Voluntary announcement: acquisition of 100% interest in Coninghamlee CSG HOLDINGS LIMITED (Formerly M&S Holdings Limited) (Incorporated in the Republic of South Africa) (Registration number: 2006/011359/06) Share code: CSG ISIN code: ZAE000184438 ("CSG Holdings" or "the Company") VOLUNTARY ANNOUNCEMENT: ACQUISITION OF A 100% INTEREST IN CONINGHAMLEE AND ASSOCIATES CC 1. INTRODUCTION Shareholders of CSG Holdings (“Shareholders”) are hereby advised that the Company has entered into a sale of shares agreement dated 23 October 2014 (“the Agreement”) with Tamin Coningham, sole member of ConinghamLee and Associates CC (“ConinghamLee”). ConinghamLee is a close corporation duly registered in accordance with the laws of the Republic of South Africa which is currently being converted to a private company. In terms of the Agreement, CSG Holdings will acquire 100% of the issued ordinary share capital of ConinghamLee (“the Acquisition”). 2. NATURE OF BUSINESS OF CONINGHAMLEE ConinghamLee is a specialist recruitment and placement organisation focusing on the banking and financial services and engineering industries. ConinghamLee employs a team of industry specialist consultants and their tailored and consultative approach allows the forging of solid, long-term relationships. 3. RATIONALE FOR THE ACQUISITION CSG Holdings’ strategy is one of both organic growth and growth through specific acquisitions. Recruitment and placements is an underdeveloped area of the Workforce Management Division of the Company and ConinghamLee provides a solid base from which CSG Holdings can build this service. 4. CONSIDERATION FOR THE ACQUISITION The purchase consideration payable by CSG Holdings in terms of the Acquisition will be an initial amount of R24 million (“Initial Amount”), which may be increased by a maximum amount of R11 million (“Performance Guarantee Amount”) based on the financial performance of ConinghamLee for the twelve month period immediately following the effective date of the Acquisition (“Performance Guarantee Period”). The purchase consideration will be settled as follows: - payment of the Initial Amount within seventy two hours of the effective date of the Acquisition; and - should the necessary performance criteria be met, payment of an amount up to the Performance Guarantee Amount following finalisation of the closing accounts relating to the Performance Guarantee Period. 5. CONDITIONS PRECEDENT The Acquisition is subject to CSG Holdings board approval by no later than 31 October 2014. For the avoidance of doubt, the conversion of ConinghamLee from a close corporation to a private company is not a condition precedent to the Acquisition. 6. EFFECTIVE DATE AND COMPLETION OF THE ACQUISITION The effective date of the Acquisition will be 1 November 2014, subject to the fulfilment of the condition precedent as set out in paragraph 5 above. The completion of the Acquisition will take place on the effective date being, 1 November 2014 or the date on which the parties receive confirmation that ConninghamLee has been converted from a close corporation to a private company, whichever date is the latest. 7. PRO FORMA FINANCIAL EFFECTS The pro forma financial effects of the Acquisition (“Financial Effects”) on CSG’s basic earnings per share (“EPS”), headline earnings per share (“HEPS”), fully diluted EPS, fully diluted HEPS, net asset value per share (“NAVPS”) and net tangible asset value per share (“NTAVPS”) are set out below. The Financial Effects have been prepared in terms of the JSE Limited Listings Requirements (“LRs”) and the Guide on Pro Forma Financial Information issued by the South African Institute of Chartered Accountants. The Financial Effects have been prepared to illustrate the impact of the Acquisition on CSG’s audited results for the 13 Months ended 31 March 2014 as published on 30 June 2014 (“Year End Results”), had the Acquisition occurred on 1 March 2013 for consolidated statement of comprehensive income purposes, and on 31 March 2014, for consolidated statement of financial position purposes. The Financial Effects have been prepared using accounting policies that comply with IFRS and are consistent with those applied in the Year End Results. The Financial Effects are the responsibility of CSG’s directors and have been prepared for illustrative purposes only and, due to their nature, may not fairly present the financial position, results of operation or cash flows of CSG after the Acquisition. Before the After the Change Acquisition Acquisition % EPS (cents) 16.17 19.10 18 Fully diluted EPS (cents) 16.00 18.90 18 HEPS (cents) 16.02 18.95 18 Fully diluted HEPS (cents) 15.86 18.76 18 NAVPS (cents) 67.40 67.40 0 NTAVPS (cents) 43.27 40.48 (6) Number of ordinary shares in issue at 31 March 387 954 387 954 0 2014 (‘000) Weighted average number of shares in issue for 238 427 238 427 0 the period ended 31 March 2014 (‘000) Fully diluted number of shares in issue for the 240 963 240 963 0 period ended 31 March 2014 (‘000) Notes: 1. The information in the “Before the Acquisition” column has been extracted from the Year End Results. 2. The financial information relating to ConinghamLee has been extracted from the audited results of ConinghamLee for the year ended 28 February 2014. 3. Based on a before tax profit of R12 million attributable to ConinghamLee for the year ended 28 February 2014. 4. A taxation rate of 28% is assumed. 5. On the assumption that CSG will settle the purchase consideration through a cash payment of the Initial Amount on the effective date of the Acquisition utilising a term funding facility, repayable over 5 years, incurring interest at 9% per annum. 6. Payment of the Performance Guarantee Amount has not been taken into account in the Financial Effects. 7. Transaction costs of R300 000 are assumed to be paid in cash. 8. Based on a net asset value of R13.3 million attributable to ConinghamLee as at 28 February 2014. 9. The Financial Effects take into account goodwill of R10.7 million arising on the Acquisition. 10. NAVPS and NTAVPS have been calculated based on the number of shares in issue at 31 March 2014. 11. EPS, fully diluted EPS, HEPS and fully diluted HEPS have been calculated based on the weighted average number of shares in issue during the period ended 31 March 2014. 8. CATEGORISATION OF THE ACQUISITION The Acquisition is below the Category 2 threshold and an announcement is not required in terms of the LRs. The Financial Effects of the Acquisition and the further information set out in this announcement have therefore been made on a voluntary basis. 27 October 2014 Sponsor Sasfin Capital (a division of Sasfin Bank Limited) Date: 27/10/2014 03:38:00 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. 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