of the Companies Act on 8 September 2015.

3.2.1.4 Following the issue of the four Constituent Shares and the 750 000 000 Ordinary Shares, CAPPREC repurchased one Constituent Share from Alan Salomon for R1.00, with the result that, following the repurchase, CAPPREC had four Constituent Shares and 750 000 000 Ordinary Shares in issue. The repurchase of the one Constituent Share was approved by a special resolution passed in terms of section 48(8) of the Companies Act on 8 September 2015.

3.2.1.5 On 8  September  2015, a special resolution was passed in terms of section  48 of the Companies Act approving the repurchase of 500 000 000 Ordinary Shares, at an aggregate repurchase price of R5 000, held by the Founders, resulting in the Founders holding 20% of the total number of Ordinary Shares in issue immediately after the issuance of Ordinary Shares pursuant to the Listing. The aforementioned repurchase was effected immediately prior to the Listing.

3.2.1.6 Pursuant to the Listing, CAPPREC issued 1 000 000 000 Ordinary Shares at an aggregate subscription price of R1 000 000 000, in accordance with the terms and conditions of the Pre-listing Statement, which issuance was approved by a special resolution in terms of section 41 of the Companies Act on 8 September 2015 and by a resolution of the Board passed on 8 September 2015.

3.2.1.7 If CAPPREC does not successfully Complete an acquisition of a Viable Asset within the period prescribed by the Listings Requirements:

3.2.1.7.1 CAPPREC will redeem all of the Ordinary Shares then in issue in accordance with the rights attaching to the Ordinary Shares set out the Pre-Listing Statement and the provisions of the MOI. The Board anticipates that if such redemption is undertaken, each holder of an Ordinary Share will receive from the Company an amount of not less than the amount initially invested by such holder; and

3.2.1.7.2 the Founders will not participate in the redemption referred to in paragraph 3.2.1.7.1 above where it relates the Founders Ordinary Shares as referred to in paragraph 3.2.1.3 above. Each of such Ordinary Shares will be acquired or repurchased by CAPPREC prior to the redemption described in paragraph 3.2.1.7.1 at a price of R0.00001 per Ordinary Share.

Upon the successful Completion of either the Proposed AR-DP Transaction or the Proposed SST Transaction, the aforementioned redemption provisions, as reflected in the MOI, will no longer be of any effect.

3.2.1.8 Save as described in paragraph 3.2.1 above, CAPPREC has not issued or offered any securities in its share capital that is material to CAPPREC nor have there been any alterations in the capital of CAPPREC, during the last three years preceding the Last Practicable Date

3.2.2 African Resonance, Rinwell, Dashpay and Synthesis

3.2.2.1 Neither African Resonance, Rinwell nor Dashpay have issued or offered any securities in their respective share capitals that are material to CAPPREC during the three years preceding the Last Practicable Date nor have there been any alterations in the capital of African Resonance during the last three years preceding the Last Practicable Date.

3.2.2.2 Save as described below, Synthesis has not issued or offered any securities in its share capital that is material to CAPPREC nor have there been any alterations in the capital of Synthesis, during the three years preceding the Last Practicable Date.

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3.2.2.2.1 On 15 October 2015, 1 000 ordinary shares, with a par value of R1 each, in the share capital of Synthesis, were converted into 10 000 ordinary, with a par value of R0.10 each;

3.2.2.2.2 on 15 October 2015, 10 000 class B shares, with a par value of R0.10 each, were issued and allotted, pursuant to which each of Mr JE Cohen (“Cohen”), Michael Shapiro, the JS Family Trust and Tom Wells acquired 2 375 class B shares and Steyn Basson acquired 500 class B shares;

3.2.2.2.3 on 24 February 2016, Cohen transferred to (i) each of Michael Shapiro, the JS Family Trust and Tom Wells 1 000 ordinary shares and 791 class B shares and (ii) the JS Family Trust an additional two class B shares;

3.2.2.2.4 on 30 April 2016, Michael Shapiro transferred 32 ordinary shares and 39 class B shares to Steyn Basson;

3.2.2.2.5 on 30  April  2016, the JS Family Trust transferred 32 ordinary shares and 41 class B shares to Steyn Basson; and

3.2.2.2.6 on 30 April 2016, Tom Wells transferred 32 ordinary shares and 39 class B shares to Steyn Basson;

3.2.2.2.7 as a result of the alterations referred to in paragraphs 3.2.2.2.1 through 3.2.2.2.6, as of 30 April 2016, (i) Michael Shapiro held 3 950 ordinary shares and 3 127 class B shares, (ii) the JS Family Trust held 3 950 ordinary shares and 3 127 class B shares, (iii) Tom Wells held 1 450 ordinary shares and 3 127 class B shares, and (iv) Steyn Basson held 650 ordinary shares and 619 class B shares.

3.3 Subdivisions or consolidations

Save as described in paragraph 3.2.1 above, there have been no consolidations or sub-divisions of securities of CAPPREC since the date of its incorporation.

3.4 Other listings

Other than the listing of the Ordinary Shares pursuant to the Listing, no securities of CAPPREC are listed on any other stock exchange.

3.5 Issue of Shares

3.5.1 The issue of authorised but unissued securities of CAPPREC are governed by the MOI, and summary of the relevant provisions is set out in Appendix 6 to these Revised Listing Particulars.

3.5.2 As of the last Practicable Date, no new Shares have been issued since the Listing. As part of the Proposed Transactions, it is envisaged that CAPPREC will issue and allot the AR Consideration Shares to the respective African Resonance Shareholders in accordance with the AR Agreement, issue and allot the Restraint Shares to Eitan Neishlos in accordance with the Restraint and Warrant Agreement, grant the Warrants to Castledash in accordance with the Restraint and Warrant Agreement and issue and allot the SST Consideration Shares to the respective SST Shareholders in accordance with the SST Agreement. These envisaged corporate actions have been authorised by the Board on 13 January 2017 in accordance with the Listings Requirements.

3.5.3 It is not envisaged to issue CAPPREC Shares simultaneously or almost simultaneously with the issuance of CAPPREC Shares in terms of the Proposed Transactions.

3.6 Options or preferential rights in respect of securities

3.6.1 As of the Last Practicable Date, CAPPREC had established the ‘Capital Appreciation Share Option Plan’ to enable officers and employees of the CAPPREC group to acquire Ordinary Shares in order to provide them with an incentive to advance the CAPPREC group’s interests, and to promote an identity of interests with CAPPREC Shareholders. Options will only be granted in terms of the ‘Capital Appreciation Share Option Plan’ after CAPPREC has successfully Completed an acquisition of a Viable Asset.

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3.6.2 The aforementioned ‘Capital Appreciation Share Option Plan’ was approved by an ordinary resolution (with a 75% majority of the votes cast in favour) passed by the CAPPREC Shareholders on 8 September 2015, in accordance with Schedule 14 of the Listings Requirements.

3.6.3 In terms of the proposed AR Acquisition, it will be proposed to the CAPPREC Shareholders, as contemplated in the Notice of General Meeting, to amend and restate the Share Plan in order to make the management of the Share Plan more efficient and effective and flexible to the future needs of the CAPPREC group. The aforementioned proposed approval by CAPPREC Shareholders will be tabled in accordance with Schedule 14 of the Listings Requirements.

3.6.4 Save for the Warrants and the SST Consideration Shares, there is no contract or arrangement, either actual or proposed, whereby any option or preferential right has been or will be given to any person to subscribe for CAPPREC Shares or any shares in African Resonance, Rinwell, Dashpay or Synthesis.

3.7 Controlling and major CAPPREC Shareholders

3.7.1 The table below reflects, as of the Last Practicable Date, the major CAPPREC Shareholders, that are known to the Directors, and who beneficially hold, directly or indirectly, an interest of 5% or more of the CAPPREC Shares currently in issue, as well as the impact of the Proposed Transactions on these CAPPREC Shareholders and the CAPPREC Shareholders who will, after Completion of the Proposed Transactions, hold 5% or more of the CAPPREC Shares in issue:

As of Last Practicable DateOn Completion

of the Proposed Transactions

Shareholder

Number ofCAPPREC

Shares

Percentageholding of

CAPPRECShares

Number ofCAPPREC

Shares

Percentageholding of

CAPPRECShares

PIC 333 333 333 27.00 333 333 333 21.79CAET 75 000 000 6.00 75 000 000 4.90Michael Pimstein 55 903 543 4.47 55 903 543 3.66Bradley Sacks 70 833 334 5.67 70 833 334 4.63Motty Sacks 40 973 750 3.28 40 973 750 2.68Alan Salomon 55 903 543 4.47 55 903 543 3.66Hanoch Neishlos – – 204 500 000 13.37

Total 631 947 500 50.89 836 447 500 54.69

3.7.2 The Founders entered into the Founders Agreement in terms of which they have undertaken to vote the CAPPREC Shares they hold in the manner described in paragraph 10 of the Circular and paragraph 4.1.6 of these Revised Listing Particulars.

3.7.3 There has been no change in the controlling Shareholder/s of CAPPREC during the five years preceding the Last Practicable Date, save for those changes described in paragraph 3.2 of these Revised Listing Particulars.

3.7.4 There has been no change in the controlling shareholder/s of African Resonance during the five years preceding the Last Practicable Date.

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4. DIRECTORS AND MANAGEMENT

4.1 Directors and experience of Directors

4.1.1 The full names, ages, designations, business addresses and a brief description of the expertise and experience of the current Directors are outlined below:

Michael Reuven Pimstein (62)Nationality: South AfricanBusiness address: 4th Floor, One Vdara, 41 Rivonia Road, Sandhurst,

South AfricaDate appointed: 3 March 2015Qualifications: BComm Acc (Wits)Occupation: Director of companiesPosition: Joint Chief Executive OfficerBackground Michael has more than 30 years’ experience as a senior

executive in the steel, engineering and manufacturing sector having served as chief executive officer of Macsteel Service Centres SA, a position he held from 1999 through 2013. Michael has been and is a member of various government, labour and business committees that address industrial policy, growth and development plans, infrastructure requirements and investment, labour mediation and wage negotiations. Michael is the President of the Steel and Engineering Industries Federation of Southern Africa and has served as President of the Southern African Stainless Steel Development Association and President of the Association of Steel Service Centres. He served on the advisory committee of The Adopt-A-School Foundation.

Bradley Jonathan Sacks (49)Nationality: South African/United States of AmericaBusiness address: 590 Madison Avenue, New York, NY, 10022, United StatesDate appointed: 15 March 2015Qualifications: BEconSc (Wits), MBA/JD (Honors) (Duke University School

of Business and School of Law)Occupation: Principal investorPosition: Joint Chief Executive OfficerBackground Bradley has more than 20 years’ experience in the financial

services and investment business. Bradley was the managing partner of Centric. Previously Bradley was a managing director, global head of technology, media and telecommunications mergers & acquisitions for Bank of America. Bradley was also an investment banker with Citigroup, having started his investment banking career at Salomon Brothers. Bradley started his professional career as an associate in the corporate department of Fried, Frank, Harris, Shriver & Jacobson, a law firm based in New York, United States. Over the course of his career Bradley has been involved in evaluating, advising and investing in strategic and financing transactions with an aggregate value exceeding US$100 billion. Among others, Bradley is a director of various private companies in which Centric has invested, giving him extensive experience in the operational management of these portfolio companies.

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Alan Charles Salomon (68)Nationality: South AfricanBusiness address: 4th Floor, One Vdara, 41 Rivonia Road, Sandhurst,

South AfricaDate appointed: 3 March 2015Qualifications: BSc Hons (University of London), CA (SA)Occupation: Director of companiesPosition: Chief Financial OfficerBackground Alan has more than 35 years’ experience as a senior

executive in an array of financial services and industrial sectors. Alan served as the chief executive officer of Bidvest Bank, a subsidiary of The Bidvest Group Limited, a position he held for 8 years. In addition to banking and financial services, Alan has also held executive management positions in waste management and waste recycling, stationery, packaging, catering equipment, services, property, import and export and distribution. He also has extensive experience in various manufacturing businesses. Other directorships held by Alan include executive director of The Bidvest Group Limited (from 1990 to 2012), chief executive officer of AFCOM Group Limited, non-executive director of Transpaco Limited, non-executive director of Voltex Limited and non-executive director of Enviroserv Holdings Limited.

Michael (Motty) Ivan Sacks (74)Nationality: South AfricanBusiness address: 4th Floor, One Vdara, 41 Rivonia Road, Sandhurst,

South AfricaDate appointed: 3 March 2015Qualifications: CA (SA), AICPA (Isr)Occupation: Director of companiesPosition: Non-executive director and ChairpersonBackground Motty has more than 45 years’ experience as a consultant,

adviser and mentor to numerous local and foreign companies and executives. He has also held executive and non-executive office in various business sectors, including healthcare, financial services, technology, education, property and manufacturing. Motty was a co-founder of Netcare Limited, having served as its executive chairman for 12 years and thereafter as non-executive chairman and non-executive director. Motty was also a co-founder and chairman of Aplitec Limited (now Net 1) and co-founder of and mentor to black economic empowerment controlled Afrocentric Investment Corporation Limited. Motty has served as chairman and/or director on several boards including, Fedsure Holdings, Federated Employers Mutual, The Automobile Association, Clinic Holdings Limited, Advtech Limited, The International Association of Political Consultants and, more recently, was appointed an independent non-executive director of Adcock Ingram Limited.

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Dr Daniel (Dan) Matjila (54)Nationality: South AfricanBusiness address: Block C, Riverwalk Office Park, 41 Matroosberg

Road, Ashlea Gardens Extension 6, Menlo Park, Pretoria, South Africa

Date appointed: 18 September 2015Qualifications: Ph.D. (Wits), M.Sc. (Rhodes),

B.Sc. Hons (Fort Hare)Occupation: Chief executive officer, PICPosition: Non-executive directorBackground Dan is a senior leader and respected figure in the investment

management industry and has substantial expertise and experience as a finance and investment specialist, investment risk management specialist and investment strategist. Dan is the chief executive officer of PIC where he is responsible for managing and investing funds for a diversified group of clients. He joined PIC in 2003 as a Risk Manager before being promoted to the position of the chief investment officer and executive director in 2005. Dan is also currently a non-executive director and board member at Afrisam Limited, Entabeni Holdings, Inc. (chairman) and Harith General Partners. Prior to joining PIC, he was the senior manager quantitative research analysis for Stanlib, and before that he worked for Anglo American where he was the senior manager of quantitative research analysis. Dan started his career as a senior mathematics lecturer at the University of the North and worked in academia for over nine years.

Roshan Morar (48)Nationality: South AfricanBusiness address: Ground Floor, Nedbank House, 161 Pietermaritz Street,

Pietermaritzburg 3201, South AfricaDate appointed: 14 September 2015Qualifications: CA (SA), CFEOccupation: Managing director, Morar IncorporatedPosition: Non-executive directorBackground Roshan is a chartered accountant and the managing director

of Morar Incorporated, Public Accountants and Auditors. Roshan is the non-executive deputy chairman of PIC. He also serves as the non-executive deputy chairman of the Airports Company (SOC) Limited, is a non-executive director of the South African National Road Agency (SOC) Limited and a non-executive director of Adcock Ingram Holdings Limited.

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Bukelwa Bulo (39)Nationality: South AfricanBusiness address: Unit 7 One on Cross, 1 Cross Street, Bryanston, 2196,

South AfricaDate appointed: 14 September 2015Qualifications: BBusSc, CA (SA)Occupation: Chartered accountantPosition: Independent non-executive directorBackground Bukelwa is a founder and executive director of Jade Capital, a

principal investment firm with a focus on the property sector, including direct property investments as well as investments in property services companies. She started her career in finance with Investec Limited as part of their TOPP programme. Bukelwa soon moved into Investec’s private equity division where she was intimately involved in various investments made by the group in companies in the hospitality, quick service restaurant, industrial services, engineering, retail and wholesale sectors. Bukelwa is a director of Unispan Holdings Proprietary Limited and Franki Geotechnical Proprietary Limited having first been exposed Franki as an Investec representative prior to Franki’s joining with Esor. Bukelwa is also a trustee of the Franki Africa Employee and Community Trust. Bukelwa completed the program for leadership development at the Harvard Business School.

