Acquisition of Mama Chakas GOLD BRANDS INVESTMENTS LIMITED Incorporated in the Republic of South Africa Registration Number: 2015/168426/06 Share code on the JSE: GBI ISIN: ZAE 000212791 (“Gold Brands” or “the Company” or “GBI”) ACQUISITION OF MAMA CHAKAS INTRODUCTION The Board is pleased to announce that subject to the conditions precedent set out below, Gold Brands (“the Purchaser”) has acquired 100% of the business and brands known as Mama Chaka’s from Econ Food Concepts Proprietary Limited (“Econ” of “the Seller’). VENDOR OF MAMA CHAKA’S The shareholders of Econ are Roelcor Holdings (Pty) Ltd (“Roelcor”) of which the directors are Willie Dique, Trevor Poyo and Hanelie Strydom; Axiom Developments (Pty) Ltd of which the director is Dennis Finch; and the Yvonne Mhinga (Yvonne Chaka Chaka) the brand ambassador of Mama Chaka’s. Dennis Finch, will join GBI to run the new division. DESCRIPTION OF THE BUSINESS The Mama Chaka’s concept and brand was developed by Dennis Finch in 2014 and consists of meals based on affordable, nutritious, traditional chicken and beef forequarter recipes from all South African ethnic cultures. The basis is focused on nutritious, fresh meals using only the best ingredients and stringent health and safety standards. All the meals are prepared at a central kitchen, refrigerated and or frozen and delivered to the various vendors for reheating and serving. Mama Chaka’s focuses on empowering black entrepreneurs in township communities through job creation, via franchised kiosks and converted spaza shops (14 currently). Mama Chaka’s meals are also currently available at 27 Total fuel station Bonjour outlet stores with another 115 being rolled out over the next 24 months and they have recently been listed in the Fresh Stop stores. The kiosks and converted spaza shops provide individuals with the opportunity to run their own business and serve their community at very low start-up costs. The first Mama Chaka’s kiosk was piloted in Gugulethu in January 2015, there are currently 10 kiosks and 4 converted spaza shops in operation with 40 kiosks being installed currently in conjunction with a major FMCG food brand. Current menu items include, beef and chicken curry, beef and chicken stew, chicken chakalaka, meatballs and beef chakota. RATIONALE FOR THE ACQUISTION The vision of Gold Brands is to become the leading franchise company, both within the South African as well as the international markets, by offering their customers unique and authentic brands with unbeatable value - backed by their cost-efficient and reliable supply chain and their simple, clever business models. The acquisition of Mama Chaka’s, will further enhance the Company’s current capabilities in South Africa on the following basis: • Mama Chaka’s has an established infrastructure in the Western Cape which could immediately facilitate the growth of the Gold Brands business; • Gold Brands will facilitate the roll out of Mama Chaka’s in Gauteng and surrounding areas; • Mama Chaka’s will provide an immediate value add and significant income stream to GBI’s Chesanyama franchisees by adding a range of cooked meals to the menus; and • Mama Chaka’s stores will broaden the franchise options available to future potential franchisees that GBI will have available. All of the above coupled with the enormous goodwill and influence the brand ambassador Yvonne Chaka Chaka brings in Africa and internationally will result in a valuable contribution to the already successful and growing franchises of Gold Brands. CONSIDERATION PAYABLE The purchase consideration for the Business shall be the between R15 and R20 million on the achievement of certain warranties and is payable as follows: • R5 million in cash (R2 500 000) and GBI shares (R2 500 000 in GBI shares to be issued at the closing price of GBI’s shares on Friday 17 June 2016), payable 30 days after the successful completion of the due diligence; • Up to an additional R10 million, payable in cash, or shares (to be issued at the 30 day VWAP prior to the calculation date), or a combination of both at the election of GBI on the achievement of R3 million post tax profits at the end of the first twelve months after acquisition; and • Up to an additional R5 million in cash, or shares (to be issued at the 30 day VWAP prior to the second calculation date), or a combination of both at the election of GBI on the achievement of at least R4 million post tax profits at the end of the second twelve months after acquisition(the second calculation date). CONDITIONS PRECEDENT The acquisition is subject to the fulfillment of the following conditions precedent: • the Shareholders and Board of Directors of Econ approving the transaction in terms of the concluded Sale Agreement; • approval of or ratification of the implementation of the agreement by the Board of Directors of Gold Brands by not later than 7 (seven) days from the date of receipt of the written notice after completion of the due diligence; • by not later than the expiry of the due diligence period – o the Key Employee (“Dennis Finch”) has entered into the Key Employee Agreement and it has become unconditional; o the Shareholders of the Seller has passed, in a General Meeting of Shareholders of the Seller, all special resolutions as may be necessary to approve the Sale in terms of section 112 and section 115 of the Companies Act; o all of the shareholders of the Seller have waived in writing, the Parties requirement to comply with the requirements of the Takeover Regulations. VALUE OF THE NET ASSETS AND PROFITS ATTRIBUTABLE TO THE NET ASSETS BEING ACQUIRED The book value of the tangible assets of Mama Chaka’s that are being acquired are R2,4 million. The value of the profits attributable to net assets that are being acquired are forecast at R3 million as per the warranted profits per the contract. CATEGORISATION OF THE ACQUISITION This transaction is a category 2 transaction as defined by the JSE Listings Requirements and as such does not require specific shareholder approval. 20 June 2016 Sponsor and Corporate Advisor River Group Date: 20/06/2016 09:30:00 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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