Settlement of legal proceedings against Bravura Equity Services, Cadiz Holdings and certain associates HUDACO INDUSTRIES LIMITED (“Hudaco” or the “Company”) Incorporated in the Republic of South Africa Registration number 1985/004617/06 Share code: HDC & ISIN: ZAE000003273 SETTLEMENT OF LEGAL PROCEEDINGS AGAINST BRAVURA EQUITY SERVICES, CADIZ HOLDINGS AND CERTAIN ASSOCIATES In exchange for the payment of a total amount of R35 million on 4 September 2020, in settlement of a damages claim instituted by the Hudaco group (“Hudaco”) to recover tax paid by Hudaco, Hudaco has agreed to settle its legal proceedings against Bravura Equity Services Proprietary Limited (“BES”), Cadiz Holdings Limited, certain other entities in the BES and Cadiz groups, as well as certain BES executives and former executives of Cadiz (“the defendants”). Hudaco instituted the legal proceedings in November 2015 with the aim of recovering as much as possible of the payment made by Hudaco to SARS in the amount of R312 million, in settlement of a challenge under the general anti-avoidance rule, and pertaining to the financing arrangements for Hudaco’s 2007 empowerment transaction. The Hudaco board firmly believed that Hudaco had been wronged, and that from an ethical perspective to seek redress was the right thing to do. A comprehensive explanation of the basis for the claim was set out in an announcement released by Hudaco on SENS on 10 November 2015. Having earnestly pursued the litigation and having engaged in extensive negotiations with the defendants, the Hudaco board has concluded that it has become expedient to settle the claim, albeit for very much less than the amount claimed, in the context of the following: • Hudaco is satisfied that its original ethical objectives in launching the action have been achieved. • The defendants have impressed upon Hudaco that they are not in a position to make a larger payment. Therefore, even if Hudaco were to succeed in its action, any award made by the court would probably prove irrecoverable. In this context, Hudaco is cognizant of the fact that the entities against which the action has been brought are no longer operating. • The management time that would be required to run the case would be very considerable, particularly as the matter is highly complex. Three months have been set down for court time alone, excluding preparation time. The board believes that management time can be better spent focusing on Hudaco’s core business, especially in light of the prevailing economic conditions and the challenges posed by the Covid-19 pandemic. • The repudiation by Bravura’s insurers of the professional indemnity claim by BES, BES group companies and BES executives. • Normal legal risk in a highly complex matter of this nature. • The considerable legal costs (estimated at an additional R15 million) that would be incurred in running the case to its conclusion, potentially without return for the reasons outlined above. After careful consideration of all relevant factors, the board is of the opinion that, under the circumstances, rather than to pursue what is now a 13 year old matter with limited prospects of recovery, it is preferable to accept the settlement and avoid the legal costs, thereby leaving the group R50 million better off. It is important to note that Hudaco’s BEE shareholders were not affected in any way by the settlement with SARS and that Hudaco’s BEE credentials remain in place. EDENVALE 31 August 2020 Sponsor: Nedbank Corporate and Investment Banking Date: 31-08-2020 08:15:00 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.