Jacob Meyer Kahn (77)Nationality: South AfricanBusiness address: 4th Floor, One Vdara, 41 Rivonia Road, Sandhurst,

South AfricaDate appointed: 20 September 2015Qualifications: BA (Law), MBA, DCom (hc)Occupation: Director of companiesPosition: Independent non-executive directorBackground Jacob is the former chairman and group managing director of

the former SABMiller Plc having joined that company in 1966 and retired in 2012. During 1997 to 1999 he was seconded full-time to the South African Police Service as its chief executive officer and was awarded the South African Police Star for outstanding service in 2000. Jacob is a non-executive director of Netcare Limited and is currently its acting chairman. He is a co-founder and non-executive director of Afrocentric Investment Holdings Limited. Jacob has served on the boards of numerous companies, has been active in various charitable and civic organisations and has been recognised with various business and leadership awards over his career.

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Victor Sekese (50)Nationality: South AfricanBusiness address: 20 Morris Street East, Woodmead, 2191, South AfricaDate appointed: 17 September 2015Qualifications: BComm (Wits), BAcc (Wits), CA (SA)Occupation: Chief executive officer, SizweNtsalubaGobodoPosition: Independent non-executive directorBackground Victor is the past national vice chairman of the South African

Institute of Chartered Accountants. He has also served as the chairman of the audit committee and as a member of the strategy committee of the South African Institute of Chartered Accountants. Victor is active in the accounting profession having served on the board of the South African Institute of Chartered Accountants for the last ten years. He is also past national president of the Association for the Advancement of Black Accountants.Victor is the chief executive officer of SizweNtsalubaGobodo, the largest national black owned accounting firm and fifth largest national audit and accounting firm in Southern Africa. He has extensive audit and consulting experience in various industries such as transport, logistics, energy and the public sector.He is a former member of the Assurance and Auditing Standards Committee, a committee of the Independent Regulatory Board for Auditors, which is tasked with setting Auditing Standards in South Africa.

Charles Valkin (82)Nationality: South AfricanBusiness address: 165 West Street, Sandton, 2196, South AfricaDate appointed: 18 September 2015Qualifications: BComm LLB (Wits), H Dip Tax (Wits)Occupation: AttorneyPosition: Independent non-executive directorBackground Charles was the most senior partner in Bowman Gilfillan’s

corporate, commercial and financial services department. He has extensive experience in mergers & acquisitions and financing transactions. Chambers and Partners has regularly ranked him as one of South Africa’s foremost corporate/mergers & acquisition and banking and finance lawyers. Charles has been the lead lawyer in some of the largest transactions in which Bowman Gilfillan firm has acted as legal advisers. Charles is currently working on a full time basis as a Special Counsel to Bowman Gilfillan.

The names of all companies and partnerships of which each current Director referred to above has been a director or partner at any time in the five years prior to the Last Practicable Date (indicating whether or not the Director is still a director or partner and excluding subsidiaries of any such company of which he is also a director) are set out in Section 1 of Appendix 1 to these Revised Listing Particulars.

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4.1.2 The full names, ages, designations, business addresses and a brief description of expertise and experience of the current African Resonance Directors, are outlined below:

Tumi Frazier (47)Nationality: South AfricanBusiness address: 52 & 54 Melville Road, Illovo, Sandton 2196, South AfricaDate appointed: 1 December 2015Qualifications: BA Psychology (Rand Afrikaans University), Certified

Executive and Professional Coaching (Cape Town, Graduate School of Business)

Occupation: International professional speaker, author & executive coachPosition: Human Capital Manager and DirectorBackground Tumi holds a BA Psychology degree from the University of

Johannesburg (then the Rand Afrikaans University) and is a Certified Executive and Professional Coach, a qualification she obtained from the University of Cape Town Graduate School of Business. Tumi is the leadership and change expert responsible for human capital matters at African Resonance. Tumi combines psychology and coaching disciplines, business-consulting skills with an in-depth understanding of languages, and organisational cultures. Tumi has extensive organisational development and business process re-engineering experience and is an author of four books in the field of personal development.

Christian van der Merwe (38)Nationality: South AfricanBusiness address: 52 & 54 Melville Road, Illovo, Sandton 2196, South AfricaDate appointed: 27 March 2017Qualifications: Chartered management accountantOccupation: Financial Manager Position: Financial Manager and DirectorBackground Christian holds a number of accounting qualifications and is

an Associate of the Chartered Institute of Management Accountants (SA), a Chartered Global Management Accountant, through the American Institute of Certified Public Accountants/Chartered Institute of Management Accountants, and a Certified Practicing Accountant (Australia). Christian manages the accounting, financial management and internal reporting functions of African Resonance. He joined African Resonance in 2006. Prior to joining African Resonance, Christian worked for WBHO for a number of years.

The names of all companies and partnerships of which each current African Resonance Director referred to above has been a director or partner at any time in the five years prior to the Last Practicable Date (indicating whether or not the African Resonance Director is still a director or partner and excluding subsidiaries of any such company of which he is also a director) are set out in Section 2 of Appendix 1 to these Revised Listing Particulars.

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4.1.3 The full name, age, designation, business address and a brief description of expertise and experience of Hanoch Neishlos, as founder of African Resonance, are outlined below:

Professor Hanoch Neishlos (69)Nationality: South AfricanBusiness address: 52 & 54 Melville Road, Illovo, Sandton 2196, South AfricaQualifications: Dr Sc.Occupation: ExecutivePosition: FounderBackground African Resonance was founded by Professor Hanoch

Neishlos. Hanoch has a wealth of experience in the payment and technology industries, holding the title of professor of Computer Science (Dr. Sc.). Additionally, Hanoch is the former ISM Chair and Head of Computer Science at the University of Witwatersrand, former South African representative to the International Federation for Information Processing (IFIP). Hanoch was also previously a founder of SEPCO Proprietary Limited (sold to Datacor Group) and co-founder of Aplitec/Net 1 Limited (listed on the JSE and NASDAQ).

4.1.4 The full names, ages, designations, business addresses and a brief description of expertise and experience of senior managers of African Resonance, are outlined below. These senior managers are in addition to the African Resonance Directors, whose details are provided in paragraph 4.1.2 above.

Nicci Redford (31)Nationality: South AfricanBusiness address: 52 & 54 Melville Road, Illovo, Sandton 2196, South AfricaDate appointed: 1 March 2012Qualifications: LLB (RAU), notary publicOccupation: Non-practicing attorneyPosition: Legal ManagerBackground Nicci holds an LLB degree from the University of

Johannesburg (then the Rand Afrikaans University), is an admitted attorney of the High Court of South Africa and has completed a Certificate in Advanced Commercial Law through Legal Education and Development South Africa, in co-sponsorship with the International Senior Lawyers Program. Nicci is responsible for all legal aspects of the business of African Resonance and its affiliates and is intimately involved and experienced in negotiating high value transactions with African Resonance’s institutional clients.

Donn Engelbrecht (48)Nationality: South AfricanBusiness address: 52 & 54 Melville Road, Illovo, Sandton 2196, South AfricaDate appointed: 4 April 2016Qualifications: International Marketing Management (Wits)Occupation: Operations ManagerPosition: Executive and general manager of African ResonanceBackground Donn holds a degree in International Marketing Management

from the University of the Witwatersrand. Donn, who is responsible for the operations of African Resonance, has 10 years of executive leadership experience in the card and payments industry and has an in depth knowledge and understanding of this industry. Donn has extensive experience in managing card payments businesses as well as complex card projects. Prior to joining African Resonance, Donn held executive roles at The Standard Bank of South Africa Limited as well as Barclays Africa Group Limited (formerly Absa Group Limited).

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The names of all companies and partnerships of which each current senior manager of referred to above has been a director or partner at any time in the five years prior to the Last Practicable Date (indicating whether or not the African Resonance Director is still a director or partner and excluding subsidiaries of any such company of which he is also a director) are set out in Section 3 of Appendix 1 to these Revised Listing Particulars.

4.1.5 The full names, ages, designations, business addresses and a brief description of expertise and experience of the current SST Directors and key management are outlined below:

Michael Shapiro (44)Nationality: South AfricanBusiness address: Melrose Arch, 3 Melrose Arch Boulevard, 2nd Floor, Unit 11,

Gauteng, South AfricaDate appointed: 1 October 2004Qualifications: BSc (Wits)Occupation: Director and engineerPosition: Managing director of SynthesisBackground As managing director of Synthesis, Michael leads the strategy,

marketing, sales entrepreneurship and customer satisfaction for the company. Michael obtained a BSc in Electrical Engineering degree from the University of the Witwatersrand in 1995. Prior to joining Synthesis he held various positions at Internet Solutions, Dimension Data and Miraculum. Michael is passionate about technology and has been active in the software development domain for the past 20 years.

Jake Shepherd (48)Nationality: South AfricanBusiness address: Melrose Arch, 3 Melrose Arch Boulevard, 2nd Floor, Unit 11,

Gauteng, South AfricaDate appointed: 4 May 2004Qualifications: BSc (Wits)Occupation: Director and engineerPosition: Technical director of SynthesisBackground Jake holds a BSc in Electrical Engineering from the University

of the Witwatersrand and is a co-founder of Synthesis. He has extensive software engineering experience, having consulted to companies in the telecommunications, industrial and financial services sectors. His areas of focus include software design methodologies, software architecture, software design, and development of business-critical applications. In addition Jake has significant experience in various banking fields including regulatory, payments and finance.

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Thomas Wells (36)Nationality: South AfricanBusiness address: Melrose Arch, 3 Melrose Arch Boulevard, 2nd Floor, Unit 11,

Gauteng, South AfricaDate appointed: 24 February 2016Qualifications: BSc (Rhodes)Occupation: DirectorPosition: Executive director of SynthesisBackground Tom holds a BSc (Information Systems) Honours in

Computer Science from Rhodes University in Grahamstown which he completed in 2000. Tom joined Synthesis in 2004 as divisional director for digital channels. Tom leads the digital channels, cloud adoption and big data strategic business units as well as heads up SynthesisLabs (which is the research and development division of Synthesis) currently researching blockchain technology at Synthesis.Tom’s passion is in the field of applied cryptography, functional programming, distributed computing and the secure software development lifecycle. Tom is obsessed with developing scalable cloud native software with strong functional and security principles baked in at the core. Tom is well known as a thought leader in cloud architecture, big Data, information security and building secure digital platforms in South Africa and is a sought after and respected personality within the industry.

Steyn Nel Basson (38)Nationality: South AfricaBusiness address: Melrose Arch, 3 Melrose Arch Boulevard, 2nd Floor, Unit 11,

Gauteng, South AfricaDate appointed: 15 January 2002Qualifications: MSc in Computer ScienceOccupation: Divisional DirectorPosition: Divisional Director of IntegrationBackground Steyn holds an MSc degree in Computer Science from the

University of Johannesburg. Steyn joined Synthesis in 2002 as a software engineer and was appointed to his current role as Divisional Director of Systems Integration in 2007. Steyn has extensive experience in the area of systems integration, with a particular focus on treasury systems, financial exchanges and other regulatory systems.

The names of all companies and partnerships of which each current SST Director and key management referred to above has been a director or partner at any time in the five years prior to the Last Practicable Date (indicating whether or not the SST Director is still a director or partner and excluding subsidiaries of any such company of which he is also a director) are set out in Section 3 of Appendix 1 to these Revised Listing Particulars.

4.1.6 Each Founder has undertaken to CAPPREC, and to each of the other Founders, to vote for the appointment and re-appointment of the current Directors for a period of at least two years commencing as of the date of the Listing, and to refrain from voting for the appointment of additional directors without the consent of the other Founders. Each Founder has also undertaken not to vote for the removal of, or to take any steps to remove or procure the removal of, any of the current Directors for at least two years from the date of Listing, except for just cause.

4.1.7 Save in respect of the appointment of CAPPREC’s company secretary as described in paragraph 6.2 of these Revised Listing Particulars or as envisaged in paragraph 4.1.8 below, neither the business of CAPPREC nor any part thereof, is managed or is proposed to be managed by a third party under a contract.

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4.1.8 Save for the proposed appointment of HNS with effect from Completion of the Proposed AR-DP Transaction, the respective businesses of each of African Resonance, Rinwell, Dashpay and Synthesis (or any part thereof) is not managed or proposed to be managed by a third party under a contract. African Resonance and HNS have entered into a written agreement pursuant to which HNS will render management, legal, financial, administrative, marketing, information technology, security, co-ordination and communication services to African Resonance and its affiliates in consideration for a fee, which fee equals the costs (and not more than such costs) of HNS that have been allocated to African Resonance and its affiliates in respect of rendering such services. As of the Last Practicable Date, the costs of HNS as referred to above to amount to approximately R730 062 on a monthly basis. As of the Last Practicable Date, the registered office of HNS is 54 Melville Road, Illovo, 2196, Johannesburg, South Africa. The services agreement referred to is available for inspection in accordance with paragraph 7 of these Revised Listing Particulars.

4.1.9 The founders of CAPPREC are the Founders.

4.2 Qualification, appointment, voting power, retirement and remuneration

4.2.1 A summary of the provisions of the MOI relating to the qualification and remuneration of Directors, any power (and any restriction thereto) enabling the Directors to vote on remuneration to themselves or any member of the Board, and the retirement of Directors is set out in Appendix 6 to these Revised Listing Particulars. A summary of the same provisions of the memorandum of incorporation of African Resonance is set out in Appendix 7 to these Revised Listing Particulars and in respect of the memorandum of incorporation of Synthesis in Appendix 8 to these Revised Listing Particulars.

4.2.2 Each of the persons referred to in paragraphs 4.1.1 through 4.1.5 has confirmed that s/he has not been involved in, and is not subject to, any:

4.2.2.1 bankruptcies, insolvencies or individual voluntary compromise arrangement;

4.2.2.2 business rescue plans and/or resolution proposed by any entity to commence business rescue proceedings, application having been made for any entity to begin business rescue proceedings, notices having been delivered in terms of Section 129(7) of the Companies Act, receiverships, compulsory liquidations, creditors voluntary liquidations, administrations, company voluntary arrangements, or any compromise or arrangement with creditors generally or any class of creditors of any company where such person is or was a director with an executive function at the time of any such event or within the preceding 12 months;

4.2.2.3 compulsory liquidations, administrations, partnership voluntary arrangements of any partnership where the individual was a partner at the time of such arrangements or within the preceding 12 months;

4.2.2.4 receiverships of any asset/s of such person or of a partnership of which the individual is or was a partner at the time thereof or within the preceding 12 months;

4.2.2.5 public criticism by statutory or regulatory authorities (including recognised professional bodies) or disqualified by a court from acting as a director or in the management or conduct of the affairs of any company;

4.2.2.6 offence involving dishonesty;

4.2.2.7 removal from an office of trust, on the grounds of misconduct and involving dishonesty; or

4.2.2.8 order granted by court declaring the person delinquent or placing the person under probation in terms of section 162 of the Companies Act and/or section 47 of the Close Corporations Act, 69 of 1984, or disqualification by a court to act as a director in terms of section 219 of the Companies Act, 61 of 1973.

4.3 Borrowing powers

4.3.1 Until such time as CAPPREC successfully Completes the acquisition of a Viable Asset, CAPPREC’s borrowing powers are limited as envisaged in the Listings Requirements. Post the successful Completion of the Proposed Transactions, the borrowing powers of CAPPREC exercisable by the Directors will be unlimited, subject to compliance with applicable law. The borrowing powers of CAPPREC may not be varied unless a special resolution has been passed by the CAPPREC Shareholders.

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4.3.2 The borrowing powers of the African Resonance Directors, the Rinwell directors, the Dashpay directors and the SST Directors are identical to those of CAPPREC.

4.3.3 The borrowing powers of the Directors, the African Resonance Directors and the SST Directors have not been exceeded during the three years preceding the Last Practicable Date and no exchange control or other restrictions have been imposed on the CAPPREC group’s borrowing powers in that period.

4.4 Directors’ service contracts

4.4.1 The Directors do not have service contracts in respect of their appointment as Directors but are appointed as Directors in terms of letters of appointment. Salient details of the letters of appointment were disclosed in the Pre-Listing Statements, a copy of which is available on CAPPREC’s website (www.capitalappreciation.co.za) and are available for inspection in accordance with paragraph 7 of these Revised Listing Particulars.

4.4.2 The African Resonance Directors do not have service contracts in respect of their appointment as directors but are appointed as directors in terms of letters of appointment. Hanoch Neishlos’ proposed service contract (including his terms of remuneration), which contract is envisaged to become effective on Completion of the Proposed AR-DP Transaction, is available for inspection in accordance with paragraph 7 of these Revised Listing Particulars.

4.4.3 The SST Directors do not have service contracts in respect of their appointment as directors but are appointed as directors in terms of letters of appointment. The proposed service contracts of the SST Directors in their capacity of employees of Synthesis (including their terms of remuneration), which contracts are envisaged to become effective on Completion of the Proposed SST Transaction, are available for inspection in accordance with paragraph 7 of these Revised Listing Particulars.

