Acquisition by a subsidiary of Zeder of 100% of the issued share capital of Mpongwe Milling (2009) Limited Zeder Investments Limited (Incorporated in the Republic of South Africa) Registration number: 2006/019240/06 Share code: ZED ISIN: ZAE000088431 (“Zeder”) ACQUISITION BY A SUBSIDIARY OF ZEDER OF 100% OF THE ISSUED SHARE CAPITAL OF MPONGWE MILLING (2009) LIMITED (“MPONGWE MILLING”) 1. THE ACQUISITION Shareholders are hereby advised that Zeder, acting through its subsidiary Chayton Africa (or its nominee) (“the Purchaser”), has entered into an agreement with the shareholders of Mpongwe Milling (“the Sellers”) in terms of which the Sellers will dispose of the entire issued share capital in Mpongwe Milling (“the Sale Shares”) to the Purchaser (“the Acquisition”). 2. BACKGROUND INFORMATION Mpongwe Milling, which has been privately owned by a family since 2006, is a leading maize and wheat mill in the Copperbelt province of Zambia and has been operating as such for over a decade. Chayton Africa, through its Zambian subsidiaries, currently owns and operates several large scale commercial farming operations in the Copperbelt and Central provinces of Zambia. 3. RATIONALE FOR THE ACQUISITION Chayton Africa’s strategy is to become a diversified agricultural company that owns and operates grain and other related agri and value chain businesses across Southern Africa. Mpongwe Milling complements Chayton Africa’s current operations and the Acquisition provides Chayton Africa with an opportunity to expand its product offering across the value chain. 4. PURCHASE CONSIDERATION The cash consideration payable by the Purchaser to the Sellers for the purchase of the Sale Shares is USD27 500 000, with USD2 500 000 of such purchase consideration being subject to the achievement of predefined future performance criteria by Mpongwe Milling. Failing such achievement, the USD2 500 000 portion of the purchase consideration shall be reduced or forfeited. 5. CONDITION PRECEDENT The Acquisition is subject to the condition precedent that the approval of the relevant competition authorities is obtained on conditions acceptable to the Purchaser. 6. OTHER SIGNIFICANT TERMS Warranties and indemnities as are normal in transactions of this nature have been provided by each of the Sellers to the Purchaser. 7. PRO FORMA FINANCIAL EFFECTS The pro forma financial effects of the Acquisition are presented for illustrative purposes only and because of their nature may not give a fair reflection of Zeder’s financial position nor of the effect on future earnings after the Acquisition. Set out below are the unaudited pro forma financial effects of the Acquisition, based on the unaudited interim results for the period ended 31 August 2013. The directors of Zeder are responsible for the preparation of the unaudited pro forma financial information. Unaudited Unaudited Change (%) before Pro Forma Acquisition after (cents) Acquisition (cents) Recurring 9.2 9.3 1.1% headline earnings per share (basic and diluted) Headline 7.4 7.4 - earnings per share (basic and diluted) Attributable 10.6 10.6 - earnings per share (basic and diluted) Net asset value 347.8 347.8 - per share Net tangible 322.7 307.3 (4.8%) asset value per share Number of shares 980.2 980.2 - in issue (million) Weighted average 979.3 979.3 - number of shares in issue (million) Notes and assumptions: The unaudited interim information for the period ended 31 August 2013 has been extracted from the published interim results announcement of Zeder. All the adjustments for the Acquisition will have a continuing effect, except for the transaction costs (refer note 8). 1. The recurring headline earnings per share, headline earnings per share and attributable earnings per share figures in the “Unaudited Pro Forma after Acquisition” column have been calculated on the basis that the Acquisition was effected on 1 March 2013. The pro-forma financial effects on the aforementioned include: a. Zeder’s share of Mpongwe Milling's recurring headline earnings, headline earnings and attributable earnings for the six months ended 30 June 2013 in accordance with lag- accounting principles under IFRS 10 Consolidated Financial Statements; b. Finance costs incurred, at a rate of 3.5%, on Mauritian-based borrowings obtained in order to settle the purchase consideration; and c. Depreciation on Mpongwe Milling's fixed assets, which are revalued as part of the business combination. 2. The net asset value per share and net tangible asset value per share figures in the “Unaudited Pro Forma after Acquisition” column have been calculated on the basis that the Acquisition was effected on 31 August 2013. 3. Intangible assets of R151.1 million were acquired as part of the Acquisition. 4. The taxation rate applicable is the Zambian corporate tax rate of 35%. 5. Exchange rates applied were: a. Average rates of R1.73/ZMW and R9.20/USD for the six months ended 30 June 2013; and b. Closing rates of R1.85/ZMW and R10.23/USD as at 6 November 2013. 6. The recurring headline earnings per share, headline earnings per share and attributable earnings per share figures have been calculated using a weighted average number of shares in issue of 979.3 million for the period ended 31 August 2013. 7. The net asset value per share and tangible net asset value per share calculations have been based on 980.2 million shares in issue as at 31 August 2013. 8. Transaction costs of R2 million relating to the Acquisition are expensed. 8. EFFECTIVE DATE OF THE ACQUISITION In terms of the agreement the effective date of the Acquisition will be the date on which the condition precedent has been fulfilled, which is estimated to be on or about 1 January 2014. 9. CLASSIFICATION OF THE TRANSACTION The Acquisition is classified as a Category 2 transaction in terms of the Listings Requirements of the JSE Limited (“Listings Requirements”). 10. SUBSIDIARY COMPANY As a result of the Acquisition, Mpongwe Milling will become a subsidiary company of Zeder and Zeder shall endeavour to ensure that the Zambian memorandum and articles of association of Mpongwe Milling (“MOI”) will not frustrate Zeder in any way from compliance with its obligation in terms of the Listings Requirements and nothing contained in the MOI shall relieve Zeder from compliance with the Listings Requirements. Stellenbosch 13 November 2013 Sponsor and Corporate Advisor PSG Capital Date: 13/11/2013 08:55:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.