Investment into preference shares issued by VSS Financial Services (Pty) Ltd ECSPONENT LIMITED Incorporated in the Republic of South Africa Registration number: 1998/013215/06 JSE Code: ECS - ISIN: ZAE000179594 (“Ecsponent”) INVESTMENT INTO PREFERENCE SHARES ISSUED BY VSS FINANCIAL SERVICES PROPRIETARY LIMITED 1. INTRODUCTION AND CLASSIFICATION OF THE TRANSACTION The board of directors of Ecsponent (“the Board”) hereby advises shareholders that the Company has resolved to invest up to R100 million in cumulative perpetual preference shares (“Preference Shares”) issued by VSS Financial Services Proprietary Limited (“VSS”) (“the Transaction”). The Company expects to invest into the Preference Shares in tranches, the first of which will be R30 million and is expected to be completed on or about today, 3 January 2018. 2. RATIONALE FOR THE TRANSACTION One of the Company’s strategic directives is the investment into private equity investments. The Board has identified VSS as a value-adding investment. The anticipated dividend yield on the investment will further enhance Ecsponent’s after tax returns. 3. OVERVIEW OF VSS VSS is 100% held by MyBucks SA Proprietary Limited (“MyBucks”). VSS currently provides group information technology and related administrative services to the MyBucks group of companies and is the entity through which the MyBucks group undertakes its information technology development. VSS invested significantly in developing its service offering which has resulted in the company securing profitable contracts during 2017. VSS will be rebranded as a financial technology (“Fintech”) entity, geared toward the provision of artificial intelligence and information technology support services to both the MyBucks group and the Ecsponent group, as well as to external Fintech related entities, such as mobile network operators and smaller financial services groups. 4. FINANCIAL INFORMATION OF VSS VSS reported net loss after tax of R17 million for the financial year ended 30 June 2017, and net deficit of R15 million as at 30 June 2017, being the latest financial year-end of VSS. The above financial information is based on the audited historic financial information of VSS, calculated in accordance with International Financial Reporting Standards and the Companies Act of South Africa. 5. KEY TERMS OF THE TRANSACTION The terms of the Preference Shares may not be modified, altered, varied, added to or abrogated without the prior written consent of the holders of the Preference Shares. Key terms of the Preference Shares are as summarised below. 5.1. Dividends Each Preference Shares will entitle the holder to share in a preferential dividend, determined at the sole discretion of the board of directors of VSS (“VSS Board”), after taking into account the distributable profits, budget and cash flows of VSS, and subject to the terms and conditions as determined by the VSS Board. 5.2. Ranking Any payment due to holders of Preferences Shares will rank in priority to any payment due to any other class of shares of VSS. 5.3. Redemption Preference Shares may be redeemed or converted into any other class of shares in VSS at the option of VSS, as determined by the VSS Board. 5.4. Voting rights Holders of Preference Shares are entitled to vote on any resolution which is proposed which affects the rights and privileges attached to the Preference Shares or interest of the holder of Preference Shares, including: - the creation or allotment of further classes of shares in VSS which rank in some or all respects pari passu or in priority to the Preference Shares; - the winding-up of VSS or commencement of business rescue proceedings; - the reduction of VSS’ capital or a change in the dividend policy of VSS; - the authorisation of any event which requires the consent of holders of the Preference Shares in terms of the VSS Memorandum of Incorporation or any variation of any matter in respect of which the holders of Preference Shares have previously given consent; - the entering into any transaction by VSS contemplated in Chapter 5 of the Companies Act of 2008; - any other resolution proposed in terms of which Preference Shares are entitled to vote in terms of the VSS Memorandum of Incorporation. At any meeting where Preference Shareholders are entitled to vote, upon a poll, the holder of a Preference Share will be entitled to 1 (one) vote for every Preference Share held. 6. CONDITIONS PRECEDENT The Transaction is not subject to any conditions precedent. 7. EFFECTIVE DATE The effective date of the Transaction is expected to be on or about today, 3 January 2018, which is when the first tranche of investment in Preference Shares will be made. 8. CATEGORISATION OF THE TRANSACTION Based on the maximum investment value of R100 million, the Transaction is a Category 2 transaction in terms of the JSE Listings Requirements and accordingly is not subject to approval of shareholders by the Company. Pretoria 3 January 2018 Sponsor and Corporate Advisor Questco Corporate Advisory Proprietary Limited Date: 03/01/2018 09:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 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