4.5 Directors emoluments and incentives

4.5.1 Up to the Last Practicable Date, the executive Directors were not remunerated. The non-executive Directors were remunerated R20  000 per Directors’ meeting attended for services rendered to CAPPREC, save for Motty Sacks who has waived such remuneration. The expected annual remuneration for the executive Directors has not been determined yet and will be established by CAPPREC’s remuneration committee post Completion of the Proposed Transactions, all in accordance with CAPPREC’s remuneration policy, subject to any such corporate approval/s as may be required.

4.5.2 No fees have been paid to any third party in lieu of Directors’ fees.

4.6 Commissions paid

4.6.1 A commission was paid to Macquarie First South Capital Proprietary Limited in terms of the Placement Agreement, as bookrunner in relation to the Listing. No commissions have been paid or will be paid to an underwriter or promotor (as such terms are defined in the Listings Requirements) in respect of the Proposed Transactions.

4.6.2 Other than as disclosed in the Pre-listing Statements in relation to the Listing, no commissions have been paid, no discounts, brokerages or other special terms have been granted in connection with the issue or sale of any CAPPREC Shares which have not been disclosed in any audited annual financial statements.

4.7 Preliminary expenses and issue expenses

4.7.1 CAPPREC’s estimated costs of preparing and distributing this Circular, preparing and holding the General Meeting and preparing and implementing the Proposed Transactions, including the fees payable to professional advisers, are approximately R14 823 000 (including VAT), and include the following:

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Cost R’000

Legal adviser Proposed AR-DP Transaction – Webber Wentzel 3,714Legal due diligence Proposed AR-DP Transaction – Webber Wentzel 2,109Legal adviser and due diligence Proposed SST Transaction – Webber Wentzel 2,112Sponsor – Investec 1,083Auditors and Independent Reporting Accountants – EY 656Financial due diligence Proposed AR-DP Transaction – EY 2,044Financial due diligence Proposed SST Transaction – EY prospects 878Working capital report AR-DP and SST – EY 547Purchase price allocation AR-DP 490Purchase price allocation SST 285Transfer Secretary and Strate fees 57Exchange control fees 23JSE listing and documentation fees 311Competition commission fees 57Printing 172

Other 285

Total 14 823

4.7.2 CAPPREC has not incurred any expenses in relation to the Proposed Transactions during the three years preceding the issuance of the Circular, save for the expenses outlined in paragraph 4.7.1 above.

4.7.3 The African Resonance Shareholders are responsible for their own costs in concluding the AR Acquisition. Castledash is responsible for its own costs in concluding the Rinwell Acquisition.

4.8 Directors’ interests

4.8.1 The direct and indirect interests of the Directors and their associates (including a director who resigned during the last 18 months) in the share capital of CAPPREC as of the Last Practicable Date and post the successful Completion of the Proposed Transactions are set out below:

Directors

Redeem-able

Shares

Constit-uent

Shares

TotalShares

LastPractic-

able Date

Total %Last

Practic-able

Date

TotalShares

postComple-

tionProposedTransact-

ions

Total %post

Complet-ion

ProposedTransact-

ions

ExecutiveMichael Pimstein 55 903 542 1 55 903 543 4.47 55 903 543 3.66Bradley Sacks 70 833 333 1 70 833 334 5.67 70 833 334 4.63Alan Salomon 55 903 542 1 55 903 543 4.47 55 903 543 3.66

Non-executiveMotty Sacks 40 973 750 1 40 973 751 3.28 40 973 751 2.68JM Kahn 3 600 000 – 3 600 000 0.29 3 600 000 0.24R Morar 100 000 – 100 000 0.01 100 000 0.01C Valkin 250 000 – 250 000 0.02 250 000 0.02

Total 227 564 167 4 227 564 171 18.21 227 564 171 14.88

Note: there has been no change in the shareholding of the Directors between the end of CAPPREC’s financial year ended 30 March 2016 and the Last Practicable Date.

4.8.2 Save for being a CAPPREC Shareholder, no Director and no director of any of its subsidiaries (including a director who has resigned during the last 18 months), has or had any material beneficial interest, directly or indirectly, in any transaction that were affected by CAPPREC:

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4.8.2.1 during the current financial year or immediate preceding financial year; or

4.8.2.2 in any previous financial year, which remains in any respect outstanding or unperformed.

4.8.3 Save for being a CAPPREC Shareholder, none of the Directors has had any, direct or indirect, material beneficial interest in, and no promoter has had any, direct or indirect material beneficial interest in:

4.8.3.1 the promotion of CAPPREC; or

4.8.3.2 any material asset or property acquired by CAPPREC or to be acquired by CAPPREC out of the proceeds raised as a result of the CAPPREC Shares being listed on the JSE.

4.8.4 Save as contemplated in paragraph 4.5 of these Revised Listing Particulars, no sums have been paid, or agreed to be paid to any Director or to any company in which he is beneficially interested, directly or indirectly, or of which he is a director (“association company”) or to any partnership, syndicate or other association of which he is a member (“associate entity”), in cash, securities or otherwise, by any person, either to induce him to become, or to qualify him as a Director or otherwise for services rendered by him or by the associate company or the associate entity in connection with the promotion or formation of CAPPREC.

4.8.5 Save as otherwise disclosed in the Circular, none of the Directors has had any beneficial interest, either directly or indirectly, in transactions that were effectuated by CAPPREC during the current or immediately preceding financial year.

4.9 Directors’ responsibility statement

4.9.1 The Directors, whose names are given in paragraph  4.1.1 of these Revised Listing Particulars, collectively and individually accept full responsibility for the accuracy of the information furnished and certify that to the best of their 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 and that Revised Listing Particulars contain all information required by the Listings Requirements.

5. FINANCIAL INFORMATION

5.1 Distributions

5.1.1 CAPPREC will not make any distributions prior to the successful Completion of an acquisition of a Viable Asset or, in the case were no Viable Asset is acquired within the period as prescribed in the Listings Requirements, prior to the redemption of the Shares, as further described in paragraph 3.2.1.7 of these Revised Listing Particulars.

5.1.2 Following the successful implementation of an acquisition of a Viable Asset by CAPPREC and for so long as is required by the Listings Requirements, any unclaimed distributions must be held in trust, subject to prescription laws.

5.1.3 The record date for the purpose of determining which holders of CAPPREC Shares are entitled to receive any distribution will be determined by the Board in accordance with the Companies Act, the Listings Requirements and the MOI.

5.1.4 As of the Last Practicable Date, the Directors are unaware of arrangements under which future dividends are waived or agreed to be waived.

5.2 Market value of the Shares

5.2.1 An overview of the aggregate volumes and values of the Ordinary Shares traded on the JSE, including the highest and lowest Ordinary Share prices for (i) each month over the twelve months, and (ii) the last thirty days, preceding the Last Practicable Date is attached hereto as Appendix 9 to these Revised Listing Particulars.

5.3 Financial information of CAPPREC

5.3.1 The historical financial information of CAPPREC showing the audited results of CAPPREC for the financial year ended 31 March 2016 is available on CAPPREC’s website (www.capitalappreciation.co.za), and are the responsibility of the Directors and are hereby incorporated by reference.

5.3.2 The interim financial information of CAPPREC for the interim period ended 30 September 2016 is annexed as Annexure 3 of the Circular, and is the responsibility of the Directors.

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5.3.3 EY’s independent reporting accountants’ report on the interim financial information of CAPPREC appears in Annexure 4 to the Circular.

5.4 Financial information of African Resonance

5.4.1 The historical financial information of African Resonance for the financial years ended 28 February 2014, 28 February 2015 and 29 February 2016 is presented in Annexure 5 to the Circular, and is the responsibility of the Directors.

5.4.2 Grant Thornton’s independent reporting accountants’ report on the historical financial information of African Resonance appears in Annexure 6 to the Circular.

5.4.3 The financial information of African Resonance for the interim period ended 31 August 2016 is presented in Annexure 7 to the Circular, and is the responsibility of the Directors.

5.4.4 Grant Thornton’s independent reporting accountants’ report on the interim financial information of African Resonance appears in Annexure 8 to the Circular.

5.5 Financial information of Rinwell and Dashpay

5.5.1 The historical financial information of Rinwell for the financial year ended 30 June 2016 is annexed as Annexure 9 of this Circular, and is the responsibility of the Directors. As Rinwell was incorporated on 27 May 2015, there is no historical financial information of Rinwell for any prior periods.

5.5.2 Grant Thornton’s independent reporting accountants’ report on the historical financial information of Rinwell appears in Annexure 9 to this Circular.

5.5.3 The interim financial information of Rinwell for the six-month period ended 30 June 2016 is annexed as Annexure 11 of this Circular, and is the responsibility of the Directors.

5.5.4 Grant Thornton’s independent reporting accountants’ report on the interim financial information of Rinwell appears in Annexure 12 to this Circular.

5.5.5 The historical financial information of Dashpay for the financial years ended 30 June 2015 and 30 June 2016 is presented in Annexure 13 to the Circular, and is the responsibility of the Directors. The audited historical financial information of Dashpay for the financial year ended 30 June 2014 is presented in Annexure 15 of the Circular, and is the responsibility of the Directors.

5.5.6 Grant Thornton’s independent reporting accountants’ report on the historical financial information of Dashpay for the financial years ended 30 June 2015 and 30 June 2016 presented in Annexure 13 appears in Annexure 15 to the Circular. KMPG’s independent reporting accountants’ report on the historical financial information of Dashpay for the financial year ended 30 June 2014 presented in Annexure 15 appears in Annexure 16 to this Circular.

5.6 Financial information of Synthesis

5.6.1 The historical financial information of Synthesis for the financial years ended 28 February 2014, 28 February 2015 and 29 February 2016 is presented in Annexure 17 to the Circular, and is the responsibility of the Directors.

5.6.2 BDO’s independent reporting accountants’ report on the historical financial information of Synthesis appears in Annexure 18 to the Circular.

5.6.3 The financial information of Synthesis for the interim period ended 31 August 2016 is presented in Annexure 19 to the Circular, and is the responsibility of the Directors.

5.6.4 BDO’s independent reporting accountants’ report on the interim financial information of Synthesis appears in Annexure 20 to the Circular.

5.7 Pro forma financial information of CAPPREC

Pro forma financial information of CAPPREC is presented in Annexure 1 to the Circular and is the responsibility of the Directors, while EY’s independent accountants report thereon is included as Annexure 2 to the Circular.

5.8 Advisers’ consents

Details of advisers’ consent/s are set out in paragraph 24 of the Circular.

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5.9 Working capital statement

The Directors are of the opinion that, following the Completion of the Proposed Transactions and provided Ordinary Resolution 5 described in the Notice of General Meeting is passed:

5.9.1 the CAPPREC group will be able, in the ordinary course of business, to pay its debts for a period of 12 (twelve) months after the date of these Revised Listing Particulars;

5.9.2 the assets of the CAPPREC group will be in excess of the liabilities of the CAPPREC group for a period of 12 (twelve) months after the date of these Revised Listing Particulars;

5.9.3 the share capital and reserves of the CAPPREC group will be adequate for ordinary business purposes for a period of 12 (twelve) months after the date of these Revised Listing Particulars; and

5.9.4 the working capital of the CAPPREC group will be adequate for ordinary business purposes for a period of 12 (twelve) months after the date of these Revised Listing Particulars.

5.10 Material changes

5.10.1 CAPPREC

5.10.1.1 There have been no material changes in the financial or trading positions of CAPPREC since the end of its last financial year ended 31 March 2016.

5.10.1.2 There have been no material changes in the business or trading objects of CAPPREC since its incorporation and thus within the past five years preceding these Revised Listing Particulars.

5.10.2 African Resonance

5.10.2.1 There have been no material changes in the financial or trading positions of African Resonance since the end of its last financial year ended 29 February 2016.

5.10.2.2 There have been no material changes in the business or trading objects of African Resonance within the past five years preceding these Revised Listing Particulars.

5.10.3 Rinwell

5.10.3.1 There have been no material changes in the financial or trading positions of Rinwell since the end of its last financial year ended 29 February 2016.

5.10.3.2 There have been no material changes in the business or trading objects of Rinwell within the past five years preceding these Revised Listing Particulars.

5.10.4 Dashpay

5.10.4.1 There have been no material changes in the financial or trading positions of Dashpay since the end of its last financial year ended 30 June 2016.

5.10.4.2 There have been no material changes in the business or trading objects of Dashpay within the past five years preceding these Revised Listing Particulars.

5.10.5 Synthesis

5.10.5.1 There have been no material changes in the financial or trading positions of Synthesis since the end of its last financial year ended 29 February 2016.

5.10.5.2 There have been no material changes in the business or trading objects of Synthesis within the past five years preceding these Revised Listing Particulars.

5.11 Material loans and receivables

5.11.1 As of the Last Practicable Date, CAPPREC has no material loans or loan capital outstanding. Save for the loans of African Resonance as described in paragraphs 5.11.2 and 5.11.3 below, African Resonance has no material loans or loan capital outstanding. Save for the loan granted by Rinwell to Dashpay as described in paragraph 5.11.3 below, neither Rinwell nor Dashpay has any material loans outstanding as of the Last Practicable Date. Save for the loans of Synthesis as described in paragraphs 5.11.5 and 5.11.7, Synthesis has no material loans outstanding as of the Last Practicable Date.

5.11.2 For business requirements, Sunlyn Proprietary Limited made available to African Resonance a loan on 19 July 2013. As of the Last Practicable Date, the amount due and outstanding amounts to

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R20 633 551 in the aggregate. In terms of the written main cession agreement, African Resonance is required to repay the amounts due to Sunlyn Proprietary Limited in accordance with the dates set out in the schedules to the main cession agreement. In terms of the facility, the yield rate payable to Sunlyn Proprietary Limited is approximately 13%. As security, African Resonance ceded its rights under two rental agreements to Sunlyn Proprietary Limited.

5.11.3 As part of the acquisition of Dashpay by Rinwell from Telesure, Rinwell acquired Telesure’s claims against Dashpay in an amount of R23 150 000. Following this acquisition of the shares and claims by Rinwell, Rinwell and Dashpay entered into a loan facility agreement on 27 November 2015 in terms of which it was recorded that Rinwell had made and was willing to make a facility available to Dashpay for drawdown to fund its business working capital requirements. The first draw down under the facility comprised of the sale claims acquired by Rinwell from Telesure. As of the Last Practicable Date, the amount due and outstanding under the facility amounts to R41 653 821 in the aggregate, of which R36 453 821 is subordinated as of the Last Practicable Date. In terms of the written facility loan agreement, Dashpay is required to repay the amount due to Rinwell, in whole or in part, upon demand of Rinwell and ultimately on 31 October 2036. Any advances made in terms of the facility are free of interest. No security has been provided by or on behalf of Dashpay to Rinwell for the loan facility since Rinwell is the sole shareholder of Dashpay. The director of Dashpay is Mr Yoav Duek, with business address at 52 & 54 Melville Road, Illovo, Sandton 2196, South Africa.

5.11.4 For business requirements, African Resonance made available to Dashpay a loan facility on 14 December 2015. As of the Last Practicable Date, the amount due and outstanding amounts to R3 250 000 in the aggregate. In terms of the written facility loan agreement, Dashpay is required to repay the amount due to African Resonance, in whole or in part, upon demand of African Resonance and ultimately on 13 December 2035. Any advances made in terms of the facility are free of interest. No security has been provided by or on behalf of Dashpay to African Resonance for the loan facility. The director of Dashpay is Mr Yoav Duek, with business address at 52 and 54 Melville Road, Illovo, Sandton 2196, South Africa.

5.11.5 For business requirements, The Standard Bank of South Africa Limited made available to Synthesis a medium term loan on 15 March 2016. As of the Last Practicable Date, the amount due and outstanding amounts to R10 347 166.63 in the aggregate. In terms of the written facility loan agreement, Synthesis is required to repay the amount due to The Standard Bank of South Africa Limited, in whole or in part, upon demand of The Standard Bank of South Africa Limited and ultimately on 14 March 2021. In terms of the facility, the interest rate is Prime plus 0.95%. An unrestricted cession of book debts, a guarantee limited to R4,300,000 from Michael Shapiro, a guarantee limited to R4,300,000 from Jake Shepherd and a guarantee limited to R4,300,000 from Tom Wells have been provided by or on behalf of Synthesis as security for the loan facility. Synthesis in turn advanced the amounts referred to in 5.11.7 to the STT Directors and manager referred to in 5.11.7 which amounts will be repaid by the SST Shareholders within five days of the closing of the SST Acquisition.

