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Annexure 1 – Salient features of the Memorandum of Incorporation of Group Five Limited (“the company”)

for the year ended 30 June 2012

1. Powers of the company and restrictive conditions
  The company has all the legal powers and capacity contemplated in the Companies Act, 71 of 2008, as amended, (“the Act”) and no provision contained in the Memorandum of Incorporation should be interpreted or construed as negating, limiting, or restricting those powers in any way whatsoever.
2. Issue of shares and variation of rights
 
2.1 The company is authorised to issue:
2.1.1 150 000 000 (one hundred and fifty million) no par value ordinary shares, of the same class, each of which ranks paripassu in respect of all rights and entitles the holder to:
2.1.1.1 vote on any matter to be decided by the shareholders of the company and to 1 (one) vote in the case of a vote by means of a poll;
2.1.1.2 participate proportionally in any distribution made by the company; and
2.1.1.3 receive proportionally the net assets of the company upon its liquidation;
2.1.2 as contemplated in section 45 of the Act, to provide direct or indirect financial assistance to a related or inter-related company or corporation, or to a member of a related or inter-related corporation,
2.2 The board shall have all of the powers afforded to it in terms of the Memorandum of Incorporation and under and in terms of the Act, except for the power to:
2.2.1 create any class of shares;
2.2.2 convert one class of shares into one or more other classes; or
2.2.3 increase or decrease the number of authorised shares of any class of shares; or
2.2.4 consolidate and reduce the number of the company's issued and authorised shares of any class; or
2.2.5 subdivide its shares of any class by increasing the number of its issued and authorised shares of that class without an increase of its capital; or
2.2.6 reclassify any classified shares that have been authorised but not issued; or
2.2.7 classify any unclassified shares that have been authorised but not issued, or
2.2.8 determine the preferences, rights, limitations or other terms of any shares,
which powers shall only be capable of being exercised by the shareholders by way of a special resolution of the shareholders.
3. Debt instruments
  The granting of special privileges to holders of debt instruments, such as attending and voting at general meetings and the appointment of directors, is prohibited.
4. Financial assistance
  The board may authorise the company:
4.1 as contemplated in section 44 of the Act, to provide financial assistance by way of loan, guarantee, the provision of security or otherwise to any person for the purpose of, or in connection with, the subscription of any option, or any securities, issued or to be issued by the company or a related or inter-related company, or for the purchase of any such securities of the company or a related or inter-related company; and
4.2 as contemplated in section 45 of the Act, to provide direct or indirect financial assistance to a related or inter-related company or corporation, or to a member of a related or inter-related corporation,
and the authority of the board in this regard is not limited or restricted by the Memorandum of Incorporation.
5. Acquisition by the company of its own shares
  Subject to the JSE Limited (“JSE”) Listings Requirements, the provisions of section 48 of the Act and the further provisions of this clause:
5.1 the board may determine that the company acquire a number of its own shares; and
5.2 the board of any subsidiary of the company may determine that such subsidiary acquire shares of the company.
6. Shareholders’ meetings
 
6.1 The board, or any prescribed officer or company secretary of the company, authorised by the board, is entitled to call a shareholders' meeting at any time.
6.2 Subject to the provisions of section 60 of the Act dealing with the passing of resolutions of shareholders other than at a meeting of shareholders, the company shall hold a shareholders' meeting:
6.2.1 at any time that the board is required by the Act, the JSE Listings Requirements or the Memorandum of Incorporation to refer a matter to shareholders for decision; or
6.2.2 whenever required in terms of the Act to fill a vacancy on the board; or
6.2.3 by any other provision of the Memorandum of Incorporation.
6.3 The board shall call a meeting of shareholders if 1 (one) or more written and signed demands by shareholders calling for such a meeting are delivered to the company and:
6.3.1 each such demand describes the specific purpose for which the meeting is proposed; and
6.3.2 in aggregate, demands for substantially the same purpose are made and signed by the holders, as of the earliest time specified in any of those demands, of at least 10% (ten percent) of the voting rights entitled to be exercised in relation to the matter proposed to be considered at the meeting.
6.4 In addition to other meetings of the company that may be convened from time to time, the company shall convene an annual general meeting of its shareholders once in each calendar year, but no more than 15 (fifteen) months after the date of the previous annual general meeting.
7. Shareholders’ meetings by electronic communication
  Subject to the provisions of the JSE Listings Requirements, the company may conduct a shareholders' meeting by electronic communication, as set out in section 63 of the act, and the power of the company to do so is not limited or restricted by the Memorandum of Incorporation. Subject to what the board may determine in terms of any notice of any meeting of shareholders at which it will be possible for shareholders to participate by way of electronic communication, participation by way of electronic communication at a meeting of shareholders shall exclude the right to vote on any matter put to the vote of the shareholders at that meeting.
8. Votes of shareholders
  Subject to any special rights or restrictions as to voting attached to any shares by or in accordance with the Memorandum of Incorporation, at a meeting of the company:
8.1 every person present and entitled to exercise voting rights shall be entitled to 1 (one) vote on a show of hands, irrespective of the number of voting rights that person would otherwise be entitled to exercise;
8.2 on a poll any person who is present at the meeting, whether as a shareholder or as proxy of a shareholder, has the number of votes determined in accordance with the voting rights associated with the securities held by that shareholder; and
8.3 the holders of securities other than ordinary shares shall not be entitled to vote on any resolution at a meeting of shareholders.
9. Shareholders’ resolutions
 
