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Standard Bank - Selection Process for Regional Business and Community Groupings as Participants in the Black Ownership Initiative Standard Bank Group Limited (Incorporated in the Republic of South Africa) (Registration number 1969/017128/06) Share code: SBK Namibian share code: SNB ISIN: ZAE000057378 ("Standard Bank" or "the Company") SELECTION PROCESS FOR REGIONAL BUSINESS AND COMMUNITY GROUPINGS AS PARTICIPANTS IN THE BLACK OWNERSHIP INITIATIVE IN STANDARD BANK 1. INTRODUCTION On 19 January 2006 Standard Bank announced that a process was being embarked upon to identify and select the regional business and community groupings that would be the beneficiaries of the 20.1 million Standard Bank ordinary shares owned by the Tutuwa Community Trust. The Tutuwa Community Trust is a trust formed for the benefit of regional business and community groupings, and is one of the participants in the broad based grouping of black entities that acquired an effective 10% interest in the South African banking operations of Standard Bank in the black ownership initiative transaction announced on 15 July 2004. The participation rights in the Tutuwa Community Trust were allocated in accordance with the following split: - 50% to regional businesses that are owned and controlled by black people (as defined in the Finance Sector Charter) operating in the small and medium sized enterprises ("SME") sector ("the regional business component"); and - 50% to community development groupings whose activities benefit black people ("the community development component"). The process that was embarked on as per the announcement on 19 January 2006 involved the identification and selection of regional businesses in the SME sector to participate in the regional business component, while the selection process of participants in the community development component was to be announced at a later stage. 2. OBJECTIVE In the identification and selection of participants in the regional business component the objective was twofold: - to identify and select operational SMEs that inter alia contribute directly - to the alleviation of unemployment on a sustainable basis by employing at least 10 people on a permanent basis; and - to target a total of approximately 250 SMEs from all the nine provinces of South Africa in an equitable manner. To this extent it was believed that this could be achieved by using the formula developed by the Finance and Fiscal Commission ("FFC developed formula"). The FFC is a statutory institution whose mission is to act as an independent and impartial institution that gives advice and makes recommendations to parliament, provincial legislatures, and other relevant authorities or organs of state, on matters affecting intergovernmental fiscal relations. As such the Trustees believed that the FFC developed formula was a reliable tool that could be used in carrying out equitable distributions to provinces. In addition to the overall objective, it was the intention of the trustees of the Tutuwa Community Trust ("the Trustees") that the applicant SMEs be entities that have sustainable business models, given that the benefits of the black ownership initiative would only be available to the selected participants in the long term. 3. OUTCOME OF REGIONAL BUSINESS COMPONENT PROCESS The Trustees are pleased to announce that following the opening of the application process relating to the regional business component 526 applications were received, of which 242 met the qualifying criteria ("qualifying applications"). Although the combined number of qualifying applications received from all the provinces was close to the total target of approximately 250, the provinces of Gauteng, KwaZulu Natal and Western Cape were oversubscribed ("the oversubscribed provinces") while the number of qualifying applications received from the other six provinces was less than the provincial targets set ("the underrepresented provinces"). All the qualifying applications from the underrepresented provinces have therefore been successful, while in the oversubscribed provinces only the highest scoring qualifying applications (i.e., up to the required target number as set using the FFC developed formula) have been successful. The names of the SMEs that have been successful will only be publicised after the outcome of certain initiatives by the Trustees to increase the number of qualifying applications from the underrepresented provinces ("the further initiatives"). 4. THE FURTHER INITIATIVES The Trustees remain committed to meeting the initial objective of having a broad base of participants from all the nine provinces of South Africa. In an effort to achieve this objective further initiatives to attract more applications ("new applications") will be undertaken in the underrepresented provinces, and such further initiatives will be carried out without compromising the qualifying criteria. These further initiatives in the underrepresented provinces will include additional publicity and a more active search of applicants through any other means which the Trustees may deem appropriate. For the avoidance of doubt, the qualifying applications from the underrepresented provinces that have already been determined as successful will remain so, notwithstanding the new applications that may be received. In the event that the further initiatives do not result in the number of qualifying applications meeting or exceeding the required provincial targets, the Trustees have the right to award the remaining participation rights to those qualifying applications in the oversubscribed provinces that have not been awarded participation rights ("excess qualifying applications"). In such event the scores of the excess qualifying applications will be taken into account. To this extent the Trustees have retained the services of SizweNtsaluba VSP to assist with the receipt and scoring of the new applications to be received. 5. FINAL ANNOUNCEMENT The names of all the SMEs that have been awarded participation rights in the Tutuwa Community Trust will be made public in an announcement to mark the completion of the identification and selection of participants in the regional business component of the Tutuwa Community Trust. It is anticipated that the final announcement will be published in the press during November 2006. 6. COMMUNITY DEVELOPMENT COMPONENT PROCESS For the community development component the Trustees are currently establishing a community foundation that will be a sustainable independent institution with a secure capital base, long-term cash flow and have ongoing allocations to specific (or broadly defined) activities that will benefit primarily black people especially those living in rural areas. As far as possible, existing community structures will be used in such allocations. These will be identified and prioritised via a research programme to be conducted in the near future. Further details on the community development component will be contained in the above mentioned announcement during November 2006. Johannesburg 28 July 2006 Investment bank and joint sponsor Standard Bank Legal adviser Bowman Gilfillan Attorneys Independent lead sponsor Deutsche Securities Independent consultant to the Trustees SizweNtsaluba VSP Date: 28/07/2006 10:44:22 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