5.11.6 As of the Last Practicable Date, no loans have been made or security furnished by CAPPREC to or for the benefit of any Director, manager or any associate of a Director or manager of CAPPREC.

5.11.7 As of the Last Practicable Date, no loans have been made or security furnished by Synthesis to or for the benefit of any SST Director, manager or any associate of a SST Director or manager of SST other than the following shareholder loans made by Synthesis to or for the benefit of the SST Directors.

Name

Amount due, with an

interest rate of prime

plus 0.95%

Amount due, with an

interest rate of prime

minus 5%

Michael Shapiro R3,830,451 R258,362Jake Shepherd R2,922,429 R296,568Tom Wells R3,167,093 R2,312,979Steyn Basson R583,023 R8,627

Note: the loans referred to are unsecured and have no fixed terms of repayment. SST has the intention to call these loans on the fifth day after the closing of the SST Acquisition.

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5.12 Material inter-company financial and other transactions

5.12.1 As of the Last Practicable Date, neither CAPPREC nor Synthesis has entered into any inter-company financial and other transactions.

5.12.2 As of the Last Practicable Date and save for any income streams and/or costs in relation to the deregistration of Firefly which are not certain as at the Last Practicable Date as the deregistration of Firefly is ongoing and save for the loan described in paragraph 5.11.3 above, African Resonance has not entered into any material inter-company financial and other transactions. Save for the inter-company loan referred to in paragraphs 5.11.3 and 5.11.4 above, neither Rinwell nor Dashpay has entered into any material inter-company financial and other transactions.

5.13 Royalties

No royalties or other items of a similar nature are payable by CAPPREC, African Resonance or SST to any person.

5.14 Leases

5.14.1 As of the Last Practicable Date, CAPPREC does not hold or occupy any principal immovable property other than the following lease:

Lessor Praxley

Property type Office

Location 4th Floor, One Vdara, 41 Rivonia Road, Sandhurst, 2196, South Africa

Rental (incl VAT) R75 600

Lease terms ending 30 November 2017

Area Approximately 304m²

5.14.2 As of the Last Practicable Date, African Resonance does not hold or occupy any principal immovable property other than the following lease:

Lessor Ravensmead Trading Proprietary Limited

Property type Office

Location 52 & 54 Melville Road, Illovo, Sandton 2196, South Africa

Rental (ex VAT) R333 253 per month

Lease terms ending 31 August 2019

Area Approximately 1 137m²

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5.14.3 As of the Last Practicable Date, Synthesis does not hold or occupy any principal immovable property other than the following lease:

Lessor Entelect Solutions Proprietary Limited

Property type Office

Location Melrose Arch, 3 Melrose Arch Boulevard, 2nd Floor, Unit 11, Gauteng, South Africa

Rental (ex VAT) R80 505.74 per month

Lease terms ending 30 September 2019

Area Approximately 400m²

6. GENERAL INFORMATION

6.1 Material contracts

6.1.1 Save for the contracts set out in Appendix 2 to these Revised Listing Particulars, no material contracts have been entered into by CAPPREC, being restrictive funding arrangements and/or contracts entered into otherwise than in the ordinary course of business and (i) within the two years prior to the date of these Revised Listing Particulars or, (ii) at any other time where such agreement contains an obligation or settlement that is material to CAPPREC or its subsidiaries as of the date of these Revised Listing Particulars.

6.1.2 Save for the contracts set out in Appendix 3 to these Revised Listing Particulars, no material contracts have been entered into by African Resonance, being restrictive funding arrangements and/or contracts entered into otherwise than in the ordinary course of business and (i) within the two years prior to the date of these Revised Listing Particulars or, (ii) at any other time where such agreement contains an obligation or settlement that is material to CAPPREC or its subsidiaries as of the date of these Revised Listing Particulars.

6.1.3 Save for the contracts set out in Appendix 4 to these Revised Listing Particulars, no material contracts have been entered into by Rinwell or Dashpay, being restrictive funding arrangements and/or contracts entered into otherwise than in the ordinary course of business and (i) within the two years prior to the date of these Revised Listing Particulars or, (ii) at any other time where such agreement contains an obligation or settlement that is material to CAPPREC or its subsidiaries as of the date of these Revised Listing Particulars.

6.1.4 Save for the contracts set out in Appendix 5 to these Revised Listing Particulars, no material contracts have been entered into by Synthesis, being restrictive funding arrangements and/or contracts entered into otherwise than in the ordinary course of business and (i) within the two years prior to the date of these Revised Listing Particulars or, (ii) at any other time where such agreement contains an obligation or settlement that is material to CAPPREC or its subsidiaries as of the date of these Revised Listing Particulars.

6.2 CAPPREC’s company secretary

6.2.1 As of the Last Practicable Date, Horwath Leveton Boner is CAPPREC’s company secretary, duly appointed by the Board in accordance with the Companies Act. The Board considered and is satisfied that the company secretary is properly qualified and experienced to competently carry out the duties and responsibilities of company secretary and that there is an arm’s-length relationship between itself and the company secretary.

6.2.2 The company secretary is subject to an annual evaluation by the Board wherein the Board will satisfy itself as to the competence, qualifications and experience of the company secretary.

6.2.3 The company secretary provides the Board as a whole and Directors individually with guidance on discharging their responsibilities. It is also a central source of information and advises the Board on matters of ethics and good corporate governance. The company secretary ensures that, in accordance with pertinent laws, the proceedings and affairs of the Board and its members, CAPPREC itself and, where appropriate, the holders of securities in CAPPREC are properly administered. The company secretary also assists and ensures that the Board, individual Directors and board committees are evaluated annually.

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6.2.4 The company secretary ensures compliance with the Listings Requirements and other statutory requirements applicable to CAPPREC.

6.3 Compliance with the King Code

6.3.1 As a result of the CAPPREC Shares being listed on the JSE, CAPPREC and the Directors are subject to the corporate governance and financial reporting requirements contemplated by the Listings Requirements and the King Code.

6.3.2 The Directors are committed maintaining a high level of corporate governance throughout CAPPREC. Effective corporate governance is central to ensuring that management and the Board lead CAPPREC in a way that is efficient, accountable, transparent and ethical.

6.3.3 The Board applied on Listing, as outlined in the Pre-listing Statement, and continues to apply, the principles of the King Code. The Board explained any non-application of the principles of the King Code in the annual financial report for the financial year ended 31 March 2016. The aforementioned report can be accessed on CAPPREC’s website (www.capitalappreciation.co.za). A copy of the aforementioned report is also available for inspection as further described in paragraph 7 below.

6.3.4 However, considering the approval being sought herein, set out in what follows is a summary of CAPPREC’s approach to the corporate governance requirements outlined in paragraph 3.84 of the Listings Requirements.

6.3.5 Considerable thought is given to the balance and composition of the Board. Collectively, the Board believes that the current mix of knowledge, skill and experience meets the requirements to lead CAPPREC effectively. As at the Last Practicable Date, the Board has 10 Directors, comprising seven non-executive Directors and three executive Directors. Of the seven non-executive Directors, four are independent. No individual Director has unfettered powers of decision making. A brief CV of each Director is provided at paragraph 4.1.1 of these Revised Listing Particulars. The classification of the capacity of each Director into executive Director, non-executive Director and independent non-executive Director is provided at the top of page 213 of these Revised Listing Particulars. To ensure a rigorous and transparent procedure, any new appointment of a Director will be considered by the Board as a whole, on the recommendation of the nominations and remuneration committee. The selection process will involve considering the existing balance of skills and experience, and a continual process of assessing the needs of CAPPREC. The nominations and remuneration committee members are Jacob Meyer Kahn (chairman) and Roshan Morar.

6.3.6 Michael Sacks, a non-executive Director, is the Chairperson of the Board and Michael Pimstein and Bradley Sacks, each an executive Director, are the Joint Chief Executive Officers. The role of the chairman is inter alia, to lead the Board, ensuring its effectiveness and setting its agenda. The joint chief executive officers lead the executive team in running the business of CAPPREC. As the chairman is not an independent non-executive Director, CAPPREC has also appointed Jacob Meyer Kahn as the lead independent Director. Alan Salomon is the executive financial director of CAPPREC. Annually, the audit and risk committee evaluates the expertise and experience of the executive financial director and report on this to CAPPREC’s shareholders in its integrated annual report, which was the case in respect of the period ended 31 March 2016.

6.3.7 The audit and risk committee consists of Victor Sekese (chairman), Charles Valkin and Bukelwa Bulo, who will meet at least twice a year and are responsible for performing the functions required of an audit committee in terms of section 94(7) of the Companies Act, and the other functions in terms of its mandate. These functions include: (i) nominating and appointing CAPPREC’s auditors and ensuring that the auditors are independent of CAPPREC; (ii) determining the auditors’ fees and terms of engagement; (iii) ensuring that the appointment of the auditors complies with the provisions of the Companies Act, and any other relevant legislation; (iv) determining, from time to time, the nature and extent of non-audit services to be provided by CAPPREC’s auditors and to pre-approve any agreement in respect of their services; (v) preparing a report to be included in the integrated annual report of CAPPREC, in compliance with the Companies Act; (vi) dealing with any complaints (whether from within or outside CAPPREC) relating to accounting practices, internal audits of CAPPREC or the content of CAPPREC’s financial statements and related matters; (vii) making submissions to the Board on any matter concerning CAPPREC’s accounting policies and financial control; and (viii) overseeing CAPPREC’s integrated reporting process.

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6.3.8 Horwath Leveton Boner is CAPPREC’s company secretary, duly appointed by the Board in accordance with the Companies Act. The Board considered and is satisfied that the company secretary is properly qualified and experienced to competently carry out the duties and responsibilities of the company secretary and that there is an arm’s length relationship between itself and the company secretary. The company secretary will be subjected to an annual evaluation by the Board wherein the Board will satisfy itself as to the competence, qualifications and experience of the company secretary. The company secretary provides the Board as a whole and Directors individually with guidance on discharging their responsibilities. It is also a central source of information and advises the Board and CAPPREC on matters of ethics and good corporate governance. The company secretary ensures that, in accordance with pertinent laws, the proceedings and affairs of the Board and its members, CAPPREC itself and, where appropriate, the owners of securities in CAPPREC are properly administered. It also assists and ensures that the Board, individual Directors and Board committees are evaluated annually. The company secretary ensures compliance with the Listings Requirements and other statutory requirements applicable to CAPPREC.

6.3.9 The Board supports the promotion of gender diversity at the Board level. After taking into account the implementation of the Proposed Transactions, the Board will report on a formal gender diversity policy in CAPPREC’s annual integrated report for 2017.

6.3.10 In relation to the above, it should be noted that the authority for the creation of the vacancies on the Board being sought in terms of Ordinary Resolution 8 set out in the Notice of General Meeting is required in order to grant the Board the flexibility to manage an effective and balanced Board composition post the Completion of the Proposed Transactions in accordance with strategic imperatives of the business and in compliance with applicable corporate governance regulations.

6.3.11 The Board notes the coming into force of the King IV Code and related proposed amendments to the Listings Requirements to incorporate the King IV Code, and intends to comply with the King IV Code and the Listings Requirements in due course.

7. DOCUMENTS AVAILABLE FOR INSPECTION

The following documents, or certified copies thereof, will be available for inspection by CAPPREC Shareholders during normal business hours at the registered office of CAPPREC from 31 March 2017 to 5 May 2017 (both days inclusive):

7.1 the Memorandum of Incorporation;

7.2 the memorandum of incorporation of African Resonance;

7.3 the memorandum of incorporation of Synthesis;

7.4 the documents referred to in Appendixes 2, 3 and 5 of these Revised Listing Particulars;

7.5 EY’s independent reporting accountants’ report on the interim and pro forma financial information of CAPPREC;

7.6 the audited annual financial statements of CAPPREC for the 13 month period ended 31 March 2016 and the interim period ended 30 September 2016;

7.7 the consolidated annual financial statements of African Resonance for the financial years ended 28 February 2014, 28 February 2015 and 29 February 2016 and the interim period ended 31 August 2016 and;

7.8 Grant Thornton’s independent reporting accountants’ report on the interim and historical financial information of African Resonance;

7.9 the annual financial statements of Dashpay for the financial years ended 30 June 2014, 30 June 2015 and 30 June 2016;

7.10 Grant Thornton’s independent reporting accountants’ report on the historical financial information of Dashpay for the financial years ended 30 June 2016 and 30 June 2015;

7.11 KPMG’s independent reporting accountants’ report on the historical financial information of Dashpay for the financial year ended 30 June 2014;

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7.12 the consolidated annual financial statements of Synthesis for the financial years ended 28 February 2014, 28 February 2015 and 29 February 2016 and the interim period ended 31 August 2016;

7.13 BDO’s independent reporting accountants’ report on the interim and historical financial information of Synthesis;

7.14 the letters of appointment of the Directors, the proposed service contract of Hanoch Neishlos and the SST Executive Employment Contracts;

7.15 a copy of the Pre-Listing Statement; and

7.16 a copy of this Circular.

Signed at Johannesburg, South Africa on 24 March 2017 by Michael Sacks on behalf of all the Directors in terms of a resolution signed by such Directors.

Michael SacksChairman

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Appendix 1

OTHER DIRECTORSHIPS

The names of all companies and partnerships of which each of the persons referred to in paragraphs 4.1.1 and 4.1.5 of the Revised Listing Particulars have been a director or partner at any time in the five years prior to the Last Practicable Date (indicating whether or not such person is still a director or partner and excluding subsidiaries of any such company of which he is also a director) are set out below.

Section 1

Michael Pimstein

Name of company Designation Active/Not Active

Savanna Private Game Reserve Proprietary Limited Non-Executive Director ActiveSteel and Engineering Industries Federation of Southern Africa President ActiveMacsteel Service Centres SA Proprietary Limited CEO Not ActiveMacsteel Global S.à.r.L. B.V. Non-Executive Director Not ActiveMSCSA Investments Proprietary Limited Executive Director Not Active

Bradley Sacks

Name of company Designation Active/Not Active

Centric Capital Ventures LLC Managing Partner ActiveGondwana International Networks (Pty) Ltd (South Africa) Non-Executive Director ActiveUluru Inc. (USA, public) Non-Executive Director ActiveCare Fertility Group Limited (UK) Chairman Not ActiveGeneral Healthcare Group Limited (UK) Non-Executive Director Active

Motty Sacks

Name of company Designation Active/Not Active

Adcock Ingram Holdings Limited Non-Executive Director ActiveADvTECH Limited Non-Executive Director Not ActiveAfrocentric Investment Corporation Limited Non-Executive Director ActiveAltrazeal SA Proprietary Limited Non-Executive Director ActiveEagle Creek Investments 605 Proprietary Limited Non-Executive Director ActiveHartebeespoort Aerial Cableway Proprietary Limited Non-Executive Director ActiveLBB Metals Proprietary Limited Non-Executive Director ActiveNetcare Limited Chairman and Non-

Executive DirectorNot Active

Osteoscan Proprietary Limited Non-Executive Director ActivePraggia Power Proprietary Limited Non-Executive Director ActiveRainbow Place Properties 0007 Proprietary Limited Non-Executive Director ActiveRevenue House Proprietary Limited Non-Executive Director ActiveTiespro 0003 Proprietary Limited Non-Executive Director ActiveYoung Adults Learning and Earning Centre Non-Executive Director ActiveZargodox Proprietary Limited Non-Executive Director Active

Alan Salomon

Name of company Designation Active/Not Active

The Bidvest Group Limited Executive Director Not ActiveBidvest Bank Limited CEO Not ActiveMaster Currency Proprietary Limited Non-Executive Director Not Active

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Dr Daniel (Dan) Matjila

Name of company Designation Active/Not Active

PIC CEO ActiveAfrisam Limited Non-Executive Director ActiveEntabeni Holdings, Inc. Non-Executive Director ActiveHarith General Partners Non-Executive Director ActiveEcobank Transnational Inc Non-Executive Director ActiveCommunity Property Holdings Non-Executive Director ActiveErin Energy Corporation Non-Executive Director Active

Roshan Morar

Name of company Designation Active/Not Active

Morar Incorporated, Public Accountants and Auditors Managing Director ActivePIC Non-Executive Deputy

ChairmanActive

Airports Company (SOC) Limited Non-Executive Deputy Chairman

Active

South African Roads Agency (SOC) Limited Non-Executive Director ActiveAdcock Ingram Holdings Limited Non-Executive Director Active