9.1 For an ordinary resolution to be approved it must be supported by more than 50% (fifty percent) of the voting rights of shareholders exercised on the resolution, as provided in section 65(7) of the Act. Notwithstanding anything to the contrary contained in the Memorandum of Incorporation, to the extent that the JSE Listings Requirements require a higher percentage in respect of any particular ordinary resolution, the company shall not implement such ordinary resolution unless the company has obtained the support of the applicable percentage prescribed in terms of the JSE Listings Requirements.
9.2 For a special resolution to be approved it must be supported by the holders of at least 75% (seventy five percent) of the voting rights exercised on the resolution, as provided in section 65(9) of the Act.
10. Shareholders acting other than at a meeting
 
10.1 In accordance with the provisions of section 60 of the Act, a resolution that could be voted on at a shareholders' meeting (other than in respect of the election of directors) may instead be:
10.1.1 submitted by the board for consideration by the shareholders entitled to exercise the voting rights in relation to the resolution; and
10.1.2 voted on in writing by such shareholders within a period of 20 (twenty) business days after the resolution was submitted to them.
10.2 The provisions of this clause 10 shall not apply to any shareholder meetings that are called for in terms of the JSE Listings Requirements or the passing of any resolution in terms of clause 11.2 or to any annual general meeting of the company.
11. Composition of the board of directors
 
11.1 In addition to the minimum number of directors, if any, that the company must satisfy any requirement in terms of the Act to appoint an audit committee and a social and ethics committee, the board must comprise not less than 4 (four) directors and not more than 15 (fifteen) directors.
11.2 All directors shall be elected by an ordinary resolution of the shareholders at a general or annual general meeting of the company and no appointment of a director in accordance with a resolution passed in terms of section 60 of the Act shall be competent.
12. Powers of directors
  The management of the company shall be vested in the directors who, in addition to the powers and authorities expressly conferred upon them by the Memorandum of Incorporation, may exercise all such powers, and do all such acts and things, as may be exercised or done by the company and are not hereby or by the Act expressly directed or required to be exercised or done by the company in general meeting, but subject nevertheless to such management and control not being inconsistent with the Memorandum of Incorporation or with any resolution passed at any general meeting of the shareholders in accordance therewith, but no resolution passed by the company in general meeting shall invalidate any prior act of the directors which would have been valid if such resolution had not been passed. The general powers given by this clause shall not be limited or restricted by any special authority or power given to the directors by any other provision of the Memorandum of Incorporation.
13. Directors’ meetings
 