Bukelwa Bulo

Name of company Designation Active/Not Active

Franki Geotechnical Proprietary Limited Non-Executive Director ActiveUnispan Holdings Proprietary Limited Non-Executive Director Not ActiveJade Capital Partners Proprietary Limited Executive Director ActiveProtea Hospitality Holdings Proprietary Limited Non-Executive Director Not ActiveV3 Crane Hire Proprietary Limited Non-Executive Director Not ActiveKumnandi Food Company Proprietary Limited Non-Executive Director Not ActiveElcon Crane and Construction Proprietary Limited Non-Executive Director Not ActiveAfrican Revival Investment Holdings Proprietary Limited Non-Executive Director Not ActiveNetcare Limited Non-Executive Director Active

Jacob Meyer Kahn

Name of company Designation Active/Not Active

SABMiller Plc Chairman and Group Managing Director

Not Active

Comair Limited Non-Executive Director ActiveTsogo Sun Holdings Limited Director Not ActivePG Group Proprietary Limited Director ActiveNetcare Limited Non-Executive Director

and Acting ChairmanActive

Afrocentric Investment Holdings Limited Non-Executive Director Active

Victor Sekese

Name of company Designation Active/Not Active

SizweNtsalubaGobodo CEO ActiveSouth African Institute of Chartered Accountants Non-Executive Director Not ActiveBlue Chip Investments Proprietary Limited Non-Executive Director Active

Charles Valkin

Name of company Designation Active/Not Active

Bowman Gilfillan Inc. Director Not Active

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Section 2

Tumi Frazier

Name of company Designation Active/Not Active

Center for International Education innovation and Research Non-Executive Director ActiveGeorgia Institute of Technology Non-Executive Director ActiveKhutso Consulting CC Non-Executive Director Not ActiveKudjon Consulting CC Executive Director Not ActiveKudjon Shoes CC Non-Executive Director Not ActiveLosika Consulting Proprietary Limited Executive Director Not ActiveTumi Frazier Foundation Non-Executive Director Active

Christian van der Merwe

Name of company Designation Active/Not Active

Not applicable Not applicable Not applicable

Nicci Redford

Name of company Designation Active/Not Active

Not applicable Not applicable Not applicable

Donn Engelbrecht

Name of company Designation Active/Not Active

Not applicable Not applicable Not applicable

Section 3

Jake Shepherd

Name of company Designation Active/Not Active

Old CQS Holding Proprietary Limited Non-Executive Director Not ActiveSynthesis Software Engineering Proprietary Limited Non-Executive Director Active

Michael Shapiro

Name of company Designation Active/Not Active

Not applicable Not applicable Not applicable

Tom Wells

Name of company Designation Active/Not Active

Yoya Proprietary Limited Non-Executive Director Active

Steyn Nel Basson

Name of company Designation Active/Not Active

Not applicable Not applicable Not applicable

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Appendix 2

DETAILS OF MATERIAL CONTRACTS ENTERED INTO BY CAPPREC

Description Salient Terms

AR Agreement between CAPPREC and the African Resonance Shareholders, dated 16 February 2017

In terms of the AR Agreement, Hanoch, Edmund Pieterse, Wayne Fagan and Safika sell and CAPPREC purchases the AR Shares in consideration for the AR Consideration, on a cash-free and debt-free basis.

Further details in respect of the AR Agreement are provided in paragraph 7 of the Circular.

Restraint and Relationship Agreement between CAPPREC, Hanoch Neishlos, Eitan Neishlos, Bradley Sacks, Michael Pimstein, Alan Salomon, Motty Sacks, Wayne Fagan and Edmund Pieterse, dated 16 February 2017

In terms of the Restraint and Relationship Agreement, each of Hanoch Neishlos, Michael Pimstein, Motty Sacks, Bradley Sacks, Alan Salomon, Wayne Fagan and Edmund Pieterse undertakes to restraint certain activities within the continent of Africa, in order to protect the goodwill and the proprietary interests of the CAPPREC group, as of the closing date of the Restraint and Relationship Agreement until two years after such person ceases to be a director of, employee of or direct or indirect consultant or contractor to any company forming part of the CAPPREC group.

The same restraint undertakings are given by Eitan Neishlos, save that the undertaking shall only apply for South Africa.

Rinwell Agreement between CAPPREC and Castledash, dated 16 February 2017

In terms of the Rinwell Agreement, Castledash sells and CAPPREC purchases the Rinwell Shares in consideration for the Rinwell Consideration, on a cash-free and debt-free basis.

Further details in respect of the Rinwell Agreement are provided in paragraph 8 of the Circular.

Restraint and Warrant Agreement between CAPPREC, Castledash and Eitan Neishlos, dated 16 February 2017

In terms of the Restraint and Warrant Agreement, Eitan Neishlos provides to, and in favour of, the CAPPREC group certain activity restraints and undertakings within the territory of Africa (excluding South Africa), in consideration for the Warrants and the Restraint Shares

Resonance Australia Subscription Agreement between CAPPREC, DVASH Holdings Pty Limited (“Dvash”), MPC Nominees Pty Limited (“MPC”) and Resonance Australia, dated 16 February 2017

In terms of this Agreement, inter alios, CAPPREC shall subscribe, as a co-shareholder in an existing joint venture structure, for 17.45% of the issued capital of Resonance Australia Pty Limited in consideration for AUD2 966 730.95.

Resonance Australia Shareholders’ Agreement between CAPPREC, Dvash, MPC, PAW Custodians Pty Ltd (“PAW”) and Resonance Australia, which agreement has been signed and is being held in escrow pursuant to the Resonance Australia Escrow Memorandum

In terms of this agreement, the relationship between CAPPREC, Dvash, MPC as shareholders of Resonance Australia, and the relationship between Resonance Australia and each of CAPPREC, Dvash, MPC and PAW as shareholders is governed.

Resonance Australia Loan Agreement, between CAPPREC and Resonance Australia, which agreement has been signed and is being held in escrow pursuant to the Resonance Australia Escrow Memorandum

In terms of this agreement, CAPPREC shall advance a loan to Resonance Australia in the amount of AUD500 000 (which amount is equal to the loan amount each existing shareholder of Resonance Australia has already advanced to Resonance Australia).

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Description Salient Terms

Resonance Australia Escrow Memorandum between Resonance Australia, Dvash, MPC, CAPPREC, PAW and Swaab Attorneys, dated 16 February 2017

In terms of the Resonance Australia Escrow Memorandum, each of, inter alia, the Resonance Australia Shareholders’ Agreement and the Resonance Australia Loan Agreement will be held undated in escrow by Swaab Attorneys, which agreements will be released by Swaab Attorneys and dated upon: (i) the AR Agreement and the Rinwell Agreement becoming unconditional in accordance with their terms; and (ii) the simultaneous implementation of the Resonance Australia Subscription Agreement.

SST Agreement between CAPPREC and Michael Shapiro, JS Family Trust, Tom Wells and Steyn Basson, dated 16 February 2017

In terms of the SST Agreement, the SST Shareholders sell and CAPPREC purchases the SST Shares and the SST Claims in consideration for the SST Consideration, on a cash-free and debt-free basis.

Further details in respect of the SST Agreement are provided in paragraph 9 of the Circular.

Lock-in and pre-emptive rights agreement between CAPPREC and Hanoch Neishlos and Centric Capital Ventures LLC, dated 16 February 2017

In terms of this agreement, Centric Capital Ventures LLC has agreed to lock-in its CAPPREC Shares on the terms and subject to the conditions as described in the agreement.

Escrow Agreement between CAPPREC and Bowman Gilfillan Inc., dated 21 September 2015

Details in relation to the Escrow Agreement were disclosed in the Pre-Listing Statements, a copy of which is made available on CAPPREC’s website (www.capitalappreciation.co.za).

Founders agreement between CAPPREC and the Founders, dated 18 September 2015

Details in relation to the Founders Agreement were disclosed in the Pre-Listing Statements, a copy of which is made available on CAPPREC’s website (www.capitalappreciation.co.za).

Placement Agreement between CAPPREC and Macquarie First South Capital Proprietary Limited, dated 28 September 2015

Details in relation to the Placement Agreement were disclosed in the Pre-Listing Statements, a copy of which is made available on CAPPREC’s website (www.capitalappreciation.co.za).

Trust Deed Details in relation to the Trust Deed were disclosed in the Pre-Listing Statements, a copy of which is made available on CAPPREC’s website (www.capitalappreciation.co.za).

Underwriting Agreement between CAPPREC and the Underwriters, dated 8 September 2015

Details in relation to the Underwriting Agreement were disclosed in the Pre-Listing Statements, a copy of which is made available on CAPPREC’s website (www.capitalappreciation.co.za).

Undertaking by PIC to subscribe for Offer Shares, dated 18 September 2015

Details in relation to the undertaking by PIC to subscribe for Offer Shares were disclosed in the Pre-Listing Statements, a copy of which is made available on CAPPREC’s website (www.capitalappreciation.co.za).

Undertaking by the Underwriters to subscribe for Offer Shares, dated 7 August 2015

Details in relation to undertakings by the Underwriters to subscribe for Offer Shares were disclosed in the Pre-Listing Statements, a copy of which is made available on CAPPREC’s website (www.capitalappreciation.co.za).

Undertaking by CAET to subscribe for Offer Shares, dated 8 September 2015

Details in relation to the undertaking by CAET to subscribe for Offer Shares were disclosed in the Pre-Listing Statements, a copy of which is made available on CAPPREC’s website (www.capitalappreciation.co.za).

Undertaking by the Additional Committed Investors to subscribe for Offer Shares, dated August 2015

Details in relation to the undertaking by the Additional Committed Investors to subscribe for Offer Shares were disclosed in the Pre-Listing Statements, a copy of which is made available on CAPPREC’s website (www.capitalappreciation.co.za).

Undertaking by JM Kahn to subscribe for Offer Shares, dated 20 September 2015

Details in relation to the undertaking by JM Kahn to subscribe for Offer Shares were disclosed in the Pre-Listing Statements, a copy of which is made available on CAPPREC’s website (www.capitalappreciation.co.za).

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Appendix 3

DETAILS OF MATERIAL CONTRACTS ENTERED INTO BY AFRICAN RESONANCE

Details of material contracts entered into by African Resonance, any of its major subsidiaries or by any subsidiary material to CAPPREC, being a contract entered into otherwise than in the ordinary course of business, since its incorporation or entered into at any time and containing an obligation or settlement that is material to African Resonance as of the date of the Circular, are set out below.

Description Salient Terms

Restraint and Relationship Agreement between CAPPREC, Hanoch Neishlos, Eitan Neishlos, Bradley Sacks, Michael Pimstein, Alan Salomon, Motty Sacks, Wayne Fagan and Edmund Pieterse, dated 16 February 2017

In terms of the Restraint and Relationship Agreement, each of Hanoch Neishlos, Michael Pimstein, Motty Sacks, Bradley Sacks, Alan Salomon, Wayne Fagan and Edmund Pieterse undertakes to restraint certain activities within the continent of Africa, in order to protect the goodwill and the proprietary interests of the CAPPREC group, as of the closing date of the Restraint and Relationship Agreement until two years after the last date such person ceases to be a director of, employee of or direct or indirect consultant or contractor to any company forming part of the CAPPREC group.

The same restraint undertakings are given by Eitan Neishlos, save that the undertaking shall only apply for South Africa.

Software Licence Agreement between African Resonance, Uplink, Hanoch Neishlos and Edmund Pieterse, dated 16 February 2017

In terms of the Software Licence Agreement, Uplink grants African Resonance an exclusive, irrevocable, royalty-free and perpetual licence to use and develop certain software and intellectual property rights within the territory of the continent of Africa.

Services Agreement between African Resonance and Uplink, dated 16 February 2017

In terms of the Services Agreement, African Resonance appoints, on a non-exclusive basis, Uplink to provide certain development, support and maintenance services in relation to the exclusive, irrevocable, royalty-free and perpetual licence to use and develop certain software and intellectual property rights within the territory of the continent of Africa.

Service agreement between African Resonance and Castlebridge Professional Services Limited, dated 16 February 2017

In terms of the services agreement, African Resonance appoints Castlebridge, on a non-exclusive basis, to provide certain services in respect of the sourcing of opportunities.

Service agreement between African Resonance and HNS, dated 16 February 2017

In terms of the services agreement, African Resonance appoints HNS, on a non-exclusive basis, to provide certain management and administrative services.

Further details in respect of the services agreement are provided in paragraph 4.1.8 of the Revised Listing Particulars.

Main cession agreement between Sunlyn and African Resonance, dated 19 July 2013

Further details in respect of the loan agreement are provided in paragraph 5.11.2 of the Revised Listing Particulars

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Appendix 4

DETAILS OF MATERIAL CONTRACTS ENTERED INTO BY RINWELL AND ITS WHOLLY-OWNED SUBSIDIARY DASHPAY

Details of material contracts entered into by Rinwell and Dashpay, respectively, any of its major subsidiaries or by any subsidiary where it is material to CAPPREC, being a contract entered into otherwise than in the ordinary course of business, since its incorporation or entered into at any time and containing an obligation or settlement that is material to Rinwell and Dashpay, respectively, as of the date of the Circular, are set out below:

Description Salient Terms

Loan agreement between Rinwell and Dashpay, dated 27 November 2015

Further details in respect of the loan agreement are provided in paragraph 5.11.3 of the Revised Listing Particulars.

Loan agreement between African Resonance and Dashpay, dated 27 November 2015

Further details in respect of the loan agreement are provided in paragraph 5.11.3 of the Revised Listing Particulars.

Sale agreement between Rinwell and TIH, dated 27 October 2015

Further details in respect of the sale agreement are provided in paragraph 2.4.2 of the Circular.

Loan agreement between Rinwell and Dashpay, dated 27 November 2015

Further details in respect of the loan agreement are provided in paragraph 5.11.3 of the Revised Listing Particulars.

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Appendix 5

DETAILS OF MATERIAL CONTRACTS ENTERED INTO BY SYNTHESIS

Details of material contracts entered into by Synthesis, any of its major subsidiaries or by any subsidiary where it is material to CAPPREC, being a contract entered into otherwise than in the ordinary course of business, since its incorporation or entered into at any time and containing an obligation or settlement that is material to Synthesis as of the date of the Circular, are set out below:

Description Salient Terms

SST Agreement between CAPPREC and Michael Shapiro, JS Family Trust, Tom Wells and Steyn Basson, dated 16 February 2017

In terms of the SST Agreement, the SST Shareholders sell and CAPPREC purchases the SST Shares and the SST Claims in consideration for the SST Consideration.

Further details in respect of the SST Agreement are provided in paragraph 9 of the Circular.

Shareholders, subscription and option agreement entered into between Tritech Media Proprietary Limited (“Tritech”), Proximity ID Proprietary Limited (“Proximity ID”), SST, Wayne Gluckman, Deven Halpern and Philip Froom

In terms of the shareholders, subscription and option agreement, each of Tritech and Synthesis subscribed for ordinary shares in Proximity ID, Tritech was granted a call option over a proportionate share of the remaining shareholders ordinary shares in Proximity ID such that Tritech may increase its shareholding in Proximity ID to a maximum of 50.1% and the shareholders, subscription and option agreement governs the relationship between the shareholders of Proximity ID inter se and the relationship between Proximity ID and its shareholders.

Medium term loan agreement between Synthesis and The Standard Bank of South Africa Limited, dated 15 March 2016

Further details in respect of the loan agreement are provided in paragraph 5.11.5 of the Revised Listing Particulars.

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Appendix 6

EXTRACTS FROM THE MEMORANDUM OF INCORPORATION OF CAPPREC

Extracts from MOI are set out below. A copy of the complete MOI is available for inspection at CAPPREC’s registered office.

For the purpose of this Appendix 6, “Act” refers to the Companies Act, No. 71 of 2008, as amended, consolidated or re-enacted from time to time and includes all schedules to such Act and the Companies Regulations, 2011. A reference to a section by number refers to the corresponding section of the Act, notwithstanding the renumbering of such section after the date on which the Company is incorporated. A reference to a clause by number refers to a corresponding provision of the MOI. The numbers in the furthest left hand column of the below table refer to the corresponding clause of the MOI.

3.3 Memorandum of Incorporation and Company Rules

3.3.1 This Memorandum does not provide any different requirements than those set out in section 16(1)(c)(i) of the Act regarding proposals for amendments to this Memorandum.

3.3.2 Unless otherwise permitted by the JSE and the Act, any amendment to this Memorandum is required to be approved by a special resolution, save for an amendment which is ordered by a court in terms of section 16(1)(a) of the Act.

3.3.3 Unless otherwise permitted by the JSE, the board shall not have the power to make, amend or repeal any necessary or incidental rules relating to the governance of the Company in respect of matters that are not addressed in the Act or this Memorandum, in accordance with the provisions of sections 15(3) to 15(5) of the Act.

3.3.4 If the board, or any individual authorised by the board, alters this Memorandum or any rules made by it in any manner necessary to correct a patent error in spelling, punctuation, reference, grammar or similar defect on the face of the document, it must publish a notice of such alteration by publishing it on the Company’s website, and must file a notice of alteration in the manner prescribed by the Act.

4.1 Authorisation for Shares

4.1.1 The Company is authorised to issue the shares specified in Schedule 1, provided that, if required by the Act or the Listings Requirements, the Company may only issue:

4.1.1.1 unissued shares to shareholders of a particular class of shares, pro rata to the shareholders’ existing shareholding, unless any such shares are to be issued for an acquisition of assets;

4.1.1.2 unissued shares or options otherwise than as envisaged in 4.1.1 above, for cash, as the directors in their discretion think fit, if approved by shareholders in general meeting; and

4.1.1.3 shares that are fully paid up.

4.3 Amendment of class, preferences, rights, limitations or other terms

4.3.1 If any proposed amendment to this Memorandum relates to the variation of any preferences, rights, limitations or other terms attaching to any class of shares already in issue other than the Redeemable Ordinary Shares, such amendment shall be subject to the prior approval of the holders of that other class passed at a separate class meeting of the holders of that class in the same manner, mutatis mutandis, as a special resolution. The holders of such other class, e.g. Ordinary Shares (if the shares of that class have voting rights at the relevant time), may be allowed to vote at the meeting of Redeemable Ordinary Shareholders convened for the purposes of considering such proposal, subject to the Listings Requirements.

4.3.2 The provisions of this Memorandum and the Act relating to shareholders meetings of the Company shall, mutatis mutandis, apply to any such separate class meeting except that, subject to the Act, the necessary quorum shall be 2 (two) persons (unless all the shares of that class are held by 1 (one) person) holding or representing by proxy not less than one-third of the issued shares of the class (provided that if at any adjourned meeting of such holders a quorum is not present, those shareholders who are present in person or by proxy shall be a quorum).

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4.3.3 The special rights attached to the shares of any class shall not, unless otherwise expressly provided by the conditions of issue of such shares, be deemed to be varied by the creation or issue of further shares, ranking pari passu with, or enjoying lesser rights, and which do not have preference over the first-mentioned shares. Without derogation from the aforegoing, any issue of Ordinary Shares shall not be deemed to vary any of the rights attached to the Redeemable Ordinary Shares, and any issue of Redeemable Ordinary Shares shall not be deemed to vary any of the rights attached to the Ordinary Shares.

4.3.4 For so long as is required by the Listings Requirements, the preferences, rights, limitations or other terms of any class of shares may not be varied, and no resolution may be proposed to shareholders for rights to include any variation, in response to any objectively ascertainable external fact or facts as provided for in sections 37(6) and (7) of the Act. The provisions of this 4.3.4 shall not apply to the Ordinary Shares and the Redeemable Ordinary Shares.

4.14 Limitation of voting rights

As required by the Listings Requirements, while there are Redeemable Ordinary Shares in issue, the holders of any securities other than Redeemable Ordinary Shares and any special shares created for the purposes of black economic empowerment in terms of The Broad-Based Black Economic Empowerment Act of 2003, as amended, and The Broad-Based Black Economic Empowerment Codes of Good Practice gazetted from time to time under the aforesaid Act, shall be prohibited from voting on any resolution taken by the Company save as expressly provided for in this Memorandum. In instances that such shareholders are permitted to vote at shareholders meetings, their votes may not carry any special rights or privileges and they shall be entitled to one vote for each share that they hold, provided their total voting rights at a general or annual general meeting may not exceed the percentage prescribed by the Listings Requirements.

6.10 Shareholders’ resolutions

6.10.1 This Memorandum does not require a higher percentage of voting rights to approve an ordinary resolution than the percentage voting rights specified in the Act.

6.10.2 This Memorandum does not require a different percentage of voting rights to approve a special resolution than the percentage voting rights specified in the Act.

6.10.3 Subject to the Listings Requirements, this Memorandum does not require a special resolution for any other matter not contemplated in section 65(11) of the Act.

6.10.4 No shareholders resolution in terms of section 20(2) of the Act may be proposed if such resolution would result in the ratification of any act that is contrary to the Listings Requirements, unless otherwise permitted by the JSE.

7.1 Composition of the Board of Directors

7.1.1 This Memorandum does not specify a higher number in substitution for the minimum number of directors required in terms of the Listings Requirements.6

7.1.2 Subject to 7.2, the shareholders shall elect the directors, and shall be entitled to elect one or more alternate directors, in accordance with the provisions of section 68(1) of the Act.

7.1.3 This Memorandum does not provide for :

7.1.3.1 the direct appointment or removal of any director or alternate director by any particular person; or the appointment of any person as an ex officio director of the Company.

7.1.4 This Memorandum does not stipulate any additional qualifications or eligibility requirements other than those set out in the Act for a person to become or remain a director or a prescribed officer of the Company.

7.1.5 At the first annual general meeting of the Company all of the directors of the Company shall retire, but all of them shall be eligible for re-election. At every subsequent annual general meeting, one third of the non-executive directors for the time being or, if their number is not a multiple of 3 (three), then the number nearest to but not less than one third, or if there are less than three non-executive directors, then all of the non-executive directors, shall retire from office, provided that the directors appointed in terms of 7.2 shall not be taken into account in determining which directors are to retire by rotation at the annual general meeting immediately following their appointment.

6 Interms of the JSE Listings Requirements, the minimum number of directors is four.

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7.1.6 The non-executive directors so to retire at every subsequent annual general meeting shall be those who have been longest in office since their last election. In the case of persons who became non-executive directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by lot. The length of time a non-executive director has been in office shall be computed from his last election, appointment or date upon which he was deemed re-elected.

7.1.7 A director retiring at a general meeting shall retain office until the election of directors at that general meeting has been completed.

7.1.8 A retiring director may be re-elected, provided that, for as long as the Listings Requirements require it, the board, through its nominations committee, has recommended his eligibility, taking into account past performance and contribution made.

7.2 Vacancies

7.2.1 The board may appoint any person who satisfies the requirements for election as a director to fill any vacancy and serve as a director on a temporary basis until the vacancy is filled by election in accordance with section 68(1) of the Act.

7.2.2 Should the number of directors fall below 4 (four), the remaining directors must, as soon as possible, and, in any event, not later than 3 (three) months from the date that the number of directors falls below that number, fill the vacancies or call a shareholders meeting for the purpose of filling the vacancies. A failure by the Company to have 4 (four) directors during the 3 (three) month period does not limit or negate the authority of the board or invalidate anything done by the board or the Company. After the expiry of the 3 (three) month period, the remaining directors shall only be permitted to act for the purpose of filling vacancies or calling a shareholders meetings.

7.2.3 The appointment of a director to fill a vacancy or as an addition to the board must be confirmed by shareholders at the next annual general meeting.

7.3 Authority of the Board of Directors

The authority of the board to manage and direct the business and affairs of the Company, as contemplated in section 66(1), is not limited, restricted or qualified by this Memorandum.

7.7 Directors compensation and financial assistance to directors and related persons

7.7.1 This Memorandum does not limit, restrict or qualify the power of the Company to pay remuneration to its directors for their service as directors in accordance with section 66(9) of the Act.

7.7.2 Subject to the provisions of the Act, any director who is required to:

7.7.2.1 perform extra services;

7.7.2.2 be specifically occupied about the Company’s business;

7.7.2.3 resides outside the Republic for the purpose of the Company; or

7.7.2.4 otherwise performs or binds himself to perform services which, in the opinion of the directors, are outside the scope of the ordinary duties of a director,

may be paid such extra remuneration or allowances in addition to or in substitution for any other remuneration to which he may be entitled as a director, as a disinterested quorum of directors may from time to time determine.

7.7.3 The directors shall also be paid all their travelling and other expenses properly and necessarily expended by them:

7.7.3.1 in and about the business of the Company; and

7.7.3.2 in attending general meetings of the directors or of committees of the directors of the Company.

7.7.4 This Memorandum does not limit, restrict or qualify the authority of the board to authorise the Company to provide direct or indirect financial assistance to directors or persons related to directors contemplated in section 45 of the Act.

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9. Special Purpose Acquisition Company

9.1 As at the date of filing of this Memorandum with the Commission, the Company is a special purpose acquisition company. It will remain a special purpose acquisition company until it has Completed an acquisition of Viable Assets. The initial acquisition of Viable Assets must be approved by an ordinary resolution by shareholders of the Company.

9.2 If the Company does not Complete an acquisition of Viable Assets within the Initial Period, the Redeemable Ordinary Shares shall be redeemed by the Company in accordance with the terms of the Redeemable Ordinary Shares set out in paragraph 2 of Schedule 1.

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Appendix 7

EXTRACTS FROM THE MEMORANDUM OF INCORPORATION OF AFRICAN RESONANCE

Extracts from African Resonance’s memorandum of incorporation are set out below. A copy of the complete memorandum of incorporation is available for inspection at CAPPREC’s registered office.

For the purpose of this Appendix 7, “Act” refers to the Companies Act, No. 61 of 1973, as at date of repeal. A reference to a section by number refers to the corresponding section of the Act, notwithstanding the renumbering of such section after the date on which African Resonance is incorporated. The numbers in the furthest left hand column of the below table refer to the corresponding clause of the articles. A reference to “Company” refers to African Resonance.

Directors

32 Subject to the provisions of the Act-

32.1 unless otherwise determined by a general meeting, the number of directors shall not be less than one or more than nine;

32.2 the first directors may be appointed by the subscribers to the memorandum.

33 A general meeting or the directors shall have the power from time to time, to appoint anyone as a director, either to fill a vacancy in the directors or as an additional director, provided that the total number of directors shall not at any time exceed the maximum number fixed by or in accordance with these articles and the appointment of any director so appointed shall cease at the conclusion of the next annual general meeting, unless it is confirmed at that annual general meeting.

36 The remuneration of the directors for their services as such shall be determined from time to time by a general meeting.

Interest of Directors

43 A director shall, if he has, in accordance with the Act, disclosed his interest (if it is material) in the relevant contract or arrangement-

43.1 be counted in a quorum for the purpose of a meeting of directors at which he is present to consider any matter, and

43.2 be entitled to vote in regard to any matter,

relating to any existing or proposed contract or arrangement in which he is interested, other than a contract or arrangement regulating his holding of an office or place of profit under the company or a subsidiary of the company.

Disqualification of Directors

44 A director shall cease to hold office as such if he-

44.1 is prohibited from being or is removed as or is disqualified from acting as a director of a company in terms of the Act;

44.2 gives notice to the company of his resignation as a director with effect from the date of, or such later date as is provided for in, such notice;

44.3 absents himself from meetings of directors for six consecutive months without the leave of the other directors, and they resolve that his office shall be vacated, provided that this provision shall not apply to a director who is represented by an alternate who does not so absent himself;

44.4 is given notice, signed by members holding in the aggregate more than 50% of the total voting rights on a poll of all members then entitled to vote on a poll at a general meeting, of the termination of his appointment.

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Appendix 8

EXTRACTS FROM THE MEMORANDUM OF INCORPORATION OF SYNTHESIS

Extracts from Synthesis’ memorandum of incorporation are set out below. A copy of the complete memorandum of incorporation is available for inspection at CAPPREC’s registered office.

For the purpose of this Appendix 8, “Act” refers to the Companies Act, No. 71 of 2008, as amended, consolidated or re-enacted from time to time and includes all schedules to such Act and the Companies Regulations, 2011. A reference to a section by number refers to the corresponding section of the Act, notwithstanding the renumbering of such section after the date on which Synthesis is incorporated. A reference to an article by number refers to a corresponding provision of the memorandum of incorporation. The numbers in the furthest left hand column of the below table refer to the corresponding clause of the memorandum of incorporation. A reference to “Company” refers to Synthesis.

1. Definitions

1.4.1 “Act” means the Companies Act, Act 71 of 2008, as amended;

1.4.8 “Board” means the board of directors of the Company from time to time, as constituted in terms of this Memorandum;

1.4.14 “Company” means Synthesis Software Technologies (Pty) Ltd with registration number 2000/007160/07, a company duly incorporated in terms of the laws of South Africa;

1.4.16 “Director” means a member of the Board or an alternate director and includes any person occupying the position of a director or alternate director by whatever name designated;

1.4.24 “Juristic person” means an entity (such as a firm) other than a natural person (human being) created by law and recognised as a legal entity having distinct identity, legal personality, and duties and rights, and includes a foreign company and a trust;

1.4.25 “Memorandum” means the Memorandum of Incorporation of the Company as filed and registered with the CIPC from time to time;

1.4.28 “Prescribed Officer” means a person who, within the Company and despite not being a Director, exercises general executive control over and management of the whole, or a significant portion, of the business and activities of the Company, or regularly participates to a material degree in the exercise of such;

1.4.29 “Shareholders” means the shareholders in the Company from time to time;

5 Article 5 – Directors and Officers

5.1 Composition of the Board of Directors

5.1.1 The Board comprises a minimum of 2 (two) Directors, to be elected by the Shareholders.

5.1.2 Every Shareholder holding at least 15% (fifteen percent) of the Shares, shall be entitled to nominate at least 1 (one) Director to be elected to the Board.

5.1.3 Directors shall be elected from the nominees by an ordinary resolution of the Shareholders at a general meeting of the Company.

5.1.4 Each of the Shareholders hereby undertakes in favour of each other, to vote in favour of each other’s nominees.

5.1.5 Despite 5.1.3 an election of a Director that could be conducted at a Shareholders’ meeting may instead be conducted by written polling of all the Shareholders entitled to exercise voting rights in relation to the election of that Director.

5.1.6 In any election of Directors -

5.1.6.1 the election is to be conducted as a series of votes, each of which is on the candidacy of a single individual to fill a single vacancy, with the series of votes continuing until all vacancies on the Board have been filled; and

5.1.6.2 in each vote to fill a vacancy-

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5.1.6.2.1 each vote entitled to be exercised may be exercised once; and

5.1.6.2.2 the vacancy is filled only if a majority of the votes exercised support the candidate.

5.1.7 In addition to the Shareholder elected Directors, there are no appointed or ex officio Directors of the Company, as contemplated in section 66(4) of the Act.

5.1.8 To become or remain a Director or a Prescribed Officer of the Company, a person needs to satisfy the qualifications and eligibility requirements set out in section 69 of the Act. For avoidance of doubt, the following persons will be ineligible or disqualified from serving as Directors:

5.1.8.1 a Juristic person;

5.1.8.2 an unemancipated minor;

5.1.8.3 a person prohibited by a court from serving as such, or having been declared to be delinquent in terms of the Act;

5.1.8.4 an unrehabilitated insolvent;

5.1.8.5 a person prohibited by public regulation from being a Director;

5.1.8.6 a person removed from an office of trust, on the grounds of misconduct involving dishonesty;

5.1.8.7 a person convicted of a crime and imprisoned without the option of a fine or fined more than the prescribed amount, for any offence involving theft, fraud, dishonesty, forgery, perjury, or in connection with the formation and management of a company, or in terms of the Insolvency Act, 1936, the Close Corporations Act, 1984, the Competition Act, the Financial Intelligence Centre Act,  2001, the Security Services Act,  2004 or the Prevention and Combating of Corruption Activities Act, 2004.

5.1.9 In addition to satisfying the requirements of 5.1.8, no person other than a Shareholder may be appointed as a Director without the prior written approval of the other Shareholders, who undertake not to withhold such approval unreasonably.

5.1.10 Each Director of the Company serves for an indefinite term, as contemplated in section 68(1) of the Act, until removed or replaced by the Shareholders.

5.1.11 Despite article 5.1.9, a Director shall cease to hold office as such:

5.1.11.1 if he/she becomes ineligible or disqualified in terms of the Act or this Memorandum;

5.1.11.2 if he/she resigns;

5.1.11.3 if he/she is removed in terms of an ordinary resolution of the Shareholders as provided for in section 71(1) of the Act;

5.1.11.4 if he/she is removed in terms of a Board resolution as provided for in section 71(3) of the Act; or

5.1.11.5 if he/she is absent from meetings of the Directors for 6 (six) consecutive months without leave of the Directors otherwise than on the business of the Company and is not represented at any such meeting during such 6 (six) consecutive months by an alternate directors, and the Directors resolve that his office be, by reason of such absence, vacated; provided that the Directors shall have the power to grant to any Director leave of absence for any or an indefinite period.