13.1 Save as may be provided otherwise herein, the directors may meet together for the despatch of business, adjourn and otherwise regulate their meetings as they think fit.
13.2 The directors may elect a chairperson and a deputy chairperson and determine the period for which each is to hold office. The chairperson, or in his absence the deputy chairperson, shall be entitled to preside over all meetings of directors. If no chairperson or deputy chairperson is elected, or if at any meeting neither is present or willing to act as chairperson thereof within 10 (ten) minutes of the time appointed for holding the meeting, the directors present shall choose 1 (one) of their number to be chairperson of such meeting.
13.3 In addition to the provisions of section 73(1), any director shall at any time be entitled to call a meeting of the directors.
14. Directors’ compensation
  The company may pay remuneration to the directors for their services as directors in accordance with a special resolution approved by the shareholders within the previous 2 (two) years, as set out in sections 66(8) and (9) of the Act and the power of the company in this regard is not limited or restricted by the Memorandum of Incorporation.
15. Executive directors
  The directors may from time to time appoint 1 (one) or more of their body to the office of executive director for such term and at such remuneration as they may think fit (subject only to the requirements of sections 66(8) and (9) of the Act and may revoke such appointment subject to the terms of any agreement entered into in any particular case, provided that the period of office of an executive director appointed in terms of an agreement shall not exceed the terms of his employment with the company. A director so appointed shall be subject to retirement in the same manner as the other directors except during the period of his agreement, and his appointment shall terminate if he ceases for any reason to be a director.
16. Indemnification of directors
  The company may:
16.1 advance expenses to a director or directly or indirectly indemnify a director in respect of the defence of legal proceedings, as set out in section 78(4) of the Act;
16.2 indemnify a director in respect of liability as set out in section 78(5) of the Act; and/or
16.3 purchase insurance to protect the company or a director as set out in section 78(7) of the Act,
and the power of the company in this regard is not limited, restricted or extended by the Memorandum of Incorporation.
17. Borrowing powers
 
17.1 Subject to the provisions of clause 18.2 and the other provisions of the Memorandum of Incorporation, the directors may from time to time
17.1.1 borrow for the purposes of the company such sums as they think fit; and
17.1.2 secure the payment or repayment of any such sums, or any other sum, as they think fit, whether by the creation and issue of securities, mortgage or charge upon all or any of the property or assets of the Company.
17.2 The directors shall procure (but as regards subsidiaries of the company only in terms of the exercised voting and other rights or powers of control exercisable by the company they may so procure) that the aggregate principal amount at any one time outstanding in respect of moneys so borrowed or raised by:
17.2.1 the company; and
17.2.2 all the subsidiaries for the time being of the company (excluding moneys borrowed or raised by any of such companies from any other of such companies but including the principal amount secured by any outstanding guarantees or suretyships given by the company or any of its subsidiaries for the time being for the indebtedness of any other company or companies whatsoever and not already included in the aggregate amount of the moneys so borrowed or raised),
shall not exceed the aggregate amount at that time authorised to be borrowed or secured by the company or the subsidiaries for the time being of the company (as the case may be).
18. Annual financial statements
 
18.1 The company shall keep all such accurate and complete accounting records, in English, as are necessary to enable the company to satisfy its obligations in terms of:
18.1.1 the Act;
18.1.2 any other law with respect to the preparation of financial statements to which the company may be subject; and
18.1.3 the Memorandum of Incorporation.
18.2 The company shall each year prepare annual financial statements within 6 (six) months of the end of its financial year, or such shorter period as may be appropriate to provide the required notice of an annual general meeting in terms of section 61(7) of the Act.
18.3 The company shall appoint an auditor each year at its annual general meeting. If the company appoints a firm as its auditor, any change in the composition of the members of that firm shall not by itself create a vacancy in the office of auditor.
18.4 The annual financial statements of the company must be prepared and audited in accordance with the provisions of section 30 of the Act.
18.5 A copy of the annual financial statements must be sent to shareholders at least 15 (fifteen) business days before the date of the annual general meeting of the company, where such annual financial statements will be considered.
18.6 In accordance with section 62(3)(d) of the Act, a summary of the annual financial statements shall be prepared on a basis that is not inconsistent with any unalterable or non-elective provision of the Act.
19. Distributions
 