5.1.12 The Board has the authority to fill any vacancy on the Board on a temporary basis, as set out in section 68(3) of the Act. For avoidance of doubt, the Board may appoint any person who satisfies the requirements for election as a Director to fill any vacancy and serve on the Board on a temporary basis until the vacancy has been filled by election, and during that period any person so appointed shall have all of the powers, functions and duties, and is subject to all of the liabilities, of any other Director of the Company.

5.1.13 The Directors may from time to time appoint 1 (one) or more of their body to be Managing Director, Assistant Managing Director or General Manager of the Company or to any other executive office/position within the Company as the Board shall think fit, for a period not exceeding 5 (five) years, and may, subject to any contract between him or them and the Company, from time to time terminate his or their appointment and appoint another or others in his or their place or places.

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5.1.13.1 Subject to any provisions in the contract under which he is appointed, any Director appointed to any position or executive office pursuant to 5.1.13 shall be subject to the same provisions as to removal as the other Directors of the Company.

5.1.13.2 The Board may from time to time entrust and confer upon a Managing Director or other executive officer appointed under 5.1.13 for the time being such of the powers and authorities vested in them as they think fit, and may confer such powers and authorities for such time, and to be exercised for such objects and purposes and upon such terms and conditions and with such restrictions as they may think expedient, and they may convert such powers and authorities either collaterally with, or to the exclusion of, or in substitution for, all or any of the powers and authorities of the Directors in that regard, and may from time to time revoke, withdraw, alter or vary all or any of such powers and authorities.

5.3 Authority of the Board of Directors

5.3.1 The authority of the Board to manage and direct the business and affairs of the Company, as set out in section 66(1) is not limited or restricted by this Memorandum. As such, the management and control of the affairs of the Company shall vest in the Board which shall have full power and authority to do or perform any act, function, matter or thing which could or might be done by the Company, except where such matters are in this Memorandum specifically reserved to be dealt with by a general meeting of Shareholders.

5.3.2 If, at any time, the Company has only one Director, as contemplated in section 57(3) of the Act, the authority of that Director to act without notice or compliance with any other internal formalities, as set out in that section, is not limited or restricted by this Memorandum. As such:

5.3.2.1 that Director may exercise any power or perform any function of the Board at any time, without notice or compliance with any other internal formalities, except to the extent that this Memorandum provides otherwise, and

5.3.2.2 sections 71(3) to (7), 73 and 74 of the Act respectively, do not apply to governance of the Company.

5.3.3 The Company may at any general meeting of Shareholders repeal, approve or amend any decision of the Board but no such decision of the Company shall invalidate any action taken by the Board in accordance with this Memorandum. No decision so repealed or amended shall invalidate any prior act of the Board which would have been valid if that decision had not been repealed or amended.

5.5 Directors’ compensation and financial assistance

5.5.1 The authority of the Company to pay remuneration to the Company’s Directors, in accordance with a special resolution approved by the Company’s Shareholders within the previous 2 (two) years, and as set out in section 66(8) and (9) of the Act, is not further limited or restricted in any way by this Memorandum.

5.5.2 The authority of the Board, as set out in section 45 of the Act, to authorise the Company to provide financial assistance to a Director, Prescribed Officer or other person referred to in section 45(2) of the Act is not limited or restricted by this Memorandum.

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Appendix 9

ORDINARY SHARE TRADING HISTORY OF CAPPREC

An overview of the aggregate volumes and values of the Ordinary Shares traded on the JSE, including the highest and lowest Ordinary Share prices for (i) each month over the twelve preceding months, and (ii) the last thirty days, preceding the Last Practicable Date is as follows:7

DATE HIGH LOW VALUE VOLUME

31/12/15 114 89 10,794,241.00 11,206,86931/01/16 110 95 11,309,623.00 11,007,46529/02/16 100 87 31,224,240.00 32,918,31731/03/16 98 89 30,017,584.00 32,179,80130/04/16 100 91 8,601,016.00 8,924,65031/05/16 99 92 12,258,170.00 12,821,58030/06/16 98 90 9,449,690.00 10,146,09631/07/16 96 89 20,087,759.00 21,422,92431/08/16 95 89 10,983,906.00 12,024,74830/09/16 95 91 35,881,663.00 38,588,20431/10/16 94 85 5,183,676.00 5,733,70530/11/16 95 89 3,717,870.00 4,072,38031/12/16 100 89 33,250,161.00 36,241,56931/01/17 100 89 5,669,948.00 5,786,92528/02/17 99 86 24,739,932.00 26,172,689

DATE HIGH LOW VALUE VOLUME

07/02/17 96 95 112,625.00 117,50008/02/17 96 94 757,832.00 800,04009/02/17 0 0 - -10/02/17 95 92 1,764,980.00 1,896,90213/02/17 95 93 896,996.00 950,26114/02/17 96 94 3,476,231.00 3,672,36715/02/17 97 95 709,169.00 743,21516/02/17 97 95 234,390.00 244,81217/02/17 98 91 3,009,210.00 3,123,05520/02/17 94 93 58,611.00 62,58721/02/17 93 88 1,895,555.00 2,114,10822/02/17 93 89 721,629.00 801,69623/02/17 91 89 190,944.00 214,22424/02/17 91 86 1,876,763.00 2,148,52527/02/17 91 87 290,994.00 322,30028/02/17 92 86 817,403.00 922,63801/03/17 93 92 21,408.00 23,11102/03/17 91 86 57,526.00 65,61103/03/17 91 86 380,895.00 427,66206/03/17 90 85 107,814.00 124,82207/03/17 90 86 219,054.00 249,00008/03/17 89 86 198,638.00 230,91009/03/17 89 89 4,450.00 5,00010/03/17 0 0 - -13/03/17 88 86 59,832.00 69,32214/03/17 88 86 185,648.00 215,65715/03/17 88 85 393,224.00 461,54516/03/17 87 84 439,699.00 520,62717/03/17 85 82 844,736.00 1,022,96620/03/17 85 85 107,950.00 127,00021/03/17 0 0 - -22/03/17 85 83 404,387.00 481,1127Source: I-NET Bridge (Pty) Ltd

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CAPITAL APPRECIATION LIMITED(Incorporated in South Africa)

(Registration number 2014/253277/06)JSE ordinary share code: CTA

ISIN: ZAE000208245(“CAPPREC” or the “Company”)

DIRECTORS

Executive Independent non-executiveMichael Pimstein (Joint Chief Executive Officer) Bukelwa BuloBradley Sacks (Joint Chief Executive Officer) Jacob Meyer KahnAlan Salomon (Chief Financial Officer) Victor Sekese

Charles ValkinNon-independent non-executiveMichael (Motty) Sacks (Chairperson)Dr Daniel (Dan) MatjilaRoshan Morar

NOTICE OF GENERAL MEETING OF CAPPREC SHAREHOLDERS

The definitions and interpretations commencing on page 6 of the Circular to which this Notice of General Meeting is attached, apply, mutatis mutandis, to this Notice of General Meeting.

Notice is hereby given that a general meeting of CAPPREC Shareholders (“General Meeting”) will be held at the offices of CAPPREC on the 4th Floor, One Vdara, 41 Rivonia Road, Sandhurst, 2196 at 10:00 on Friday, 5 May 2017.

Purpose

The purpose of the General Meeting is to consider and, if deemed fit, to approve and adopt, with or without modification, the resolutions set out in this Notice of General Meeting.

Note:

• The definitions and interpretations commencing on page 6 of the Circular to which this Notice of General Meeting is annexed, apply, mutatis mutandis, to this Notice of General Meeting and to the resolutions set out below.

• For a special resolution to be approved by CAPPREC Shareholders, it must be supported by at least 75% of the voting rights exercised on the resolution. For an ordinary resolution to be approved by CAPPREC Shareholders, it must be supported by more than 50% of the voting rights exercised on the resolution, save for Ordinary Resolution 6, which must be supported by at least 75% of the voting rights exercised on the resolution.

• In accordance with Schedule 14 to the Listings Requirements, equity securities held by a trust or a scheme governed by Schedule 14 to the Listings Requirements will not have their votes at general meetings taken into account for the purpose of resolutions proposed in terms of the Listings Requirements.

1. ORDINARY RESOLUTION 1 – ACQUISITION OF THE AR SHARES

“RESOLVED AS AN ORDINARY RESOLUTION that, subject to the approval of Ordinary Resolution 2 and Ordinary Resolution 5, the acquisition by the Company of the AR Shares for an aggregate purchase consideration comprising of (a) an aggregate cash payment of R295 000 000, and (b) the allotment and issue of 230 000 000 Ordinary Shares in aggregate, in accordance with the terms and subject to the conditions of the AR Agreement, the salient terms of which are contained in the Circular and copies of which have been made available for inspection by CAPPREC Shareholders, be and is hereby approved in terms of the Listings Requirements.”

Reason and effect

The reason for Ordinary Resolution 1 is that the AR Acquisition together with the Rinwell Acquisition in respect of which the AR Acquisition is inter-conditional constitutes the acquisition of a Viable Asset and a Category 1 transaction

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(as such term is defined in the Listings Requirements), each of which require CAPPREC Shareholder approval by way of an ordinary resolution in terms of the Listings Requirements.

The effect of Ordinary Resolution 1, if approved by CAPPREC Shareholders, is to grant the requisite approval for the AR Acquisition in terms of the Listings Requirements, to be implemented in accordance with the terms and subject to the conditions of the AR Agreement. To the extent that the AR Acquisition and the Rinwell Acquisition, respectively, are successfully implemented, CAPPREC will no longer be classified as a SPAC.

2. ORDINARY RESOLUTION 2 – ACQUISITION OF THE RINWELL SHARES

“RESOLVED AS AN ORDINARY RESOLUTION that, subject to the approval of Ordinary Resolution 1 and Ordinary Resolution 5, the acquisition by the Company of the Rinwell Shares for an aggregate purchase consideration of R225 000 000 payable in cash, in accordance with the terms and subject to the conditions of the Rinwell Agreement, the salient terms of which are contained in the Circular and copies of which have been made available for inspection by CAPPREC Shareholders, be and is hereby approved in terms of the Listings Requirements.”

Reason and effect

The reason for Ordinary Resolution 2 is that the Rinwell Acquisition together with the AR Acquisition in respect of which the Rinwell Acquisition is inter-conditional constitutes the acquisition of a Viable Asset, requiring CAPPREC Shareholder approval by way of an ordinary resolution in terms of the Listings Requirements.

The effect of Ordinary Resolution 2, if approved by CAPPREC Shareholders, is to grant the requisite approval for the Rinwell Acquisition in terms of the Listings Requirements, to be implemented in accordance with the terms and subject to the conditions of the Rinwell Agreement. To the extent that the AR Acquisition and the Rinwell Acquisition, respectively, are successfully implemented, CAPPREC will no longer be classified as a SPAC.

3. ORDINARY RESOLUTION 3 – ACQUISITION OF THE SST SHARES

“RESOLVED AS AN ORDINARY RESOLUTION that, subject to the approval of Ordinary Resolution 5, the acquisition by the Company of the SST Shares and the SST Claims for an aggregate purchase consideration comprising of (a) an initial cash payment of R82 300 000, (b) the allotment and issue of the SST Closing Shares (60 000 000 Ordinary Shares in aggregate, subject to an adjustment upon the occurrence of an SST Adjustment Event between the signature date and the date of closing of the SST Acquisition), (c) the allotment and issue of the SST PW Shares (if any) and (d) the aggregate cash payment of the SST PW Cash (if any), in accordance with the terms and subject to the conditions of the SST Agreement, the salient terms thereof are contained in the Circular and copies of which have been made available for inspection by CAPPREC Shareholders, be and is hereby approved in terms of the Listings Requirements.”

Reason and effect

The reason for Ordinary Resolution 3 is that the Proposed SST Transaction constitutes the acquisition of a Viable Asset, requiring CAPPREC Shareholder approval by way of an ordinary resolution, in terms of the Listings Requirements. Further, Ordinary Resolution 3 is to provide the Company with the requisite approvals to comply with the terms and conditions of the SST Agreement.

The effect of Ordinary Resolution 3, if approved by CAPPREC Shareholders, is to grant the requisite approval for the Proposed SST Transaction in terms of the Listings Requirements, to be implemented in accordance with the terms and subject to the conditions of the SST Agreement. To the extent that the Proposed SST Transaction is successfully implemented, CAPPREC will no longer be classified as a SPAC.

4. ORDINARY RESOLUTION 4 – USE OF RESIDUAL CAPITAL – RESONANCE AUSTRALIA INVESTMENT

“RESOLVED AS AN ORDINARY RESOLUTION that, subject to the approval of Ordinary Resolution 1 and Ordinary Resolution 2, the use of the Residual Capital by the Company to implement and fund the Resonance Australia Investment, be and is hereby approved.”

Reason and effect

The reason for Ordinary Resolution 4 is that in terms of paragraph 4.35(c) of the Listings Requirements, the use of the Residual Capital by CAPPREC requires CAPPREC Shareholder approval by ordinary resolution.

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The effect of Ordinary Resolution 4, if approved by CAPPREC Shareholders, is to grant CAPPREC the requisite approval for the use of the Residual Capital to implement and fund the Resonance Australia Investment in terms of the Listings Requirements.

5. ORDINARY RESOLUTION 5 – USE AND RETENTION OF RESIDUAL CAPITAL

“RESOLVED AS AN ORDINARY RESOLUTION that, subject to the approval and adoption of either (i) Ordinary Resolution 1 and Ordinary Resolution 2, or (ii) Ordinary Resolution 3, the use and retention of the Residual Capital by CAPPREC to source new investments and for working capital purposes, be and is hereby approved.”

Reason and effect

The reason for Ordinary Resolution 5 is that, in terms of paragraph 4.35(c) of the Listings Requirements, the use and retention of the Residual Capital by CAPPREC requires CAPPREC Shareholder approval by way of an ordinary resolution.

The effect of Ordinary Resolution 5, if approved by CAPPREC Shareholders, is to grant CAPPREC the requisite approval for the use and retention of the Residual Capital in terms of the JSE Listings Requirements.

6. ORDINARY RESOLUTION 6 – GENERAL AUTHORITY TO ISSUE SHARES FOR CASH

“RESOLVED AS AN ORDINARY RESOLUTION that, subject to the provisions of the Companies Act, the Listings Requirements and the MOI, the Board be and is hereby authorised, by way of general authority, to issue and allot any of CAPPREC’s unissued securities for cash as the Board in its discretion may deem fit, without restriction, provided that:

1. the general authority be valid until CAPPREC’s next annual general meeting of CAPPREC Shareholders, provided that it shall not extend beyond 15 months from the date of the passing of this ordinary resolution (whichever period is shorter);

2. the allotment and issue of the securities must be made to public shareholders, as such term is defined in the Listings Requirements, and not to related parties;

3. the securities which are the subject of the issue for cash must be of a class already in issue, or where this is not the case, must be limited to such securities that are convertible into a class already in issue;

4. the number of securities issued for cash, in aggregate in any one financial year, shall not exceed 15% of CAPPREC’s issued share capital as of the date of this Notice of General Meeting, provided that any securities to be issued pursuant to a rights issue (announced, irrevocable and fully underwritten) or an acquisition issue shall not diminish the number of securities that comprise the 15% of securities that may be issued in terms of this ordinary resolution. As of the date of this Notice of General Meeting, CAPPREC’s issued share capital amounts to 1 250 000 000 Ordinary Shares and 4 Constituent Shares;

5. the maximum discount at which securities may be issued is 10% of the weighted average traded price of those securities on the JSE over the 30 Business Days prior to the date that the price of the issue is agreed between CAPPREC and the party subscribing for the securities or any other price agreed to by the JSE. The JSE will be consulted for a ruling if the securities have not traded in such 30-day period; and

6. after CAPPREC has issued securities for cash which represent, on a cumulative basis within a financial year, 5% or more of the number of Shares in issue prior to that issue, the Company shall publish an announcement containing full details of the issue (including the number of securities issued, the average discount to the weighted average traded price of the securities over the 30 Business Days prior to the date that the price of the issue is agreed in writing between the issuer and the party subscribing for the securities and the effect of the issue on net asset value, net tangible asset value, earnings and headline earnings per security), or any other announcements that may be required in such regard in terms of the Listings Requirements of the JSE which may be applicable from time to time.”

Note:

In terms of the Listings Requirements, a 75% majority of the votes cast by Shareholders present or represented by proxy at the General Meeting must be cast in favour of Ordinary Resolution 6 for it to be approved.

Reason and effect

For listed entities wishing to issue securities for cash (other than issues by way of rights offers, in consideration for acquisitions and/or to share incentive schemes (which schemes have been duly approved by the JSE and by the

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CAPPREC Shareholders)), it is necessary for the Board to obtain the prior authority of the CAPPREC Shareholders in accordance with the Listings Requirements and the MOI. Accordingly, the reason for Ordinary Resolution 6 is to obtain a general authority from CAPPREC Shareholders to issue securities for cash in compliance with the Listings Requirements and the MOI.