19.1 Subject to the provisions of the Act, and particularly section 46, the company may make a proposed distribution if such distribution:
19.1.1 is pursuant to an existing legal obligation of the company, or a court order; or
19.1.2 is authorised by resolution of the board, in compliance with the JSE Listings Requirements.
19.2 No distribution shall bear interest against the company, except as otherwise provided under the conditions of issue of the shares in respect of which such distribution is payable.
19.3 Distributions may be declared either free of or subject to the deduction of income tax and any other tax or duty in respect of which the company may be liable.
19.4 The directors may from time to time declare and pay to the shareholders such interim distributions as the directors consider to be appropriate.
19.5 The company in general meeting or the directors may declare dividends, provided that the company in general meeting will not be able to declare a larger dividend than that declared by the directors.
19.6 All unclaimed distributions may be invested or otherwise made use of by the directors for the benefit of the company until claimed, provided that distributions unclaimed for a period of 3 (three) years from the date on which they were declared may be declared forfeited by the directors for the benefit of the company. The directors may at any time annul such forfeiture upon such conditions (if any) as they think fit. All unclaimed monies, other than distributions, that are due to any shareholder(s) shall be held by the company in trust for an indefinite period until lawfully claimed by such shareholder(s).
19.7 Any distribution, interest or other sum payable in cash to the holder of a share may be paid in any way determined by the directors, including by way of cash, electronic funds transfer or by cheque or warrant sent by post.
20. Access to company records
  Each person who holds or has a beneficial interest in any securities issued by the company is entitled to inspect and copy, without any charge for any such inspection or upon payment of no more than the prescribed maximum charge for any such copy, the information contained in the records of the company referred to in section 26(1) of the Act, being:
20.1 the Memorandum of Incorporation, and any amendments or alterations thereof;
20.2 a record of the directors, including the details of any person who has served as a director, for a period of 7 (seven) years after that person has ceased to serve as a director, and any information relating to such persons referred to in section 24(5) of the Act;
20.3 all:
20.3.1 reports presented at an annual general meeting of the company for a period of 7 (seven) years after the date of any such meeting; and
20.3.2 annual financial statements required by the Act for a period of 7 (seven) years after the date on which each such particular statements were issued;
20.3.3 notice and minutes of all shareholders' meetings, including:
20.3.3.1 all resolutions adopted by them, for 7 (seven) years after the date each such resolution was adopted; and
20.3.3.2 any document that was made available by the company to the holders of securities in relation to each such resolution;
20.4 any written communications sent generally by the company to all holders of any class of the company's securities, for a period of 7 (seven) years after the date on which each of such communications was issued; and
20.5 the Securities Register of the company, as established in terms of section 50(1) of the Act.
21. Payment of commission
  The company may pay a commission at a rate not exceeding 10% (ten percent) of the issue price of a share to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of the company or for procuring or agreeing to procure, whether absolutely or conditionally, subscriptions for any shares of the company.
22. Winding up
  If the company shall be wound up, whether voluntarily or otherwise, the liquidator may with the sanction of a special resolution divide among the shareholders in specie any part of the assets of the company, and may with the like sanction vest any part of the assets of the company in trustees upon such trusts for the benefit of the shareholders as the liquidator with the like sanction shall think fit, and if thought expedient any such division so sanctioned may be otherwise than in accordance with the legal rights of the shareholders of the company, and in particular any class may be given preferential or special rights or may be excluded altogether or in part.
23. Notices
 
23.1 All notices shall be given by the company to each shareholder of the company and simultaneously to the Issuer Services Division of the JSE, and shall be given in writing in any manner authorised by the JSE Listings Requirements and the Companies Regulations 2011 (“Regulations”) and particularly Table CR 3 annexed to the Regulations. All notices shall, in addition to the above, be released through SENS provided that, in the event that the shares or other securities of the company are not listed on the JSE, all the provisions of the Memorandum of Incorporation relating to the publication of notices via SENS shall no longer apply and such notices shall thereafter only be published in accordance with the provisions of the Act.
23.2 Any notice or document delivered or sent by electronic mail, by post or delivered to the registered address of any shareholder in pursuance of the Memorandum of Incorporation shall, notwithstanding that such shareholder was then deceased, and whether or not the company has notice of his death, be deemed to have been duly served in respect of any shares, whether held solely or jointly with other persons by such shareholder, until some other person be registered in his stead as the sole or joint holder thereof, and such service shall for all purposes of the Memorandum of Incorporation be deemed a sufficient service of such notice or document on his heirs, executors or administrators, and all persons (if any) jointly interested with him in any such shares.
24. Amendment of Memorandum of Incorporation
  The Memorandum of Incorporation may only be altered or amended by way of a special resolution of the ordinary shareholders in accordance with section 16(1)(c) of the Act, except if such amendment is in compliance with a court order as contemplated in section 16(1)(a) of the Act.
25. Company rules
  The board is prohibited from making any rules as contemplated in section 15(3) of the Act and the board's capacity to make such rules is hereby excluded.
         
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