7. ORDINARY RESOLUTION 7 – AMENDMENT OF SHARE PLAN

“RESOLVED AS AN ORDINARY RESOLUTION that, subject to the Companies Act, the Listings Requirements and the provisions of the Share Plan, the Board be and is hereby authorised to amend the Share Plan as follows:

• clause 1.1.8 be and is hereby deleted in its entirety and replaced with the following “Group – the Company and its subsidiaries for the time being and any company, partnership or trust or other entity or association of persons which is controlled or jointly controlled by the Company, whether directly or indirectly, for which purpose “control” includes the right to exercise or otherwise control the exercise of a majority of the voting rights (or one-half of the voting rights in the case of joint control) of the issued voting securities or other voting instruments in that company, partnership, trust or other entity or association of persons as well as any company, partnership or trust or other entity or association of persons that is beneficial to and involved with the business of the Group; and

• clause 2.1 be and is hereby deleted in its entirety and replaced with the following “The maximum number of Share Options shall be in respect of 150 000 000 (one hundred and fifty million) Shares; provided that the said number shall be increased or reduced in direct proportion to the increase or reduction of issued Shares arising from any conversion, consolidation, sub-division, rights or capitalisation issue of Shares.””

Reason and effect

The reason for Ordinary Resolution 7 is that in terms of the Listings Requirements and the provisions of the Share Plan, the Company requires approval of CAPPREC Shareholders to amend the Share Plan as set out above.

The effect of Ordinary Resolution 7, if approved by CAPPREC Shareholders, is that the Company will be granted the necessary authority by CAPPREC Shareholders in terms of the Share Plan, and the Listings Requirements to amend the Share Plan in order to make the management of the Share Plan more efficient and effective and flexible to the future needs of the CAPPREC group.

Note:

In terms of the Listings Requirements, a 75% majority of the votes cast by CAPPREC Shareholders present or represented by proxy at the General Meeting must be cast in favour of Ordinary Resolution 7 for it to be approved.

8. ORDINARY RESOLUTION 8 – CREATING VACANCIES ON THE BOARD

“RESOLVED AS AN ORDINARY RESOLUTION that, an aggregate of six vacancies be and are hereby created on the Board and that the Board be and is hereby authorised to appoint eligible persons to fill any such vacancy on the Board until the CAPPREC Shareholders approve the appointment of such person/s at the first general meeting of CAPPREC Shareholders following the appointment of such person/s by the Board to fill any such vacancy.”

Reason and effect

The reason for Ordinary Resolution 8 is to allow the Board for the flexibility to manage an effective and balanced Board composition post the Completion of the Proposed Transactions in order to meet strategic imperatives post implementation of the Proposed Transactions and in compliance with applicable corporate governance regulations.

The effect of Ordinary Resolution 8, if approved by CAPPREC Shareholders, is that six vacancies will be created and that the Board shall be authorised to fill such vacancies on a temporary basis until such appointment is confirmed by the General Meeting within the meaning of the Companies Act and the MOI.

9. SPECIAL RESOLUTION 1 – INTERCOMPANY FINANCIAL ASSISTANCE

“RESOLVED AS A SPECIAL RESOLUTION that, the Board may, subject to compliance with the requirements of the Companies Act, the Listings Requirements and the MOI, authorise the Company to provide direct or indirect financial assistance by way of loan, guarantee, the provision of security or otherwise, to any of its present or future subsidiaries (as such term is defined in the Listings Requirements) and/or any other company or corporation that is or becomes related or inter-related to the Company or any of its subsidiaries (and/or to any member of such subsidiary or related or inter-related company or corporation) for any purpose or in connection with any matter, including, but not limited to the subscription for any option, or any securities, issued or to be issued by the Company or a related or inter-related company, or for the purchase of any securities of the Company or a related or inter-related company.”

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Reason and effect

The reason for and effect of Special Resolution 1, if approved by CAPPREC Shareholders, is to grant the Board the authority, until the next annual general meeting of Shareholders, to provide direct or indirect financial assistance to any company or corporation which is related or interrelated to the Company. In effect, the Company is, inter alia, authorised to grant loans to its subsidiaries and to guarantee the debt of its subsidiaries in furtherance of the conduct of the business.

VOTING REQUIREMENTS AND PROXIES

The date on which CAPPREC Shareholders must be recorded in the Register for purposes of being entitled to receive this notice is Friday, 24 March 2017. The date on which CAPPREC Shareholders must be recorded in the Register for purposes of being entitled to attend and vote at the General Meeting is Friday, 28 April 2017. Accordingly, the Last Day to Trade to be entitled to attend and vote at the General Meeting is Monday, 24 April 2017.

Any CAPPREC Shareholder who holds Certificated Shares or who holds Dematerialised Shares through a CSDP or Broker and who has selected “own-name” registration, may attend, participate in and vote at the General Meeting or at any adjournment thereof or may appoint any other person or persons (none of whom need be a CAPPREC Shareholder) as a proxy or proxies, to attend, participate in and vote or abstain from voting at the General Meeting or at any adjournment thereof, in such Shareholder’s stead.

A form of proxy (yellow) is attached for use by such CAPPREC Shareholders. Such form of proxy (yellow), duly completed, must be forwarded to and reach the Transfer Secretaries, Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Ave, Rosebank, Johannesburg, 2196, South Africa (PO Box 61051, Marshalltown, 2107, South Africa), by no later than 10:00 on Wednesday, 3 May 2017.

CAPPREC Shareholders holding Dematerialised Shares, but not with own-name registration, must furnish their CSDP or Broker with their instructions for voting at the General Meeting. If your CSDP or Broker, as the case may be, does not obtain instructions from you, it will be obliged to act in terms of your mandate furnished to it, or if the mandate is silent in this regard, complete the relevant form of proxy (yellow) attached.

Unless you advise your CSDP or Broker, in terms of the agreement between you and your CSDP or Broker by the cut-off time stipulated in the agreement, that you wish to attend the General Meeting or send a proxy to represent you at the General Meeting, your CSDP or Broker will assume that you do not wish to attend the General Meeting or send a proxy.

If you wish to attend the General Meeting or send a proxy, and you are not an “own-name” Dematerialised Shareholder or Certificated Shareholder, you must request your CSDP or Broker to issue the necessary Letter of Representation to you.

The completion of a form of proxy does not preclude any Shareholder registered by the Voting Record Date from attending the General Meeting.

Section 63(1) of the Companies Act requires that meeting participants provide satisfactory identification. Meeting participants will be required to provide proof of identification to the reasonable satisfaction of the chairperson of the General Meeting and must accordingly bring a copy of their identity document, passport or driver’s licence to the General Meeting. If in doubt as to whether any document will be regarded as satisfactory proof of identification, meeting participants should contact the Transfer Secretaries for guidance.

ELECTRONIC PARTICIPATION

CAPPREC Shareholders or their proxies may participate in (but not vote at) the General Meeting by way of a webcast. If you wish to do so, you must contact the company secretary by Wednesday, 3 May 2017 and identify yourself to the satisfaction of the company secretary to obtain the webcast access details. CAPPREC Shareholders participating in this manner will still have to appoint a proxy to vote on their behalf at the General Meeting. Access by means of electronic communication will be at the expense of the CAPPREC Shareholders.

SIGNED AT JOHANNESBURG, SOUTH AFRICA, ON 24 MARCH 2017 ON BEHALF OF THE BOARD.

By order of the Board

Michael SacksChairman

PRINTED BY INCE (PTY) LTD REF. JOB011730

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CAPITAL APPRECIATION LIMITED(Incorporated in South Africa)

(Registration number 2014/253277/06)JSE ordinary share code: CTA

ISIN: ZAE000208245(“CAPPREC” or the “Company”)

FORM OF PROXY – FOR USE BY CERTIFICATED SHAREHOLDERS AND DEMATERIALISED SHAREHOLDERS WITH “OWN-NAME” REGISTRATION ONLY

For use at the General Meeting, to be held at the offices of CAPPREC on the 4th Floor, One Vdara, 41 Rivonia Road, Sandhurst, 2196 at 10:00 on Friday, 5 May 2017.

The definitions and interpretations commencing on page 6 of the Circular to which this form of proxy is attached, apply, mutatis mutandis, to this “form of proxy”.

If you are a Dematerialised Shareholder without “own-name” registration, you must not complete this form of proxy (yellow) but must contact your CSDP or Broker who will furnish you with the necessary Letter of Representation to attend the General Meeting or to be represented thereat by proxy. This must be done in accordance with the custody agreement between you and your CSDP or Broker.

I/We (full names in BLOCK LETTERS please)

of (address)

Telephone number Cellphone number

Email address

being the registered holder(s) of: Certified Shares or Dematerialised Shares with “own- name” registration do hereby appoint:

1. or failing him/her

2. or failing him/her

3. the chairperson of the General Meeting, as my/our proxy to vote for me/us on my/our behalf at the General Meeting which will be held for the purpose of considering and, if deemed fit, approving and adopting, with or without modification, the resolutions to be proposed thereat and at each adjournment thereof and to vote for and/or against the said resolutions and/or to abstain from voting in respect of the Shares registered in my/our name(s), in accordance with the following instructions (see notes):

For Against Abstain

Ordinary Resolution 1 – Acquisition of the AR Shares

Ordinary Resolution 2 – Acquisition of the Rinwell Shares

Ordinary Resolution 3 – Acquisition of the SST Shares

Ordinary Resolution 4 – Use of residual capital – Resonance Australia

Ordinary Resolution 5 – Use and retention of residual capital

Ordinary Resolution 6 – General authority to issue shares for cash

Ordinary Resolution 7 – Amendment of Share Plan

Ordinary Resolution 8 – Creating vacancies on the Board

Special Resolution 1 – Intercompany financial assistance

One vote per Share held by CAPPREC Shareholders. CAPPREC Shareholders must insert the relevant number of votes they wish to vote in the appropriate box provided or “X” should they wish to vote all Shares held by them. If the form of proxy (yellow) is returned without an indication as to how the proxy should vote on a particular matter, the proxy will exercise his/her discretion as to whether, and if so, how he/she votes.

Signed at on 2017

Signature

Assisted by me (where applicable) (state capacity and full name)

Please read the notes on the reverse side of this form of proxy.

Summary of rights within the meaning of section 58 of the Companies Act:

• A CAPPREC Shareholder may, at any time and in accordance with the provisions of section 58 of the Companies Act, appoint any individual (including an individual who is not a CAPPREC Shareholder) as a proxy to participate in, and speak and vote at, a Shareholders’ meeting on behalf of such CAPPREC Shareholder.

• A CAPPREC Shareholder may appoint two or more persons concurrently as proxies, and may appoint more than one proxy to exercise voting rights attached to different securities held by the CAPPREC Shareholder.

• A proxy may delegate his authority to act on behalf of a CAPPREC Shareholder to another person, subject to any restriction set out in the instrument appointing such proxy (please refer to item 15 below).

• Irrespective of the form of instrument used to appoint a proxy, the appointment of a proxy is suspended at any time and to the extent that the relevant CAPPREC Shareholder chooses to act directly and in person in the exercise of any of such CAPPREC Shareholder’s rights as a CAPPREC Shareholder.

• Any appointment by a CAPPREC Shareholder of a proxy is revocable, unless the form of instrument used to appoint such proxy states otherwise.

• If an appointment of a proxy is revocable, a CAPPREC Shareholder may revoke the proxy appointment by (i) cancelling it in writing, or making a later inconsistent appointment of a proxy and (ii) delivering a copy of the revocation instrument to the proxy and to the relevant company.

• A proxy appointed by a CAPPREC Shareholder is entitled to exercise, or abstain from exercising, any voting right of such Shareholder without direction, except to the extent that the relevant company’s memorandum of incorporation, or the instrument appointing the proxy, provides otherwise.

• If the instrument appointing a proxy or proxies has been delivered by a CAPPREC Shareholder to a company, then, for so long as that appointment remains in effect, any notice that is required in terms of the Companies Act or such company’s memorandum of incorporation to be delivered to a CAPPREC Shareholder must be delivered by such company to: – the relevant CAPPREC Shareholder; or – the proxy or proxies, if the relevant CAPPREC Shareholder has: (i) directed such company to do so, in writing and (ii) paid any

reasonable fee charged by such company for doing so.

Notes:1. Each CAPPREC Shareholder is entitled to appoint 1 (one) or more proxies (none of whom need be a shareholder of CAPPREC) to attend, speak and vote

in place of that CAPPREC Shareholder at the General Meeting.2. A CAPPREC Shareholder may insert the name of a proxy or the names of two alternative proxies of the CAPPREC Shareholder’s choice in the space/s

provided with or without deleting “the chairperson of the General Meeting,” but the Shareholder must initial any such deletion. The person whose name stands f irst on the form of proxy (yellow) and who is present at the General Meeting will be entitled to act as proxy to the exclusion of those whose names follow.

3. A CAPPREC Shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by the Shareholder in the appropriate box provided or an “x” should the CAPPREC Shareholder wish the proxy to exercise all votes. Failure to comply with the above will be deemed to authorise and direct the chairperson of the General Meeting, if the chairperson is the authorised proxy, to vote or abstain from voting at the General Meeting as the chairperson deems f it, or any other proxy to vote or abstain from voting at the General Meeting as he/she deems f it, in respect of all the votes of the CAPPREC Shareholder exercisable at the meeting.

4. Completed forms of proxy (yellow) and the authority (if any) under which they are signed must be lodged with or posted to the Transfer Secretaries at Rosebank Towers, 15 Biermann Ave, Rosebank, Johannesburg, 2196, South Africa or PO Box 61051, Marshalltown, 2107, South Africa, to be received by them by no later than 10:00 on Wednesday, 3 May 2017 (it being deemed, for purposes hereof, that the General Meeting will commence at 10:00 on Friday, 5 May 2017).

5. The completion and lodging of this form of proxy (yellow) will not preclude the relevant CAPPREC Shareholder from attending the General Meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such Shareholder wish to do so.

6. The chairperson of the General Meeting may accept or reject any form of proxy (yellow) not completed and/or received in accordance with these notes or with the MOI.

7. Any alteration or correction made to this form of proxy (yellow) must be initialled by the signatory/ies.8. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity (e.g. for a company, close corporation,

trust, pension fund, deceased estate, etc.) must be attached to this form of proxy (yellow), unless previously recorded by CAPPREC or the Transfer Secretaries.

9. Where this form of proxy (yellow) is signed under power of attorney, such power of attorney must accompany this form of proxy (yellow), unless it has been registered by CAPPREC or the Transfer Secretaries or waived by the chairperson of the General Meeting.

10. Where Shares are held jointly, all joint holders are required to sign this form of proxy (yellow).11. A minor CAPPREC Shareholder must be assisted by his/her parent/guardian, unless the relevant documents establishing his/her legal capacity are produced

or have been registered by CAPPREC or the Transfer Secretaries.12. Dematerialised Shareholders who do not own Shares in “own-name” dematerialised form and who wish to attend the General Meeting, or to vote by way

of proxy, must contact their CSDP or Broker who will furnish them with the necessary Letter of Representation to attend the General Meeting or to be represented thereat by proxy. This must be done in terms of the agreement between the Shareholder and his/her CSDP or Broker.

13. This form of proxy (yellow) shall be valid at any resumption of an adjourned meeting to which it relates although this form of proxy (yellow) shall not be used at the resumption of an adjourned meeting if it could not have been used at the General Meeting from which it was adjourned for any reason other than it was not lodged timeously for the meeting from which the adjournment took place. This form of proxy (yellow) shall, in addition to the authority conferred by the Companies Act except insofar as it provides otherwise, be deemed to confer the power generally to act at the General Meeting in question, subject to any specif ic direction contained in this form of proxy (yellow) as to the manner of voting.

14. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the death or mental disorder of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Share in respect of which the proxy is given, provided that no notif ication in writing of such death, insanity, revocation or transfer as aforesaid shall have been received by the Transfer Secretaries before the commencement of the meeting or adjourned meeting at which the proxy is used.

15. Any proxy appointed pursuant to this form of proxy (yellow) may not delegate her or his authority to act on behalf of the relevant CAPPREC Shareholder.16. In terms of section 58 of the Companies Act, unless revoked, an appointment of a proxy pursuant to this form of proxy (yellow) remains valid only until

the end of the General Meeting or any adjournment of the General Meeting.17. The def initions and interpretations commencing on page 6 of the Circular apply, mutatis mutandis, to this “form of proxy”.